In re Lyft Inc. Securities Litigation
- Haywood Gilliam
- 4:19-cv-02690
- U.S. District Court · Northern District of California
- 4
In re Lyft Securities Litigation: Judge Gilliam sealed settlement opt-out information and part of the complaint, while denying the rest of the sealing request.
The ruling affected Lead Plaintiff, Defendants, class members, and the public’s access to the specified court records.
What happened
In In re Lyft Inc. Securities Litigation, the Lead Plaintiff asked to keep certain court filings secret. The request covered the number and percentage of shares that would allow Defendants to withdraw from a proposed class settlement, as well as parts of the second amended complaint.
The court granted the request to seal the settlement opt-out threshold because disclosure could encourage improper efforts to persuade class members to opt out. For the complaint, the court allowed only paragraph 125 to remain sealed because it contained specific confidential investor information. It denied sealing for paragraphs 16, 93–99, 122, and 124, and ordered public versions of the unsealed material within seven days.
Judge Haywood S. Gilliam, Jr. granted the motion concerning the opt-out threshold and granted in part and denied in part the motion concerning the complaint. The order addressed confidentiality of court records, not the underlying securities claims.
The detailed version
- In re Lyft Inc. Securities Litigation · No. 4:19-cv-02690
- Haywood Gilliam
- Mar. 16, 2023
Background
Lead Plaintiff filed administrative motions asking the court to keep documents or portions of documents under seal. One request concerned the threshold number of class-member opt-outs that would allow Defendants to withdraw from the proposed settlement. The other concerned portions of the operative second amended complaint.
Legal standard
Because the settlement-approval motion and the complaint were closely related to the underlying action, the court applied the “compelling reasons” standard. That standard starts with a strong presumption that judicial records should be open to the public. A party seeking secrecy must identify specific reasons that outweigh the public’s interest in access and must request no more secrecy than necessary. The court also considered Civil Local Rule 79-5, which requires an explanation of the private or public interests supporting secrecy, the injury that disclosure would cause, and why a less restrictive alternative would not be sufficient.
Rulings
The court found compelling reasons to seal the opt-out threshold and granted the motion concerning that information. It reasoned that keeping the threshold confidential could discourage third parties from using it to solicit class members to opt out for improper purposes. The request was narrowly tailored because it sought to seal only the number and percentage of shares that would trigger the withdrawal option.
As to the complaint, the court found compelling reasons to seal only paragraph 125. The court rejected sealing for paragraphs 16, 93–99, 122, and 124. It explained that much of the requested material either repeated information already publicly available or consisted of generalized statements about analysts and investors. Paragraph 125, by contrast, disclosed specific confidential investor information.
Disposition
The court granted the administrative motion concerning the opt-out threshold. It granted in part and denied in part the administrative motion concerning the complaint, allowing paragraph 125 to remain sealed and denying sealing for the other specified paragraphs. Documents covered by the granted requests were to remain under seal. The parties were directed to file public versions of the documents or portions for which sealing was denied within seven days of the order.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.