ORDER RE: REQUESTS TO SEAL DOCUMENTS
WILLIAM B. SHUBB, District Judge.
Plaintiff Starbucks Corporation ("Starbucks") brought this action against defendants Amcor Packaging Distribution, Amcor Packaging (USA), Inc., and Pallets Unlimited, LLC ("Pallets Unlimited") after discovering mold on its unroasted green coffee that was stored and shipped on wooden pallets provided by defendants. (Docket No. 1.) Starbucks alleges that defendants supplied it with defective pallets that caused the mold. (Id.) Pallets Unlimited filed a third-party complaint against Ozburn-Hessey Logistics ("OHL"), the owner and operator of a warehouse located in Sparks, Nevada ("Sparks facility") where Starbucks' unroasted green coffee and the wooden pallets were stored before they were shipped to Starbucks' roasting plants. (First Am. Third-Party Compl. ¶¶ 7-10 (Docket No. 46).)
On March 8, 2016, OHL moved for summary judgment on Pallets Unlimited's sole claim for equitable indemnity. (Docket No. 104.) In support of the motion, OHL included a redacted version of the written contract between OHL and Starbucks detailing OHL's duties regarding the storage of Starbucks' coffee at its warehouses (the "Agreement"). (Johnson Decl. ¶¶ 4-6, Exs. A-C ("Ag.") (Docket Nos. 107-1 to 107-4).)
The Agreement is comprised of the Master Warehouse-Logistics Agreement, Nashville Distribution Center supplement regarding OHL's facility in Nashville, Tennessee ("Nashville Supplement"), Sparks Green Bean Warehouse supplement regarding OHL's Sparks facility in Sparks, Nevada ("Sparks Supplement"), and an amendment to the Sparks Supplement where OHL agrees to store certain Starbucks finished goods at its Sparks facility in addition to green coffee. To date, no protective order has issued in this case concerning the Agreement.
A party seeking to seal a judicial record bears the burden of overcoming a strong presumption in favor of public access. Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). The party 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." Id. at 1178-79 (citation omitted).
"[T]he strong presumption of access to judicial records applies fully to dispositive pleadings, including motions for summary judgment and related attachments . . . 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. at 1179 (citation omitted). In ruling on a motion to seal, notwithstanding the other party's failure to object, the court must balance the competing interests of the public and the party seeking to keep the records secret. Id.
I. OHL's Request to Seal or Redact the Agreement
OHL states it filed the redacted version of the Agreement at Starbucks' request because the document contains sensitive business information that is subject to a confidentiality agreement between OHL and Starbucks. (Docket No. 108 at 2; Shipley Decl. ¶ 4 (Docket No. 109).) There is no explanation why the confidentiality agreement contained in the Sparks Supplement has been fully redacted, but an exactly identical confidentiality agreement in the Nashville Supplement has been filed unredacted. (Compare Ag. Ex. A at OHL0028, with id. Ex. B at OHL0045.) Both confidentiality agreements also contain provisions titled "EXCEPTIONS TO CONFIDENTIAL INFORMATION," which provide that information is not confidential if it must be disclosed "pursuant to judicial order or other compulsion of law." (E.g., id. Ex. A at OHL0028.)
This court has previously pointed out that a private confidentiality agreement does not per se constitute a compelling reason to seal or redact a record that outweighs the interests of public disclosure and access. (E.g., Oct. 8, 2014 Order at 2 (Docket No. 33)); Sept. 3, 2015 Order at 3, Foster Poultry Farms, Inc. v. Certain Underwriters at Lloyd's, London, Civ. No. 1:14-953; Sept. 18, 2015 Order at 2, Rosales v. City of Chico, Civ. No. 2:14-2152. OHL does not specifically identify the provisions it asserts constitute sensitive business information or explain why that information is sensitive and should be sealed or redacted from the public record. Absent any guidance, the court cannot find a compelling reason to seal the document.
II. Starbucks' Request to Seal or Redact the Agreement
Starbucks had filed a request to seal or redact the Agreement in connection with OHL's motion to dismiss Pallet Unlimited's original third-party complaint. (Docket No. 42; see Docket Nos. 29-31, 33.) Starbucks argued that the Agreement contained "trade secret and proprietary information" and attached a redacted version it claimed "eliminate[d] the sensitive and confidential information of concern." (Ferrell Decl. ¶ 5 (Docket No. 42-1); Kirsch Decl. Ex. A (Docket Nos. 42-2 to 42-4).) The court, however, declined to consider the Agreement altogether for purposes of OHL's motion to dismiss. (See Nov. 5, 2014 Order at 7 (Docket No. 44).)
Starbucks' previously-filed version of the Agreement had redacted the entirety of the Sparks Supplement based upon Starbucks' assertions it contained trade secrets and sensitive information that, if disclosed, presented a security risk and commercial disadvantage to Starbucks. (See Kirsch Decl. Ex. A; Ferrell Decl. ¶¶ 3-4.) But Starbucks approved the version filed here in support of OHL's motion for summary judgment as having "been redacted of such assertedly confidential or proprietary information"; yet this version discloses the majority of the Sparks Supplement. (Shipley Decl. ¶ 4; see Ag. Ex. B.) This inconsistency suggests that Starbucks' assertions about the sensitive nature of the information contained in the Agreement were not entirely accurate.
