1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 EDUARDO GARCIA, Case No. 23-cv-2017-MMA-BLM

14 Plaintiff, ORDER GRANTING DEFENDANT’S 15 v. EX PARTE APPLICATION TO FILE UNDER SEAL 16 NAVY FEDERAL CREDIT UNION, 17 Defendant. [Doc. No. 59] 18 19 20 21 22 23 On December 19, 2024, Defendant Navy Federal Credit Union (“Defendant 24 NFCU”) filed an ex parte application to file anticipated exhibits under seal regarding 25 forthcoming motions for summary judgment. Doc. No. 59. Plaintiff Eduardo Garcia 26 (“Plaintiff”) filed a response in opposition on December 20, 2024. Doc. No. 61. For the 27 following reasons, the Court GRANTS Defendant NFCU’s ex parte application to file 28 under seal. 1 I. BACKGROUND 2 Plaintiff filed this action against Defendant NFCU regarding Defendant NFCU’s 3 attempt to pursue debt that it attributes to Plaintiff, but which Plaintiff contends 4 originated from a fraudulent loan taken out by an unauthorized third party. Doc. No. 1 5 (“Compl.”) ¶¶ 1–31. In pursuing this debt, Plaintiff alleges that the Defendant NFCU 6 violated California Civil Code sections 1798.92–1798.97 (“California Identity Theft 7 Act”), California Civil Code section 1785.1, et seq. (“California Consumer Credit 8 Reporting Agencies Act”), California Civil Code sections 1788–1788.3 (“Rosenthal Fair 9 Debt Collections Practices Act”),

, et seq. (“Electronic Funds 10 Transfer Act”),

et seq. (“Fair Credit Billing Act”), and California Penal 11 Code section 530.8. 12 Plaintiff filed an amended complaint on December 13, 2023, adding other 13 defendants now no longer party to this action. Doc. Nos. 6, 25, 32. Plaintiff 14 subsequently filed a second amended complaint, the operative complaint. Doc. No. 45. 15 Discovery in this matter is now closed. See Doc. No. 26 at 2. 16 II. LEGAL STANDARD 17 “Historically, courts have recognized a ‘general right to inspect and copy public 18 records and documents, including judicial records and documents.’” Kamakana v. City & 19 Cnty. of Honolulu,

, 1178 (9th Cir. 2006) (quoting Nixon v. Warner 20 Commc’ns, Inc.,

, 597 & n.7 (1978)). This is “because court records often 21 provide important, sometimes the only, bases or explanations for a court’s decision.” 22 Oliner v. Kontrabecki,

(9th Cir. 2014) (quotation marks omitted). 23 Accordingly, when considering a request to seal, “a strong presumption in favor of 24 access” is generally a court’s “starting point.” United States v. Bus. of Custer Battlefield 25 Museum & Store,

(9th Cir. 2011) (quoting Kamakana, 447 F.3d at 26 1178). For filings more than tangentially related to the case’s merits, including the 27 parties’ anticipated motions for summary judgment, that presumption can be overcome 28 only by a showing of a “compelling reason,” that “outweigh[s] the general history of 1 access and the public policies favoring disclosure.” Id. at 1194–95; Settrini v. City of San 2 Diego, No. 320CV02273RBMBGS,

*1 (S.D. Cal. Oct. 11, 2022). 3 III. DISCUSSION 4 Defendant NFCU seeks to file under seal four exhibits in connection with 5 anticipated dispositive motions, referred to in its application to file under seal as Exhibits 6 A–D. Doc. No. 59 at 2. Defendant NFCU filed, alongside its motion to seal, redacted 7 copies of the proposed sealed documents, and lodged unredacted versions with the Clerk 8 of Court. Doc. No. 59-2–59-5, 60. Defendant NFCU asserts that Exhibit A, an image 9 capture of Defendant NFCU’s fraud alert system includes, beyond personally identifying 10 information relating to Plaintiff, “sensitive information revealing how [Defendant’s fraud 11 prevention] system tracks suspicious account activity.” Doc No. 59 at 4. According to 12 Defendant NFCU, this information is not subject to public disclosure, and “would expose 13 both parties to third party fraud” or other harm if disclosed publicly.

