Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00258/USCOURTS-casd-3_15-cv-00258-5/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332pr Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

STACY LUCAS, an individual, 

TAREK ALBABA, an individual, 

RIGOBERTO VINDIOLA, an 

individual, DAVID GAMMA, an 

individual, SARAH FISHER, an 

individual, on behalf of themselves 

and all other similarly situated 

consumers,

Plaintiffs,

Case No. 15-cv-00258-BAS-NLS

ORDER:

(1) GRANTING IN PART AND 

DENYING IN PART 

PLAINTIFFS’ MOTION TO 

SEAL;

(2) GRANTING PLAINTIFFS’

SUPPLEMENTAL MOTION TO 

SEAL; AND

(3) GRANTING DEFENDANT 

BREG INC.’S MOTION TO SEAL

[ECF Nos. 53, 61, 72]

v.

BREG, INC., a California 

corporation; GARY LOSSE, an 

individual; MARK HOWARD, an 

individual; and DOES 1 through 50, 

inclusive, 

Defendants.

Presently before the Court are Plaintiffs’ motions to file under seal certain 

exhibits in support of their motion for class certification, and Defendant Breg, Inc.’s 

motion to file under seal an expert report in support of Breg’s opposition to Plaintiffs’ 

motion for class certification. For the following reasons, the Court GRANTS IN 

PART and DENIES IN PART Plaintiffs’ motion to seal (ECF No. 53), GRANTS 

Plaintiffs’ supplemental motion to seal (ECF No. 61), and GRANTS Breg’s motion 

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to seal (ECF No. 72).

I. LEGAL STANDARD

“It is clear that the courts of this country recognize a general right to inspect 

and copy public records and documents, including judicial records and documents.”

Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). Thus, in assessing a 

motion to seal, the starting point is “a strong presumption in favor of access to court 

records.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 

2003). “The presumption of access is ‘based on the need for federal courts, although

independent—indeed, particularly because they are independent—to have a measure 

of accountability and for the public to have confidence in the administration of 

justice.” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 

2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)).

A party seeking to seal a judicial record bears the burden of overcoming the 

strong presumption of access. Foltz, 331 F.3d at 1135. The showing required to meet 

this burden depends upon whether the documents to be sealed relate to a motion that 

is “more than tangentially related to the merits of [the] case.” Ctr. for Auto Safety, 

809 F.3d at 1101. When the underlying motion is more than tangentially related to 

the merits, the “compelling reasons” standard applies. Id. at 1096–98. When the 

underlying motion does not surpass the tangential relevance threshold, the “good 

cause” standard applies. Id.

Here, the motions to file under seal relate to Plaintiffs’ motion for class 

certification. A class certification motion “generally involves considerations that are 

enmeshed in the factual and legal issues comprising plaintiff’s cause of action.” Wal–

Mart Stores, Inc. v. Dukes, 564 U.S. 338, 352 (2011) (quoting Gen. Tel. Co. of Sw. 

v. Falcon, 457 U.S. 147, 160 (1982)) (internal quotation marks omitted). In deciding 

whether to certify a class, district courts engage in a “rigorous analysis” that 

frequently “will entail some overlap with the merits of the plaintiff’s underlying 

claim.” Dukes, 564 U.S. at 351. Thus, the Court finds that Plaintiffs’ motion for class 

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certification is more than tangentially related to the merits of the case, and that the 

compelling reasons standard applies.

In general, sealing court records under the compelling reasons test will be 

justified when such records could be used to “gratify private spite or promote public 

scandal,” to circulate “libelous” statements, or “as sources of business information 

that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598 (citations 

omitted). As to this last category, courts have been willing to seal court filings 

containing confidential business material, “such as marketing strategies, product 

development plans, licensing agreements, and profit, cost, and margin data,” where 

the parties have been able to point to concrete factual information to justify sealing. 

Cohen v. Trump, No. 13-cv-2519-GPC-WVG, 2016 WL 3036302, at *5 (S.D. Cal. 

May 27, 2016) (citing cases). However, “[t]he mere fact that the production of 

records may lead to a litigant’s embarrassment, incrimination, or exposure to further 

litigation will not, without more, compel the court to seal its records.” Kamakana v. 

City & County of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006) (citation omitted).

II. DISCUSSION

In their motion to seal (ECF No. 53), Plaintiffs seek to file under seal a total 

of nine exhibits, including Breg’s 510(k) premarket notifications, Breg’s U.S. 

wholesale price lists from various years, Breg’s Cold Therapy Training Manual, 

excerpts from Breg’s customer lists, a copy of a 2006 settlement involving Breg, and 

a Form 10-K annual report pulled from the SEC’s online EDGAR system. The Court 

finds that Plaintiffs satisfy the compelling reasons test as to only four of these records: 

Breg’s 510(k) premarket notifications, Breg’s Cold Therapy Training Manual, and 

the filing containing excerpts from Breg’s customer lists. These documents contain 

confidential business material that might harm Breg’s competitive standing. 

However, Plaintiffs have not satisfied the compelling reasons test as to the 

remaining five documents, for the following reasons. First, it is unclear how Breg’s 

U.S. wholesale price lists from the years 2003, 2005, and 2009 would harm Breg’s 

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market position, and neither side articulates a factual basis for such a finding. Second, 

although the 2006 settlement agreement contains a confidentiality provision, that 

alone is insufficient to overcome the strong presumption in favor of public access.

See, e.g., Select Portfolio Serv. v. Valentino, No. C 12–0334 SI, 2013 WL 1800039, 

at *3 (N.D. Cal. Apr. 29, 2013) (finding that the parties’ agreement among 

themselves to make a settlement agreement confidential was insufficient to shield the 

information from public access). Finally, Form 10-Ks are publicly accessible 

documents available through the SEC’s online EDGAR database—there is no basis 

for sealing such documents. Therefore, Plaintiffs’ motion to seal is GRANTED IN 

PART and DENIED IN PART.

In their supplemental motion to seal (ECF No. 61), Plaintiffs seek to file under 

seal an exhibit containing excerpts of Breg sales data broken down by year and 

product type. This motion is GRANTED. The information in this exhibit is detailed 

enough to constitute the kind of sales data that could undermine Breg’s market 

position if made public.

For its part, Defendant Breg seeks to file under seal the expert report of Dwight 

D. Steward, Ph.D., on the grounds that the report contains confidential Breg sales and 

marketing data that would lose its value if made public. (ECF No. 72.) The Court 

finds that Breg has met the compelling reasons standard. The public disclosure of this 

business information could result in improper use by Breg’s competitors seeking to 

undercut Breg’s market position. See, e.g., Algarin v. Maybelline, LLC, Civil No. 

12cv3000 AJB (DHB), 2014 WL 690410, *3–4 (Feb. 21, 2014) (finding the 

compelling reasons standard satisfied where public access to marketing and sales data

“may result in improper use by competitors who may circumvent expending their 

own resources in obtaining the information”). Accordingly, Breg’s motion to seal is 

GRANTED.

III. CONCLUSION & ORDER

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

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PART Plaintiffs’ motion to seal (ECF No. 53), GRANTS Plaintiffs’ supplemental 

motion to seal (ECF No. 61), and GRANTS Breg’s motion to seal (ECF No. 72). 

Accordingly, the Clerk of Court is instructed to file the following currently lodged 

documents under seal: ECF No. 54 (Exh. 3), ECF No. 54-1 (Exh. 4), ECF No. 54-2 

(Exh. 7), ECF No. 54-7 (Exh. 36), ECF No. 62, and ECF No. 73.

IT IS SO ORDERED.

DATED: September 28, 2016

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