Citations
- 231 Cal. App. 4th 471
Full opinion text
Opinion
BANKE, J.
I. Introduction
In this consolidated appeal, we address two “sealing” orders. The first granted motions by defendants to seal documents submitted in connection with plaintiffs’ efforts to file a fifth amended complaint. The second denied, in substantial part, motions by defendants to seal documents submitted in connection with defense motions for summary judgment. The second order overlapped the first, since the materials underlying the proffered amended pleading resurfaced in opposition to the summary judgment motions. Accordingly, the second sealing order is the trial court’s final call as to the propriety of sealing these discovery materials, and the parties have ultimately focused on this order, as do we.
We affirm most of the trial court’s sealing decisions. But there are key exceptions, a principal one being thousands of pages of documentation plaintiffs submitted to the court, but which they never cited and which were irrelevant to the issues raised by the summary judgment motions. Under the plain terms of the protective order in place, these irrelevant materials never should have burdened the trial court or this court. Nor should they have been subjected to analysis under the sealing rules, since irrelevant materials have no bearing on the trial court’s adjudicatory function and, thus, are not within the ambit of the public’s right of access to court records. Rather, these discovery materials should have been struck from the record and remained confidential pursuant to the provisions of the protective order. As for the materials that were relevant to the summary judgment proceedings, some contain confidential financial information of third parties and should have been sealed under the “sealed records rules.”
On our way to reaching these conclusions, we address several issues pertaining to sealing orders that have remained unsettled, including the reach of California Rules of Court, rules 2.550 and 2.551, and media participation in sealing hearings. We also discuss tools available to the trial courts to deal with abusive litigation tactics impacting the handling of sealing issues. Indeed, we are appalled at the burden the parties foisted on the trial court here and view this case as a companion to the decision of our brethren in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 289-290 [100 Cal.Rptr.3d 296], decrying unnecessary and oppressive summary judgment tactics.
II. Background
Plaintiffs are Overstock.Com, Inc., an online retailer, and several of its investors. In their fourth amended complaint, plaintiffs alleged defendants, Merrill Lynch, Pierce Fenner & Smith Inc. and Merrill Lynch Professional Clearing Corp. (collectively Merrill) and Goldman Sachs & Co. and Goldman Sachs Execution & Clearing L. P. (collectively Goldman), intentionally depressed the price of Overstock stock by effecting “naked short sales” — that is, sales of shares the brokerage houses and their clients never actually owned or borrowed. This practice, plaintiffs claimed, artificially increased the supply and short sales of the stock, while decreasing its value. Plaintiffs alleged this conduct violated Corporations Code sections 25400 and 25500, Business and Professions Code sections 17200 and 17500, and New Jersey’s RICO statute (N.J. Rev. Stat. § 2C:41-2.c., d.).
A. The Protective Order
The parties’ discovery demands were extensive, and in May 2008, pursuant to a stipulation, the trial court issued a protective order. The order allowed the parties to designate certain produced materials as “Protected Material,” and to further classify this material as either “Confidential” or “Highly Confidential.” Paragraph 13 of the order specified: “If a party seeks to file Protected Material, the party must seek to do so under seal pursuant to California Rules of Court 2.550 and 2.551.” Paragraph 14 required the parties to “endeavor in good faith to restrict their . . . submissions to Confidential Information . . . reasonably necessary for the Court[’s deliberations].”
Two years later, in June 2010, the trial court entered a second protective order to “modif[y] and extend[] the [May 30, 2008]” order to confidential information pertaining to third parties. The parties acknowledged in this order that information identifying specific client transactions “may be protected by rights of privacy or other confidentiality rights.” “[T]o avoid undue delay, burden, and expense in document production,” the parties also agreed to “produce documents containing information of Third Parties without redaction of such information.” We refer to both orders, collectively, as the protective order.
