Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-00437/USCOURTS-cand-4_14-cv-00437-9/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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United States District Court 

For the Northern District of California 

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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

HEARTLAND PAYMENT SYSTEMS, INC., 

 

Plaintiff and CounterDefendant, 

 

 v. 

MERCURY PAYMENT SYSTEMS, LLC, 

Defendant and Counter-Claimant. 

________________________________/ 

No. C 14-0437 CW 

ORDER ON MOTIONS 

TO SEAL 

Before the Court are administrative motions to seal Defendant 

and Counter-Claimant Mercury Payment Systems’ unredacted Amended 

Answer, Affirmative Defenses and Counterclaims to Heartland’s 

First Amended Complaint (Docket No. 109), Plaintiff and CounterDefendant Heartland Payment Systems’ Motion to Dismiss Mercury’s 

Counterclaims and to Strike Mercury’s Unclean Hands Affirmative 

Defense (Docket No. 112) and Mercury’s Opposition to Heartland’s 

Motion to Dismiss and to Strike (Docket No. 120). 

Pursuant to Civil Local Rule 79-5, a party seeking to file a 

document under seal must establish that the portions sought to be 

sealed “are privileged, protectable as a trade secret or otherwise 

entitled to protection under the law.” Civ. L.R. 79-5(b). The 

request must be “narrowly tailored” to cover only “sealable 

material.” Id. 

“Historically, courts have recognized a ‘general right to 

inspect and copy public records and documents, including judicial 

records and documents.’” Kamakana v. City & Cty. of Honolulu, 447 

F.3d 1172, 1178 (9th Cir. 2006) (citation omitted). “Unless a 

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particular court record is one ‘traditionally kept secret,’ a 

‘strong presumption in favor of access’ is the starting point.” 

Id. (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 

1122, 1135 (9th Cir. 2003)). 

When a party seeks to seal information attached to a 

dispositive motion, that party must “‘articulate compelling 

reasons supported by specific factual findings’ that outweigh the 

general history of access and the public policies favoring 

disclosure.” Id. at 1178-79 (quoting Foltz, 331 F.3d at 1135) 

(brackets omitted). Resolving “a dispute on the merits . . . is 

at the heart of the interest in ensuring the ‘public’s 

understanding of the judicial process and of significant public 

events.’” Id. at 1179 (citation omitted). 

I. Mercury’s Motion to File Under Seal Amended Answer, 

Affirmative Defenses, and Counterclaims to Heartland’s 

First Amended Complaint 

Mercury moves to file under seal an unredacted version of its 

Amended Answer, Affirmative Defenses and Counterclaims and 

exhibits attached to them (Docket No. 109). Mercury bases this 

motion on Heartland’s previous designation of certain documents as 

subject to the parties’ protective order. Heartland submitted a 

declaration specifying bases for maintaining certain materials 

under seal. Docket No. 111, Declaration of Kajsa M. Minor. 

The Court applies the “compelling reasons” standard and makes 

the following rulings. See Delfino Green & Green v. Workers 

Compensation Sols., LLC, 2015 WL 4235356, at *2 (N.D. Cal.) 

(“Because Plaintiff’s complaint and Defendant’s answer and 

counter-claim are the pleadings on which this action is based, the 

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Court applies the ‘compelling reasons’ standard to Defendant's 

motions to seal.”). 

Mercury’s Second Affirmative Defense: Unclean Hands 

Material Ruling

Page 15:9-14 

beginning with “A 

document 

produced" and 

ending with 

“under 

Heartland’s 

Interchange Plus 

Pricing” 

GRANTED, because the lines describe 

proprietary pricing information and 

communications about pricing (“with the 

expectation of confidentiality,” Minor Dec. 

¶ 3), which Heartland asserts “could be used 

by competitors to undercut Heartland and 

expose Heartland to risk of competitive harm,” 

id. ¶ 6. 

Page 15:14-18 

beginning with 

“An advertisement 

produced” and 

ending with “a 

small merchant”1

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 7. 

Page 15:18–16:1 

beginning with 

“Heartland also 

offers” 

GRANTED, because the lines describe 

proprietary pricing information and 

communications about pricing (“with the 

expectation of confidentiality,” id. ¶ 3), 

which Heartland asserts could result in 

competitive harm if disclosed, id. ¶ 8. 

Page 16:18-19 DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 9. 

