555 F.Supp.3d 829
N.D. Cal.2021Background
- Defendants (and Plaintiffs derivatively) filed unopposed administrative motions to seal portions of exhibits and opposition briefing related to Defendants’ motion to dismiss in the Xyrem MDL.
- The materials at issue are Settlement Agreements and Authorized Generic (AG) Agreements between Jazz and four generic manufacturers (Hikma, Par, Lupin, Amneal) that disclose pricing, royalty rates, quantities, allocation terms, dates/net-sales thresholds, and shared litigation-cost terms.
- Because the contested documents were filed in support of a dispositive motion, the Ninth Circuit’s “compelling reasons” standard for sealing applies (documents are more than tangentially related to the merits).
- Defendants submitted unredacted documents with highlighted portions to be sealed and declarations from senior company employees asserting the information is confidential and its disclosure would cause competitive harm and disadvantage in future negotiations.
- The court found the requested redactions narrowly tailored and granted the sealing motions, but flagged a procedural defect: Defendants failed to file and email a narrowly tailored proposed sealing order and table as required by Civil Local Rule 79-5.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of sealing standard | Presumption of public access applies but Plaintiffs did not oppose sealing here | Exhibits are to a dispositive motion, so "compelling reasons" standard should apply | Court applied the "compelling reasons" standard (dispositive motion exhibits) |
| Whether information is sealable (competitive/business confid.) | Plaintiffs raised no opposition to sealing; acknowledged confidentiality concerns | Pricing, royalty rates, quantities, allocation, and similar terms are competitively sensitive and could harm bargaining position | Court found competitive-harm justification sufficient and sealed the specified portions |
| Narrow tailoring of redactions | Plaintiffs sought sealing only for portions that reveal confidential terms | Defendants provided highlighted unredacted versions and limited categories for sealing | Court found the requests narrowly tailored and appropriate |
| Compliance with Civil Local Rule 79-5 procedural requirements | Plaintiffs’ filing derived from Defendants’ redactions and complied as derivative | Defendants failed to submit the required proposed order/table by email as required by Civ. L.R. 79-5 | Court warned of the procedural defect and cautioned future violations will lead to denial; but granted current sealing despite the defect |
Key Cases Cited
- Kamakana v. City & County of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (presumption of public access; ‘‘compelling reasons’’ required to seal records more than tangentially related to merits)
- Nixon v. Warner Communications, Inc., 435 U.S. 589 (U.S. 1978) (court files generally open; sealing permitted to prevent improper uses such as trade-secret exposure)
- Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003) (discusses presumption of access and standards for sealing)
- In re Electronic Arts, Inc., [citation="298 F. App'x 568"] (9th Cir. 2008) (business information like pricing/royalty terms can constitute compelling reasons to seal)