In re Anthem, Inc. Data Breach Litigation
5:15-md-02617
N.D. Cal.Aug 25, 2017Background
- Multidistrict litigation in N.D. Cal. concerning Anthem data breach settlement; parties filed a joint administrative motion to seal portions of the preliminary-approval papers and two exhibits.
- Court recognized the presumption of public access to judicial records and set the applicable standards for sealing (compelling reasons for records more than tangentially related to merits; good-cause under Rule 26(c) for others).
- Parties sought sealing for: (1) specific details of Anthem’s cybersecurity practices and planned security measures and funding levels in the settlement; and (2) a Statement showing the exact number of opt-outs that would permit Anthem to terminate the settlement.
- Parties argued disclosure could aid attackers, harm Anthem’s competitive position, and enable strategic obstruction by objectors.
- Court applied the Ninth Circuit’s "compelling reasons" standard because the preliminary-approval motion is more than tangentially related to the merits.
- Court granted sealing in part: it sealed the specific cybersecurity practices and funding amounts and sealed the opt-out threshold statement, finding compelling reasons for both.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable sealing standard | Parties: preliminary-approval papers affect merits so compelling-reasons standard applies | Public access presumption favors no sealing | Court: applied compelling-reasons standard (motion more than tangentially related) |
| Seal cybersecurity practices & protocols | Disclosure would give attackers info to defeat security and harm class members; funding levels would harm Anthem competitively | (Joint movants) urged sealing for security and competitive reasons | Court: granted sealing for specific cybersecurity practices and funding amounts (compelling reasons) |
| Seal opt-out threshold triggering termination right | Disclosure would enable strategic opt-outs/obstruction and higher payouts | (Joint movants) urged sealing to prevent misuse of threshold info | Court: granted sealing of the Statement regarding exclusion/opt-out threshold (compelling reasons) |
Key Cases Cited
- Kamakana v. City & County of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (presumption of public access; compelling-reasons standard for dispositive-related records)
- Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978) (historical right to inspect judicial records)
- Center for Auto Safety v. Chrysler Group, 809 F.3d 1092 (9th Cir. 2016) (distinguishes standards for sealing based on relation to merits)
- Phillips v. General Motors Corp., 307 F.3d 1206 (9th Cir. 2002) (Rule 26(c) good-cause requires particularized showing of specific harm)
- Beckman Industries, Inc. v. International Insurance Co., 966 F.2d 470 (9th Cir. 1992) (broad, unsubstantiated harm allegations insufficient)
- Clark v. Bunker, 453 F.2d 1006 (9th Cir. 1972) (definition of trade secret under Restatement)
- In re Online DVD-Rental Antitrust Litigation, 779 F.3d 934 (9th Cir. 2015) (approving sealing of exact opt-out/termination thresholds)