Lacuna Sustainable Investments, LLC, et al. v. Victory Capital Management,...

4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA LACUNA SUSTAINABLE Case No. 24-cv-07705-AMO INVESTMENTS, LLC, et al., Plaintiffs, ORDER GRANTING MOTION TO 9 SEAL v. 10 Re: Dkt. No. 125 VICTORY CAPITAL MANAGEMENT, 11 INC., et al., Defendants.

14 Before the Court is Defendants Patrick Fox, Bennett Collier, Victory Capital Management, 15 Inc., NECICF II GP, LLC, Curt Whittaker, Rath Young, & Pignatelli, P.C., and Nominal 16 Defendants Lacuna Project Investments, LLC and Lacuna Project Investments II, LLC’s 17 (collectively, “Defendants”) administrative motion to file under seal. Dkt. No. 125.

18 I. LEGAL STANDARD 19 Civil Local Rule 79-5 requires that a party seeking to file a document or portions of a 20 document under seal must explain “(i) the legitimate private or public interests that warrant 21 sealing; (ii) the injury that will result if sealing is denied; and (iii) why a less restrictive 22 alternative to sealing is not sufficient.” Civ. L.R. 79-5(c)(1). The request must be “narrowly 23 tailored to seal only the sealable material.” Civ. L.R. 79-5(c)(3). A party seeking to seal records 24 must provide “compelling reasons” to overcome the “strong presumption in favor of access.”

25 Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 28 1178 (9th Cir. 2006); see Ctr. for Auto 26 Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016). The standard derives from 27 the “common law right ‘to inspect and copy public records and documents, including judicial (quoting Kamakana, 447 F.3d at 1178). To overcome this strong presumption, the party seeking to seal judicial records 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.” Kamakana, 447 F.3d at 1178-79 (citations omitted). The party must make 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). It is in the “sound discretion of the trial court” to determine what constitutes a “compelling reason” for sealing a court document. Ctr. for Auto Safety, 809 F.3d at 1097 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 599 (1978)).

10 Compelling reasons justifying sealing court records generally exist when the “court files might 11 . . . become a vehicle for improper purposes” such as “releas[ing] trade secrets,” Kamakana, 447 12 F.3d at 1179, or “as sources of business information that might harm a litigant’s competitive 13 standing,” Ctr. for Auto Safety, 809 F.3d at 1097. Compelling reasons must exist to seal records 14 attached to motions that are “more than tangentially related to the merits of a case.” Ctr. for Auto 15 Safety, 809 F.3d at 1101.

16 II. DISCUSSION 17 Defendants seek to seal portions of an arbitration award and portions of their motion for 18 judgment on the pleadings. Dkt. No. 125 at 4. The Court finds sealing is proper because (1) 19 Defendants have a legitimate interest in sealing; (2) Defendants may be injured if sealing is 20 denied; and (3) Defendants’ request is narrowly tailored.

21 First, the redacted portions of the award and the motion contain confidential business 22 information concerning the Defendants’ investments. Defendants have a legitimate interest in the 23 competitiveness of their investments and maintaining the competitiveness of the investments 24 requires ensuring that competitors cannot exploit sensitive information regarding those 25 investments. This interest justifies sealing. VLSI Tech. LLC v. Intel Corp., No. 17-CV-05671- 26 BLF, 2023 WL 9187549, at *2 (N.D. Cal. Oct. 24, 2023) (finding identities of investment entities 27 were properly sealable). ] Second, making the redacted portions of the award and motion public could damage 2 Defendants. The redacted portions of the award and motion, if made public, could impact 3 Defendants’ ability to do business as potential competitors could exploit this information to gain 4 a competitive advantage. This constitutes a legitimate injury. See Ctr. for Auto Safety, 809 F.3d 5 at 1097; Brown v. Brown, No. CV 13-03318 SI, 2013 WL 12400041, at *1 (N.D. Cal. Dec. 30, 6 2013) (granting motion to seal information about company’s profits, losses, income, investments, 7 and expenses).

8 Finally, Defendants move to file under seal only discrete portions of the award and the 9 motion that contain confidential business information concerning the Defendants’ investments.

10 These redactions are narrowly tailored to conceal no more information than is necessary and they 11 “do not impede upon the public’s ability to understand the nature of the proceedings and the a 12 factual basis for the parties’ claims.” Jn re Qualcomm Litig., No. 3:17-CV-00108-GPC-MDD, 13 2019 WL 1557656, at *3 (S.D. Cal. Apr. 10, 2019).

Y 14 For the foregoing reasons, the Court ORDERS as follows: © Document title | Dkt. No. Dkt. No. of | Dkt. No. | Party with Full or Brief Granted / = 15 or description | of Unredacted | of Decl. | burden to partial statement of | Denied Redacted | Version in substantiate | sealing reasons for 16 Version support need to seal | sought sealing of a 17 sealing Defendants’ 126 125-3 125-2 Defendants Partial Contains GRANTED 18 Motion for confidential Judgment on information 19 the Pleadings of parties. and 20 Memorandum of Points and 71 Authorities in Support 2 Second 126-3 125-4 125-2 Defendants Partial Contains GRANTED Corrected confidential 23 JAMS information Arbitration of parties.

24 Award 95 IT IS SO ORDERED.

Dated: May 8, 2026 - 27 - CELI MARTINEZ- U 28 United States District Judge