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Aerodynamics Inc. v. Caesars Entertainment Operating Co., Inc.

United States District Court, D. Nevada

July 21, 2017

Aerodynamics, Inc. and ADI Holdings Company, Inc., Plaintiffs
v.
Caesars Entertainment Operating Company, Inc., et al., Defendants

          ORDER DENYING MOTIONS TO SEAL WITHOUT PREJUDICE AND STRIKING UNNECESSARILY VOLUMINOUS EXHIBITS [ECF NOS. 208, 211, 215, 221, 235, 239, 241, 243, 246, 249, 257 AND 259]

          Jennifer A. Dorsey U.S. District Judge

         Plaintiffs Aerodynamics, Inc. and ADI Holdings Company, Inc. sue all of the defendants for misappropriation of trade secrets and some of the defendants for breach of contract and breach of the covenant of good faith and fair dealing.[1] The parties obtained a protective order to govern the production and use of evidence containing information that they have designated as confidential under that order. The defendants filed motions for summary judgment, and the parties now move to seal and redact the exhibits and briefs associated with those motions that have been designated as confidential under the protective order.[2]

         The standard to seal judicial records is a stringent one: the sealing party must articulate compelling reasons supported by specific factual findings that overcome the strong presumption favoring public access. None of the parties meet this burden. I therefore deny the motions without prejudice to the parties reurging their requests to seal and redact in a single, joint motion.

         In reviewing the motions to seal and redact, I noticed that the Via Airlines, Inc., Via Air, LLC, and Amos Vizer defendants attached entire deposition transcripts as exhibits to their motions for summary judgment that are excessively voluminous. So I also direct the Clerk of Court to strike the offending exhibits and give these defendants leave to file relevant excerpts of the transcripts as amended exhibits to their motions.

         Discussion A.Legal standard to seal judicial records used in dispositive motions

The “compelling reasons” standard applies when the evidence sought to be sealed is a judicial record-not private material unearthed during discovery-and is used in the context of a dispositive motion.[3] Under this standard, “a district court must weigh ‘relevant factors, ' base its decision ‘on a compelling reason, ' and ‘articulate the factual basis for its ruling, without relying on hypothesis or conjecture.'”[4] The relevant factors “include the ‘public interest in understanding the judicial process and whether disclosure of the material for scandalous or libelous purposes or infringement upon trade secrets.'”[5]

         With limited exceptions not relevant here, there is a strong presumption favoring public access to judicial records.[6] In order to overcome this presumption, the party seeking to seal a judicial record bears the burden of “articulat[ing] compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure . . . .[7] “When sealing documents attached to a dispositive pleading, a district court must based its decision on a compelling reason and articulate a factual basis for its ruling, without relying on hypothesis or conjecture.”[8] Thus, a moving party's “conclusory statements about the content of documents-that they are confidential and that, in general, their production would” harm the sealing party are not sufficient.[9]

         B. Applying this standard to the parties' motions to seal

         The pending motions to seal and redact all pertain to evidence or textual discussions of evidence proffered in the context of the parties' summary-judgment motions, responses, and replies. In many instances, the party proffering the evidence and moving to seal it is not the same party that designated the evidence as confidential during discovery. To account for this discrepancy, the protective order smartly places the burden on the party who designated evidence as confidential to supply the court with the information necessary to support a motion to seal it.[10]Caesars Entertainment Operating Company, Inc. and the plaintiffs are the only designating parties that attempt to do this, but neither ultimately succeeds.[11]

         I anticipate that some of the evidence at issue should be sealed under the compelling-reasons standard, but the parties have not made a sufficient factual showing that compelling reasons overcoming the public's right to access exist to allow me to support a sealing order with the required findings. The plaintiffs make general assertions that the 70 exhibits they want sealed include trade-secret and other forms of information that are not publicly available-like names of customers and vendors, financial information and projections, and settlement strategies-and they conclude that they would be harmed if this information is revealed to their competitors.[12] But they do not explain why they would be harmed by public disclosure, so I can only speculate. The plaintiffs do not identify which category of needs-to-be-protected information each exhibit contains; they do not specify any facts supporting their general assertions and conclusions; and they do not provide a declaration or affidavit to establish those necessary facts.

         Caesars is more specific than the plaintiffs about the contents of the evidence, [13] but it generally concludes that this evidence contains information that is not public and that public disclosure would harm Caesars's business.[14] Caesars does not explain why it would be harmed by public disclosure. It does not specify any facts supporting its general conclusions about the non-public nature of the evidence and the harm that will befall if it is made public. And it does not provide a declaration or affidavit to establish those necessary facts.

         Plaintiffs and Caesars are the only designating parties who attempt to show compelling reasons to seal judicial records in this case, but their briefs lack sufficient explanation, factual detail, and evidentiary support. Thus, it would be conjecture on my part to decide that compelling reasons exist to seal the evidence and briefs that are the subject of the parties' motions to seal and redact. I therefore deny the parties' motions without prejudice to their ability to re-urge their requests in a single, joint motion as I detail below.

         C. Unnecessarily voluminous exhibits

         Between their two motions for summary judgment, the Via and Vizer defendants attach full transcripts of the depositions of eight witnesses-nearly 3, 000 pages- but appear to refer the court to less than a dozen pages from each transcript.[15] I strike these exhibits because they are “unnecessarily voluminous” in violation of LR IA 10-3(h) (“Exhibits . . . must be . . . not unnecessarily voluminous”), and ...


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