Pardi v. Tricida, Inc.

Background

Lead plaintiff Jeffrey Fiore received thousands of pages of documents from the Food and Drug Administration at the end of 2022. The second amended complaint quoted extensive portions of those documents. The defendants had designated the documents “Confidential,” and several parties filed motions asking the court to seal portions of the complaint, briefing, exhibits, and a motion for leave to amend. The court considered Docket Nos. 108, 110, 114, 116, 127, 130, 133, and 134 together.

The court noted that defendants Tricida, Inc. and Gerrit Klaerner filed new administrative motions to seal rather than declarations explaining why the information needed to remain sealed. The court also noted that Tricida, Inc. had filed a voluntary petition for relief under Chapter 11, but that fact was not the basis of the ruling.

Legal standard

A judicial record is a court filing or other document submitted in a case. The court explained that such records generally receive a strong presumption of public access. For documents attached to a dispositive motion or included in a complaint, the party seeking secrecy must satisfy the “compelling reasons” standard by identifying specific reasons that outweigh the public’s interest in understanding the judicial process. The party must also consider reasonable alternatives, limit the amount of material sealed, explain the injury that would result from disclosure, and show why a less restrictive alternative would not work.

The court contrasted that standard with the lower “good cause” standard that applies to records attached to nondispositive motions. Because the motions here concerned the complaint and related filings, the court applied the compelling-reasons standard.

Court’s analysis

Defendants argued that quotations and paraphrases from the FDA correspondence contained trade secrets or confidential commercial information that could give competitors unfair insight into Tricida’s research and development processes. They described the information generally as reflecting Tricida’s time, effort, and costs in developing and testing a product and communicating with the FDA.

The court found those broad assertions insufficient. Defendants did not explain how any particular communication revealed a specific trade secret, and the court itself did not find it clear that the communications disclosed trade secrets capable of causing competitive harm. The court also held that the FDA’s confidentiality regulations did not control whether the court should seal information after it had been included in court documents. A confidentiality designation by Tricida or the FDA, by itself, did not satisfy the compelling-reasons standard.

The plaintiffs contended that the documents supported claims that defendants made misstatements and failed to disclose information, including specific FDA feedback about clinical trials, the testing of the drug’s effectiveness, and the ability to apply the resulting data to the U.S. population. The court concluded that sealing the basis for those claims would undermine the public’s ability to understand the case and the judicial process. It found no basis for sealing large portions of the complaint and briefing based on the generic explanations provided.

Disposition

The court denied the motions to seal identified in Docket Nos. 108, 110, 114, 116, 127, 130, 133, and 134. It directed the parties to file public versions of the documents for which sealing was denied within ten days of the order. Alternatively, defendants could file a streamlined motion to seal within ten days that specifically identified each excerpt, the trade secret allegedly contained in a particular communication, the injury that disclosure would cause, and why a less restrictive alternative was insufficient. The order did not decide the pending motion to dismiss.