Sumotext Corp. -v- Zoove, Inc.
5:16-cv-01370
N.D. Cal.Feb 20, 2020Background
- Sumotext sued Zoove and related defendants; defendants filed an administrative motion to keep five trial exhibits under Attorneys’ Eyes Only (AEO) sealing.
- Plaintiff Sumotext opposed continued sealing for use at trial.
- The court applied Ninth Circuit law requiring "compelling reasons" to seal trial exhibits and Civil L.R. 79-5 procedural/tailoring requirements.
- Five exhibits at issue: a 2016 customer pricing email (ECF 423-2), a Zoove due diligence report (ECF 423-3), a reseller agreement amendment (ECF 423-4), a customer invoicing spreadsheet (ECF 423-5), and an internal email proposing reseller terms (ECF 423-6).
- Court denied sealing for ECF 423-2 but granted sealing in full for ECF 423-3, 423-4, 423-5, and 423-6; set limited trial-specific protections (not filed publicly or published to gallery; jury and counsel may see exhibits; courtroom and transcript remain public).
- The court left the underlying Protective Order/AEO designations intact and noted the order does not lift or modify that Protective Order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicable sealing standard | Public has strong presumption of access; trial exhibits require compelling reasons | Sealing is justified to protect competitive/confidential business information | Court applied Ninth Circuit "compelling reasons" standard and Civ. L.R. 79-5 requirements |
| ECF 423-2 (2016 customer pricing email) | Opposes sealing; public interest; Sumotext does not seek seal | Defendants claim price-related competitive harm | DENIED — email reflects Sumotext's historical pricing, not defendants' current confidential rates; defendants failed to show specific competitive harm |
| ECF 423-3 (Zoove due diligence report) | Argues defendants selectively seek sealing | Defendants say report contains detailed sensitive financial/customer data that could harm Zoove | GRANTED — contains customer names, P&L, AR, invoices, asset lists; compelling competitive/privacy interests shown and request not overbroad |
| ECF 423-4, 423-5, 423-6 (reseller amendment; invoicing spreadsheet; internal deal email) | Plaintiff contends defendants "cherry-pick" protection | Defendants say these contain customer-specific pricing/terms and contract terms that competitors could exploit | GRANTED — essential, negotiated, customer-specific commercial terms and billing/ customer data are sealable; narrow sealing appropriate |
Key Cases Cited
- Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (establishing "compelling reasons" standard to seal judicial records at trial)
- Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (U.S. 1978) (recognizing common-law right of public access to judicial records)
- United States v. Doe, 870 F.3d 991 (9th Cir. 2017) (describing common-law right of access and its importance)
- Oliner v. Kontrabecki, 745 F.3d 1024 (9th Cir. 2014) (affirming public access principles)
- Ctr. for Auto Safety v. Chrysler Group LLC, 809 F.3d 1092 (9th Cir. 2015) (distinguishing records less related to merits and discussing sealing threshold)
- In re Electronic Arts, 298 Fed. Appx. 568 (9th Cir. 2008) (pricing/royalty terms and detailed financial information may constitute sealable trade secrets)
- Apple Inc. v. Samsung Electronics Co., 727 F.3d 1214 (Fed. Cir. 2013) (trial court abused discretion by refusing to seal detailed product-specific financial information)