Jones v. PGA Tour, Inc.

Background

PGA Tour, Inc. filed an administrative motion asking the court to consider sealing materials submitted with its motion for leave to amend its counterclaim. LIV Golf, Inc., identified in the order as a plaintiff and counter-defendant, supported the sealing request. LIV sought to seal portions of the proposed amended counterclaim, a redlined version, PGA Tour’s memorandum supporting amendment, and an exhibit.

Legal standard

The court applied the “compelling reasons” standard because a motion to amend pleadings is more than tangentially related to the underlying claims. Under that standard, the party seeking secrecy must provide specific reasons showing that disclosure would cause a legally significant harm that outweighs the public’s general right to inspect court records. The court also required compliance with the Northern District of California’s local sealing rule, including a narrowly tailored request covering only material entitled to protection.

Rulings on the requested information

The court granted the request to seal information about the terms of certain indemnification agreements. It found that disclosure could reveal the contours of potential litigation and the amounts offered for indemnification, which other litigants could exploit.

The court also granted the request to seal confidential terms of LIV’s Shareholder Agreement, including investor rights. It found that disclosure could prejudice LIV’s ability to obtain outside funding, pursue a franchise model in the future, and obtain future business.

The court denied the request to seal information describing some of LIV’s relationships with investors and information about LIV’s internal decision-making. The court found that LIV had offered only speculative harms and noted that alleged control over LIV was central to the counterclaim, increasing the public interest in access to that information.

The court granted the request to seal information about specific negotiations and offers to players, agents, sponsors, and broadcasters, including specific offer terms. It found that disclosure could cause competitive harm by affecting LIV’s ability to negotiate and obtain future business.

Finally, the court granted the request to seal an exhibit and related excerpts concerning LIV’s player recruitment, including player identities, the number and structure of offers, offer terms, and specific amounts. The court found that disclosure could reveal LIV’s ability and willingness to pay and allow competitors to exploit its recruitment strategy.

Order

The court granted in part and denied in part the motion to seal. It ordered redactions consistent with its chart and required PGA Tour to file public redacted versions of the proposed counterclaim, the proposed counterclaim redline, and the supporting memorandum by March 3, 2023. Judge Beth Freeman signed the order.