United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
parties are Caudill Seed and Warehouse Company, Inc.
(“Caudill Seed”) and Jarrow Formulas, Inc.
(“Jarrow Formulas”). Eight motions to seal are
before the Court:
I. DN 193: Jarrow Formulas moves to seal exhibits in support
of its motion to compel. The Court will grant in part and
deny in part the motion.
II. DN 197: Caudill Seed moves to seal exhibits in support of
its motion to compel. The Court will grant in part and deny
in part the motion.
III. DN 200: Caudill Seed moves to seal exhibits in support
of its response to Jarrow Formulas's motion to compel.
The Court will grant the motion.
IV. DN 203: Jarrow Formulas moves to seal exhibits in support
of its response to Caudill Seed's motion to compel. The
Court will grant in part and deny in part the motion.
V. DN 206: Caudill Seed moves to seal its memorandum in
support of its motion to maintain the seal on the documents
already under seal. The Court will deny the motion.
VI. DN 209: Caudill Seed moves to maintain the seal on two
hundred thirty-seven documents already under seal. The Court
will grant in part and deny in part the motion.
VII. DN 210: Jarrow Formulas moves to maintain the seal on
two documents already under seal. The Court will grant the
VIII. DN 217: Jarrow Formulas moves to seal its response in
opposition (DN 216) to Caudill Seed's motion to maintain
documents under seal. The Court will deny the motion.
appendix to this memorandum opinion contains a detailed
breakdown of the documents referenced in each motion to seal.
December 27, 2013, the Court entered an agreed protective
order in this matter. (DN 33; see also, DN 122.)
Under that order, the parties agreed that “certain
discovery is likely to involve confidential, sensitive,
proprietary, trade secret, personal, and commercial
information.” (DN 33, #296.) The order requires parties
to file documents marked “CONFIDENTIAL” or
“HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY”
in the record under seal. (DN 33, #307.) Documents marked
“CONFIDENTIAL” include “confidential
information, personal information, all non-public or
proprietary information, non-pubic business or financial
strategies, existing or contemplated business practices,
confidential competitive information, patentable ideas, trade
secrets, concepts and customer information.” (DN 33,
#297.) Documents marked “HIGHLY CONFIDENTIAL -
ATTORNEYS' EYES ONLY” include
any document or other material (including digital
information) when there is a good faith belief that
information is particularly sensitive because it relates to
trade secrets, technical practices or methods, research or
development, marketing plans, product data or projections,
financial data, business strategy, or agreements and
relationships with third parties that, if discovered by the
opposing party, might give the opposing party a competitive
advantage over the producing party.
(DN 33, #298.)
November 17, 2016, the Court entered an order discussing
recent Sixth Circuit case law and its potential application
to the numerous filings under seal in this matter. (DN 177.)
The Court ordered the parties to file separate motions to
seal if they disagreed as to whether certain documents should
To the extent there are documents that one party believes
should be filed under [seal] and the other party disagrees,
file separate motions to seal for such documents. The
memorandum in support of any such motion must analyze in
detail, document by document, the propriety of secrecy,
providing reasons, and legal citations.
(Id., #10863 (brackets added) (quotation marks
either the civil or the criminal courtroom, secrecy insulates
the participants, masking impropriety, obscuring
incompetence, and concealing corruption.” Brown
& Williamson Tobacco Corp. v. FTC, 710 F.2d
1165, 1179 (6th Cir. 1983). Still, “[s]ecrecy is fine
at the discovery stage, before the material enters the
judicial record.” Shane Grp. Inc. v. Blue Cross
Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016)
(brackets added). “At the adjudication stage, however,
very different considerations apply.” Id.
is a “strong presumption” in favor of open court
records. Rudd Equip. Co. v. John Deere, 834 F.3d
589, 593 (6th Cir. 2016); 825 F.3d at 305. This presumption
stems from the public's right of access to the courts
under the First Amendment and the common law. 710 F.2d at
1177 - 79. Exceptions to the public's right of access
exist to protect “certain privacy rights of
participants or third parties, trade secrets, and national
security.” Id. at 1179.
when no party objects, the public's right of access
remains. 834 F.3d at 595 (“But as the magistrate judge
accurately stated, Deere ‘could not have waived the
public's First Amendment and common law right of
access to court filings.'”); see also, 825
F.3d at 307 (“A court's obligation to keep its
records open for public inspection is not conditioned on an
objection from anybody.”). The Court must still
“set forth specific findings and conclusions which
justify nondisclosure to the public.” 825 F.3d at 306
(internal quotation marks omitted). The Court must articulate
its basis for sealing documents: “why the interests in
support of nondisclosure are compelling, why the interests
supporting access are less so, and why the seal itself is no
broader than necessary.” Id.
