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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BESTWAY (USA), INC., et al.,

Plaintiffs,

v.

PIETRO PASQUALE-ANTONI SGROMO, 

et al.,

Defendants.

Case No. 17-cv-00205-HSG 

ORDER GRANTING

ADMINISTRATIVE MOTIONS TO 

FILE UNDER SEAL; TERMINATING 

AS MOOT MOTION FOR LEAVE TO

APPEAL IN FORMA PAUPERIS

Re: Dkt. Nos. 85, 89, 92, 99, 126

Pending before the Court are four administrative motions to file under seal, see Dkt. Nos. 

85, 89, 99, 126, and a motion for leave to appeal in forma pauperis, see Dkt. No. 92. The Court 

will consider each motion in turn.

I. LEGAL STANDARD

Courts generally apply a “compelling reasons” standard when considering motions to seal 

documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana

v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from 

the common law right ‘to inspect and copy public records and documents, including judicial 

records and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in 

favor of access is the starting point.” Kamakana, 447 F.3d at 1178 (quotation omitted). To 

overcome this strong presumption, the party seeking to seal a judicial record attached to a 

dispositive motion must “articulate compelling reasons supported by specific factual findings that 

outweigh the general history of access and the public policies favoring disclosure, such as the 

public interest in understanding the judicial process” and “significant public events.” Id. at 1178–

79 (quotation omitted). “In general, ‘compelling reasons’ sufficient to outweigh the public’s 

interest in disclosure and justify sealing court records exist when such ‘court files might have 
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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. at 1179 

(quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). “The 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.” Id.

The Court must “balance[] the competing interests of the public and the party who seeks to 

keep certain judicial records secret. After considering these interests, if the court decides to seal 

certain judicial records, it must base its decision on a compelling reason and articulate the factual 

basis for its ruling, without relying on hypothesis or conjecture.” Id. Civil Local Rule 79-5 

supplements the compelling reasons standard set forth in Kamakana: the party seeking to file a 

document or portions of it under seal must “establish[] that the document, or portions thereof, are 

privileged, protectable as a trade secret or otherwise entitled to protection under the law . . . The 

request must be narrowly tailored to seek sealing only of sealable material.” Civil L.R. 79-5(b). 

Records attached to nondispositive motions, however, are not subject to the strong 

presumption of access. See Kamakana, 447 F.3d at 1179. Because such records “are often 

unrelated, or only tangentially related, to the underlying cause of action,” parties moving to seal 

must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil Procedure. 

Id. at 1179–80 (quotation omitted). This requires only a “particularized showing” that “specific 

prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. 

Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. P. 26(c). 

“Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning” will 

not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (quotation 

omitted).

II. DISCUSSION

A. Motion to Seal Portion of Plaintiffs’ Response to Order to Show Cause

Plaintiffs moved on June 15, 2018 to file under seal portions of their response to the 

Court’s order directing them to show cause why the Court should not grant what it construed as a

motion to compel arbitration. See Dkt. No. 85. Because these records are attached to a 
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nondispositive motion, the Court will apply the lower good cause standard. The Court GRANTS

the motion to seal in its entirety because the good cause standard is met, as these redacted portions 

are subject to a confidentiality agreement and contain confidential business information, the 

disclosure of which could cause harm to the parties in this action.

B. Motion to Seal Portion of Sgromo’s Response to Order to Show Cause

Plaintiffs moved on June 22, 2018 to file under seal portion of Sgromo’s response to the 

Court’s order directing Plaintiffs, Scott, and Eureka to show cause why the Court should not grant 

what it construed as a motion to compel arbitration. See Dkt. No. 89. Sgromo also responded to 

the order to show cause, but because the Court did not request his input, the Court did not consider 

it in ruling on the motion. See Dkt. No. 90 at 5 n.5. Plaintiffs assert that sealing is warranted 

because Sgromo’s response “references the specific terms of six Options Agreements,” each of 

which “contains a confidentiality clause preventing the parties from disclosing the terms and 

conditions of the agreements.” See Dkt. No. 89-1 ¶ 4. Because these records are attached to a 

nondispositive motion (Sgromo’s unsolicited response to an order to show cause not directed at 

him), the Court applies the lower good cause standard. The Court has reviewed the records 

individually and finds that the good cause standard is met because these documents were subject 

to a confidentiality agreement and contain confidential business information and licensing terms; 

therefore, the Court GRANTS the motion to file under seal.

C. Sgromo’s Motion to Proceed in Forma Pauperis

Because the Ninth Circuit has granted Sgromo’s motion to proceed in forma pauperis, see 

Dkt. No. 136, his earlier motion for leave to appeal in forma pauperis, Dkt. No. 92, is now moot. 

Accordingly, the Clerk is DIRECTED TO TERMINATE Dkt. No. 92 as moot.

D. Motion to Seal Portions of Fees Motion

In connection with their motion for attorney’s fees, Plaintiffs filed an administrative 

motion to file portions of their fees motion and accompanying declarations under seal. See Dkt. 

