Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01667/USCOURTS-casd-3_06-cv-01667-0/pdf.json

Nature of Suit Code: 160
Nature of Suit: Stockholder's Suits
Cause of Action: 28:1332 Diversity - Stockholders Suits

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06cv1667

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

FRED YOUNG, an individual, et al.,

Plaintiffs,

v.

ACTIONS SEMICONDUCTOR CO.,

LTD., a Republic of Mauritius Company,

et al.,

Defendants.

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Civil No. 06cv1667-L(AJB)

ORDER 

(1) GRANTING IN PART AND

DENYING IN PART RENEWED

JOINT MOTION TO FILE

DOCUMENTS UNDER SEAL; 

(2) DENYING JOINT MOTION FOR

LEAVE OF COURT TO FILE

EVIDENCE PRODUCED AFTER

BRIEFING WAS COMPLETE

REGARDING DEFENDANT’S

MOTION TO DISMISS FOR LACK

OF PERSONAL JURISDICTION

AND FORUM NON CONVENIENS;

AND 

(3) DENYING WITHOUT

PREJUDICE DEFENDANT

ACTIONS SEMICONDUCTOR CO.,

LTD.’S MOTION TO DISMISS FOR

LACK OF PERSONAL

JURISDICTION AND FORUM NON

CONVENIENS

On May 4, 2007, Plaintiffs and Defendant Actions Semiconductor Co., Ltd. (“Actions”)

filed a Renewed Joint Motion for an Order to File Documents Under Seal (“Renewed Joint

Motion”). Actions seeks to seal in whole or in part thirty-seven exhibits totaling approximately

300 pages, which were, with the exception of one declaration, submitted in connection with

opposition and reply briefing on Actions’s Motion to Dismiss for Lack of Personal Jurisdiction

Case 3:06-cv-01667-MMA-AJB Document 78 Filed 07/27/07 Page 1 of 9
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1 This is particularly troubling because the parties had previously filed a motion to

seal the same records. The motion was denied in large part on the grounds that it lacked

specificity required under the good cause standard of Federal Rule of Civil Procedure 26(c) and

because it was overinclusive. (See Order (1) Denying Joint Motion to File Documents Under

Seal; and (2) Continuing Hearing on Defendant’s Motion to Dismiss, filed May 1, 2007.) In

their Renewed Joint Motion, the parties apparently did not take into consideration all the

grounds for the denial of their initial motion. 

2 06cv1667

and Forum Non Conveniens (“Motion to Dismiss”). Upon review of the Renewed Joint Motion

and related documents, the court finds it does not meet the pertinent legal standard and is grossly

overinclusive by any standard,1

 with the exception of portions of Exhibit AK, declaration of

Hsuan-Wen Chen in support of the Renewed Joint Motion. Accordingly, the Renewed Joint

Motion is GRANTED IN PART AND DENIED IN PART. 

The parties have expressed a desire to reconsider the record in case certain exhibits are

not sealed. Furthermore, after the close of briefing, they filed a Joint Motion for Leave of Court

to File Evidence Produced After Briefing Was Complete Regarding Defendant’s Motion to

Dismiss for Lack of Personal Jurisdiction and Forum Non Conveniens (“Joint Motion to

Supplement Record”). In light of the gross inadequacy of the Renewed Joint Motion and the

incomplete state of the record, the Motion to Dismiss is DENIED WITHOUT PREJUDICE to

refiling it with appropriate supporting documentation and the Joint Motion to Supplement

Record is DENIED as moot.

The documents requested to be sealed consist primarily of minutes and resolutions of

directors’ and shareholders’ meetings for Actions, its predecessor and some of its subsidiaries,

and include other corporate records, agreements, discovery responses and declarations. These

voluminous exhibits and a declaration were filed in redacted form variously in support and in

opposition to the Motion to Dismiss. Historically, courts have recognized 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 & n. 7 (1978). The party seeking to seal a

judicial record pertaining to dispositive motions and trials bears the burden of overcoming this

strong presumption by meeting the “compelling reasons” standard. Kamakana v. City and

County of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006) . “[T]he strong presumption of access

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3 06cv1667

to judicial records applies fully to dispositive pleadings, including motions for summary

judgment and related attachments.” Id. However, sealing of documents attached to nondispositive motions is treated differently. There is “an exception to the presumption of access to

judicial records for a sealed discovery document attached to a non-dispositive motion, such that

the usual presumption of the public’s right of access is rebutted.” Id. (internal quotation marks,

brackets, emphases and citations omitted). The party seeking to seal a discovery document or a

document attached to a non-dispositive motion must meet the lower standard pursuant to Federal

Rule of Civil Procedure 26(c). Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th

Cir. 2003) (discussing Phillips v. General Motors Corp., 307 F.3d 1206 (9th Cir. 2002)); see

also Kamakana, 447 F.3d at 1180. 

