HOV Services, Inc. v. ASG Technologies Group, Inc.

Background

ASG Technologies Group, Inc., the defendant and counterclaimant, sought permission to file under seal exhibits to a declaration supporting its letter brief asking the court to compel HOV Services, Inc. to produce source code. The exhibits had been produced by HOV in discovery and designated confidential under the parties’ stipulated confidentiality and protective order. HOV agreed to remove the confidentiality designation from two documents and consented to filing the remaining identified documents under seal.

The documents concerned HOV’s relationships with customers, customer data, alleged reverse engineering of ASG’s proprietary software, HOV’s migration process and development of new programs, and internal discussions about technological procedures. ASG stated that the exhibits were examples of the information underlying its amended counterclaims and trade-secret-misappropriation claim, but were not necessarily directly needed to support the request to compel production because other supporting documents were already publicly available.

Legal standard

The court described the framework for deciding whether court materials should be sealed. Under the common-law right of access, the court first asks whether the materials are “judicial documents”—documents relevant to and useful in the court’s judicial function. If they are, the court weighs the presumption of public access based on how important the materials are to the exercise of judicial power and the parties’ substantive rights. The court then considers competing interests, including privacy and confidentiality.

The court also discussed the qualified First Amendment right of access to written materials submitted to a court. If that right applies, sealing requires a showing that higher values outweigh the right of access. The court noted that the presumption of access is strongest for materials that substantially affect substantive rights, such as principal materials supporting summary judgment or materials introduced at trial. It is weaker for documents produced in discovery that play only a limited role in the court’s work.

Court’s analysis

The court determined that the public interest in the exhibits was low. The exhibits were being used as examples of information disclosed in discovery, and the documents supporting ASG’s request to compel source-code production were already available in the public record under an earlier sealing order. The court therefore treated the access issue as more similar to the treatment of discovery materials than to materials directly determining the parties’ substantive rights.

Against that limited public-access interest, the court weighed the parties’ strong interest in keeping confidential documents containing business information, business processes, proprietary technologies, and customer information. The court concluded that those confidentiality concerns outweighed the presumption of public access.

Disposition

The court’s order states: “Application Granted.” Judge P. Kevin Castel granted ASG’s application, made with HOV’s consent, to file the identified exhibits under seal. The text provided does not state that the underlying request to compel source-code production was decided by this order.