1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JEROME’S FURNITURE Case No.: 3:20-cv-01765-RBM-BGS WAREHOUSE, a California Corporation, 12 ORDER ON DEFENDANTS’ Plaintiff, 13 MOTIONS TO SEAL v. 14 [Docs. 125, 128, 130] ASHLEY FURNITURE INDUSTRIES, 15 INC., a Wisconsin Corporation, et al., 16 Defendants. 17 18 19 Currently pending before the Court are: (1) Defendants’ Stoneledge Furniture, LLC, 20 Ashley Furniture Industries, LLC, and Ashley Global Retail (collectively, “Defendants”) 21 motion to file under seal the Joint Statement of Disputed and Undisputed Material Facts 22 Re Defendants’ Motion for Summary Judgment (the “Joint Statement of Material Facts”) 23 (Doc. 125); (2) Defendants’ motion to file under seal Defendants’ reply brief in support of 24 Defendants’ motion for summary judgment (Doc. 128); and (3) Defendants’ motion to file 25 under seal Defendants’ reply brief in support of Defendants’ motion to exclude testimony 26 of Ronald Goodstein and to strike his reports (Doc. 130). Plaintiff Jerome’s Furniture 27 Warehouse (“Plaintiff”) has not opposed any of Defendants’ motions. 28 For the reasons discussed below, Defendants’ motions to seal are GRANTED. 1 I. LEGAL STANDARD 2 “[T]he courts of this country recognize a general right to inspect and copy public 3 records and documents, including judicial records and documents.” Nixon v. Warner 4 Commc’ns, Inc.,

(1978). “Unless a particular court record is one 5 ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” 6 Kamakana v. City & Cty. of Honolulu,

, 1178 (9th Cir. 2006) (citing Foltz v. 7 State Farm Mut. Auto Ins. Co.,

(9th Cir. 2003)). “The presumption 8 of access is ‘based on the need for federal courts, although independent—indeed, 9 particularly because they are independent—to have a measure of accountability and for the 10 public to have confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler 11 Grp., LLC,

(9th Cir. 2016) (quoting United States v. Amodeo,

(2d Cir. 1995)). 13 A party seeking to seal a judicial record bears the burden of overcoming the strong 14 presumption of public access. Foltz,

. The showing required to meet this 15 burden depends upon whether the documents to be sealed relate to a motion that is “more 16 than tangentially related to the merits of the case.” Ctr. for Auto Safety,

. 17 When the underlying motion is more than tangentially related to the merits, the 18 “compelling reasons” standard applies.

at 1096–98. When the underlying motion does 19 not surpass the tangential relevance threshold, the “good cause” standard applies.

The 20 “compelling reasons” standard applies to documents related to a motion for summary 21 judgment. Foltz, 331 F.3d at 1135–36; see also In re Midland Nat. Life Ins. Co. Annuity 22 Sales Pracs. Litig.,

, 1119–20 (9th Cir. 2012) (compelling reasons standard 23 applied to Daubert motion filed in connection with pending summary judgment motion). 24 The “compelling reasons” standard is generally satisfied if the moving party can 25 show that the “‘court files might have become a vehicle for improper purposes,’ such as 26 the use of records to gratify private spite, promote public scandal, circulate libelous 27 statements, or release trade secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 28 U.S. at 598). The decision to seal documents is “one best left to the sound discretion of 1 the trial court” upon consideration of “the relevant facts and circumstances of the particular 2 case.” Nixon,

. 3 Compelling reasons may exist if sealing is required to prevent documents from being 4 used “as sources of business information that might harm a litigant’s competitive standing.” 5 Nixon,

. “[A] trial court has broad discretion to permit sealing of court 6 documents for, inter alia, the protection of ‘a trade secret or other confidential research, 7 development, or commercial information.’” GPNE Corp. v. Apple Inc., No. 12-cv-2885- 8 LHK,

, at *1 (N.D. Cal. July 16, 2015) (quoting FED. R. CIV. P. 9 269(c)(1)(G)). Additionally, courts have been willing to seal court filings containing 10 confidential business material, “such as marketing strategies, product development plans, 11 licensing agreements, and profit, cost, and margin data,” where the “parties have been able 12 to point to concrete factual information” to justify sealing. Cohen v. Trump, No. 13-cv- 13 2519-GPC-WVG,

