London Computer Systems, Inc. v. Zillow, Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

LONDON COMPUTER SYSTEMS, : Case No. 1:18-cv-696

INC., :

: Judge Timothy S. Black

Plaintiff, :

:

vs. :

:

ZILLOW, INC., :

:

Defendant. :

ORDER GRANTING DEFENDANT’S

UNOPPOSED SUPPLEMENTAL MOTION

FOR LEAVE TO FILE UNDER SEAL (Doc. 66)

This civil action is before the Court on Defendant’s Unopposed Supplemental

Motion to File Under Seal (the “Motion to Seal” or the “Motion”). (Doc. 66).

I. BACKGROUND

Plaintiff London Computer Systems, Inc. (“Plaintiff”) has filed suit against

Defendant Zillow, Inc. (“Defendant”) for, inter alia, trademark infringement, deceptive

trade practices, and unfair competition. (Doc. 1 at ¶¶ 16–55). Plaintiff is an Ohio

corporation headquartered in Cincinnati. (Id. at ¶ 5). Defendant is a Washington

corporation headquartered in Seattle. (Id. at ¶ 6). Both parties offer property-

management products: Plaintiff’s is called Rent Manager; Defendant’s is called Zillow

Rental Manager. (Id. at ¶¶ 10, 12; Doc. 27-1 at 14).

On September 12, 2019, Defendant filed the instant Motion to Seal. (Doc. 66). In

it, Defendants asks the Court to maintain under permanent seal four documents that have

already been filed under conditional seal: Exhibit 2 to the Second Sayre Decl. (Doc. 43-

2); Exhibit 8 to the Second Sayre Decl. (Doc. 43-8); Exhibit 10 to the Second Sayre Decl.

(Doc. 43-10); and Exhibit 11 to the Second Sayre Decl. (Doc. 43-11) (collectively the

“Exhibits”). (Doc. 66 at 1). Defendant asserts that sealing is appropriate because each of

the Exhibits contains confidential business information. (Id. at 3).

In a previous motion, Defendant mistakenly asked the Court to maintain only

certain “portions” of the Exhibits under permanent seal. (See Doc. 53 at 3; see generally

Docs. 51, 53-10, 66). In the instant Motion, Defendant clarifies that it actually seeks to

seal the Exhibits in their “entirety.” (Doc. 66 at 2).

II. STANDARD OF REVIEW

A district court’s decision to seal court records is reviewed for an abuse of

discretion. Beauchamp v. Fed. Home Loan Mortg. Corp., 658 F. App’x 202, 207 (6th

Cir. 2016) (citing Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 306

(6th Cir. 2016)). However, “the district court’s decision is not accorded the deference

that standard normally brings.” Id. (quoting Shane Grp., 825 F.3d at 306).

There is a “stark” difference between, on the one hand, the propriety of allowing

litigants to exchange documents in secret, and on the other hand, the propriety of

allowing litigants to shield from public view those documents which are ultimately relied

on in the Court’s adjudication. See Shane Grp., 825 F.3d at 305. Parties are typically

entitled to a “protective order” limiting the disclosure of documents in discovery upon a

mere showing of good cause. Id. However, “very different considerations apply” when

these materials are filed in the public record. Id. (quoting Joy v. North, 692 F.2d 880,

893 (2d Cir. 1982)).

Unlike information merely exchanged between the parties, the public has a strong

interest in obtaining the information contained in the court record. Id. Accordingly, the

courts have long recognized a “strong presumption in favor of openness” of court

records. Id. (quoting Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165, 1179

(6th Cir. 1983)).

The Sixth Circuit has repeatedly explained that a party moving to seal court

records must overcome a significant burden. See Shane Grp., 825 F.3d at 305-06;

Beauchamp, 658 Fed. App’x at 207–08; Rudd Equip. Co. v. John Deere Constr. &

Forestry Co., 834 F.3d 589, 593–96 (6th Cir. 2016). According to the Sixth Circuit:

The burden of overcoming that presumption [of openness] is

borne by the party that seeks to seal them. In re Cendant Corp.,

260 F.3d 183, 194 (3d Cir. 2001). The burden is a heavy one:

“Only the most compelling reasons can justify non-disclosure

of judicial records.” In re Knoxville News-Sentinel Co., 723

F.2d 470, 476 (6th Cir. 1983). . . . And even where a party can

show a compelling reason why certain documents or portions

thereof should be sealed, the seal itself must be narrowly

tailored to serve that reason. See, e.g., Press-Enter. Co. v.