Court's decision on sealing is “completely
separate” from the underlying merits. 834 F.3d at 593.
The Court “must balance the litigants' privacy
interests against the public's right of access,
recognizing our judicial system's strong presumption in
favor of openness.” Id. at 594.
“Moreover, the greater the public interest in the
litigation's subject matter, the greater the showing
necessary to overcome the presumption of access.” 825
F.3d at 305. That being said, the Court should consider a
party's reliance on a seal in applying the balancing
test. 834 F.3d at 596.
overcome the strong presumption in favor of open court
records, a party seeking to seal a document bears a
“heavy” burden. 825 F.3d at 305. “Only the
most compelling reasons can justify non-disclosure of
judicial records.” In re Knoxville News-Sentinel
Co., 723 F.2d 470 476, (6th Cir. 1983); 834 F.3d at 593;
825 F.3d at 305. “Simply showing that the information
would harm the company's reputation is not sufficient to
overcome the strong common law presumption in favor of public
access to court proceedings and records.” 710 F.2d at
can deny access to court records that could be used “as
sources of business information that might harm a
litigant's competitive standing.” Nixon v.
Warner Comm'ns, Inc., 435 U.S. 589, 598 (1978).
Generally, “only trade secrets, information covered by
a recognized privilege (such as the attorney-client
privilege), and information required by statute to be
maintained in confidence (such as the name of a minor victim
of sexual assault), ” can overcome the presumption of
open records. 834 F.3d at 589; see also, 710 F.2d at
1179 (noting that “certain privacy rights of
participants or third parties, trade secrets and national
security” are content-based exceptions to the right of
proponent of sealing bears “the burden of showing that
disclosure will work a clearly defined and serious
injury.” 825 F.3d at 307 (internal quotation marks
omitted) (brackets omitted). The injury asserted must be
specific. Id. “The proponent of sealing
therefore must analyze in detail, document by document, the
propriety of secrecy, providing reasons and legal
citations.” Id. at 305 - 06 (internal
quotation marks omitted). “And even where a party can
show a compelling reason why certain documents or portions
thereof should be sealed, the seal itself must be narrowly
tailored to serve that reason.” Id. at 305.
I, the Court will discuss the motions related to the
documents already filed under seal (DNs 206, 209, 210, &
217). In Part II, the Court will discuss the motions to seal
related to the motions to compel (DNs 193, 197, 200, 203).
Motions related to the documents already filed under
Caudill Seed's motion to maintain the seal on the
documents already under seal (DN 209)
Seed moves to maintain the seal on two hundred thirty-seven
documents currently under seal. (See App.
infra.) Caudill Seed argues that it can demonstrate
a compelling reason to seal the documents because the Defend
Trade Secrets Act of 2016 requires the sealing of documents
containing trade secrets. (DN 209-1, #13243 - 44 (citing 18
U.S.C. § 1835(a)).) Finally, Caudill Seed notes that it
has “undertaken significant time and expense” in
reviewing the docket and narrowing what it seeks to seal as
much as possible. (DN 209-1, #13244.) Caudill Seed divides
these documents into four categories, which often overlap:
its formulas and processes; its research and development; its
customer lists and vendor information; and its
“proprietary business communications and
operations.” (Id., #13244 - 47.)
its “formulas and processes are at the core of its
trade secrets; and Caudill must protect them from disclosure
at all costs.” (Id., #13245.) Second,
“[c]ourts routinely seal research and development
related to trade secrets or other intellectual
property.” (Id. (brackets added).) Third,
“courts routinely” seal customer lists, vendor
identification, and pricing and sales information.
