Judge Virginia Keeny, Case 20VECV00691 2022-09-27 Tentative Ruling

(2) Motion to Seal Exhibits and Certain Portions of Plaintiff Spotlight’s Motion for Leave to Amend

(3) Motion to Seal Documents in Support of Opposition to Motion for Leave to Amend Complaint

(4) Motion to Seal Portions of Plaintiff’s Reply Brief re: Motion for Leave to Amend Complaint

This action arises from plaintiff Spotlight Ticket Management, Inc.’s (Spotlight) use of online marketplaces operated by defendants StubHub, Inc. (StubHub) and eBay Inc. (eBay)[1] in order to conduct sales online.[2] Plaintiff’s pleading alleges that plaintiff is a member of StubHub’s “affiliate program,” terms and conditions for which promise plaintiff certain commissions that StubHub has failed to deliver, and that this is “due to StubHub’s underreporting of commissionable transactions and failure to accurately track commission data.” (FAC, ¶¶ 1, 3.)

Spotlight filed its initial complaint against defendants on June 23, 2020, and on August 28, 2020, plaintiff filed its first amended complaint (the FAC), alleging: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) unjust enrichment; (4) quantum meruit; (5) promissory estoppel; (6) unlawful, unfair, or fraudulent business practices; (7) tortious interference with contractual relations; and (8) tortious interference with prospective economic advantage.

Spotlight now seek leave to file a second amended complaint alleging two additional causes of action: 1) breach of contract based on defendants’ breach of the parties’ Mutual Nondisclosure Agreement (“NDA”); and 2) tortious interference with performance of a contract. Plaintiffs also seek to add additional allegations obtained through discovery to support these causes of action.

(1) Defendant StubHub, Inc.’s Motion to Seal Exhibits and Certain Portions of Plaintiff Spotlight’s Motion for Leave to Amend is GRANTED.

(2) Defendant StubHub, Inc.’s Motion to Seal Documents in Support of Opposition to Motion for Leave to Amend is GRANTED.

(3) Defendant StubHub, Inc.’s Motion to Seal Portions of Plaintiff’s Reply Brief re: Motion for Leave to Amend Complaint is GRANTED.

A motion seeking an order sealing the record must be accompanied by “a declaration containing facts sufficient to justify the sealing.” (Cal. Rules of Court, Rule 2.551(b)(1).) Unless confidentiality is required by law, court records are presumed to be open to public review. (Cal. Rules of Court, Rule 2.550(c); see also Cal. Const., art. I, § 3, subd. (b)(1) [“The people have the right of access to information concerning the conduct of the people’s business”].) “The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, Rule 2.550(d); see also NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1217-1218.)

“A request to seal a document must be filed publicly and separately from the object of the request. It must be supported by a factual declaration or affidavit explaining the particular needs of the case.” (In re Marriage of Lechowick (1998) 65 Cal.App.4th 1406, 1416.)

Here, StubHub has filed three separate motions to seal concerning documents and certain testimony filed in conjunction with Spotlight’s motion for leave to amend. Stubhub seeks to seal the following documents: (1) Exhibit F attached to the Declaration of Katherine Sandberg and page 3:10- 12 of Spotlight’s Notice of Motion and Motion to Amend which excerpts the same Exhibit F (see Notice of Motion re: Seal [filed August 15, 2022] at pg. 2); (2) Exhibit A (document with Bates stamp SPOTLIGHT-0015350) attached to the Declaration of Emily T. Kuwahara in Support of StubHub’s Opposition to Spotlight’s Motion for Leave to Amend and pages 4:11-15 and 8:11-15 of StubHub’s Opposition, which contains quoted language from Exhibit A (see Notice of Motion re: Seal [filed August 16, 2022] at pg. 2); and (3) pages 5:21-27 of Spotlight’s Reply to StubHub’s Opposition, which comprises of excerpts from StubHub’s NDA agreement (see Notice of Motion re: Seal [filed September 1, 2022] at pg. 2).

StubHub contends that the aforementioned documents and excerpts contain proprietary information “regarding its affiliates, affiliate relationships, affiliate contracts, and negotiations of contract terms” and subject to a protective order that was entered by the court on January 29, 2021. (Motion re: Seal [filed August 15, 2022] at pg. 4; Motion re: Seal [filed August 16, 2022] at pg. 4; Motion re: Seal [filed September 1, 2022] at pg. 4.) StubHub further asserts that it has an overriding interest to withhold this proprietary information from the public because its disclosure would cause StubHub economic harm and allow its competitors to gain an unfair competitive advantage. (Motion re: Seal [filed August 15, 2022] at pg. 5, Huff Decl. ¶¶ 6, 9; Motion re: Seal [filed August 16, 2022] at pg. 5, Huff Decl. ¶¶ 5, 8; Motion re: Seal [filed September 1, 2022] at pg. 5, Huff Decl. ¶¶ 5, 8.) Furthermore, StubHub contends that the proposed sealing is narrowly tailors because it focuses on select exhibits and their corresponding excerpts, and as a result, there are no less restrictive means to protect its interests. (Motion re: Seal [filed August 15, 2022] at pp. 5-6, Huff Decl. ¶ 10; Motion re: Seal [filed August 16, 2022] at pg. 6, Huff Decl. ¶ 9; Motion re: Seal [filed September 1, 2022] at pp. 5-6, Huff Decl. ¶ 9.)

Upon review of StubHub’s motions and the accompanying declarations, the court finds that (1) there exists an overring interest not to disclose the documents and references that overcomes the right of public access to the records listed above, which contain confidential business information that would pose a competitive harm to StubHub if disclosed, (2) the overring interest supports sealing the record to protect StubHub’s ability to remain competitive in the marketplace, (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, (4) the proposing sealing is narrowly tailored, and (5) no less restrictive means exists to achieve the overriding interest. (Cal. Rules of Court, rule 2.550(d).) Furthermore, the court notes that the motions are unopposed and a protective order is in place.

Plaintiff Spotlight Ticket Management, Inc.’s Motion for Leave to File Second Amended Complaint is GRANTED.

Defendant StubHub Inc.’s motions to seal are GRANTED. The following documents and references are ordered sealed: (1) Exhibit F attached to the Declaration of Katherine Sandberg and page 3:10- 12 of Spotlight’s Notice of Motion and Motion to Amend which excerpts the same Exhibit F; (2) Exhibit A (document with Bates stamp SPOTLIGHT-0015350) attached to the Declaration of Emily T. Kuwahara in Support of StubHub’s Opposition to Spotlight’s Motion for Leave to Amend and pages 4:11-15 and 8:11-15 of StubHub’s Opposition, which contains quoted language from Exhibit A; and (3) pages 5:21-27 of Spotlight’s]Reply to StubHub’s Opposition, which comprises of excerpts from StubHub’s NDA agreement.

[1] At paragraph 18, the FAC provides that StubHub is a wholly owned subsidiary of eBay

[2] Non-party American Express (Amex) is involved in this action due to plaintiff’s alleged contractual and business relationship with Amex, which serves as the basis for certain elements of plaintiff’s causes of action for interference with businesses relationships. (See FAC, ¶ 8; see generally id. at ¶¶ 72—99 [part C].)