Powersecure, Inc. v. Art Alger, Inc.
- Haywood Gilliam
- 4:19-cv-08002
- U.S. District Court · Northern District of California
- 4
In Powersecure v. Art Alger, Judge Gilliam approved the proposed settlement but denied the request to keep its amount secret.
Powersecure, Inc. and Art Alger, Inc. were affected by the settlement ruling. Art Alger was required to file public versions of the documents within seven days, although it could file a new sealing motion meeting the court’s requirements.
What happened
In Powersecure, Inc. v. Art Alger, Inc., Powersecure sued Art Alger over damage to an electrical energy storage module during transportation and sought at least $693,648. The parties proposed a settlement, and Art Alger asked the court to approve it as made in good faith.
The court found that Art Alger’s settlement payment was within the reasonable range of its potential responsibility. It approved the good-faith settlement determination. Art Alger also asked to keep the settlement amount under seal, but the court found that it had not shown specific harm from disclosure and denied that request.
Judge Gilliam directed Art Alger to file public versions of the affected documents within seven days. The court also said Art Alger could file a new sealing motion within seven days that met the stated requirements.
The detailed version
- Powersecure, Inc. v. Art Alger, Inc. · No. 4:19-cv-08002
- Haywood Gilliam
- Dec. 10, 2020
Background
Powersecure alleged that it hired Art Alger in June 2016 to help transport two custom-configured electrical energy production and storage modules for installation at the Apple Campus Facility in Cupertino, California. During an attempted lift, one module listed to one side. After the workers lowered it, tried to secure it, and attempted the lift again, the securing straps broke and the module fell onto a concrete floor. Powersecure determined that the module could not be repaired.
Powersecure filed claims for breach of contract and breach of the implied covenant of a duty to perform with reasonable care. The complaint sought at least $693,648 in damages. Art Alger later applied for a good-faith settlement determination under California Code of Civil Procedure section 877.6. The proposed settlement called for Art Alger to pay an amount that was initially unspecified in the application in exchange for dismissal of the action with prejudice. After the court requested the settlement amount, Art Alger supplied it in a supplemental filing and also asked to file that information under seal.
Good-Faith Settlement
Under section 877.6, a court may determine whether a settlement between a plaintiff and one or more alleged joint tortfeasors or co-obligors was made in good faith. Such a determination can protect the settling party from later claims for equitable contribution or comparative indemnity based on comparative fault.
The court applied the factors identified in Tech-Bilt, Inc. v. Woodward-Clyde Associates, including the approximate value of the case, the settling party’s potential share of responsibility, the settlement payment, the settling party’s financial condition and insurance, and any evidence of collusion or fraud. The court found that the settlement payment was within the “ballpark” of Art Alger’s potential liability. It also found that the lack of an allocation, the absence of issues concerning Art Alger’s finances or insurance, and the lack of evidence or accusations of collusion, fraud, or similar misconduct did not prevent a good-faith finding.
Sealing Request and Disposition
Because the request to seal concerned a filing related to a nondispositive motion, the court applied the lower “good cause” standard. That standard requires a particularized showing of specific prejudice or harm that would result from disclosure. Art Alger’s only stated reason was protecting the confidentiality of information concerning the settlement agreement. The court held that Art Alger had not identified any specific harm and that a preference for secrecy was not enough.
The court GRANTED the motion for good faith settlement determination and DENIED the administrative motion to file under seal. It DIRECTED Art Alger to file public versions of documents for which sealing had been denied within seven days of the order. The court also stated that Art Alger could file a new motion to seal within seven days that complied with the requirements discussed in the order.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.