B. The Proposed Fifth Amended Complaint and Related Motions to Seal
In February 2011, defendants successfully demurred to the New Jersey RICO cause of action in the fourth amended complaint. The trial court allowed plaintiffs to propose a fifth amended complaint with a reworked RICO claim, stating if they did so, the court would order an expedited briefing and hearing schedule. In May, plaintiffs submitted a proposed new pleading. The publicly filed document was heavily redacted; an unredacted version was conditionally lodged under seal.
Defendants opposed allowing the fifth amended complaint on three grounds: a California court should not apply New Jersey RICO law; plaintiffs had not, in any event, stated a claim under that law; and granting leave to amend so late in the case would prejudice defendants. The publicly filed opposition papers were redacted; unredacted versions were conditionally lodged under seal. Plaintiffs then submitted papers in support of their proposed pleading, and defendants thereafter submitted reply papers. Again, the publicly filed documents were redacted; unredacted versions were conditionally lodged under seal.
In connection with these substantive filings, defendants made 10 separate motions to seal. Plaintiffs opposed five of the motions, including two motions to seal certain allegations of the proposed fifth amended complaint based on discovery materials designated “Confidential” or “Highly Confidential” under the parties’ protective order. Plaintiffs contended the allegations did not reveal trade secrets or implicate significant privacy interests. The media also filed, without court permission, opposition to the sealing motions, including requesting the court to unveil the “88 paragraphs of the proposed Fifth Amended Complaint” defendants wished to seal in whole or in part.
After a lengthy hearing, the trial court ruled from the bench and denied leave to file the proposed fifth amended complaint on two grounds: (1) granting leave to add a new, complex RICO claim would prejudice defendants on the eve of trial, and (2) the RICO claim “would be futile because the facts as alleged ... do not warrant the application of New Jersey RICO [law] to this case under California choice-of-law principles.”
Two days later, on August 3, 2011, the court issued a written order granting the motions to seal/ It first determined the sealed records rules applied, and then made the express findings required under the rules and ordered the clerk to file, under seal, the unredacted materials that had been conditionally lodged with the court. The court also ruled the media had not sought to intervene in conformance with Code of Civil Procedure section 387 or under rule 2.551 and therefore denied intervention and struck the media’s memorandum opposing sealing. The court noted, however, it had allowed the media to participate in the hearing. Plaintiffs and the media appealed (appeal No. A133487).
C. The Summary Judgment Motions and Related Motions to Seal
The following month, defendants moved for summary judgment on the remainder of plaintiffs’ causes of action (under Corp. Code, §§ 25400, 25500 and Bus. & Prof. Code, §§ 17200, 17500) on multiple grounds.
Plaintiffs’ opposition would eventually fill 38 banker’s boxes and included thousands of pages of discovery materials that had been designated “Confidential” or “Highly Confidential” pursuant to the protective order. The materials were ostensibly proffered to show defendants knowingly employed a strategy of naked short sales to devalue Overstock, and did so in California. The trial court, at the parties’ urging, approved lodging all of these confidential materials conditionally under seal and deferring disposition of any sealing motions until after it ruled on the summary judgment motions.
The trial court heard three days of argument on evidentiary objections to the materials filed in connection with the summary judgment motions and a full day of argument on the merits of the motions. In an order dated January 10, 2012, the trial court granted the motions. As to the Corporations Code claim, the court ruled only conduct in California was actionable and plaintiffs “failed to raise [any] triable issue of material fact supportive of a finding that any act by any defendant foundational to liability, causation, or damages occurred in California.” The court declined to reach any of the other grounds for judgment defendants had urged in connection with this claim. As to the Business and Professions Code claim, the court noted plaintiffs sought only injunctive relief and ruled such relief was unavailable since defendants had ceased the complained-of conduct as of 2008, and it was not likely to recur given new Securities and Exchange Commission rules prohibiting it. Again, the court did not consider other grounds urged by defendants. The court issued a final, comprehensive order on April 11, 2012, setting forth, as required by Code of Civil Procedure section 437c, subdivision (g), “the evidence proffered in support of, and if applicable in opposition to, the motion which indicates that no triable issue exists.”