(Id., #13246.) Fourth, its “business
communications and other confidential business records that
contain the trade secrets must remain sealed to protect those
trade secrets.” (Id., #13247.)
Formulas argues that Caudill Seed “has provided, at
most, cursory, circuitous and conclusory explanations of its
reasons for sealing, and has failed to identify any specific
information that would constitute a trade secret.” (DN
213, #13320.) Jarrow Formulas also argues that many of the
documents Caudill Seed wants to remain sealed are already in
the public domain. (Id.) Further, Jarrow Formulas
argues, “Caudill further elected not to identify any
specific harm that might befall it if the information
contained in these documents became publicly
available.” (DN 218-1, #13436.)
Caudill Seed's argument that it need only demonstrate a
good faith basis for sealing documents ignores the Sixth
Circuit's command that a proponent of sealing must
demonstrate a compelling reason for the seal.
Seed cites Citizens First National Bank and
NetJets Association for the proposition that it need
only demonstrate a good faith basis for sealing documents.
(DN 209-1, #13241 - #13243 (quoting Citizens First Nat.
Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943
(7th Cir. 1999) & NetJets Assoc. of Shared Aircraft
Pilots v. NetJets, Inc., 2016 WL 5349793, at *1 - *2
(S.D. Oh. Sept. 23, 2016).)
First is legally distinguishable. Citizens
First does say that a party may
keep their trade secrets (or some other properly demarcated
category of legitimately confidential information) out of the
public record provided the judge (1) satisfies himself that
the parties know what a trade secret is and are acting in
good faith in deciding which parts of the record are trade
secrets and (2) makes explicit that either party and any
interested member of the public can challenge the secreting
of particular documents.
178 F.3d at 946. However, throughout that opinion, the court
referred to the good cause required for sealing documents in
a particular case. See, e.g., 178 F.3d at 944
(“That issue is the judge's failure to make a
determination, as the law requires, of good cause to seal any
part of the record of a case.” (internal citations
omitted)). While good cause may be the standard a party must
meet to seal documents in the Seventh Circuit, Rudd
and Shane Group make clear that a proponent of
sealing in the Sixth Circuit must demonstrate a
“compelling reason” for the seal. 825 F.3d at 305
- 06; 834 F.3d at 593.
Association is likewise factually distinguishable. The
district court in that case said, “this case involves a
small amount of information from one document that has been
redacted and sealed from the public view.” 2016 WL
5349793 *2 (emphasis added). That court distinguished
Rudd and Shane Group because those seals
involved “large portions of the litigation (including,
in one case, the existence of the lawsuit itself).”)
Here, Caudill Seed seeks to maintain a seal on two hundred
thirty-seven documents. The sheer volume of information
Caudill Seed seeks to maintain under seal is far closer to
Rudd and Shane Group than the one redacted
document at issue in NetJets.
Caudill Seed has demonstrated a compelling reason for
maintaining the seal until trial.
its brief, Caudill Seed argues that the two hundred
thirty-seven documents must remain under seal until trial.
(See, e.g., DN 209-1, #13237 (“Caudill
respectfully states that these documents must remain sealed
until trial. Any other result would penalize Caudill for
pursuing legitimate trade secret claims, and would prejudge
the key fact-finding role of the jury in ruling on the
claims.”); id., #13239 (“Confidential
information related to those trade secrets must remain
protected at least until a jury has a chance to decide the
Court is puzzled by this language. Caudill Seed's use of
the phrase “until trial” could have been a
strategic choice designed to highlight the fact that it
overcame much of Jarrow Formulas's motion for summary
judgment. (See DN 145, #9435.) Or, Caudill
Seed's use of the phrase “until trial” may
reflect its misunderstanding of what happens when the Court
seals documents. If the Court seals a document, that document
remains sealed not just until trial, but during
trial as well. See, e.g., Microsoft Corp. v. Motorola,
Inc., 2012 WL 5476846 *3 (W.D. Wash. Nov. 12, 2012).
