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compelling reasons existed to seal exhibit where public dissemination "may allow Defendants' competitors to reap the benefit of the [content] without having to incur the costs associated with developing the[m]"
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No. 2:12-cv-02502-GEB-KJN
07-10-2015
ANTONIO ESQUIVEL and BEATRIZ ESQUIVEL, individually, on behalf of all others similarly situated, and on behalf of the general public, Plaintiffs, v. BANK OF AMERICA, N.A.; BANK OF AMERICA CORPORATION, Defendants.
ORDER REGARDING STIPULATED SEALING REQUEST
On July 2, 2015, the parties submitted for in camera consideration a Stipulated Request to Seal Class Certification Documents, a declaration in support thereof, the documents sought to be sealed, a proposed redacted version of Plaintiffs' Motion for Class Certification, and a proposed sealing order.
The parties seek to file the following documents under seal in their entirety for a period of no less than six years: an unredacted version of Plaintiffs' Motion for Class Certification and exhibits 1, 2, 4, 8-13, and 15 to the Declaration of Noah Zinner in support thereof. The parties argue:
All of these documents have been designated as "CONFIDENTIAL" pursuant to the Parties' Stipulated Protective Order and there is good cause to seal these documents. Some of these documents contain confidential(Notice Stipulated Req. to Seal ("Notice") 3:3-8, ECF No. 80.) Specifically, the parties argue:
and proprietary information of Bank of America that is not available to Bank of America's competitors or the public at large. Public disclosure of this information would harm Bank of America and put it at a competitive disadvantage. Other of these documents contain personal financial information of Plaintiffs.
Zinner Decl. Exhibits 1, 2, and 4 contain individual personal information that is protected from disclosure, borrower specific and/or credit applicant specific information that is derived using nonpublic personal information, and/or information regarding Plaintiffs' banking or lending relationships, including information regarding Plaintiffs' mortgage or credit history.(Stipulated Req. to Seal ("Req.") 4:3-5:24 (internal quotation marks, citations, and alternations omitted).)
Zinner Decl. Exhibits 4, 8-13 and 15 contain information that constitutes a trade secret, and/or reflecting non-public business strategies, and/or confidential competitive information which, if disclosed, would result in competitive harm to [Defendants]. . . .
. . . Bank of America's servicing records (Exhibit 4), policies and procedures (Exhibit 12), and the excerpts from the deposition transcripts of Bank of America employees . . . (Exhibits 8, 9, 10, 11, 13, 15) contain information related to Bank of America's loan servicing and modification practices that are proprietary to Bank of America. Bank of America's loan servicing and modification practices are complex business operations that depend on a sophisticated body of internal policies and procedures that require significant time and human resources to develop and thus have substantial value to the bank. Filing them on a public docket would disadvantage Bank of America by making information about its proprietary, internal policies available to other institutions that have not invested the time and resources necessary to develop them.
The parties also "request an order permitting Plaintiffs to file a redacted version of their Motion for Class Certification, because portions of the Motion reference or discuss confidential or proprietary information contained in the aforementioned [exhibits]." (Notice 3:12-15.)
I. LEGAL STANDARD
"Courts have long recognized a 'general right to inspect and copy public records and documents, including judicial records and documents.'" Williams v. U.S. Bank Nat'l Ass'n, 290 F.R.D. 600, 604 (E.D. Cal. 2013) (quoting Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978)). "Unless a particular court record is one 'traditionally kept secret,' a 'strong presumption in favor of access' is the starting point." Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). "In order to overcome this strong presumption, a party seeking to seal a judicial record must articulate justifications for sealing that outweigh the historical right of access and the public policies favoring disclosure." Williams, 290 F.R.D. at 604 (citing Kamakana, 447 F.3d at 1178-79).
"Two standards generally govern [requests] to seal documents . . . ." Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 677 (9th Cir. 2010). "[J]udicial records attached to dispositive motions [are treated] differently from records attached to non-dispositive motions." Kamakana, 447 F.3d at 1180. "[T]he resolution of a dispute on the merits, whether by trial or summary judgment, is at the heart of the interest in ensuring the public's understanding of the judicial process and of significant public events." Kamakana, 447 F.3d at 1179 (quoting Valley Broadcasting Co. v. U.S. Dist. Ct., 798 F.2d 1289, 1294 (9th Cir. 1986)). "Accordingly, a party seeking to seal a judicial record attached to a dispositive motion or one that is presented at trial must articulate 'compelling reasons' in favor of sealing." Williams, 290 F.R.D. at 604 (citing Kamakana, 447 F.3d at 1178). "In general, 'compelling reasons' sufficient to outweigh the public's interest in disclosure and justify sealing court records exist when such 'court files might have become a vehicle for improper purposes,' such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets." Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). "'[S]ources of business information that might harm a litigant's competitive standing' often warrant protection under seal." Williams, 290 F.R.D. at 604 (alteration in original) (quoting Nixon, 435 U.S. at 598).
In contrast, "[t]he Ninth Circuit has determined that the public's interest in non-dispositive motions is relatively lower than its interest in trial or a dispositive motion. Accordingly, a party seeking to seal a document attached to a non-dispositive motion need only demonstrate 'good cause' to justify sealing." Williams, 290 F.R.D. at 604 (citing Pintos, 605 F.3d at 678). Even under the lesser "good cause" standard, "'the party seeking protection bears the burden of showing specific prejudice or harm will result' if the request to seal is denied." Ross v. Bar None Enters., No. 2:13-cv-00234-KJM-KJN, 2014 WL 2700901, at *2 (E.D. Cal. June 13, 2014) (quoting Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002)). The movant "must make a 'particularized showing' with respect to any individual document in order to justify [its] sealing . . . ." Herskowitz v. Apple, Inc., No. 12-CV-02131-LHK, 2014 WL 3920036, at *2 (N.D. Cal. Aug. 7, 2014) (quoting Kamakana, 447 F.3d at 1180). "'Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning' are insufficient." Ross, 2014 WL 2700901, at *2 (quoting Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992)).