The threshold issue in this case is whether the pending Motion to Dismiss is dispositive

for purposes of sealing exhibits. The parties have provided no briefing on this point. Aside

from noting that summary judgment motions are dispositive, Kamakana, 447 F.3d at 1179, and

discovery sanctions motions are non-dispositive, Phillips, 307 F.3d at 1209, 1213, the distinction

has not been articulated by the Ninth Circuit, see In re Nat’l Sec. Agency Telecomm. Records

Litig., 2007 WL 549854 *3 (N.D. Cal. Feb. 20, 2007) (noting “absence of explicit guidance on

this issue”). In deciding this issue, the court is therefore guided by the rationale justifying the

distinction. “There are . . . good reasons to distinguish between dispositive and non-dispositive

motions.” Kamakana, 447 F.3d at 1179. “The public policies that support the right of access to

dispositive motions, and related materials, do not apply with equal force to non-dispositive

materials.” Id. (citing Phillips, 307 F.3d at 1213). A higher standard applies to dispositive

motions because “the resolution of a dispute on the merits, whether by trial or summary

judgment, is at the heart of the interest in ensuring the “public’s understanding of the judicial

process and of significant public events.” Id. On the other hand, “the public has less of a need

for access to court records attached only to non-dispositive motions because those documents are

often unrelated, or only tangentially related, to the underlying cause of action.” Id. An order on

a motion to dismiss for lack of personal jurisdiction and for forum non conveniens, such as the

motion pending in this case, does not resolve the merits of the underlying causes of action, and is

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4 06cv1667

only tangentially related to the merits. If such a motion is granted, it is without prejudice to refiling the action so as to cure the jurisdictional defect. See, e.g., Kendall v. Overseas Dev. Corp.,

700 F.2d 536, 539 (9th Cir. 1983). Accordingly, the pending Motion to Dismiss is nondispositive for purposes of sealing exhibits.

To warrant sealing documents attached to a non-dispositive motion, the party seeking

protection must show good cause under Rule 26(c). In this case the documents are subject to the

Order Granting Joint Motion for Entry of Protective Order, filed February 1, 2007 (“Protective

Order”). This is a blanket protective order to which the parties stipulated prior to Actions’s

production of what it considered confidential documents. The Protective Order is prospective in

nature, as it expressly states that “[t]he parties seek the entry of a protective order on the ground

that discovery in this action likely will involve production of confidential, proprietary, or private

information.” (Protective Order at 1 (emphasis added).) Such protective orders are necessarily

overinclusive. See Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992). 

Accordingly, the magistrate judge did not have the occasion to engage in the Rule 26(c) good

cause analysis prior to signing the order. This is not uncommon. “[A] party seeking the

protection of the court via a blanket protective order typically does not make a ‘good cause’

showing required by Rule 26(c) with respect to any particular document.” Foltz, 331 F.3d at

1133. Because Actions did not make the requisite showing when the Protective Order was

signed, it must do so at this juncture to warrant sealing the exhibits.

Under Rule 26(c), the court, for good cause shown, “may make any order which justice

requires to protect a party . . . from annoyance, embarrassment, oppression or undue burden or

expense, including one or more of the following: . . . (7) that a trade secret or other confidential

research, development, or commercial information not be revealed or be reveled only in a

designated way . . ..” Fed. R. Civ. P. 26(c). “Any such order . . . requires that the court’s

determination identify and discuss the factors it considered in its good cause examination . . ..” 

Foltz, 331 F.3d at 1130 (internal quotation marks and citation omitted). “A party asserting good

cause bears the burden, for each particular document it seeks to protect, of showing that specific

prejudice or harm will result if no protective order is granted.” Id. “[B]road allegations of harm,

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5 06cv1667

unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test.” 

Beckman, 966 F.2d at 476.

