Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-02329/USCOURTS-casd-3_19-cv-02329-0/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1446nr Notice of Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LENA CHILDS, DONALD CHILDS, and 

T. CHILDS, a minor,

Plaintiffs,

v.

SAN DIEGO FAMILY HOUSING, LLC, 

LINCOLN MILITARY PROPERTY 

MANAGEMENT, LP, and INDEPTH 

CORPORATION, 

Defendants.

Case No.: 19cv2329 JM (MDD)

ORDER GRANTING DEFENDANTS’ 

MOTION TO SEAL

Defendants San Diego Family Housing, LLC (“SDFH”) and Lincoln Military 

Property Management, LP (“Lincoln”) move the court to seal “excerpts from four 

confidential and proprietary business documents.” (Doc. No. 18.) The court finds the 

motion suitable for submission without oral argument in accordance with Civil Local Rule 

7.1(d)(1). For the below reasons, the motion is GRANTED.

I. BACKGROUND

Plaintiffs Lena Childs, Donald Childs, and T. Childs1(“Plaintiffs”) claim they 

suffered injury as a result of being exposed to mold while residing in military housing 

1 T. Childs is a minor acting by and through her guardian ad litem, Lena Childs.

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located within Naval Amphibious Base Coronado. (Doc. No. 1-2 ¶¶ 15-18.) Defendants 

state that SDFH is a “public-private venture (‘PPV’)” between the United States Navy and 

Lincoln/Clark San Diego, LLC, which was formed under the Military Housing 

Privatization Initiative, 10 U.S.C. §§ 2871-85. (Doc. No. 18-1 at 2.) 

On May 2, 2019, Plaintiffs filed their initial Complaint in Superior Court for the 

County of San Diego, which contained claims against Defendants for negligence, private 

nuisance, breach of contract, breach of the implied warranty of habitability, breach of the 

implied covenant of peaceful and quiet enjoyment, and constructive eviction. (Doc. No. 

1-2 at 5.) On December 12, 2019, Defendants removed the case to federal court on the 

basis that: (1) the events alleged in the Complaint occurred within a federal enclave; 

(2) SDFH is a federal agency; and (3) at all relevant times, SDFH and Lincoln were acting 

under federal officers. (Doc. No. 1 ¶ 3.) Following a February 12, 2020 early neutral 

evaluation and case management conference, the magistrate judge ordered Defendants to 

file their motion to dismiss based on derivative sovereign immunity by April 10, 2020. 

(Doc. No. 16.) Additionally, the magistrate judge allowed the parties to engage in 

jurisdictional discovery for 75 days after the filing of the motion to dismiss. The magistrate 

judge further ordered that Plaintiffs’ response to the motion to dismiss was due 15 days 

after the close of the 75-day discovery period, and Defendants’ reply was due seven days 

after that. On April 10, 2020, Defendants filed the motion to dismiss, (Doc. No. 19), as 

well as the instant motion to file documents under seal, (Doc. No. 18). On April 13, 2020, 

the magistrate judge issued a protective order, to which the parties stipulated, limiting the 

use and disclosure of information deemed confidential by the parties. (Doc. No. 18-1.) 

II. LEGAL STANDARDS

“[T]he 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). “Unless a particular court record is one 

‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.”

Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Foltz v. 

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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) (internal quotation marks and citation 

omitted). “The common law right of access, however, is not absolute and can be overridden 

given sufficiently compelling reasons for doing so.” Foltz, 331 F.3d at 1135 (citation 

omitted). In deciding whether to seal records, courts should consider “the public interest 

in understanding the judicial process and whether disclosure of the material could result in 

improper use of the material for scandalous or libelous purposes or infringement upon trade 

secrets[.]” Id. When the underlying motion is more than tangentially related to the merits, 

the “compelling reasons” standard applies. Chrysler, 809 F.3d at 1096-98. The party 

seeking to seal records bears the burden of overcoming the presumption of access. Foltz, 

331 F.3d at 1135.

A trial court has broad discretion to permit sealing of court documents for the 

protection of “a trade secret or other confidential research, development, or commercial 

information.” See Fed. R. Civ. P. 26(c)(1)(G); see also Fed. Trade Comm’n v. Qualcomm 

Inc., No. 17-CV-00220-LHK, 2019 WL 95922, at *2 (N.D. Cal. Jan. 3, 2019). “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.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 

1972) (quoting Restatement (First) of Torts § 757 cmt. b). “Generally [a trade secret] 

relates to the production of goods . . . . It may, however, relate to the sale of goods or to 

other operations in the business[.]” Id. Sealing may also be justified to prevent judicial 

documents from being used “as sources of business information that might harm a litigant’s 

competitive standing.” Nixon, 435 U.S. at 598.