, at *5 (S.D. Cal. May 27, 2016) (collecting cases); 14 see also In re Electronic Arts,

(9th Cir. 2008) (finding compelling 15 reasons to seal “pricing terms, royalty rates, and guaranteed minimum payment terms”); 16 Quidel Corp. v. Siemens Med. Sols. USA, Inc., No. 16-CV-3059-BAS-AGS,

1062949, at *2 (S.D. Cal. Mar. 4, 2020) (applying compelling reasons standard to seal 18 plaintiff's “confidential financial and pricing information”). 19 II. DISCUSSION 20 Defendants seek to seal: (1) portions of the parties’ Joint Statement of Material Facts 21 filed in connection with Defendants’ motion for summary judgment; (2) portions of 22 Defendants’ reply brief in support of Defendants’ motion for summary judgment; and (3) 23 portions of Defendants’ motion to exclude testimony of Ronald Goodstein and to strike his 24 reports. (Docs. 125, 128, 130.) Defendants argue that the information they seek to seal 25 “relat[es] to Defendants’ expenses, pricing methodologies, revenue, and profits—which, if 26 disclosed, would irreparably prejudice Defendants’ business operations.” (Doc. 125 at 2; 27 Doc. 128 at 2; Doc. 130 at 2.) Defendants further argue that sealing of this information is 28 necessary “to prevent Plaintiff’s business teams—and other competitors of Defendants— 1 from utilizing discovery in this litigation to obtain such competitively sensitive 2 information.” (Doc. 125 at 2; Doc. 128 at 2; Doc. 130 at 2.) 3 Defendants filed the declaration of Kurt Haines, president of Stoneledge Furniture, 4 LLC, in support of Defendants’ motions to seal. (See Docs. 94-1, 128-1, 130-1.) Haines 5 maintains that the information subject to Defendants’ motions to seal is not publicly shared, 6 and that it is important to Defendants’ business to maintain the confidentiality of this 7 information. (Doc. 128-1 ¶ 3.) Haines also states that if Defendants’ competitors gained 8 access to this information, such competitors could use it to Defendants’ competitive 9 disadvantage. (Id. ¶ 4.) Finally, Haines states that Defendants safeguard the information 10 by “utilizing confidentiality and non-disclosure provisions in agreements with employees 11 and vendors, requiring company-wide annual training on the importance of maintaining 12 confidentiality, and limiting the circulation of certain Sensitive Information to the Vice 13 President level.” (Id. ¶ 5.) 14 The Court finds compelling reasons to seal the documents subject to Defendants’ 15 motions. Having reviewed Defendants’ proposed redactions to the Joint Statement of 16 Material Facts, Defendants’ reply brief, and Defendants’ motion to exclude testimony of 17 Ronald Goodstein, the Court finds that the redactions appear narrowly tailored to protect 18 only that information directly related to Defendants’ pricing models and approaches. 19 Additionally, the Court finds that the information, if disclosed, could potentially hurt 20 Defendants’ competitive standing. See Quidel Corp.,

, at *2 (S.D. Cal.

, 2020) (applying compelling reasons standard to seal plaintiff’s “confidential 22 financial and pricing information”); Obesity Rsch. Inst., LLC v. Fiber Rsch. Int’l, LLC, No. 23 15-CV-595-BAS-MDD,

, at *3 (S.D. Cal. Mar. 17, 2017) (granting 24 motion to seal documents containing defendant’s “pricing and shipping information” 25 where court found such information “could be improperly used” by competitors); Lucas v. 26 Breg, Inc., No. 15-CV-00258-BAS-NLS,

, at *2 (S.D. Cal. Sept. 28, 27 2016) (applying compelling reasons standard to seal party’s confidential “sales and 28 marketing data” where “public disclosure of this business information could result in | ||}improper use by Breg’s competitors seeking to undercut Breg’s market position”). 2 Il. CONCLUSION 3 Accordingly, the Court GRANTS Defendants’ motions to seal. (Docs. 125, 128, 4 ||130.) The Court directs the Clerk of the Court to accept and FILE UNDER SEAL the 5 lodged documents. (Docs. 126, 129, 131.) 6 IT IS SO ORDERED. 7 DATE: August 18, 2022 pA Barracks Mata 9 HON. RUTH BERMUDEZ MONTENEGRO UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28