Shortly after the initial summary judgment order in January, Merrill and Goldman each filed a motion to seal copious amounts of the materials plaintiffs had submitted in opposition to the summary judgment motions. Plaintiffs opposed both motions. The media also sought, and was granted leave, to intervene in opposition to the motions.
After a lengthy hearing, the trial court largely denied the motions by written order filed March 6, 2012. The court again determined the sealed records rules applied. It also concluded the rules applied to all of the discovery materials submitted in connection with the summary judgment motions, not just those materials related to the limited grounds on which the court ultimately ruled. The court next concluded, as to a significant number of the materials, defendants’ declarations were “conclusory” and “unpersuasive,” and lacked the “specific facts” necessary to support sealing. The court additionally concluded plaintiffs had “persuasively show[n]” many of the documents no longer had sufficient indicia of confidentiality to warrant sealing. In sum, “[g]iven (1) that this case was filed in February 2007, more than five years ago, (2) that most, if not all, of the transactions reflected in the documents are at least four years old, (3) that many of the allegedly confidential business practices and trading strategies are outdated due to changes in federal law, and (4) that much of the material at issue was publicly disclosed at the January 5, 2012 hearing on the motions for summary judgment,” the trial court observed, “defendants’ failure to present specific facts to justify sealing the documents at issue is understandable.”
Still, the trial court ordered a significant number of the discovery materials sealed. These generally fell into three categories: (1) documents “laced with identifying information about hundreds of thousands of financial transactions of third parties who have no connection to this litigation”; (2) nonpublic regulatory documents having no direct connection to this action, the sealing of which plaintiffs did not oppose; and (3) approximately 200 exhibits plaintiffs submitted, but never cited.
While the March 2012 sealing order did not expressly revisit the 2011 order, when the trial court and parties discussed sealing the summary judgment materials at a December 8, 2011, case management conference, they agreed to a “holistic hearing that would apply not only to the [summary judgment sealing motions], but also would involve reconsideration of the court’s previous sealing rulings.” As the court observed, the “overlap is inseparable.” At a later case management conference, on December 23, 2011, the court reiterated it was “prepared holistically to consider these sealing issues with respect to past and present and future motions at the same time” and again noted, “the information that is sought to be sealed in the currently pending motions overlaps largely with the previous rulings.” This holistic, evolving view of the propriety of sealing was well taken. (See In re Marriage of Nicholas (2010) 186 Cal.App.4th 1566, 1569 [113 Cal.Rptr.3d 629] [“well-established constitutional, case, and statutory authority subjects] sealing orders to continuing review and modification by the trial judge . . .”].)
Merrill and Goldman filed notices of appeal to the extent the March 2012 order denied their motions to seal and allowed the media to intervene (appeal No. A135180), and we subsequently ordered the appeals consolidated. As we noted at the outset, the parties have focused on the 2012 order.
III. Discussion
A. Background: Access to Records in Civil Cases
1. Common Law Right of Access
Nearly all jurisdictions, including California, have long recognized a common law right of access to public documents, including court records. (See Nixon v. Warner Communications, Inc. (1978) 435 U.S. 589, 597 [55 L.Ed.2d 570, 98 S.Ct. 1306] (Nixon) [it “is clear that the courts of this country recognize a general right to inspect and copy public records and documents”]; IDT Corp. v. eBay, Inc. (8th Cir. 2013) 709 F.3d 1220, 1222 (IDT Corp.) [noting most federal circuits have embraced a common law right of access to court records]; Craemer v. Superior Court (1968) 265 Cal.App.2d 216, 220, fn. 3 [71 Cal.Rptr. 193] [“right of a citizen to inspect public writings has its origin in the common law”].)
This common law right is effectuated through a presumption of access. (See Nixon, supra, 435 U.S. at p. 602 [“on respondents’ side is the presumption — however gouged — in favor of public access to judicial records”].) As articulated by California’s courts, this presumption means court records are “open to the public unless they are specifically exempted from disclosure by statute or are protected by the court itself due to the necessity of confidentiality.” (McGuire v. Superior Court (1993) 12 Cal.App.4th 1685, 1687 [16 Cal.Rptr.2d 726]; accord, Estate of Hearst (1977) 67 Cal.App.3d 777, 782-783 [136 Cal.Rptr. 821].)