Exhibit B, 14 readouts of access events for Plaintiff’s account, “documents instances of online access 15 of Plaintiff's Navy Federal accounts over a period of about six months[,]” and “also 16 reveals [Defendant NFCU’s] method of identifying suspicious online activity . . . . This 17 information is not subject to public disclosure and would expose both parties to third 18 party fraud or other forms of harm if disclosed . . . .”

. Exhibit C, a claim denial 19 letter, “contains sensitive personal information, including the account numbers . . . the 20 amounts of each transaction, Plaintiff’s social security number, and his date of birth. . . . 21 Exhibit C also reveals the precise steps taken by the fraud investigator and the basis for 22 denying Plaintiff’s claim.”

Exhibit D, Defendant NFCU’s claim denial procedures, 23 “details [Defendant NFCU’s] fraud investigation guidelines, bases for denying claims, 24 and how investigators weigh different kinds of evidence[,]” information “not subject to 25 public disclosure [that] would expose both parties to third party fraud or other forms of 26 harm if disclosed . . . . For example . . . to exploit or circumvent Navy Federal’s security 27 protocols and harm Navy Federal and its customers.”

Plaintiff does not object to the 28 Court sealing Exhibits A, B, and D. Doc. No. 61 at 2. 1 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest in 2 disclosure and justify sealing court records exist when such ‘court files might have 3 become a vehicle for improper purposes,’ such as the use of records to gratify private 4 spite, promote public scandal, circulate libelous statements, or release trade secrets.” 5 Kamakana, 447 F.3d at 1179 (quoting Nixon v. Warner Commc’ns, Inc.,

, 6 598 (1978)). “Courts have held that ‘confidential business information’ in the form of 7 ‘license agreements, financial terms, details of confidential licensing negotiations, and 8 business strategies’ also satisfies the compelling reasons standard.” Nia v. Bank of Am., 9 N.A., No. 21-CV-1799-BAS-BGS,

*3 (S.D. Cal. Jan. 12, 2024). 10 Having reviewed Exhibits A, B, and D, the Court determines that the information 11 revealing how Defendant NFCU identifies and tracks suspicious activities, as well as the 12 information revealing how it investigates frauds and approves or denies fraud claims, is 13 information which may become a vehicle for improper purposes if made public. Namely, 14 it could assist third parties in perpetrating fraud and evading Defendant NFCU’s anti- 15 fraud methods. This information likewise constitutes the sort of confidential business 16 information which could harm Defendant NFCU financially if released. Additionally, 17 publicization would risk exposing Plaintiff’s personally identifying information. As 18 such, the Court finds that there are compelling reasons that warrant sealing Exhibits A, B, 19 and D. 20 Plaintiff opposes sealing Exhibit C, Doc No. 61 at 3, claiming that, though the 21 document contains Plaintiff’s personally identifying information, the exhibit does not 22 contain “statements of internal protocols or communications between Defendant NFCU 23 and other customers” or “proprietary information as to how [Defendant NFCU’s] 24 employees handle or investigate claims in general.”

. As personally identifying 25 information must already be redacted under Federal Rule of Civil Procedure 5.2, Plaintiff 26 argues that sealing is unnecessary and inappropriate.

Comparing the sealed lodged 27 documents with the filed redacted versions, personally identifying information is 28 included within, including bank account numbers and similarly sensitive information. 1 || The document also contains descriptions of the steps Defendant NFCU ostensibly took 2 regarding Plaintiff's fraud claim. While not explicitly revealing “general” practices or 3 || policies, the information within gives sufficient insight into Defendant NFCU’s anti- 4 || fraud and claim assessment procedures such that its release may aid third parties in 5 || evading fraud detection. Therefore, the Court determines that, for the same reasons as 6 || Exhibits A, B, and D, there are compelling reasons to seal Exhibit C. 7 IV. CONCLUSION 8 For the reasons above, the Court GRANTS Defendant’s ex parte application to file 9 |}under seal. The Court DIRECTS the Clerk of Court to file the unredacted versions of 10 || Defendant NFCU’s proposed exhibits, Doc. No. 60, under seal. 11 IT IS SO ORDERED. 12 ||Dated: December 26, 2024 Maik MM — / her 13 HON. MICHAEL M. ANELLO 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28