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Commonwealth v. Marathon Petroleum Co. LP

United States District Court, W.D. Kentucky, Louisville Division

September 17, 2019

COMMONWEALTH OF KENTUCKY, Plaintiff,
v.
MARATHON PETROLEUM COMPANY LP, et al. MARATHON PETROLEUM CORPORATION, et al. SPEEDWAY, LLC, et al. Defendants.

          MEMORANDUM OPINION AND ORDER

          COLIN H. LINDSAY, MAGISTRATE JUDGE

         Before the Court are numerous motions to seal filed by both plaintiff Commonwealth of Kentucky (“the Commonwealth” or “Plaintiff”) and defendants Marathon Petroleum Company LP, Marathon Petroleum Corp. and Speedway LLC (“Marathon” or “Defendants”). The Court will address the motions by grouping for clarity.

         For the reasons set forth below:

         The Commonwealth’s Motion DN 197 is GRANTED.

         The Commonwealth’s Motions DNs 164, 192, 202, 213 are GRANTED IN PART and DENIED IN PART.

         Marathon’s Motions DNs 155, 166, 189, 194, 198, 211, 210, 214 are GRANTED.

         I. Statement of Facts and Procedural History

         The Commonwealth’s second amended complaint alleges that Marathon has engaged in anticompetitive conduct in violation of the Sherman Act, Clayton Act, and Kentucky’s Consumer Protection Act, through its business dealings in Louisville and northern Kentucky. (DN 88, at PageID #1087.) Essentially, the Commonwealth alleges that Marathon has entered into contracts with various gasoline retailers for the distribution of its reformulated gasoline (“RFG”) that restrict its competitors’ ability to challenge Marathon’s market dominance. (Id. at 1087–88.) The Commonwealth has alleged, inter alia, that these distribution agreements unlawfully restrict the gasoline retailers’ ability to purchase RFG from Marathon’s competitors; separate contracts allegedly include deed restrictions that prevent competitors from entering the market. (Id.)

         Previously, this Court granted the Commonwealth’s motion to amend its complaint. (DN 86.) The Commonwealth subsequently filed its second amended complaint, which added Speedway LLC and Marathon Petroleum Corp. as co-defendants alongside Marathon Petroleum Co. LP. (DN 88.) Marathon Petroleum Corp. promptly filed a motion to dismiss for a want of personal jurisdiction (DN 92). A settlement conference was held on February 1, 2018 and parties were unable to come to an agreement. (DN 122.) On September 26, 2018, the Court denied Marathon Corp.’s and Speedway’s motion to dismiss. (DN 147.) On November 20, 2018, Marathon filed its motion for summary judgment based on lack of personal jurisdiction. (DN 156.) On April 5, 2019, Marathon filed a motion to exclude expert testimony and opinions of Plaintiff’s expert Dr. Michael J. Sattinger (DN 191) and a motion for summary judgment on all claims. (DN 195.) That same day, the Commonwealth also filed a motion to exclude the testimony and opinions of Marathon’s experts Ramsey Shehadeh and Michael Baye. (DN 193.)

         II. Summary of Law

         Although the Sixth Circuit has long recognized a “strong presumption in favor of openness” regarding court records, there are certain interests that overcome this “strong presumption.” Rudd Equipment Co., Inc. v. John Deere Construction & Forestry Co., 834 F.3d 589, 593 (6th Cir. 2016) (citing Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165, 1179 (6th Cir. 1983)). These interests include “certain privacy rights of participants or third parties, trade secrets, and national security.” Brown & Williamson Tobacco Corp., 710 F.2d at 1179. The party seeking to seal the records bears a “heavy” burden; simply showing that public disclosure of the information would, for instance, harm a company’s reputation is insufficient. Id.; Shane Grp. Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016). Instead, the moving party must show that it will suffer a “clearly defined and serious injury” if the judicial records are not sealed. Shane Grp. Inc., 825 F.3d at 307. Examples of injuries sufficient to justify a sealing of judicial records include those 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). In rendering a decision, the Court must articulate why the interests supporting nondisclosure are compelling, why the interests supporting public access are not as compelling, and why the scope of the seal is no broader than necessary. Shane Grp. Inc., 825 F.3d at 306. Importantly, the presumption that the public has the right to access judicial records does not vanish simply because all parties in the case agree that certain records should be sealed. Rudd Equipment Co., Inc., 834 F.3d at 595 (noting that although the defendant did not object to the plaintiff’s motion to seal, his lack of objection did not waive the public’s First Amendment and common law right of access to court filings); Shane Grp. Inc., 825 F.3d at 305 (“A court’s obligation to keep its records open for public inspection is not conditioned on an objection from anybody.”)

         III. Analysis

         A. Marathon’s Motion for Summary Judgment- Personal Jurisdiction

         First, the Court addresses the parties’ request to seal certain documents related to Marathon’s motion for summary judgment based on lack of personal jurisdiction. (DNs 155, 164, 166.)

         Marathon requests the Court issue an order to seal portions of its memorandum in support of its motion for summary judgment based on lack of personal jurisdiction as well as supporting Exhibits C, E, F, G and H. (DN 156.) The supporting exhibits are supply agreements for the sale of gasoline products in Louisville, northern Kentucky, and the surrounding areas of Kentucky with third parties, as well as amendments to and renewals of those agreements. (DN 155, at PageID #3379.) Exhibits F and G also include contract renewal analyses produced by Marathon LP prior to entering into the supply agreements. (Id. at PageID #3380.) Marathon contends the supply agreements and renewal documents contain sensitive pricing, volume and other commercial term information of third parties with whom Marathon negotiated. (Id. at PageID #3381.) Marathon states the corresponding portions of the memorandum in support of the motion for summary judgment based on a lack of personal jurisdiction contain a detailed discussion of these exhibits and the images embedded at pages 7-9 are taken directly from Exhibits C and E. (DN 156, at PageID #3402; DN 155, at PageID #3380.) Marathon states the Court has previously granted Defendant leave to file Exhibits C, E, F and G under seal. (Id. at PageID #3379; DN 136, at PageID #3258.)

