Hudock v. LG Elecs. U.S.A., Inc., Case No. 0:16-cv-1220-JRT-KMM

Hudock et al., Plaintiff, v. LG Electronics U.S.A., Inc., et al., Defendants.

This document relates to: All actions

Case No. 0:16-cv-1220-JRT-KMM

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

June 2, 2020

ORDER

This matter is before the Court on the parties' Joint Motion Regarding Continued Sealing for documents filed under temporary seal in connection with the Defendants' motion to exclude the opinions and testimony of the Plaintiffs' damages experts, Steven Gaskin and Colin Weir. (Joint Mot., ECF No. 471; Defs.' Mot. to Exclude, ECF No. 373.) Having reviewed the relevant documents and applying the legal standards articulated in IDT Corp. v. eBay, 709 F.3d 1220 (8th Cir. 2013), the Joint Motion is GRANTED IN PART and DENIED IN PART as set forth in this Order.

I. Agreement to Unseal

First, the Court notes that the parties have agreed that several documents filed under temporary seal in connection with the Defendants' motion to exclude should be unsealed. These include: (1) Ms. Wilkinson's Declaration submitted in support of the motion (ECF 377); (2) excerpts of Gaskin's deposition transcript (ECF 377-1, 387, 392-1); (3) excerpts of Weir's deposition transcript (ECF 377-4, 387-1); (4) excerpts of the deposition of Ronald Wilcox (ECF 387-2); (5) excerpts of the deposition of Keith Ugone (ECF 387-3); and (6) Ms. Wilkinson's Reply Declaration (ECF 392). Based on the parties' agreement that these documents should be unsealed, the Clerk of Court is directed to unseal the documents at the following docket entries: 377-1, 377-4, 387, 387-1, 387-2, 387-3, 392, 392-1.

II. Remaining Documents

The parties disagree as to the remaining documents at issue. The Defendants argue that the following documents should remain under seal, and the Plaintiffs disagree: (1) the Defendants' unredacted memorandum of law in support of the motion to exclude (ECF 375); (2) the Declaration of Dr. Ronald Wilcox and supporting exhibits (ECF 377-2); (3) the Declaration of Colin Weir and exhibits (ECF 377-3); (4) the Declaration of Keith Ugone, Ph. D., and exhibits (ECF 377-5); (5) the Plaintiffs' unredacted opposition memorandum (ECF 384); and (6) the Defendants' unredacted reply memorandum (ECF 390).¹

A. Legal Standard

The parties dispute the applicable legal standard. As previously noted by this Court, the standard governing requests to seal documents depends on whether the documents constitute "judicial records." If they do, then there is a presumption of public access. IDT Corp. v. eBay, 709 F.3d 1220 (8th Cir. 2013); Aviva Sports, Inc. v. Fingerhut Direct Mktg., Inc., 960 F. Supp. 2d 1011, 1013 (D. Minn. 2013). Courts must weigh competing interests when determining whether judicial records should be sealed or made publicly available. Webster Groves Sch. Dist. v. Pulitzer Publ'g Co., 898 F.2d 1371, 1376 (8th Cir. 1990). Courts consider the degree to which "sealing a judicial record would interfere with the interests served by the common-law right of access and balance that interference against the salutary interests served by maintaining confidentiality of the information sought to be sealed." IDT Corp., 709 F.3d at 1223. This balancing must take into account "the role of the material at issue in the exercise of Article III judicial power and resultant value of such information to those monitoring the federal courts." Id. at 1224; see also Krueger v. Ameriprise Fin., Inc., Civ. No. 11-2781 (SRN/JSM), 2014 WL 12597948, at *8-9 (D. Minn. Oct. 14, 2014) (discussing information submitted in connection with a motion for summary judgment and its impact on the adjudicatory process). The party seeking to have the information sealed must show that there is a "compelling reason" to overcome the public's right to access judicial records.

If the documents at issue are not "judicial records," then the Court applies a "good cause" standard to determine whether the material should be sealed. Krueger, 2014 WL 12597948, at *11 ("If the documents are not judicial records, the Court will order the documents to remainunder seal because Ameriprise met its burden under Rule 26(c) to establish good cause to maintain the confidentiality of the documents."). The party seeking to seal such documents must demonstrate, pursuant to Fed. R. Civ. P. 26(c), that continued sealing is needed to protect it from "annoyance, embarrassment, oppression, or undue burden or expense...." Fed. R. civ. P. 26(c). The types of information the Court may choose to protect include "trade secrets or other confidential research, development, or commercial information...." Id.