Page 17:14-21 and 

17:22-23 ending 

with “email to 

Heartland” 

GRANTED, because the lines “reveal the 

identity of a Heartland customer who is not a 

party to this lawsuit, that customer’s 

confidential communications with Heartland, 

and certain purported terms of that customer’s 

agreement with Heartland, without consent of 

the customer,” id. ¶ 10. Also, because the 

portion to be sealed is an example of a 

practice that otherwise is described in nonsealed portions of the Amended Counterclaims 

about whether Heartland charges a termination 

fee without previously disclosing it, the 

public interest in the sealed information is 

minimal. See Affirmative Defenses ¶ G; Music 

Grp. Macao Commercial Offshore Ltd. v. Foote, 

2015 WL 3993147, at *2 (N.D. Cal.). 

Page 17:23-27 DENIED, because Heartland’s declaration does 

 1 Heartland’s declaration first refers to the information on 

Page 15:18-20 as not sealable, see id. ¶ 7, and, then, sealable, 

see id. ¶ 8. The Court reads the reasons to seal in paragraph 

eight to apply to Page 15:18–20. 

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beginning with 

“Even the 

smallest” 

not support sealing, Minor Dec. ¶ 11.

Mercury’s Counterclaim: Heartland’s Literally False or Misleading 

Advertising Claims 

Material Ruling

Page 27:6-14 

ending with 

“Interchange Plus 

Pricing” 

GRANTED, because the lines describe 

proprietary pricing information and 

communications about pricing (“with the 

expectation of confidentiality,” Minor Dec. 

¶ 3), which Heartland asserts could result in 

competitive harm if disclosed, id. ¶ 12. 

Page 27:14-15 

beginning with “A 

document 

produced” and 

ending with 

“HPS084703” 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 13. 

Page 29:9-14 

(para. 32) and 

Exhibit C 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 14. 

Page 29:15-21 

(para. 33) 

GRANTED, because the lines describe 

proprietary pricing information and 

communications about pricing (“with the 

expectation of confidentiality,” id. ¶ 3), 

which Heartland asserts could result in 

competitive harm if disclosed, id. ¶ 15. 

Page 30:21 DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 16. 

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Page 32:18-33:8 

GRANTED IN PART and DENIED IN PART. Page 

32:18–24 describes proprietary pricing 

information and communications about pricing 

(“with the expectation of confidentiality,” 

id. ¶ 3), which Heartland asserts could result 

in competitive harm, if disclosed, id. ¶ 17. 

However, Page 32:25–33:8 describes the name of 

a new fee, internal Heartland communications 

about the importance of the fee and internal 

Heartland communications about how it expected 

customers to react to the fee. Although 

Heartland identifies an interest in 

maintaining communications about its pricing 

strategy confidential, the information is 

relevant to Mercury’s theory of how the name 

of the fee is deceptive for its “fair and 

upfront pricing” and Unfair Competition Law 

(UCL) claims and, thus, there is a strong 

public interest in the information. See 

Kamakana, 447 F.3d at 1179. Cf. In re Elec. 

Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 

2008) (unpublished) (“A ‘trade secret may 

consist of any formula, pattern, device or 

compilation of information which is used in 

one’s business, and which gives him an 

opportunity to obtain an advantage over 

competitors who do not know or use it.’” 

(quoting Restatement of Torts § 757, cmt. B)). 

Also, Heartland’s prior motion to dismiss 

referred to this fee by name and argued that 

Mercury “ignore[d] that Heartland specifically 

discloses this fee in Heartland’s Merchant 

Application and identifies it as a fee charged 

by Heartland[.]” Docket No. 94, Heartland’s 

Motion to Dismiss at 8. Finally, Heartland 

has not explained precisely how the 

information on Page 32:25–33:8 would be used 

by competitors to harm it. Thus, Heartland 

provides sufficiently compelling reasons to 

seal lines revealing pricing terms, but not 

lines revealing how Heartland expected 

customers to react to it. 

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Page 33:14-18 

ending with 

“HPS082903.” 

GRANTED, because the lines describe 

proprietary pricing information and 

Heartland’s financial situation, which 

Heartland asserts could result in competitive 

harm if disclosed. Id. ¶ 18. Yet, given that 

this information ultimately may be relevant to 

Mercury’s “fair and upfront pricing” claim, 

the public interest in disclosure might 

outweigh the reasons Heartland provides for 

sealing later in the litigation. See Music 

Grp. Macao, 2015 WL 3993147, at *6 (“It may 

well be that, as this case progresses the 

balance shifts in favor of disclosure.”). 

