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London Computer Systems, Inc. v. Zillow, Inc.

United States District Court, S.D. Ohio, Western Division

August 29, 2019

LONDON COMPUTER SYSTEMS, INC., Plaintiff,
v.
ZILLOW, INC., Defendant.

          ORDER GRANTING THE PARTIES' UNOPPOSED MOTIONS TO SEAL (DOCS. 48, 51)

          Timothy S. Black, United States District Judge.

         This civil action is before the Court on the parties' unopposed motions to seal. (Docs. 48, 51).

         I. BACKGROUND

         Plaintiff is an Ohio corporation, headquartered in Cincinnati. (Doc. 1 at ¶ 5). Defendant is a Washington corporation, headquartered in Seattle. (Id. at ¶ 6). Both parties offer property-management products: Plaintiff's is called “Rent Manager”; Defendant's is called “Zillow Rental Manager.” (Id. at ¶¶ 10, 12; Doc. 27-1 at 14).

         On October 1, 2018, Plaintiff filed suit against Defendant for, inter alia, trademark infringement, deceptive trade practices, and unfair competition. (Doc. 1 at ¶¶ 16-55). Thereafter, Plaintiff filed a motion for a preliminary injunction (the “Preliminary Injunction”).[1] (Doc. 27).

         On November 14, 2018, the Court granted the parties leave to file their Preliminary Injunction memoranda (and related declarations, exhibits, etc.) under conditional seal. (Doc. 26 at 5). However, the Court directed the parties to submit motions to seal within 30 days. (Id.)

         The Court held as follows:

[T]he Court will allow the parties to file their pleadings under seal on the condition that the seal will expire 30 days from filing unless (1) one party, or both of the parties, successfully move(s) to seal the filing under the proper standard set forth by the Sixth Circuit Court of Appeals, or (2) one party, or both of the parties, move(s) to extend the conditional period on the basis that a motion to seal is pending before the Court.

(Id.)[2]

         Pursuant to the Court's direction, the parties filed numerous documents under conditional seal. (See Docs. 27-32, 35-39, 42-43, 45-46 (including numerous attachments)). Thereafter, the parties filed motions to seal. (Docs. 48, 51). The parties' motions to seal are now ripe for adjudication.

         II. STANDARD OF REVIEW

         A district court's decision to seal court records is reviewed for an abuse of discretion. Beauchamp v. Fed. Home Loan Mortg. Corp., 658 Fed.Appx. 202, 207 (6th Cir. 2016) (citing Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 306 (6th Cir. 2016)). However, “the district court's decision is not accorded the deference that standard normally brings.” Id. (quoting Shane Grp., 825 F.3d at 306).

         There is a “stark” difference between, on the one hand, the propriety of allowing litigants to exchange documents in secret, and on the other hand, the propriety of allowing litigants to shield from public view those documents which are ultimately relied on in the Court's adjudication. See Shane Grp., 825 F.3d at 305. Parties are typically entitled to a “protective order” limiting the disclosure of documents in discovery upon a mere showing of good cause. Id. However, “very different considerations apply” when these materials are filed in the public record. Id. (quoting Joy v. North, 692 F.2d 880, 893 (2d Cir. 1982)).

         Unlike information merely exchanged between the parties, the public has a strong interest in obtaining the information contained in the court record. Id. Accordingly, the courts have long recognized a “strong presumption in favor of openness” of court records. Id. (quoting Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165, 1179 (6th Cir. 1983)).

         The Sixth Circuit has repeatedly explained that a party moving to seal court records must overcome a significant burden. See Shane Grp., 825 F.3d at 305-06; Beauchamp, 658 Fed. App'x at 207-08; Rudd Equip. Co. v. John Deere Constr. & Forestry Co., 834 F.3d 589, 593-96 (6th Cir. 2016). According to the Sixth Circuit:

The burden of overcoming that presumption [of openness] is borne by the party that seeks to seal them. In re Cendant Corp., 260 F.3d 183, 194 (3d Cir. 2001). The burden is a heavy one: “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). . . . 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. See, e.g., Press-Enter. Co. v.Superior Court of California, Riverside Cnty., 464 U.S. 501, 509-11, 104 S.Ct. 819, 78 L.Ed.2d 629 (1984). The proponent of sealing therefore must “analyze in detail, document by document, the propriety of secrecy, providing reasons and legal citations.” Baxter, 297 F.3d at 548.

Shane Grp., 825 F.3d at 305-06.

         A movant's obligation to provide compelling reasons justifying the seal exists even if the parties themselves agree the filings should be sealed. See Rudd Equip., 834 F.3d at 595 (noting that the parties “could not have waived the public's First Amendment and common law right of access to court filings”) (citation omitted); see also In re Knoxville, 723 F.2d at 475 (noting that, in reviewing a motion to seal, the district court has “an obligation to consider the rights of the public”). Simply put, this Court has an obligation to keep its records open for public inspection, and that obligation is not conditioned upon the desires of the parties to the case. See Shane Grp., 825 F.3d at 306.

         A district court that chooses to seal court records must set forth specific findings and conclusions “which justify nondisclosure to the public.” Id. (quoting Brown & Williamson, 710 F.2d at 1176). A court's failure to set forth reasons explaining why the interests in support of nondisclosure are compelling, why the interests in support of access are less so, and why the seal itself is no broader than necessary is grounds to vacate an order to seal. Id.

         III. ANALYSIS

         A. Plaintiff's Motion to Seal

         Plaintiff argues that the following documents (the “Pl. Docs.”) contain highly confidential business information, which should remain under seal:

• Memorandum in Support of Plaintiff's Renewed Motion for Preliminary Injunction (Doc. 27-1);
• Deposition of David Hegemann and Exhibits 7-14 and 17 attached thereto ...

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