Unlockd Media, Inc. Liquidation Trust v. Google LLC

Background

Unlockd Media, Inc. Liquidation Trust filed an administrative motion to seal portions of its Second Amended Complaint. Google LLC separately filed an administrative motion concerning whether portions of another party’s materials should be sealed. Google’s motion concerned discrete sections of its pending motion to dismiss that Unlockd contended were nonpublic and protectable trade secrets.

Legal standard

The court explained that documents attached to a dispositive motion generally may be sealed only for “compelling reasons,” because judicial records carry a strong presumption of public access. Compelling reasons can include protecting trade secrets and confidential business information. The court also noted that documents attached to nondispositive motions are subject to the lower “good cause” standard, which requires a particularized showing of specific harm from disclosure.

Court’s analysis

For Unlockd’s motion, the court applied the compelling-reasons standard because the Second Amended Complaint was the operative pleading. Unlockd sought to seal excerpts containing confidential business and financial information about its business model, including the amount received per smartphone user from partners, the values of rewards paid to users for viewing advertisements, user attrition rates, and prospective future partners. The court found that public disclosure could allow competitors of Unlockd and its partners to gain an unfair advantage in developing and negotiating competing products. It concluded that this information satisfied the compelling-reasons standard.

For Google’s motion, the court also applied the compelling-reasons standard because the material was related to a dispositive motion. The challenged footnote referenced figures from the Second Amended Complaint concerning Unlockd’s average monthly revenue per user and projected future revenue if its business had continued. Relying on its conclusions about similar confidential business and financial information in prior pleadings, the court found compelling reasons to seal these figures as well.

Disposition

The court granted both motions to seal, Docket Nos. 102 and 109. Under Civil Local Rule 79-5(f)(1), the documents covered by the granted administrative motions will remain under seal.