Page 33:18-26 

beginning with 

“One Heartland 

executive” 

DENIED. Heartland asserts that these lines 

“describe proprietary pricing terms and 

formulas and compilations of information used 

by Heartland in its business which give 

Heartland an opportunity to obtain an 

advantage over competitors who do not know or 

use it,” and contain pricing strategy 

information that competitors could use to 

undercut Heartland. Id. ¶ 19. Yet the lines 

refer to how Heartland benefited from the fee, 

how it should use or adjust the fee and how it 

should explain the fee to customers, all of 

which relate to the merits of Mercury’s “fair 

and upfront pricing” and UCL claims and, thus, 

there is a strong public interest in the 

information. See Kamakana, 447 F.3d at 1179. 

In addition, Heartland has not explained 

precisely how the information would be used by 

competitors to harm it. 

Page 37:9-38:2 

GRANTED IN PART and DENIED IN PART. Heartland 

explains that the lines reveal confidential 

nonparty customers’ information without the 

customers’ consent. Minor Dec. ¶ 20. Yet 

this reason only justifies redacting the names 

of the customers. Thus, the motion to seal is 

GRANTED to the extent the names are redacted, 

but DENIED as to the information about the 

customers’ interactions with Heartland. 

Page 38:3–4 DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 21. 

Page 38:10–12 and 

Exhibit C 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 22. 

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Page 38:12-20 

beginning with 

“Heartland’s 

‘Monthly 

Minimum’” 

GRANTED, because the lines contain proprietary 

pricing information and communications about 

pricing, which Heartland asserts could result 

in competitive harm if disclosed, and because 

the lines reveal confidential nonparty 

customers’ information without the customers’ 

consent. Minor Dec. ¶ 23. Yet, given that 

non-customer-identifying information 

ultimately may be relevant to Mercury’s “fair 

and upfront pricing” claim, the public 

interest in disclosure might outweigh the 

reasons Heartland provides for sealing later 

in the litigation. See Music Grp. Macao, 2015 

WL 3993147, at *6. 

Page 38:23-25 DENIED, because Heartland’s declaration does 

not support sealing, Minor Dec. ¶ 24. 

Page 38:28-39:1 

GRANTED IN PART and DENIED IN PART. The 

motion is GRANTED to the extent the lines 

reveal confidential nonparty customer 

information without the customer’s consent. 

Id. ¶ 25. However, this reason only justifies 

redacting the customer’s name. Thus, the 

motion to seal is GRANTED to the extent the 

name is redacted, but DENIED with regard to 

the information about the customer’s 

interactions with Heartland. 

Page 39:2-8 

DENIED, because these lines describe whether a 

given regulation existed in an industry and 

Heartland communications about how customers 

have reacted to a fee. Although Heartland 

identifies an interest in maintaining 

communications about its pricing strategy 

confidential, the name of the fee, how 

customers react to it and Mercury’s theory of 

how it is deceptive relate to the merits of 

Mercury’s “fair and upfront pricing” and UCL 

claims and, thus, there is a strong public 

interest in the information. See Kamakana, 

447 F.3d at 1179. Also, Heartland has not 

explained precisely how the information would 

be used by competitors to harm it. Thus, 

Heartland fails to provide sufficiently 

compelling reasons to seal lines revealing how 

Heartland characterizes its pricing and how 

customers react to it. 

Page 43:26-44:1 DENIED, because Heartland’s declaration does 

not support sealing, Minor Dec. ¶ 27. 

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Page 44:3-24 and 

Exhibit F 

GRANTED. Heartland characterizes this 

information as internal documents and 

communications between Heartland and customers 

that demonstrate “Heartland’s marketing and 

communications strategy.” Id. ¶ 28. Also, 

there appears to be minimal public interest in 

this information because, although it relates 

to Mercury’s defamation claim by describing 

Heartland’s marketing and communication 

strategy, the basis for that claim is the 

content of an advertisement—“Pennies Add Up”—

that is not sealed. Accordingly, the balance 

favors sealing the material at this time. 

II. Heartland’s Motion to File  Under Seal Motion to Dismiss 

 Heartland moves to file under seal portions of its motion to 

dismiss Mercury’s Amended Counterclaims and Memorandum of Points 

and Authorities, and portions of the Declaration of Lisa A. Jacobs 

in support of the motion to dismiss (Docket No. 112). The Court 

applies the “compelling reasons” standard and makes the following 

rulings. 

