Apex Operations, LLC v. Rosenberg
2:22-cv-01169
| D. Nev. | Aug 22, 2022Background
- Defendant Everything Blockchain, Inc. (erroneously named OBITX, Inc.) moved to seal an exhibit (a settlement agreement) attached to its motion to dismiss.
- Blockchain argued the settlement agreement contains a confidentiality provision protecting its business terms.
- Plaintiffs indicated they do not oppose the sealing motion.
- The settlement agreement already forms the basis of the complaint, so some terms are publicly referenced in the record.
- The exhibit was filed in conjunction with a dispositive motion, triggering the Ninth Circuit’s heightened "compelling reasons" sealing standard.
- The court denied the motion to seal without prejudice, kept the exhibit sealed temporarily, and ordered Blockchain to refile or justify sealing (or unseal) by September 21, 2022.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement agreement exhibit should be sealed | Plaintiffs do not oppose sealing the exhibit | Blockchain seeks to honor the agreement's confidentiality provision and requests sealing of the exhibit in full | Denied without prejudice: full sealing not justified; parties may redact or submit further justification under the "compelling reasons" standard |
| Applicable standard for sealing an exhibit filed with a dispositive motion | Public access favored; no opposition is insufficient to meet higher standard | Sealing justified by contractual confidentiality provisions | Court held Ninth Circuit "compelling reasons" standard applies and requires factual justification beyond the presence of a confidentiality clause |
| Whether confidentiality clause alone establishes compelling reason to seal | Implied that confidentiality interest exists but not dispositive | Confidentiality clause is sufficient to request sealing | Court held confidentiality clause alone is inadequate; redaction or detailed justification required |
| Whether the court should keep the exhibit sealed pending further submission | Plaintiffs did not oppose immediate sealing | Blockchain sought to keep the document sealed | Court kept the exhibit sealed temporarily and ordered Blockchain to refile or justify sealing by a deadline (Sept. 21, 2022) |
Key Cases Cited
- Kamakana v. City and County of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (establishes "compelling reasons" standard for sealing records filed with dispositive motions)
- Center for Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092 (9th Cir. 2016) (requires courts to articulate factual basis for sealing and limits sealing to circumstances meeting compelling reasons)
- Harper v. Nevada Property 1, LLC, 552 F. Supp. 3d 1033 (D. Nev. 2021) (district court applied a middle approach: redact irrelevant confidential terms while leaving settlement terms pertinent to the motion unredacted)