Platypus Wear, Inc v. United States Fidelity and Guaranty Company, No. 3:2009cv02839 - Document 26 (S.D. Cal. 2010)
Court Description: ORDER denying 21 Motion to Seal or, Alternatively, Redact Settlement Conference Transcript. Signed by Magistrate Judge William V. Gallo on 10/15/10. (lmt)
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Platypus Wear, Inc v. United States Fidelity and Guaranty Company Doc. 26 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PLATYPUS WEAR, INC., 12 Plaintiff, 13 v. 14 UNITED STATES FIDELITY AND GUARANTY COMPANY, 15 Defendant. 16 ) ) ) ) ) ) ) ) ) ) ) Civil No. 09-2839-JLS(WVG) ORDER DENYING MOTION TO SEAL OR, ALTERNATIVELY, REDACT SETTLEMENT CONFERENCE TRANSCRIPT (Doc. No. 21) 17 18 Defendant United States Fidelity & Guaranty Company (hereaf- 19 ter “Defendant”), has filed a Motion to Seal Or Alternatively, 20 Redact 21 Plaintiff Platypus Wear, Inc. (hereafter “Plaintiff”), has filed a 22 Statement of Non-Opposition to Defendant’s Motion. 23 having reviewed Defendant’s Motion and the transcript at issue, and 24 GOOD CAUSE APPEARING, HEREBY DENIES Defendant’s Motion. Settlement Conference Transcript (hereafter “Motion”). The Court, 25 26 27 28 1 09cv2839 Dockets.Justia.com 1 I 2 PROCEDURAL HISTORY PERTAINING TO DEFENDANT’S MOTION 3 On July 15, 2010, the Court conducted a Settlement Conference 4 in this matter.1/ At the Settlement Conference, the case settled. The 5 terms of the settlement were placed on the record in open court. 6 7 On July 27, 2010, the official transcript of the terms of the settlement was filed with the Court. 8 On August 6, 2010, Plaintiff and Defendant filed a Joint 9 Motion to Dismiss the Entire Action without prejudice. On August 10, 10 2010, the District Judge assigned to this case granted the Joint 11 Motion to Dismiss. The Order Granting the Joint Motion to Dismiss 12 did not reserve the Court’s jurisdiction over the case. 13 On August 17, 2010, Defendant filed the Motion now before the 14 Court. 15 Motion. On August 24, 2010, Plaintiff filed a Non-Opposition to the 16 On September 15, 2010, Defendant filed a Motion to Amend the 17 Dismissal in Order to Allow Ruling on Motion to Seal or Alterna- 18 tively, Redact Settlement Conference Transcript. On October 8, 2010, 19 the District Judge assigned to this case granted Defendant’s Motion 20 to Amend the Dismissal. The Court’s October 8, 2010 Order states: 21 “The Court retains jurisdiction and the case is reopened for the 22 limited purpose of deciding Defendant’s Motion to seal, or, in the 23 alternative, redact settlement conference (transcript).” 24 25 26 27 28 1/ The undersigned conducted a Settlement Conference by speaking to each party off-the-record, together as well as separately and privately. The substance of the off-the-record private communications between the Court and the parties are confidential. 2 09cv2839 1 Defendant seeks a Court order that the transcript recorded in 2 open court containing the terms of the settlement be sealed or 3 redacted in its entirety due to the confidential nature of the 4 discussions at the settlement conference. 5 Defendant cites to the Notice of Early Neutral Evaluation Conference 6 filed on January 28, 2010, that states “All (Early Neutral Evalua- 7 tion) Conference discussions will be informal, off-the-record, 8 privileged and confidential.” 9 States District Court, Southern District of California Local Rule2/ 10 16.1.c.1.b., which states: “The (Early Neutral Evaluation) Confer- 11 ence will be informal, off-the-record, privileged and confidential.” 12 Further, Defendant cites to Local Rule 16.3.h., which states: “The 13 Settlement 14 confidential, unless otherwise ordered by the Court.” Conference will To support this request, Defendant also cites to the United be off-the-record, 15 and II 16 privileged ANALYSIS 17 The United States Supreme Court has acknowledged a common law 18 right of access to court records in a civil proceeding. 19 time, the Supreme Court recognized that the right of access is not 20 absolute. 