Blockchain Innovation, LLC v. Franklin Resources, Inc.

4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA BLOCKCHAIN INNOVATION, LLC, Case No. 21-cv-08787-HSG 8 Plaintiff, ORDER DENYING ADMINISTRATIVE MOTION TO SEAL 9 v. Re: Dkt. No. 41, 60 10 FRANKLIN RESOURCES, INC., et al., 11 Defendants.

13 Pending before the Court are two administrative motion to consider whether another party’s material should be sealed related to Defendants’ motions to dismiss. Dkt. Nos. 41, 60.

15 The Court DENIES the motions for the reasons below.

16 I. LEGAL STANDARD 17 Courts generally apply a “compelling reasons” standard when considering motions to seal documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the common law right ‘to inspect and copy public records and documents, including judicial records and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this strong presumption, the party seeking to seal a judicial record attached to a dispositive motion must “articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process” and “significant public events.” Id. at 1178–79 (quotations omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The mere fact that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records.” Id. 6 Records attached to nondispositive motions must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil Procedure, as such records “are often unrelated, or only tangentially related, to the underlying cause of action.” Id. at 1179–80 (quotations omitted). This requires a “particularized showing” that “specific prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 13 F.2d 470, 476 (9th Cir. 1992) (quotation omitted).

14 II. DISCUSSION 15 As an initial matter, the motion to seal at Dkt. No. 41 is denied as moot; it is associated with motions to dismiss that were terminated as moot in light of Plaintiff’s first amended complaint, Dkt. No. 55. See Eli Lilly & Co. v. Genentech, Inc., No. 13-CV-0919 YGR, 2013 WL 18 4396718, at *1 (N.D. Cal. Aug. 13, 2013) (denying motion to seal documents related to motions that the court denied as moot). Because the court did not reach these motions to dismiss, the Court will not consider the associated documents and they will remain under seal.

21 The Court will instead address the administrative motion to seal at Dkt. No. 60 associated with the motions to dismiss the first amended complaint. Because Defendants seek to seal documents related to a dispositive motion, the Court applies the “compelling reasons” standard.

24 Defendants seek to file under seal portions of briefing in support of their motions to dismiss the first amended complaint, portions of Exhibit 4 to the Declaration of Darryl M. Woo in support of Defendants’ request for judicial notice, and Exhibit G to the Supplemental Declaration of Roger Bayston in support of Defendants’ motions to dismiss. The documents include an asset purchase the basis of Plaintiff’s claims. The motion seeks to seal the agreements in their entirety and redact || portions of other filings that excerpt those agreements.

3 Defendants filed the motion to seal “to afford the designating parties the opportunity to || defend the confidentiality of these documents,” and the only basis offered is that the documents were designated as confidential. /d. at 2. The designating party did not file a declaration || establishing that the documents are sealable within seven days of Defendant’s motion as required under Civil Local Rule 79-5(f)(3). As Civil Local Rule 79-5(c) explains, “[rJeference to a stipulation or protective order that allows a party to designate certain documents as confidential is not sufficient to establish that a document, or portions thereof, are sealable.”

10 Because the motion to seal does not comply with Civil Local Rule 79-5 in light of the 11 designating party’s failure to respond, the Court finds no basis to seal the requested documents. | || I. CONCLUSION 13 The Court DENIES Dkt. No. 41 as moot. The court will not consider the associated || documents, and the parties are excused from filing public versions of the documents provisionally 15 filed under seal in association with Dkt. No. 41. The Court DENIES Dkt. No. 60. The Court || DIRECTS the parties to file public versions of all documents for which the proposed sealing has 17 been denied within seven days from the date of this order.

IT IS SO ORDERED.

19 || Dated: 9/29/2022 20 Abpea 5 Mbt) HAYWOOD S. GILLIAM, JR. United States District Judge