Actions seeks to protect information about the sources of capital, including the identity of

its angel and venture capital investors, identities of its officers and directors and officers and

directors of its subsidiaries, business development and strategies, and the source of technology

for future product development. (Hsuan-Wen Chen Decl. at 3.) Upon review of the documents,

it is apparent that other types of information, such as financial performance, shareholder

transactions, asset acquisitions, formation of subsidiaries, and similar types of information are

also sought to be sealed. 

As to the identities of angel and venture investors, i.e., sources of capital, and of officers

and directors, the declaration states, in full, “Non-financial incentives to attract talents includes

[sic] a tacit promise to keep such talent’s identity confidential, which talent may have personal

or family reasons to wish to keep confidential. If a business is unable to protect the privacy of

such talents, the business will lose its ability to attract other talents in the future.” (Id. at 2.) No

more specifics are provided in the discussion of individual exhibits. (Id. at 3-18.) No

elaboration or example is provided regarding the “tacit promise” or any efforts outside this

litigation to keep the identities of various individuals confidential. This does not amount to

showing with respect to each document that “specific prejudice or harm will result if no

protective order is granted” or substantiating the request with “specific examples or articulated

reasoning.” See Foltz, 331 F.3d at 1130; Beckman, 966 F.2d at 476. Moreover, the Actions’s

stock is publicly traded in the United States, and Actions has made regular filings with the

Securities and Exchange Commission (“SEC”) since October 2005. The names of many

individuals it seeks to conceal, particularly its officers and directors, have been made public in

these filings, and therefore do not warrant protection.

Similarly, information pertaining to many transactions and financial results which Actions

now seeks to conceal is disclosed to various degrees in Actions’s SEC filings. For example,

with respect to Exhibit C, Actions requests to seal information pertaining to its initial public

offering, when the offering is the subject of several of its SEC filings. Another example is

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6 06cv1667

Exhibit H, where Actions requests to seal a resolution regarding acquisition of certain land. It

provides no reason why confidentiality is necessary, and the same transaction, including location

of the land, seller and price, is disclosed in the SEC filings. Without disclosing and addressing

the information which is already publicly available, the Renewed Joint Motion is fatally

deficient.

With respect to the sources of technology, the declaration provides a generalized

explanation, “If a competitor has access to a business’ source of technology, the competitor can

determine how to develop better a ‘product roadmap’ [sic] or form a superior strategic alliances

[sic], all of which will be detrimental to the operation of such business.” (Decl. at 3; see also id.

passim at 3-18.) While the declaration provides some more specifics with respect to certain

exhibits, the explanations are invariably general in nature, do not show that any measures outside

of this litigation had been taken to secure confidentiality, and lack substantiation with specific

examples or articulated reasoning. More specificity is required. See Foltz, 331 F.3d at 1130;

Beckman, 966 F.2d at 476. 

Furthermore, in many instances, the information Actions requests to seal pertains to

transactions or sources of technology from 2005. Actions does not explain why any such

information, some of which possibly could have warranted confidentiality when it was current,

should remain confidential two years later. In the dynamic world of technology, this type of

information often quickly becomes outdated and irrelevant.

In many other instances, Actions requests to seal generic provisions from various minutes

and resolutions of directors’ meetings, which do not contain substantive information, but merely

reference other documents or exhibits which are not included. For example, with respect to

Exhibit G, Actions moves to seal a resolution to amend its insider trading policy which does not

include the policy itself, a reference to unaudited financial statements which does not include

any financial information but authorizes the Chief Financial Officer to release such information

to the public, a resolution regarding new organization structure in Zhuhai which merely

references an exhibit which is not included, and authorization to negotiate a new insurance

policy which does not discuss any policy terms. Such generic provisions do not warrant sealing. 

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Moreover, with respect to many redactions, Actions provides no reason whatsoever. For

example, Actions seeks to seal provisions regarding the form of share certificate and subdivision

of shares in Exhibit D, however, no explanation is given why confidentiality is needed. (See

Decl. at 4-5.) Similarly, as to Exhibit G Actions requests to seal resolutions pertaining to new

organization structure in Zhuhai and authorization to negotiate a new insurance policy, without

providing any explanation for confidentiality. (Id. at 6.) As to Exhibit H Actions moves to seal

a resolution to engage an independent auditor and a consultant for internal control of financial

reporting. Again, no explanation was provided why the resolutions should be sealed. (Id. at 7-

8.) 