Seed provided the Court with three large tabbed binders
rather than burdening the Court with the task of combing
through the docket. The eighty-three tabs in the three
binders correspond to eighty-three sets of documents Caudill
Seed seeks to maintain under seal. Jarrow Formulas's
response followed Caudill Seed's tabbing system. For
example, Tab 1 includes the fourteen excerpts from Dan
Caudill's January 21, 2014 deposition transcript that
have been filed in various places in the record under seal.
Court conducted a review of these two hundred thirty-seven
documents in camera. In the interest of using the
Court's finite resources efficiently, the Court will not
discuss each individual document Caudill Seed seeks to
maintain under seal. After a review of these documents in
camera, the Court finds that Caudill Seed has shown a
compelling reason for maintaining the seal on these two
hundred thirty-seven documents pending trial. The Court bases
this finding on six considerations.
a decision on sealing is separate from a decision on the
merits. Rudd, 834 F.3d at 593. The Court has already
ruled that Caudill Seed had demonstrated a genuine issue of
material fact on its misappropriation of trade secret claims
sufficient for those claims to proceed to trial. (DN 145,
#9428 - 29 (“We conclude that genuine issues of
material fact exist with respect to whether the information
so identified constitutes trade secrets, whether Jarrow
Formulas made unauthorized use of Caudill's trade
secrets, and whether Caudill Seed was injured thereby. A jury
should decide these fact-based issues.”).) A jury will
decide whether Caudill Seed has proven its alleged trade
secrets. Caudill Seed need not prove its alleged trade
secrets to justify sealing these documents at this point.
Caudill Seed has convincingly argued-and the Court has seen
firsthand in an in camera review-that these
documents contain commercially information that, if made
available for its competitors to view, would put Caudill Seed
at a disadvantage in the marketplace. The Court should not
allow its docket to be used as a source “of business
information that might harm a litigant's competitive
standing.” Nixon, 435 U.S. at 598.
the court of appeals has said that “the greater the
public interest in the litigation's subject matter, the
greater the showing necessary to overcome the presumption of
access.” Shane Grp., 825 F.3d at 305. The
inverse is true, too. The lesser the public interest in the
litigation's subject matter, the lesser the showing
necessary to overcome the presumption of access. Although the
Court rejects Caudill Seed's argument that there is
no public interest in this lawsuit, see
infra Part I(A)(3), the public's interest in this
litigation is less than it would be in a case involving
constitutional rights, among other things.
although the number of sealed documents in this matter will
remain quite large, the parties agreed to unseal even more
documents than the number Caudill Seed seeks to maintain
under seal. Their joint efforts to agree to the unsealing of
over three hundred documents have gone a long way in
expanding the public's access to the docket in this
Jarrow Formulas only objected to the sealing of these
documents after the Court's sua sponte order.
Now, Jarrow Formulas would have the Court engage in a
mini-trial as to each of the two hundred thirty-seven
documents currently under seal. Such an endeavor would serve
only to delay this nearly four-year-old case further and
would not be an efficient use of the Court's time. Both
parties relied on the agreed protective order in filing these
two hundred thirty-seven documents under seal. Reliance on a
sealing order is a factor the Court must consider in deciding
whether a document should be sealed. Rudd, 834 F.3d
maintaining the seal on these documents until trial simply
maintains the status quo. Maintaining the status quo as the
parties prepare for trial serves the interests of efficiency
and judicial economy. See Fed. R. Civ. P. 1.
being said, the Court will address whether one document in
particular should be sealed. Caudill Seed moves to seal DN
66-1. (DN 207, #13204 at n.12.) Caudill Seed says that Jarrow
Formulas inadvertently filed that document in the record
unsealed and that it should have been filed under seal.
(Id.) Jarrow Formulas filed that document unsealed
on June 16, 2014. It sat on the Court's docket unsealed
for over two and a half years before Caudill Seed noticed
that it had not been sealed. See Rudd, 834 F.3d at
596 (“The complaint then sat unsealed on the district
court's docket for two weeks before the seal was entered,
and Rudd has not alleged it suffered any harm during this
period.”). Caudill Seed has not alleged that the public
availability of that document for two and a half years caused
it any harm. The Court will deny Caudill Seed's motion to
seal DN 66-1.
Court will grant in part and deny in part Caudill Seed's
motion to maintain the seal on the ...