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The Vaccine Center LLC v. Glaxosmithkline LLC

May 14, 2013

THE VACCINE CENTER LLC, PLAINTIFF(S),
v.
GLAXOSMITHKLINE LLC, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Nancy J. Koppe United States Magistrate Judge

ORDER REGARDING HEARING ) ON MOTIONS TO SEAL

Pending before the Court is Defendant Apexus, Inc.'s ("Defendant") motion to file under seal Exhibits A and B to its motion to dismiss. Docket No. 59 ("Motion").*fn1 Plaintiff opposed the motion and Defendant filed a reply. Docket Nos. 73 ("Response"), 80 ("Reply"). Also pending before the Court is Plaintiff's motion to file under seal its response to the motion to dismiss. Docket No. 68 ("Pls.' Mot."). The sole ground for Plaintiff's motion is that Defendant designated Exhibits A and B as confidential pursuant to the stipulated protective order entered in this case. See id. at 2. Defendant failed to file a declaration in support of Plaintiff's motion. See Docket No. 55 at 2 (providing directions for supporting motions to seal based entirely on the fact that an opposing party designated material as confidential). The Court has set these motions for hearing for May 17, 2013.

Docket No. 101.

The Court issues this order to resolve certain issues so the parties can focus their argument at the hearing on only those issues requiring further development.

STANDARDS GENERALLY

The Ninth Circuit has held that there is a strong presumption of public access to judicial See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006); Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). A party seeking to file documents under seal bears the burden of overcoming that presumption. Pintos v. Pac. Creditors , 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana, 447 F.3d at 1178). Parties "who seek to maintain the secrecy of documents attached to dispositive motions must meet the high threshold of showing that 'compelling reasons' support secrecy." Kamakana, 447 F.3d at 1180.*fn2 Those compelling reasons must outweigh the competing interests of the public in having access to the judicial records and understanding the judicial process. Id. at 1178-79; see also Pintos, 605 F.3d at 679 & n.6 (court must weigh "relevant factors," including the public's interest in understanding the judicial process). The Ninth Circuit has indicated that "'compelling reasons' sufficient to outweigh the public's interest in disclosure and justify sealing court records exist when such 'court files might have become a vehicle for improper purposes,' such as the use of records to . . . release trade Kamakana, 447 F.3d at 1179.

DEFENDANT'S FACTUAL SHOWING Defendant's pending motion to seal is its second opportunity to demonstrate that sealing Exhibits A and B is proper. See Docket No. 30 at 2 (first motion to seal providing eight lines of text in support of sealing). The Court had already identified the relevant standards. See, e.g., Docket No. 49 (denying first motion to seal and explaining relevant standards); see also Docket No. 55 (concurrently with entry of stipulated protective order, identifying procedures and standards for filing under seal). Nonetheless, Defendant's pending motion to seal continues to provide cursory detail as to why entire pages of Exhibits A and B constitute trade secrets. See Mot. at 3. To meet its burden to seal this information, Defendant must "articulate compelling reasons supported by specific factual findings." Kamakana, 447 F.3d at 1178 (emphasis added). Similarly, sealing is proper only where the Court "articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture." Id. at 1179 (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. At this point, the Court has before it an identification of certain pages of Exhibits A and B that Defendant has labeled as containing categories of information it contends are protected trade secrets. Mot. at 3. Defendant then identifies the definition of trade secret under Nevada law and asserts without articulation that the listed categories of information constitute trade secrets. There is no discussion, for example, as to why the "wholesale distributor sub-contractor responsibilities and performance standards" on pages 3-4 of Exhibit A "derive economic value . . . from not being generally known to . . . the public." See Mot. at 3. Importantly, Defendant also did not submit a declaration explaining why the information constitutes a trade secret.

Defendant's conclusory statements are insufficient to establish compelling reasons to allow Exhibits A and B to be filed under seal. See Kamakana, 447 F.3d at 1182 (rejecting conclusory assertions). Indeed, Defendant's showinglikely would not even meet the "good cause" standard under Rule 26(c), see, e.g., Hill v. Eddie Bauer, 242 F.R.D. 556, 561-62 (C.D. Cal. 2007) (finding failure to file a declaration in support of Rule 26(c) motion significant), Creative Gifts, Inc. v. UFO, 183 F.R.D. 568, 571 (D.N.M. 1998) (conclusory assertions did not establish that requested documents were trade secrets and merited secrecy under Rule 26(c)), let alone the more rigorous standard of "compelling reasons" as required here, see Kamakana, 447 F.3d at 1180 (explaining that heightened "compelling reasons" standard is not met by showing sufficient for "good cause" under

Making matters worse, some of Defendant's representations are patently false, which is deeply troubling to the Court. For example, Defendant argues that pages 190-193 of Exhibit B confidential supplier names." Mot. at 3 (emphasis added). Defendant further contends that it has engaged in reasonable efforts to maintain the secrecy of supplier names and represents has never presented the information to the general public in any form." Id. (emphasis added). Defendant fails to acknowledge that the vast majority of the suppliers identified in Exhibit B are listed publicly on Defendant's website. See www.340bpvp.com/partnering/value-add (Last visited May 7, 2013).*fn3 The Court does not discern how Defendant can square its contentions that these supplier names are "confidential" and that it has "never presented the information to the general public" with the fact that Defendant identifies these suppliers publicly on its website. Counsel owes the Court a duty of candor, which appears to have lapsed here.

Nor is this problem isolated to the representations related to pages 190 to 193 of Exhibit B. The Court has not checked all other portions of the Exhibits Defendant claims contain confidential trade secret information, but cursory Internet searches have revealed that some of the information identified as a trade secret is available in identical or nearly identical form on the Internet.

Defendant's counsel shall be prepared at the hearing to discuss the representations in its brief regarding the confidential nature of the identified pages of information. Defendant's counsel shall also be prepared to explain with specificity why the information contained in the pages it has identified of Exhibits A and B satisfies the requirements to be deemed a trade secret.*fn4

REDACTIONS

Plaintiff argues that Defendant's request to seal the entirety of Exhibits A and B is overbroad because Defendant only identified portions of those documents as trade secrets and, to the extent those portions are found by the Court to be trade secrets, they can be redacted to allow public access to the rest of the documents. See, e.g., Response at 8. Defendant counters that Plaintiff's position would lead to absurd results wherein "confusing and meaningless documents filled with black lines, interspersed with the occasional 'non-confidential' phrase" are filed on the public docket. See Reply at 5. Defendant does not explain why that absurd result would be reached in this case given the relatively limited amount of information identified as warranting secrecy.

Although not discussed by either party, the Ninth Circuit has held that a district court abuses its discretion in sealing entire documents when they "can be redacted easily to protect [the confidential information] while leaving other meaningful information." Foltz, 331 F.3d at 1137; see also In re Roman Catholic Archibishop of Portland in Oregon, 661 F.3d 417, 425 (9th Cir. 2011) (where cause exists to shield discovery material from third-party disclosure, "a court must still consider whether redacting portions of the discovery material will nevertheless allow disclosure"). Courts in this District have followed suit and refused to grant motions to seal entire documents containing only ...


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