Superior Court of California, Riverside Cnty., 464 U.S. 501,

509–11, 104 S. Ct. 819, 78 L. Ed. 2d 629 (1984). The

proponent of sealing therefore must “analyze in detail,

document by document, the propriety of secrecy, providing

reasons and legal citations.” Baxter, 297 F.3d at 548.

Shane Grp., 825 F.3d at 305–06.

A movant’s obligation to provide compelling reasons justifying the seal exists

even if the parties themselves agree the filings should be sealed. See Rudd Equip., 834

F.3d at 595 (noting that the parties “could not have waived the public’s First Amendment

and common law right of access to court filings”) (citation omitted); see also In re

Knoxville, 723 F.2d at 475 (noting that, in reviewing a motion to seal, the district court

has “an obligation to consider the rights of the public”). Simply put, this Court has an

obligation to keep its records open for public inspection, and that obligation is not

conditioned upon the desires of the parties to the case. See Shane Grp., 825 F.3d at 306.

A district court that chooses to seal court records must set forth specific findings

and conclusions “which justify nondisclosure to the public.” Id. (quoting Brown &

Williamson, 710 F.2d at 1176). A court’s failure to set forth reasons explaining why the

interests in support of nondisclosure are compelling, why the interests in support of

access are less so, and why the seal itself is no broader than necessary is grounds to

vacate an order to seal. Id.

III. ANALYSIS

In the instant Motion, Defendant argues that the Court should maintain the

Exhibits under seal—in their “entirety.” (Doc. 66 at 2).

On review, the Exhibits contain emails, between various of Defendants’

employees, discussing Defendant’s highly sensitive business strategies. (See generally

Docs. 43-2, 43-8, 43-10, 43-11). More specifically, Exhibit 2 contains an email

correspondence regarding Defendant’s private business negotiations with Plaintiff. (Doc.

43-2). Exhibit 8 contains an email correspondence regarding Defendant’s potential

business partnerships. (Doc. 43-8). Exhibit 10 contains an email correspondence

regarding the specifics of Defendant’s brand positioning. (Doc. 43-10). And Exhibit 11

contains an email correspondence regarding content changes to certain of Defendant’s

product offerings. (Doc. 43-11).

The Court concludes that, upon careful consideration, Defendant’s Motion to Seal

is well-taken. (See Doc. 66).

As an initial matter, there is a compelling reason for sealing the Exhibits. This

Court has repeatedly held that companies have a compelling interest in protecting their

business strategies from competitors. See, e.g., Ethicon Endo-Surgery, Inc. v. Covidien,

Inc., No. 1:11-CV-871, 2017 WL 4168290, at *2 (S.D. Ohio Sept. 20, 2017). The highly

sensitive business strategies contained in the Exhibits constitute just the type of

confidential information subject to protection under this precedent.

Additionally, the public has little interest in the information contained in the

Exhibits. The Exhibits were filed in connection with a pending motion for a preliminary

injunction. (See Docs. 27, 58). On the Court’s review, the public will not need to view

Defendant’s highly confidential business information in order to understand the

arguments for and against that motion. As such, the public’s interest in the Exhibits’

disclosure is limited.

Finally, the seal proposed is no broader than necessary to protect Defendant’s

confidential information. The Court is, of course, hesitant to seal the Exhibits in their

entirety. After all, the Court has an independent obligation to ensure that any seal

authorized is narrowly tailored. Nevertheless, on careful review, the Court concludes that

the confidential information in the Exhibits is too pervasive to permit the use of other,

narrower, means of protecting sensitive information (e.g., partial redaction).

IV. CONCLUSION

Based upon the foregoing, Defendant’s Motion to Seal (Doc. 66) is GRANTED.

Accordingly, the Court will maintain the Exhibits under seal—in their entirety. (Docs.

43-2, 43-8, 43-10, 43-11). Within 14 days of the date of this Order, Plaintiff SHALL file

completely redacted versions of the Exhibits on the public record. To the extent the Court

previously required Plaintiff to file partially redacted versions of the Exhibits on the

public record, that requirement is hereby VACATED. (See Doc. 56 at 9).

IIT IS SO ORDERED.

Date: 7/31/2020 Fach ee Chock

Timoth lack

United States District Judge