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III. DISCUSSION

In support of their motion to dismiss, Defendants desire to seal “excerpts from four 

confidential documents” because “these documents contain confidential and proprietary 

information, which the Defendants can only submit under seal to protect certain proprietary 

business information, confidential financial discussions and information, and [because] the

agreements involve confidential terms with the United States Government and/or United 

States government-owned entities.” (Doc. No. 18-1 at 4.) The documents consist of: 

(1) SDFH’s operating agreement with the United States; (2) a ground lease between the

SDFH, the Navy, and the United States; (3) a property management agreement between 

SDFH and Lincoln; and (4) a water intrusion/mold operations and maintenance plan. 

Defendants argue that a compelling reason to seal the documents exists because the 

documents contain confidential and proprietary trade secrets that would harm their 

competitive standing. (Id. at 5-6.) In support of this argument, Defendants state: (1) the 

operating agreement and ground lease were marked “confidential” by the contracting 

parties, which includes the United States; (2) the operating agreement and ground lease 

contain “capital contributions, financial information, business structures, financial

arrangements, tax issues, operating expenses, and various management plans;” (3) the 

documents “disclose how these businesses are structured and run, and how they are 

financed, and how they execute on their government contracts;” (4) two of the documents

contain “comprehensive proprietary management plans;” (5) the Navy is a party to two of 

the agreements; (6) one of the agreements involves a company in which the Navy has a 

“proprietary interest;” (7) the fourth document was “prepared by and for the Navy’s publicprivate venture in coordination with the Navy;” (8) “SDFH and Lincoln are required to 

protect these documents, limit their disclosure, and when said documents are disclosed, it 

is always under an executed [p]rotective [o]rder;” (9) the disclosure of the documents 

“would allow a competitor PPV or military property management company to obtain a 

significant advantage over SDFH and Lincoln;” and (10) “[t]he federal government has a 

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proprietary interest in these documents and would not want their terms and agreements 

exposed[.]” (Id. at 7.) 

As pointed out by Defendants, courts in the Ninth Circuit have found comparable 

types information to constitute trade secrets worthy of protection. See, e.g., Qualcomm, 

2019 WL 95922, at *3 (“[T]o the extent that the instant motion seeks to seal information 

that, if published, may harm Qualcomm’s or third parties’ competitive standing and 

divulges terms of confidential contracts, contract negotiations, or trade secrets, the Court 

agrees with the parties that compelling reasons exist to seal this information.”); Velasco v. 

Chrysler Grp. LLC, Case No. CV 13-08080 DDP (VBK), 2017 WL 445241, at *2 

(C.D. Cal. Jan. 30, 2017) (“[D]istrict courts in this Circuit have sealed records containing 

‘information about proprietary business operations, a company’s business model or 

agreements with clients,’ ‘internal policies and strategies,’ and ‘manufacturing 

information[.]’”) (internal citations omitted); Selling Source, LLC v. Red River Ventures, 

LLC, No. 2:09-cv-01491-JCM-GWF, 2011 WL 1630338, at *6 (D. Nev. Apr. 29, 2011)

(“Where the material includes information about proprietary business operations, a 

company’s business model or agreements with clients, there are compelling reasons to seal 

the material because possible infringement of trade secrets outweighs the general public 

interest in understanding the judicial process.”). 

Based on the representations made by Defendants, the information they seek to seal 

includes trade secrets. Although Defendants do not explain exactly how their competitive 

advantage would be harmed by publicly releasing the records, it is reasonable to conclude 

that the Defendants’ formula for successfully obtaining and managing government 

contracts is information with some proprietary value. The federal government’s choice to 

deem the records “confidential” is further support for the appropriateness of sealing the 

documents at this point in the litigation. The court may, however, reexamine the necessity 

of sealing the documents as the litigation develops. Additionally, portions of the 

documents currently lodged with the court are heavily redacted in a manner that 

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undermines the courts’ ability to assess its jurisdiction, and will likely interfere with the 

court’s ability to decide Defendants’ pending motion to dismiss. 

IV. CONCLUSION

For the foregoing reasons, Defendants’ Motion to Seal is GRANTED. The Clerk 

of the Court is directed to file the redacted documents currently lodged with the court under 

seal. (See Doc. No. 20.) Additionally, on or before May 21, 2020, Defendants shall 

lodge unredacted versions of the documents, which the clerk is directed to also file 

under seal. 

IT IS SO ORDERED. 

DATED: May 14, 2020 

JEFFREY T. MILLER

United States District Judge

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