"The Ninth Circuit has not yet addressed whether or not, or under what circumstances, a motion for class certification is a dispositive motion for purposes of deciding what standard applies on sealing motions, and . . . [district] courts in [the Ninth Circuit] have reached different conclusions." Herskowitz, 2014 WL 3920036, at *2 (internal quotation marks, citation, and brackets omitted). The parties contend the good cause standard applies to their joint sealing request, although they argue their requests "also meet[] the higher 'compelling reason' standard." (Req. 3:20-22, 3 n.1.)
The Court need not decide which standard applies to the instant request since the parties have not provided sufficient justification to seal the majority of the documents under the lesser good cause standard, and Defendants have shown that the remaining document should be sealed under the heightened compelling interest standard.
II. DISCUSSION
The parties have not shown good cause to seal Exhibit 1 (Commitment and Offer to Modify Mortgage and for Partial Claim dated February 15, 2012), Exhibit 2 (Loan Modification Agreement), and Exhibit 4 (excerpt from Bank of America's servicing records concerning Plaintiffs' account). "Although [the parties] allege the[se] documents" contain "individual personal information that is protected from disclosure, . . . including information regarding Plaintiffs' mortgage or credit history[,]" the documents "do[] not actually appear to involve any information of this nature." In re High-Tech Emp. Antitrust Litig., No. 11-CV-02509-LHK, 2013 WL 163779, at *9 (N.D. Cal. Jan. 15, 2013). For example, Plaintiffs' account number is partially redacted in Exhibits 1 and 2 as required by Federal Rule of Civil Procedure 5.2(a). Further, Exhibit 1 is referenced in the Complaint, (see Compl. ¶¶ 17, 18, ECF No. 1), and Exhibit 2 is an attachment to the Complaint. (Id. Ex. 2.) See Lane v. Wells Fargo Bank, N.A., No. C 12-04026 WHA, 2013 WL 2627487, at *1 (N.D. Cal. June 11, 2013) (denying request to seal information available on the public docket); accord Apple Inc. v. Samsung Elec. Co. Ltd., No. 11-CV-01846 LHK (PSG), 2012 WL 4120541, at *2 (N.D. Cal. Sept. 18, 2012). Also, although the parties assert Exhibit 4 "contain[s] information related to Bank of America's loan servicing and modification practices" the disclosure of which "would disadvantage Bank of America[,]" "[t]he information contained in this exhibit "is not sufficiently detailed to be likely to result in competitive harm to [Defendants], and [the parties] ha[ve] not established with sufficient particularity that any portion constitutes information that is . . . protectable." Lane, 2013 WL 2627487, at * 2; accord Welle v. Provident Life & Accident Ins. Co., No. 3:12-cv-3016 EMC (KAW), 2013 WL 6055369, at *2 (N.D. Cal. Nov. 14, 2013) (stating "the limited material at issue does not appear to be sufficiently detailed to be likely to result in competitive harm"). Accordingly, the request to seal Exhibits 1, 2, and 4 is DENIED.
The parties also have not shown good cause justifies sealing Exhibits 8-11, 13, and 15 (portions of certain deposition transcripts). Although the referenced transcripts concern Defendants' loan servicing and modification practices, "the information actually discussed in the transcript[s] is too general or nonspecific to warrant sealing." Lane, 2013 WL 2627487, at *2. Therefore, the request to seal Exhibits 8-11, 13, and 15 is DENIED.
The parties have provided compelling reasons to seal Exhibit 12 (Bank of America policy and procedure document regarding credit corrections). This document "is an outline" of the procedures "implemented by Defendants" to correct a homeowner's credit report once his or her loan has been modified. Davis v. Social Serv. Coordinators, Inc., No. 1:10-cv-02372-LJO-SKO, 2012 WL 1940677, at *2 (E.D. Cal. May 29, 2012). "[S]hould it be disseminated publically, [it] may allow Defendants' competitors to reap the benefit of the [outlined procedures] without having to incur the costs associated with developing the[m]." Id.; accord Hart v. U.S. Bank NA, No. CV 12-2471-PHX-JAT, 2013 WL 5965637, at *10 (D. Ariz. Nov. 8, 2013) (granting request to seal credit policies stating "[t]hese policies contain detailed information regarding Defendant's underwriting decision making process[,]" and "include credit decision matrixes which calculate credit decisions"). Therefore, the request to seal Exhibit 12 is GRANTED.
Further, the request to file the proposed redacted version of Plaintiff's class certification motion is DENIED since the parties have not provided sufficient justification for the proposed redactions. Even the motion's reference to Exhibit 12, which this order decides may be filed under seal, is too general to support redaction.
III. CONCLUSION
For the stated reasons, the parties' stipulated sealing request is granted in part and denied in part. It is denied except to the extent Defendants request to seal Exhibit 12 to the Declaration of Noah Zinner. Defendants shall provide to the Clerk an electronic copy of this exhibit to be filed under seal as prescribed in Local Rule 141(e)(2)(i). Dated: July 10, 2015
/s/_________
GARLAND E. BURRELL, JR.
Senior United States District Judge