Another Judge Criticizes Excessive Sealing Requests in Commercial Litigation

From Sitelock LLC v. GoDaddy.com LLC, released Thursday by Judge Dominic W. Lanza:

In an order issued earlier this year, the Court observed that "[t]his case has been marred by a seemingly endless series of discovery disputes" and then proceeded to resolve the parties' latest batch of squabbles. Here we go again. Pending before the Court are two more discovery-related motions: (1) GoDaddy's motion for a protective order and (2) SiteLock's motion to compel. Also pending are GoDaddy's five motions to seal….

As to the discovery-related disputes, I'll just quote the introductory line:

What a mess. Each side's affirmative requests for relief are denied.

As to sealing, the court writes (among other things):

The Court is once again bogged down by the "tedious, time-consuming" task of reviewing motions to seal huge quantities of material due to GoDaddy's "failure to carefully consider whether each proposed redaction"—or request to seal a document in full—"was, in fact, necessary." The parties have repeatedly been admonished that any sealing request must explain "with specificity" why the material in question meets the standard for sealing.

Furthermore, the Court has repeatedly ordered that any sealing request seeking redactions be accompanied by a version, lodged under seal, in which each proposed redaction is highlighted to facilitate the Court's review and to obviate the need for side-by-side comparison of drafts to determine what material has been redacted….

The public has a general right to inspect judicial records and documents, such that a party seeking to seal a judicial record must overcome "a strong presumption in favor of access." To do so, the party must "articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure…." The Court must then "conscientiously balance the competing interests of the public and the party who seeks to keep certain judicial records secret." "After considering these interests, if the court decides to seal certain judicial records, it must base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture."

The "stringent" compelling reasons standard applies to all filed motions and their attachments where the motion is "more than tangentially related to the merits of a case." However, a lower standard applies to "sealed materials attached to a discovery motion unrelated to the merits of a case," which requires only that a party establish "good cause" for sealing.

GoDaddy's motion for a protective order and SiteLock's motion to compel are more than tangentially related to the merits of this case—they involve matters that go to the heart of this litigation. Indeed, one of the sentences that GoDaddy seeks to redact from SiteLock's motion to compel—a sentence that clearly doesn't meet the sealing standard and will not be redacted—states that "GoDaddy's unproduced records of its sales of product bundles that included SiteLock," which is the topic of most of the material sought to be sealed, "are central to SiteLock's claims." For these reasons, the Court concludes that the stringent "compelling reasons" standard likely applies here. With that said, the determination of the applicable standard is ultimately irrelevant because GoDaddy's sealing requests would fail even if evaluated under the lesser "good cause" standard….

GoDaddy's motions fail to follow the Court's repeated instructions and fail to establish that the standard for sealing is satisfied….

GoDaddy's motion to seal portions of Exhibits E, F, and H to its reply in support of its motion for protective order is accompanied by unredacted versions of these documents, lodged under seal, without the required, court-ordered highlighting. The motion identifies sixteen large blocks of proposed redactions ….

GoDaddy devotes one paragraph (17 lines of text) of its memorandum to making sweeping generalizations about 28 pages of proposed redactions to Liang's deposition testimony. GoDaddy broadly asserts that the proposed redactions cover "sensitive business matters, including GoDaddy's internal proprietary technology and processes and the internal terminology used to describe same" as well as "commercially sensitive information regarding GoDaddy's strategic approach to marketing and advertising certain products, including both SiteLock and other (non-party) products, and the related product costs." GoDaddy further asserts that, buried somewhere within the 28 pages of proposed redactions, there are "references to (a) a "CONFIDENTIAL" email chain regarding SiteLock sales revenue; and (b) a document this Court previously approved as being filed under seal. This is a far cry from the Court's repeated direction that redaction requests should, "with specificity," identify what is sensitive about each "particular sentence or phrase" to be redacted. Instead, GoDaddy places the onus on the Court to review large sections of a deposition transcript to determine whether they are subject to sealing in full. [Further details omitted. -EV] …

The parties' excessive sealing requests have placed an undue burden on the Court's time and resources. The Court has been asked repeatedly "to decide a sometimes complex issue of sealing or redaction with no adversarial briefing and often, as in this case, with only a perfunctory submission from the party seeking relief." Additionally, court orders designed to streamline the sealing process have been inexplicably ignored.

The unacceptably vague sealing requests, along with the parties' seemingly endless discovery requests, have bogged down this case. The Court is mindful of the public's interest in the expeditious resolution of lawsuits and of its inherent power and duty to control its own docket. The Court is authorized to "manage cases so that disposition is expedited, wasteful pretrial activities are discouraged, the quality of the trial is improved, and settlement is facilitated" and to adopt "special procedures for managing potentially difficult or protracted actions."

Generally, when a motion to seal is denied, "the lodged document will not be filed" and the submitting party "may" resubmit the document for filing in the public record. Where the proponent of the motion to seal is also the party that wished to file the document, the Court has often given that party the option to (1) file the document in the public record, (2) make another attempt at an adequate motion to seal, or (3) withdraw the document and revise whatever brief had relied upon that document to omit the relevant citations.

But here, the substandard motions to seal and the extensive amount of proposed redactions, many of which common sense indicates are not subject to sealing, threaten to create untenable further delay in this action. The Court will not permit a new round of motions to seal, which would postpone resolution of the discovery disputes. Instead, all of the materials submitted by both parties will be filed in the public record, with the exception of Exhibit H to GoDaddy's reply in support of its motion for protective order and Exhibits 7 and 13 of SiteLock's motion to compel, which may be filed under seal. See, e.g., GoDaddy.com LLC v. RPost Comms. Ltd., 2016 WL 1158851, *4, (D. Ariz. 2016) (denying certain sealing requests by GoDaddy, noting that "GoDaddy's explanations for sealing [were] generalized in nature … and lack[ed] substantiation," and ordering the clerk of court to "unseal and file" the lodged documents in lieu of allowing another round of sealing requests)….