In Re: Zuora, Inc. Derivative Litigation

Background

This shareholder derivative action concerns alleged actions by officers and directors of Zuora, Inc. Plaintiffs filed an administrative motion to file under seal an unredacted version of their Verified Consolidated Shareholder Derivative Complaint. The motion was docketed as Dkt. No. 66.

Plaintiffs asserted that the proposed redactions contained information defendants had designated as protected and confidential under the court’s protective order. Defendants’ counsel supported the motion with a declaration stating that the information contained sensitive commercial details about Zuora’s business and products, internal processes, sales strategy, product development, and board functions and deliberations.

Legal Standard

The court stated that court records generally carry a strong presumption of public access. That presumption may be overcome by sufficiently compelling reasons, including disclosure of proprietary and confidential business information or information that could allow competitors to learn about a defendant’s technical capabilities.

Ruling

The court found that sealing was appropriate because the material had been designated confidential and included minutes from Zuora’s board meetings, board presentations and deliberations concerning product development, risk-management policies and practices, and details about Zuora’s relationships with key customers.

Judge Illston granted the motion. The plaintiffs were permitted to file the unredacted complaint under seal and were required to publicly file a version with paragraphs 106 through 116 and part of paragraph 117 redacted. The court identified the affected material by page and line ranges: page 29, lines 10–27; page 30, lines 1–26; and page 31, lines 1–3 and part of line 14.

This order addressed access to court filings and did not decide the underlying allegations in the shareholder derivative action.