Sumotext Corp. -v- Zoove, Inc.

Background

Defendants filed an administrative motion asking the court to seal five documents on the parties’ joint trial exhibit list. The documents had previously been designated “Attorneys’ Eyes Only” under the case’s protective order, and Defendants sought to maintain that restriction during trial. Sumotext opposed sealing.

Because the documents were proposed trial exhibits, the court applied the demanding “compelling reasons” standard. That standard requires the party seeking secrecy to show specific reasons that outweigh the public’s strong right to inspect judicial records. The court also required the request to comply with Civil Local Rule 79-5, including the requirement that sealing be narrowly limited to material entitled to legal protection.

The Court’s Rulings on the Exhibits

- ECF 423-2 — DENIED. This was a 2016 email between StarStar Mobile and a customer containing information about prices the customer had previously paid for Sumotext’s services. The court recognized that pricing information can sometimes justify sealing, but found that this email disclosed only historical prices and did not show the prices Defendants had offered. Defendants also did not specifically explain how disclosure would cause significant competitive harm. - ECF 423-3 — GRANTED. This was a due-diligence report about Zoove. It contained detailed financial and business information, including customer names, itemized costs, invoice numbers and amounts, profit-and-loss information, accounts receivable by customer, and a list of fixed assets. The court found this information sufficiently sensitive to justify sealing the entire exhibit. - ECF 423-4 — GRANTED. This was an amendment to a reseller agreement between StarStar Mobile and a current customer. The court found that the short agreement primarily contained customer-specific, closely negotiated terms and a payment schedule concerning a particular problem. Those terms could be used by competitors or potential customers in negotiations, and the court found the entire exhibit sealable. - ECF 423-5 — GRANTED. This was a “Mobile Invoicing Schedule” listing StarStar Mobile’s customers and detailed information about its contracts with them, including leased StarStar numbers, contract termination dates, billing methods, and monthly billing amounts for 2017 and 2018. The court found this to be sealable financial and customer information. - ECF 423-6 — GRANTED. This was an internal email describing a deal that StarStar Mobile apparently proposed to a reseller customer. The email stated the key terms of a potential reseller agreement, which the court found sealable for the same reasons as the customer-specific agreement in ECF 423-4.

Order and Effect

The court therefore granted in part and denied in part Defendants’ administrative motion to seal. If actually introduced at trial, ECF 423-3, 423-4, 423-5, and 423-6 will be sealed. Because Defendants did not specify the precise form of protection requested, the court ordered that those exhibits not be filed on the public docket or published to the gallery, and that witnesses shown the exhibits be told to maintain their confidentiality. The exhibits may still be shown to the jury and at counsel tables; witnesses may testify orally about them in open court; and the courtroom and transcript will not be sealed.

The copies of all exhibits filed with the sealing motion, including ECF 423-2, will remain under seal because they were submitted only so the court could decide the sealing request. The order addresses the exhibits’ treatment at trial only; it does not change their existing “Attorneys’ Eyes Only” designations under the protective order. Judge Beth Labson Freeman stated that the protective order remained binding and that no properly presented motion to lift or modify it was before the court.