21 interests advanced by the parties in light of the public interest 22 and the duty of the courts. Hagestad v. Tragesser, 49 F.3d 1430, 23 1434 (9th Cir. 1995)[citing Nixon v. Warner Communications, Inc., 435 24 U.S. 589, 597-598, 602 (1978)]. The Court stated that courts should At the same consider “the 25 The Ninth Circuit has held that the approach for determining 26 whether the common law right of access should be overridden requires 27 28 2/ All further references to the United States District Court, Southern District of California Local Rules shall be to “Local Rule.” 3 09cv2839 1 the court to start with a strong presumption in favor of access. 2 Hagestad, 49 F.3d at 1434 [citing Valley Broadcasting v. United 3 States 4 presumption 5 articulable facts known to the court, not on the basis of unsup- 6 ported hypothesis or conjecture.’” Id. at 1293]. “The factors 7 relevant to a determination of whether the strong presumption of 8 access is overcome include the ‘public interest in understanding the 9 judicial process and whether disclosure of the material could result 10 in improper use of the material for scandalous or libelous purposes 11 or infringement upon trade secrets.’” Hagestad, 49 F.3d at 1434 12 [citing EEOC v. Erection Co., Inc., 900 F.2d 168, 170 (9th Cir. 13 1990)](emphasis added). 14 District of Court, access 798 may F.2d be 1289 (9th overcome only Cir. ‘on 1986)]. the [“The basis of After the court takes the relevant factors into consider- 15 ation, 16 articulate the factual basis for its ruling. Pintos v. Pacific 17 Credit Assn., 605 F.3d 665, 667-668 (9th Cir. 2010)[citing Valley 18 Broadcasting, 798 F.2d at 1295; Kamakana v. City and County of 19 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006); Foltz v. State Farm 20 Mut. Auto Ins. Co., 331 F.3d 1122, 1135-1136 (9th Cir. 2003)]. it must base its decision on a compelling reason and 21 Here, Defendant fails to state reasons for its request to 22 seal the transcript containing the terms of the settlement suffi- 23 cient to override the “public(’s) interest in understanding the 24 judicial process.” 25 Early Neutral Evaluation Conference and Local Rule 16.1.c.1.b. are 26 inapposite. 27 ence, 28 principle of “confidentiality” is applicable in both scenarios, it not First, Defendant’s citations to the Notice of The settlement was reached after a settlement conferan Early Neutral Evaluation 4 Conference. While 09cv2839 the 1 simply is inaccurate to cite to the rules of the Early Neutral 2 Evaluation Conference to support Defendant’s contention in this 3 context. 4 Second, Defendant also cites to Local Rule 16.3 to support 5 its Motion. Local Rule 16.3 provides rules regarding the conduct of 6 settlement conferences in this Court. While Local Rule 16.3 states 7 that the settlement conference will be off-the-record, privileged 8 and confidential, Defendant misconstrues the Rule. 9 The Court sees a very distinct and important difference 10 between maintaining the confidentiality of the actual discussions 11 had in the settlement conference (absent a stipulation to the 12 contrary) on one hand, and memorializing on the record in open court 13 the terms of an agreed upon settlement on the other. 14 will not be confidential unless specific, articulable and compelling 15 reasons justifying secrecy are made known to the Court before (or at 16 least during) the on the record session. 17 too late to make this showing. The latter Afterwards is generally 18 Local Rule 16.3.d. specifically states: “The judge conducting 19 the settlement conference may receive in camera communications from 20 each party and its counsel, and must maintain such in confidence 21 unless there is a stipulation to the contrary.” 