Heartland’s Motion to Dismiss 

Material Ruling

Page 7:24-26 

GRANTED. The lines contain information about 

“Heartland’s pricing strategy and billing 

methodology,” which Heartland asserts could 

result in competitive harm if disclosed, and 

reveal confidential nonparty customer 

information without the customer’s consent. 

Docket No. 112-1, Declaration of Kajsa M. 

Minor ¶ 5. Yet, given that this information 

ultimately may be relevant to Mercury’s “fair 

and upfront pricing” claim, the public 

interest in disclosure might outweigh the 

reasons for sealing later in the litigation. 

See Music Grp. Macao, 2015 WL 3993147, at *6. 

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Page 16:6-14 

GRANTED IN PART and DENIED IN PART. The 

motion is GRANTED to the extent it redacts 

“the identity of two Heartland customers who 

are not parties to this lawsuit, those 

customer[s’] confidential interactions with 

Heartland, and the terms of those customer[s’] 

agreements with Heartland, without consent of 

those customers,” Minor Dec. ¶ 6. Redaction 

may prevent disclosure of their identities. 

The motion otherwise is DENIED. Although 

Heartland identifies an interest in 

maintaining communications about its pricing 

strategy confidential, the lines refer to 

Mercury’s allegations about Heartland’s 

disclosures to merchants and a refund 

Heartland provided to an unidentified merchant 

and, thus, relate to the merits of Mercury’s 

“fair and upfront pricing” claim and support a 

strong public interest in the information. 

See Kamakana, 447 F.3d at 1179. Also, 

Heartland has not explained precisely how the 

information would be used by competitors to 

harm it. 

Page 17:6-15 and 

17:25-18:1 

GRANTED. The lines contain information about 

“Heartland’s pricing strategy and billing 

methodology,” which Heartland asserts could 

result in competitive harm if disclosed, and 

reveal confidential nonparty customers’ 

information without the customers’ consent. 

Minor Dec. ¶ 7. Yet, given that this 

information ultimately may be relevant to 

Mercury’s “fair and upfront pricing” claim, 

public interest in disclosure might outweigh 

the reasons for sealing later in the 

litigation. See Music Grp. Macao, 2015 WL 

3993147, at *6. 

Pages 24:18-24, 

25:2-3, 25:10-12 

and 25:14-16 

GRANTED. The lines contain information about 

“Heartland’s pricing strategy and billing 

methodology,” which Heartland asserts could 

result in competitive harm if disclosed. 

Minor Dec. ¶ 8. Yet, given that this 

information ultimately may be relevant to 

Mercury’s “fair and upfront pricing” claim, 

the public interest in disclosure might 

outweigh the reasons for sealing later in the 

litigation. See Music Grp. Macao, 2015 WL 

3993147, at *6. 

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Jacobs Declaration 

Material Ruling

Exhibit 4 GRANTED IN PART and DENIED IN PART. The 

motion is GRANTED to the extent it redacts 

information revealing confidential nonparty 

customer information without the customer’s 

consent. Minor Dec. ¶ 9. That reason 

justifies redacting information that would 

reveal the identity of the customer. However, 

the motion otherwise is DENIED because the 

exhibit contains additional information that 

appears unrelated to such identifying 

information, e.g., names of deposits and fees. 

To the extent Heartland asserts that “Mercury 

produced this document in the litigation and 

designated it ‘Confidential’ pursuant to the 

Stipulated Protective Order,” id., Mercury has 

not filed a declaration in support of sealing. 

III. Mercury’s Motion to File Under Seal Opposition to Motion 

to Dismiss Under Seal 

 Mercury moves to file under seal an unredacted version of its 

opposition to Heartland’s motion to dismiss (Docket No. 120). 

Mercury bases this motion on Heartland’s previous designation of 

the documents at issue as subject to the parties’ protective 

order. Heartland submitted a declaration specifying bases for 

maintaining certain materials under seal, while indicating that 

other materials need not remain under seal. Docket No. 122, 

Declaration of Kajsa M. Minor. The Court applies the “compelling 

reasons” standard and makes the following rulings. 

Material Ruling

Page 8:23–24 

DENIED, because Heartland’s declaration does 

not support sealing, Minor Dec. ¶ 6. 

Page 10:5–7 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 7. 

Page 13:16–17 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 8. 

Page 13:22–23 

DENIED, because Heartland’s declaration does 

not support sealing, id. ¶ 9. 

