Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_18-cv-02107/USCOURTS-cand-5_18-cv-02107-0/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1331 Fed. Question: Securities Violation

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

CITY OF BIRMINGHAM RELIEF AND 

RETIREMENT SYSTEM,

Plaintiff,

v.

REED HASTINGS, et al.,

Defendants.

Case No. 18-cv-02107-BLF 

ORDER GRANTING PLAINTIFF’S

ADMINISTRATIVE MOTION TO FILE 

UNDER SEAL, AS MODIFIED BY 

NOMINAL DEFENDANT NETFLIX’S 

NARROWED REDACTIONS

[Re: ECF 3, 12]

Plaintiff City of Birmingham Relief and Retirement System (“Plaintiff”) has filed a 

redacted Verified Shareholder Derivative Complaint (“Complaint”) against Defendants along with 

an administrative motion to seal portions of the Complaint because it references content 

designated by Nominal Defendant Netflix, Inc. (“Netflix”) as confidential pursuant to a 

Confidentiality Agreement. See ECF 3. Plaintiff explains that it takes no position as to whether 

the information referenced in the Complaint is confidential, and Netflix’s designation is Plaintiff’s 

only basis for the requested redactions. Id. Netflix has properly filed supporting declarations as 

the designating party, conceding that some of the redactions are unnecessary but arguing that 

compelling reasons exist to seal certain internal non-public financial information. See ECF 12. 

For the reasons that follow, Plaintiff’s administrative motion to file under seal at ECF 3 is 

GRANTED as modified by Netflix’s narrowed redactions.

I. LEGAL STANDARD

There is a “strong presumption in favor of access” to judicial records. Kamakana v. City & 

Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm Mut. Auto. 

Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). A party seeking to seal judicial records bears the 

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burden of overcoming this presumption by articulating “compelling reasons supported by specific 

factual findings that outweigh the general history of access and the public policies favoring 

disclosure.” Id. at 1178-79. Compelling reasons for sealing court files generally exist when such 

“‘court files might have become a vehicle for improper purposes,’ such as the use of records to 

gratify private spite, promote public scandal, circulate libelous statements, or release trade 

secrets.” Id. (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). 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, 447 F.3d at 1179. Ultimately, “[w]hat constitutes a ‘compelling reason’ is 

‘best left to the sound discretion of the trial court.’” Ctr. for Auto Safety v. Chrslyer Grp., LLC, 

809 F.3d 1092, 1097 (9th Cir. 2016). 

“Despite this strong preference for public access, [the Ninth Circuit has] carved out an 

exception,” id. at 1097, for judicial records attached to motions that are “tangentially related to the 

merits of a case,” id. at 1101. Parties moving to seal such records need only make a 

“particularized showing” under the “good cause” standard of Federal Rule of Civil Procedure 

26(c). Kamakana, 447 F.3d at 1180 (quoting Foltz, 331 F.3d at 1138).

In this District, parties seeking to seal judicial records must also follow Civil Local Rule 

79-5, which requires, inter alia, that a sealing request be “narrowly tailored to seek sealing only of 

sealable material.” Civil L.R. 79-5(b). Pursuant to Civil Local Rule 79-5(d)(1)(A), “[r]eference to 

a stipulation or protective order that allows a party to designate certain documents as confidential 

is not sufficient to establish that a document, or portions thereof, are sealable.” Rather, if the sole 

basis of a party’s request to seal is that the document at issue was previously designated as 

confidential or subject to a protective order, then the procedures detailed in Civil L.R. 79-5(e) 

apply. Civ. L. R. 79-5(d)(1)(A). Those procedures require that within 4 days of the filing of the 

motion to seal, the designating party must file a declaration establishing that all of the designated 

material is sealable. Civ. L. R. 79-5(e)(1). In other words, where the submitting party seeks to 

file under seal a document designated confidential by another party, the burden of articulating 

compelling reasons for sealing is placed on the party designating that material as confidential. Id. 

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II. DISCUSSION

The parties have complied with Civil Local Rules 7-11 and 79-5(d) and (e). Netflix, as the 

designating party, timely filed declarations in support of Plaintiff’s administrative motion to seal 

portions of the Complaint pursuant to the Confidentiality Agreement. See Declaration of Rodney 

G. Strickland (“Strickland Decl.”), ECF 12. According to the Strickland Declaration, Netflix 

reviewed Plaintiff’s proposed redactions and determined that the majority of them are 

unnecessary. Id. ¶ 3. However, Netflix asserts that a compelling reason exists to seal certain 

limited information in the Complaint consisting of internal non-public financial information. Id. 

Netflix attaches a proposed public version of the Complaint as Exhibit A to the Strickland 

Declaration. See ECF 12-1. 

Because the motion to seal relates to the filing of the Complaint, which is the operative 

pleading and more than tangentially related to the merits of the case, the instant motion is resolved 

under the compelling reasons standard. The Court has reviewed Netflix’s proposed redactions and 

the declarations of Rodney G. Strickland and Mark Yurechko in support thereof. See Strickland 

Decl., see also Declaration of Mark Yurechko (“Yurechko Decl.”), ECF 12-2. The Court also 

notes that Plaintiff has not opposed Netflix’s narrowed redactions and takes no position as to 

whether the designated material is confidential. See ECF 3.

According to the Yurechko declaration, although most of the information originally 

redacted by Plaintiff can be made public, certain information should remain sealed because it 

contains Netflix’s non-public projected financial results and actual financial data shared with 

Netflix’s board of directors each quarter. Yurechko Decl. ¶¶ 3-4. Yurechko, Netflix’s Vice 

President of Financial Planning & Analysis, declares that this financial information is confidential 

and commercially sensitive because it would provide Netflix’s competitors with an unfair 

advantage if disclosed. Id. ¶ 4. Netflix’s proposed redactions also substantially narrow the 

original redactions proposed by Plaintiff pursuant to the Confidentiality Agreement. ECF 12-1. 

The Court finds that Netflix has articulated compelling reasons to seal the requested 

portions of the Complaint. The information that Netflix requests to seal includes confidential, 

non-public financial information, the disclosure of which would cause competitive and business 

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harm to Netflix. The proposed redactions are also narrowly tailored to exclude only sealable 

material as required by Civil L.R. 79-5(b). See ECF 12-1. Accordingly, Plaintiff’s Administrative 

Motion to Seal is GRANTED with respect to the following portions of the Complaint:

Page Line

21 28

22 14-15, 22-24

23 9, 13-14, 20, 26

24 11, 17

25 2, 8, 15, 17, 21, 27

26 1-2, 5, 13, 18-19, 25

27 1, 8, 22

Plaintiff is hereby ORDERED to file Netflix’s version of the Complaint (ECF 12-1) with 

the narrow redactions approved by this Order in the docket in this case on or before April 20, 

2018. 

IT IS SO ORDERED.

Dated: April 17, 2018

______________________________________

BETH LABSON FREEMAN

United States District Judge

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