With respect to Exhibit AH, the parties provided a Chinese language version. The court

did not consider the confidentiality of this exhibit in the absence of an English translation.

Actions requested to file under seal the entirety of the declaration of Hsuan-Wen Chen in

support of the Renewed Joint Motion, filed as Exhibit AK. It argued that the declaration

articulates how the various documents which Actions considers confidential could be used to

harm Actions. The court disagrees. The declaration is largely too general and vague. 

Nevertheless, it contains a few specific sentences as to which the court grants the request to seal. 

The court will submit for filing a redacted version of the declaration, concealing the portions

which meet the good cause standard.

Accordingly, the Renewed Joint Motion is GRANTED with respect to portions of

Exhibit AK. As to the remainder, the motion is DENIED because it fails to meet the good cause

standard of Rule 26(c). 

The parties have expressed a desire to supplement the record in case certain exhibits are

not sealed. They also filed a Joint Motion to Supplement Record. The record on the Motion to

Dismiss therefore remains incomplete. In light of the gross inadequacies and overinclusiveness

of the Renewed Joint Motion and the incomplete state of the record, the Motion to Dismiss is

DENIED WITHOUT PREJUDICE to refiling with appropriate supporting documentation. In

this regard, viewing the Renewed Joint Motion in the context of the Motion to Dismiss, it is

questionable whether much of the information Actions requests to be sealed is relevant. To the

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extent it is not relevant to the Motion to Dismiss, moving the court to review voluminous

exhibits for purposes of sealing is an inefficient use of judicial resources because the court need

not consider such materials. Therefore, prior to filing any further motions to seal, the parties

shall carefully consider not only whether a document or a portion thereof warrants sealing, but

whether what Actions deems to be confidential is relevant to the Motion to Dismiss. The

information which is not relevant and which Actions considers confidential can be redacted, and

the exhibit filed in redacted form without the need to move for filing under seal. As to any

remaining documents or portions of documents the parties move to seal, Actions shall state

under oath to what extent the same or related information was disclosed in its SEC filings,

including the date and page number of the SEC document. If no related information was

disclosed in SEC filings, Actions shall also so state.

For the foregoing reasons, IT IS HEREBY ORDERED as follows:

1. The parties’ Renewed Joint Motion for an Order to File Documents Under Seal is

GRANTED with respect to portions of Exhibit AK, declaration of Hsuan Wen-Chen, and is

DENIED WITHOUT PREJUDICE in all other respects.

2. The Clerk of Court shall not seal any exhibits the parties requested to be filed under

seal, except for Exhibit AK, declaration of Hsuan Wen-Chen. The court will file a redacted

version of Exhibit AK in the record available to the public. All other documents the parties

moved to seal shall not be filed, but shall be returned to the parties. No later than July 31, 2007,

the parties shall collect these documents from chambers. 

3. The parties’ Joint Motion for Leave of Court to File Evidence Produced After Briefing

Was Complete Regarding Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction and

Forum Non Conveniens is DENIED as moot.

4. Defendant Actions’s Motion to Dismiss for Lack of Personal Jurisdiction and Forum

Non Conveniens is DENIED WITHOUT PREJUDICE to refiling it with appropriate

documentation no later than August 15, 2007. Opposition briefing shall be filed no later than

August 29, 2007 and reply briefing shall be filed no later than September 6, 2007. Any related

/ / / / /

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motions to seal shall be filed no later than September 6, 2007. Upon the filing of the foregoing,

the parties shall await further order of the court.

5. If the parties again move to seal any exhibits or declarations, they shall narrow their

request in light of the issues discussed in this order. In addition, they shall carefully consider

whether the information Actions deems to be confidential is relevant to the motion to dismiss. 

The information which is not relevant and which Actions considers confidential can be redacted,

and the exhibit filed in redacted form without the need to move for filing under seal. As to any

documents or portions of documents the parties move to seal, Actions shall disclose as provided

more fully above the extent to which any related information was included in its SEC filings.

6. Should either party again file a motion to seal which is inadequate or overbroad for

any of the reasons stated herein or in the Order (1) Denying Joint Motion to File Documents

Under Seal; and (2) Continuing Hearing on Defendant’s Motion to Dismiss, filed May 1, 2007,

the court may impose sanctions. 

IT IS SO ORDERED.

DATED: July 27, 2007

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. ANTHONY J. BATTAGLIA

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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