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Page 13:25–26 

GRANTED, because the lines describe 

proprietary pricing information and 

Heartland’s financial situation, which 

Heartland asserts could result in competitive 

harm if disclosed. Id. ¶ 10. Yet, given that 

this information ultimately may be relevant to 

Mercury’s “fair and upfront pricing” claim, 

the public interest in disclosure might later 

outweigh the reasons for sealing. See Music 

Grp. Macao, 2015 WL 3993147, at *6. 

Page 13:28–14:2 

DENIED. Heartland asserts that the lines 

contain pricing strategy information “which, 

if made public, could be used by competitors 

to undercut Heartland and expose Heartland to 

risk of competitive harm.” Minor Dec. ¶ 11. 

Yet the lines describe internal Heartland 

communications about how it expected customers 

to react to a fee. Although Heartland 

identifies an interest in maintaining 

communications about its pricing strategy 

confidential, the information is relevant to 

Mercury’s theory of how the name of the fee is 

deceptive for the merits of Mercury’s “fair 

and upfront pricing” and UCL claims and, thus, 

there is a strong public interest in the 

information. See Kamakana, 447 F.3d at 1179. 

Also, Heartland has not explained precisely 

how the information about how it perceived 

customers would react to the fee would be used 

by competitors to harm Heartland. Thus, 

Heartland provides insufficient reason to seal 

lines revealing how Heartland characterizes 

its pricing and expected customers to react. 

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Page 14:17–24 GRANTED IN PART and DENIED IN PART. Heartland 

explains that the lines reveal confidential 

nonparty customers’ information without the 

customers’ consent. Minor Dec. ¶ 12. Yet 

this reason only justifies redacting the names 

of the customers. To the extent Heartland 

also asserts that the lines describe 

“Heartland’s pricing strategy and billing 

methodology with respect to certain 

merchants,” and that revealing this 

information could result in competitive harm, 

id., Heartland fails to show compelling reason 

to seal the remainder of the information. The 

lines describe merchants complaining that they 

were charged an early termination fee that 

Heartland previously had not disclosed, 

allegations relevant to Mercury’s “fair and 

upfront pricing” and UCL claims and, thus, 

supporting a strong public interest in the 

information. See Kamakana, 447 F.3d at 1179. 

Also, Heartland has not explained precisely 

how the information about customer complaints 

would be used by competitors to harm 

Heartland. Thus, the motion to seal is 

GRANTED to the extent the names are redacted, 

but DENIED with regard to the remainder of the 

information about the customers’ complaints. 

Page 15:5–6 GRANTED IN PART and DENIED IN PART. The 

motion is GRANTED to the extent the lines 

reveal confidential nonparty customer 

information without the customer’s consent, 

Minor Dec. ¶ 25. However, this reason only 

justifies redacting the name of the customer. 

Thus, the motion is GRANTED to the extent the 

name is redacted, but DENIED with regard to 

the remainder of the information about the 

customer’s interactions with Heartland. 

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Page 15:13–17 DENIED. These lines describe whether a given 

regulation existed in an industry and 

Heartland communications about how customers 

have reacted to a fee. Although Heartland 

identifies an interest in maintaining 

communications about its pricing strategy 

confidential, the name of the fee, how 

customers react to it and Mercury’s theory of 

how it is deceptive relate to the merits of 

Mercury’s “fair and upfront pricing” and UCL 

claims and, thus, there is a strong public 

interest in the information. See Kamakana, 

447 F.3d at 1179. Also, Heartland has not 

explained precisely how the information would 

be used by competitors to harm it. Thus, 

Heartland fails to provide sufficiently 

compelling reasons to seal lines revealing how 

Heartland characterizes its pricing and how 

customers react to it. 

CONCLUSION 

 For the reasons above, the Court GRANTS IN PART and DENIES IN 

PART the motions to seal (Docket Nos. 109, 112, 120). If either 

party believes there are particularized compelling reasons to seal 

the portions for which the Court denies the motions, it must file 

within four days of the date this Order issues a supplemental 

declaration addressing the deficiencies identified above. If 

neither party does so, then within ten days of the date this Order 

issues the parties shall file public versions of the documents 

addressed above in compliance with this Order and the District’s 

Civil Local Rules 79-5(e)(2) and (f)(1)–(3). 

IT IS SO ORDERED. 

Dated: April 8, 2016 

CLAUDIA WILKEN 

United States District Judge 

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