22 Rule 23 separately and together in in camera settlement discussions which 24 are to be kept confidential unless the party or attorney who engaged 25 in the discussions with the judge allows the judge to disclose any 26 part of those discussions to his/her opponent(s). The Local Rule 27 does 28 discussions are completed, and the terms of the settlement are 16.3 not contemplates state nor that imply the that court once 5 may the Therefore, Local engage the settlement parties conference 09cv2839 1 placed on the record in open court, that the transcript containing 2 the terms of the settlement be sealed or redacted. In practice, any 3 party to a settlement may specifically request that the transcript 4 be sealed when the terms of the settlement are placed on the record 5 in open court. In fact, the confidentiality of settlement terms is 6 often discussed with the judge who presided over the settlement 7 discussions prior to placing the settlement terms on the record in 8 open court. 9 Here, neither party discussed with the Court at any time 10 during the settlement discussions, or prior to, during, or after the 11 settlement terms were placed on the record in open court, that the 12 terms 13 transcript should be sealed for that, or any other, reason. In fact, 14 it is the Court’s recollection that the parties requested that the 15 terms of the settlement be placed on the record with at least the 16 implicit understanding that by doing so, the agreement would become 17 a matter of public record. Therefore, the Court concludes that 18 Defendant’s 19 interest in understanding the judicial process.” 20 has not presented the Court with any facts by which it could 21 conclude that public availability of the transcript will result in 22 “improper 23 purposes or infringement of trade secrets.” Nor does the Court’s 24 review 25 conference, and an in camera review of the transcript, support such 26 an assertion. Therefore, Defendant has failed to overcome the strong 27 presumption of the right of access to the Court’s records, which in of of the settlement citation use the of the to were to Local be Rule (transcript) discussions with the confidential 16.3 for supports at that the “public or the libelous settlement 28 6 the Also, Defendant scandalous parties or 09cv2839 1 this case is the transcript of the hearing in which the terms of the 2 settlement of this action were placed on the record in open court. 3 Moreover, Ninth Circuit law supports the Court’s settlement 4 process, as used in this case. In Doi v. Halekulani Corp., 276 F.3d 5 1131, 1138 (9th Cir. 2002), a settlement of that action was negoti- 6 ated in off-the-record discussions with the court. 7 parties announced in open court that the case had settled and 8 recited the terms of the settlement. The court held that a settle- 9 ment agreement announced on the record is binding even if a party 10 has a “change of heart” after agreeing to its terms but before the 11 terms are reduced to writing. See also Grimes v. Barber, 2009 WL 12 5062348 (N.D. Cal. 2009). Further, a qualification of the terms of 13 a settlement agreement not stated when the terms of the settlement 14 are placed on the record is unenforceable. WG Security Products v. 15 Tyco International, Ltd., 306 Fed. Appx. 353, 2008 WL 5272759 (9th 16 Cir. 2008). Thereafter, the 17 Here, Defendant seeks to insert, after-the-fact, a confiden- 18 tiality provision into the parties’ recitation of the terms of the 19 settlement placed on the record in open court. 20 is made after the terms of the settlement were placed on the record 21 in open court, after the terms of the settlement were reduced to 22 writing, and without mention of such a confidentiality provision 23 during the private, off-the-record discussions with the Court, or at 24 the time the settlement terms were placed on the record in open 25 court. 26 the Court views Defendant’s request to have the transcript sealed or 27 redacted to protect its confidentiality as a “change of heart” or a 28 qualification to the terms of the settlement, after it agreed to the Defendant’s request Even though Defendant’s Motion is not opposed by Plaintiff, 7 09cv2839 1 terms of the settlement and after the terms of the settlement were 2 reduced to writing. See Grimes, supra, WG Security Products, supra. 3 As a result of the foregoing, Defendant’s Motion is DENIED. 4 DATED: October 15, 2010 5 6 7 Hon. William V. Gallo U.S. Magistrate Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 09cv2839
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