No. 99. Plaintiffs ask to seal what they contend is “confidential information relating to (1) the 

amount of funds being held in escrow, (2) the billing rates and fees incurred by its counsel, 

McDermott Will and Emery LLP; and (3) billing records attached as Exhibit A to the Fees 
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Declaration.” See id. at 1. According to Plaintiffs, “[e]ach of these categories comprises 

confidential information relating to Bestway’s financial records, including its licensing and legal 

practices and budgets.” See Dkt. No. 99-1 at 2.

Because these documents are attached to Plaintiffs’ fee request, which is a nondispositive 

motion, the Court applies the lower good cause standard. But, as has been “explained by 

numerous courts in this district, attorney rates and hours are generally not considered privileged 

information that is sealable.” Aylus Networks, Inc. v. Apple Inc., No. 13-CV-04700-EMC, 2016 

WL 1252778, at *1 (N.D. Cal. Mar. 30, 2016). This rule has a principled basis: if an attorney’s 

claimed rates and number of hours billed are sealed and thus unavailable to the public, “the final 

fees award appears to be drawn from thin air.” Linex Techs., Inc. v. Hewlett-Packard Co., No. C 

13-159 CW, 2014 WL 6901744, at *1 (N.D. Cal. Dec. 8, 2014). That said, documents that may be 

used “as sources of business information that might harm a litigant’s competitive standing” may 

be sealable. See In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008) (internal quotation 

omitted).

Dkt. No.

Public/(Sealed) Document Portion(s) Sought to be Sealed Ruling (basis)

99-3/(99-7)

Plaintiffs’ Motion for 

Recovery of Attorneys’ 

Fees Incurred

4:5

GRANTED (confidential 

business information

related to value of 

licensing agreement)

3:2, 4:8, 4:16–17, 

4:19, 6:21, 6:24, 

7:3, 7:17–18

DENIED

(needed to explain attorney 

fee award, see Aylus 

Networks, 2016 WL 

1252778, at *1)

99-4/(99-8)

Declaration of Krista Vink 

Venegas in Support of 

Plaintiffs’ Motion for 

Recovery of Attorneys’ 

Fees Incurred

2:2, 2:5, 2:8, 2:11, 

2:14, 2:27, 3:1–2, 

3:14

DENIED

(needed to explain attorney 

fee award, see Aylus 

Networks, 2016 WL 

1252778, at *1)

99-5/(99-9)

Exhibit A to the Declaration 

of Krista Vink Venegas in 

Support of Plaintiffs’ 

Motion for Recovery of 

Attorneys’ Fees Incurred

Entire Exhibit

DENIED

(needed to explain attorney 

fee award, see Aylus 

Networks, 2016 WL 

1252778, at *1)
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E. Motion to Seal Exhibit Related to Notice of Temporary Restraining Order 

Violation

Plaintiffs moved to file under seal Exhibit C to the Declaration of Krista Vink Venegas for 

Plaintiffs’ Notice of Temporary Restraining Order Violation. See Dkt. No. 126 at 1. Bestway 

represents that the redacted portion of Exhibit C “includes references to the terms of agreements 

between Bestway and Sgromo that include confidentiality provisions preventing the disclosure of 

business sensitive terms of the agreements, and it includes references to settlement agreements or 

their business sensitive terms between Bestway and Sgromo.” See id. Because this exhibit is 

attached to a nondispositive motion, the Court will apply the lower good cause standard. The 

Court GRANTS the motion to seal in its entirety because the good cause standard is met, as these 

redacted portions are subject to a confidentiality agreement and contain confidential business 

information.

III. CONCLUSION

For the foregoing reasons, the Court:

A. GRANTS Plaintiffs’ motion to file under seal portions of Plaintiffs’ response to the 

Court’s order directing Plaintiffs, Scott, and Eureka to show cause. See Dkt. No. 85.

B. GRANTS Plaintiffs’ motion to file under seal portion of Sgromo’s response to the 

Court’s order directing Plaintiffs, Scott, and Eureka to show cause. See Dkt. No. 89.

C. TERMINATES AS MOOT Sgromo’s motion to proceed in forma pauperis. See Dkt. 

No. 92.

D. GRANTS IN PART AND DENIES IN PART Plaintiffs’ administrative motion to 

file portions of its fees motion and accompanying declarations under seal. See Dkt. 

No. 99. The Court DIRECTS Plaintiffs to file public versions of all documents for 

which the proposed sealing has been denied, as indicated in the chart above. Pursuant 

to Civil Local Rule 79-5(f)(1), documents filed under seal as to which the 

administrative motions are granted will remain under seal. The public will have access 

only to the redacted versions accompanying the administrative motions.

E. DEFERS a ruling on Plaintiffs’ motion for attorney’s fees and costs, see Dkt. No. 99-

7, until after Plaintiffs respond to the Court’s order to show cause, see Dkt. No. 137.
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F. GRANTS Plaintiffs’ administrative motion to file under seal Exhibit C to the 

Declaration of Krista Vink Venegas. See Dkt. No. 126.

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

3/28/2019