         Marathon contends it would be harmed if the documents are not sealed as it would compromise its ability to negotiate competitive supply agreements with other third parties in the future. Marathon also argues the Court should also consider the harm to the competitive standing of the third parties to the agreements contained in the Exhibits as well. (DN 155, at PageID #3383.)

         The Commonwealth requests that the Court seal the highlighted portions of its opposition to Marathon’s motion for summary judgment based on lack of personal jurisdiction and accompanying Exhibits B and D-H of the Declaration of Todd Leatherman. (DN 164, at PageID #4386.) Other than the fact that these documents were disclosed by Marathon and marked as confidential, the Commonwealth does not offer any explanation as to why these documents should be protected from public disclosure. (DN 164, at PageID #4386.) However, upon review of the identified exhibits and corresponding portions of the Opposition to Defendant’s Motion for Summary Judgment, Exhibits B and D are contract renewals with third parties and are duplicative of Exhibit F and Exhibit G attached to Marathon’s memorandum in support of its motion for summary judgment. Exhibit E is a duplicate of a document sealed in below Section B of this Order. However, neither party has addressed a compelling interest served by sealing Exhibits F, G or H.

         Marathon also requests that this Court seal the highlighted portions of its reply in support of its motion for summary judgment. (DN 167.) Marathon argues that in the Commonwealth’s opposition to Marathon’s motion for summary judgment, the Commonwealth cites to Marathon’s internally generated authorizations to renew supply agreements with third parties and the deposition testimony of an executive for Marathon LP. In order to respond to the opposition, Marathon in reply cites to and discusses these documents. Marathon argues that Exhibits B and D to the Commonwealth’s opposition are its authorizations to renew supply agreements with third parties and include statements made by third parties during the negotiation of those agreements. (DN 166, at PageID #4390.) Marathon argues that its reply discusses the substances of Exhibits B and D to the Commonwealth’s opposition and requests to seal those portions of the reply. Marathon argues that the Court has already granted leave to file these same documents under seal. (DN 136, at PageID #3264.)

         First, the Court acknowledges that the public interest in these documents is low. The underlying motion is a motion for summary judgment addressing whether Marathon Corp has a legally sufficient business contacts in Kentucky such that it is subject to the jurisdiction of this Court. The portions of the motion for summary judgment, opposition, reply and the specific exhibits at issue are not being offered as evidence on the merits of the case.

         Second, the Court is persuaded that there is a compelling reason to seal the documents requested by Marathon to protect both Marathon’s and the contracting third parties’ competitive standing in the marketplace since their bargaining power would be lost if their prior contractual terms were revealed to competitors. The "privacy interests of innocent third parties should weigh heavily in a court's balancing equation." Shane Group, Inc. v. Blue Cross Blue Shield of Mich. 825 F.3d 299, 308 (6th Cir.2016) (quoting U.S. v. Amodeo, 71 F.3d 1044, 1050 (2d Cir. 1995). At the time the third parties entered into contracts with Marathon, they had no reason to believe that the terms or internal communications regarding the terms of these agreements would eventually become a matter of public record. The revelation of this information would harm both Marathon’s and the third parties’ ability to enter into supply agreements with other suppliers or maintain a competitive market position.

         The Court believes Marathon’s requests to seal are narrowly tailored to serve this compelling interest as Marathon has identified the pertinent portions of its memorandum in support of its motion for summary judgment and reply discussing the third-party supply agreements at issue. Marathon did not seek to seal the entirety of the case or hundreds of documents, but only the specific documents containing sensitive third-party information or a discussion thereof.

         Accordingly, the Court GRANTS Marathon’s motion to seal portions of Marathon’s motion for summary judgment and corresponding Exhibits C, E, F and G. (DN 155.)

         The Court GRANTS IN PART the Commonwealth’s motion to seal portions of its opposition to the motion for summary judgment. (DN 164.) Specifically, the Court GRANTS the motion to seal the highlighted portions of the Commonwealth’s opposition and corresponding Exhibits B, D and E of the Declaration of Todd Leatherman. The Court DENIES WITHOUT PREJUDICE the Commonwealth’s motion as to Exhibits F, G and H of DN 165. Either party may file a renewed motion to seal within 30 days. The proffered documents shall remain PROVISIONALLY SEALED during the next 30 days. The Court directs the Clerk to unseal the same if no motion to seal is filed by the deadline set forth above.

         The Court GRANTS Marathon’s motion to seal the highlighted portions of its reply in support of its motion for summary judgment and corresponding Exhibits B and D. (DN 166.)

         B. Marathon’s Motion to Exclude Expert Testimony of Michael J. Sattinger

         Second, the Court addresses the parties’ request to seal certain documents related to Marathon’s motion to exclude expert testimony and opinions of Plaintiff’s expert Dr. Michael J. Sattinger. (DNs 189, 197, 208, 211.)

         a. Motion to Exclude Testimony

         Marathon requests the Court issue an order to seal portions of its motion to exclude expert testimony and opinions of Plaintiff’s expert Dr. Michael J. Sattinger, portions of supporting Exhibits C, Q, R and S, and ...


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