Starbucks argued that disclosing intake procedures and security services at its storage facilities "present[ed] very real security risks for Starbucks facilities and products." (Ferrell Decl. ¶ 3.) Yet the version Starbucks approved here describes its intake procedures at length, (Ag. Ex. B at OHL0053-57), and details the physical requirements of the storage facility and surrounding grounds, (e.g., id. at OHL0049 (facility floors must be "sealed concrete, minimum 6" thick" and exterior doors "fitted with tight seals")). Starbucks also discloses the security services OHL provided, (e.g., id. at OHL0054 ("assist fully with cargo security investigations involving theft, contraband, contamination, mismatched/missing seals")), and provides the types of security credentials required at OHL's facilities, (e.g., id. Ex. A § 3.4 (granting "Starbucks 24-hour access, via a security password, to its computerized inventory and distribution software system")). Starbucks had additionally contended that the "mere disclosure of the location of such large amounts of Starbucks green coffee presents a commercial risk to Starbucks which cannot be quantified." (Ferrell Decl. ¶ 3.) The version approved here, however, discloses the address of the Sparks facility. (Ag. Ex. B at OHL0042.)
Starbucks also argued that information such as temperature specifications and product handling requirements were trade secrets because they took "years of experience to develop and many hours to negotiate." (Ferrell Decl. ¶ 4.) It strains reason to believe this information constitutes sensitive business information given that the version Starbucks approved for public view reveals its temperature specifications, (Ag. Ex. B at OHL0050 ("storage temperature of 45-85 degrees Fahrenheit and a relative humidity of 50-55%")), and describes its product handling requirements in full detail, (e.g., id. at OHL0055-61 (requiring OHL to palletize bags of coffee on pre-weighed pallet boards, weigh the full pallets, and receive into inventory; sew torn bags of coffee on the spot using a large needle and twine; record product item numbers, devanning dates, bag counts, lot codes, and weights on all pallet tags; set aside stained bags of coffee into a reconditioning area containing three clean burlap sacks, "two dustpans, a utility knife, a sack sewing needle, twine, and a tare scale"; cut stained bags in crisscross manner, peel back, and use dustpans to isolate "moldy or adulterated coffee from the good coffee by creating a barrier between the two"; remove adulterated coffee and the outer layer of good bags to Starbucks; rotate all products first-in-first-out).)
Accordingly, because the above facts demonstrate that Starbucks' assertions regarding the sensitive nature of the information in the Agreement are not entirely accurate, the court will deny Starbucks' request to seal or redact the Agreement.
III. Relevance of the Agreement to Motion for Summary Judgment
Once a matter is brought to the court for resolution, it is a public matter. M.P. ex rel. Provins v. Lowe's Cos., Civ. No. 2:11-1985 GEB CKD, 2012 WL 1574801, at *2 (E.D. Cal. May 3, 2012). OHL asserts that the redactions in the version it filed "do not include any of the contractual terms cited or relied upon in OHL's motion [for summary judgment]" and "have no apparent bearing on the merits [of] OHL's motion or this action." (Shipley Decl. ¶ 5.)
The court disagrees. OHL argues in its motion that "no provision of the [Agreement] required OHL to physically inspect incoming pallets." (Mot. at 5 (Docket No. 104).) A considerable amount of information bearing on that issue is redacted from the Agreement. (E.g., Ag. Ex. A at OHL0030-31, Ex. B at OHL0062-65).) OHL also contends in its motion that its employees ensured "coffee samples were shipped to Starbucks in a timely manner." (Mot. at 14.) The provisions governing OHL's green coffee sampling and outbound shipping procedures are also redacted here. (E.g., Ag. Ex. A at OHL0030-31, Ex. B at OHL0058-60.) OHL further argues that it "minimized the likelihood of a problem arising with any of the Starbucks property stored in its facility" by following standard operating procedures. (Mot. at 14.) Yet substantial portions of those standard operating procedures are redacted from the Agreement. (E.g., Ag. Ex. A at OHL0030-33, Ex. B at OHL0047-65.)
OHL's motion for summary judgment also puts into issue Pallets Unlimited's contentions that OHL's failure to comply with operating procedures and meet Starbucks' minimum performance standards constitute evidence of OHL's breach of its duty to act as a reasonable warehouse services provider. (Mot. at 12 n.6; e.g., App. of Evid. in Supp. of OHL's Mot. ("App. Evid.") Ex. L at 7 (indicating that OHL failed several Starbucks' compliance sections) (Docket No. 107-14).) The methods by which Starbucks measured OHL's performance and determined whether it met minimum acceptable levels are also redacted. (E.g., Ag. Ex. A at OHL0034-39, Ex. B at OHL0066-69.) Pallets Unlimited further contends that Starbucks ultimately canceled the Agreement with OHL because OHL had stored improper products near the green coffee. (Mot. Ex. R at 7 (Docket No. 107-20).) An entire section of the Sparks Supplement amendment regarding OHL's storage of Starbucks' finished goods has been redacted. (Ag. Ex. C at OHL0004.)
Furthermore, the court has previously indicated that the Agreement is relevant to Pallets Unlimited's equitable indemnity claim. (E.g., Tr. Hr'g at 5:15-17, Nov. 3, 2014 (Docket No. 45) ("[W]e don't know that [OHL's duty of care] arises from the contract because we have to look to the contract to see whether it does."), 21:5-7 ("I can't get away from the fact that I think the contract has some relevant provisions that would bear upon my decision on this motion."). It thus appears that Starbucks, in bringing this action, and OHL, in bringing its pending motion for summary judgment, have waived any privilege that may have existed in the Agreement. Accordingly, the court will deny their requests to seal or redact the Agreement.
IT IS THEREFORE ORDERED that plaintiff Starbucks Corporation's and cross-defendant Ozburn-Hessey Logistics' requests to seal or redact the Agreement, (Docket Nos. 42, 108), be, and the same hereby, are DENIED.
IT IS FURTHER ORDERED that Exhibits A through C submitted in support of Ozburn-Hessey Logistics' motion for summary judgment, (Docket Nos. 107-2 to 107-4), and all other written materials in this action shall not be filed under seal.
IT IS SO ORDERED.