The Court has not located any controlling precedent indicating whether documents filed in connection with Daubert motions are subject to the "compelling reason" standard for remaining sealed or the more lenient "good cause" standard. However, several courts apply the stricter standard when documents at issue are "more than tangentially related to the merits of a case...." See Sumotext Corp. v. Zoove, Inc., Case No. 16-cv-01370-BLF, 2019 WL 6841259, at *1 (N.D. Cal. Dec. 1, 2019) (citing Ctr. For Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1101-02 (9th Cir. 2016)); Krueger, 2014 WL 12597948, at *9 n.8 (considering whether the issues in the underlying class-certification motion were "related ... only tangentially to the underlying merits of plaintiffs' claims"). Where the documents are filed in the context of Daubert motions that are intertwined with the ultimate merits of the claims, courts will require a showing sufficient to overcome the presumption of public access. Sumotext Corp., 2019 WL 6841259, at *1 (finding that the "compelling reasons standard applies" to sealing motions related to "expert opinions relevant to the motion for summary judgment"); GoDaddy.com LLC v. RPost Comm'ns Ltd., 2016 WL 1158851, at *3 (D. Ariz. Mar. 24, 2016) (applying "compelling reasons" standard to request to seal documents filed in connection with plaintiff's Daubert motion to exclude defendant's damages expert where plaintiff also sought summary judgment on the question of lack of evidence of damages) (citing In re Midland Nat'l Life Ins. Co. Annuity Sales Prac. Litig., 686 F.3d 1115, 1120 (9th Cir. 2012)); see also Gubarev v. Buzzfeed, Inc., 365 F. Supp. 3d 1250, 1255-56, 1258 (S.D. Fla. 2019) (providing that the public right of access attaches to documents filed in connection with motions asking the court to invoke its powers and finding that unsealing papers relating to Daubert motions was "critical for the public to be able to understand the reasoning and substantive effect of the Court's orders herein").

Against this legal landscape, the Court concludes that the Defendants are required to provide compelling reasons to overcome the public's right of access to the documents filed in connection with their Daubert motion. Here, the Defendants suggest that the more lenient standard should apply because their Daubert motion "turns on the admissibility of [the Plaintiffs' experts'] testimony ... and not the merits of Plaintiffs' claims...." (Joint Mot. at 3-4.) However,the Defendants understate the degree to which their efforts to exclude the opinions and testimony of Plaintiffs' damages experts are intertwined with the issues raised in the summary-judgment motion. The Defendants have argued that they are entitled to summary judgment on all of the Plaintiffs' claims because they have provided insufficient evidence of damages. (Defs.' Mem. in Supp. of Summ. J. at 19-29, ECF 436.) More specifically, Defendants ask the District Court to exclude the evidence provided by Plaintiffs' damages experts in their Daubert motion, and if those motions are successful, they suggest the Plaintiffs' claims should be dismissed because they have no admissible damages evidence. (Id. at 20-21.) Further, Defendants assert that they are entitled to summary judgment because, even if the Plaintiffs' expert reports are admissible, such evidence is inadequate to prove damages. (Id. at 21-29.) Because the Daubert motion is more than tangentially related to the substantive merits of the case, the documents related to the Daubert motion are judicial records to which the presumption of public access applies.

B. Analysis

In support of their requests that the six documents listed above remain under seal, the Defendants have offered the Declaration of Timothy Alessi (ECF 369-2), who is a Senior Director of Product Marketing with LG, and the Declaration of Luke Motschenbacher (ECF 369-2), a Vice President with Best Buy. Defendants rely on these Declarations to show that they maintain confidentiality of certain information and that its public disclosure would cause significant and undue harm to their businesses. (See, e.g., Joint Mot. at 5.) Both Mr. Alessi and Mr. Motschenbacher describe how their respective companies are involved in competitive industries, and Defendants rely on maintaining certain trade secrets and confidential strategies in conducting their business. These include strategies for television pricing, maintenance of sales data, results of consumer research and consumer surveys, strategies for developing online and in-store marketing, and practices for responding to customer complaints. The Defendants argue that revealing such information could cause both companies competitive harm. Below, the Court considers these assertions of competitive harm in the context of the specific documents at issue.

1. Defendants' Unredacted Supporting Memorandum

The Defendants filed the Daubert motion's supporting memorandum in both redacted and unredacted form, the latter being under temporary seal. The redacted version of the memorandum removes a substantial amount of information the Defendants ask the District Court to consider in support of their request to exclude the testimony of the Plaintiffs' experts, Gaskins and Weir. (ECF 374.)

Having reviewed both versions of the memorandum in the context of the asserted justifications for continued sealing found in...