The weight accorded to the common law presumption of access depends, in any particular case, on the “role of the material at issue in the exercise of . . . judicial power and the resultant value of such information to those monitoring the . . . courts. Generally, the information will fall somewhere on a continuum from matters that directly affect an adjudication to matters that come within a court’s purview solely to insure their irrelevance.” (Lugosch v. Pyramid Co. of Onondaga (2d Cir. 2006) 435 F.3d 110, 119 (Lugosch).) Accordingly, when evaluating whether records should be sealed under the common law, courts engage in a balancing analysis, weighing the presumption of access against a variety of competing interests. (See H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894 [60 Cal.Rptr.3d 501] [weighing harm of disclosing confidential information against any countervailing considerations].)
As a practical matter, this has meant documents subject to a protective order often remain outside public purview on a “good cause” showing akin to that which supported issuance of the protective order in the first place. (See Phillips v. General Motors Corp. (9th Cir. 2002) 307 F.3d 1206, 1213 [“When a court grants a protective order for information produced during discovery, it already has determined that ‘good cause’ exists to protect this information from being disclosed to the public by balancing the needs for discovery against the need for confidentiality.”]; Chicago Tribune Co. v. Bridgestone/Firestone, Inc. (11th Cir. 2001) 263 F.3d 1304, 1313 [“the Press’s common-law right to the Firestone documents filed in connection with the motion for summary judgment may be resolved by the [Federal Rules of Civil Procedure, r]ule 26 good cause balancing test”]; Mercury, supra, 158 Cal.App.4th at pp. 107-108 [concluding discovery material was not protected by constitutional right of access and remanding for determination of whether documents should remain confidential under protective order].)
2. First Amendment Right of Access
More recently, many jurisdictions, including California, have recognized a constitutional right of access to certain court documents grounded in the First Amendment. (NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1208, fn. 25 [86 Cal.Rptr.2d 778, 980 P.2d 337] (NBC Subsidiary).)
NBC Subsidiary addressed the outright closure of court proceedings and concluded the trial court infringed on First Amendment rights by barring the media from the courtroom in the absence of explicit findings of an overriding interest that was likely to be prejudiced and could not be protected by less restrictive means. (NBC Subsidiary, supra, 20 Cal.4th at pp. 1222-1223.) However, the Supreme Court additionally observed, in what is now an oft-cited footnote: “Numerous reviewing courts likewise have found a First Amendment right of access to civil litigation documents filed in court as a basis for adjudication. (See Brown & Williamson Tobacco Corp. v. F.T.C. (6th Cir. 1983) 710 F.2d 1165, 1179 (Brown & Williamson) [documents filed in civil litigation; ‘[i]n either the civil or criminal courtroom, secrecy insulates the participants, masking impropriety, obscuring incompetence, and concealing corruption’]; Rushford v. New Yorker Magazine, Inc. (4th Cir. 1988) 846 F.2d 249 (Rushford) [summary judgment pleadings]; Matter of Continental Illinois Securities Litigation (7th Cir. 1984) 732 F.2d 1302 (Continental Illinois Securities) [records related to ‘hybrid summary judgment motion’]; cf. Grove Fresh Distributors, Inc. v. Everfresh Juice Co. (7th Cir. 1994) 24 F.3d 893 [assuming both a First Amendment and a common law right of access to civil litigation documents].)” (NBC Subsidiary, supra, 20 Cal.4th at p. 1208, fn. 25.)
Since NBC Subsidiary, the California Courts of Appeal have regularly employed a constitutional analysis in resolving disputes over public access to court documents. (E.g., In re Marriage of Nicholas, supra, 186 Cal.App.4th at p. 1575 [sealing orders implicate public’s right of access under the 1st Amend.]; Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4th 588, 596 [57 Cal.Rptr.3d 215] (Savaglio) [public has 1st Amend, right to access civil litigation documents filed in court and used at trial or submitted as basis for adjudication].)
Not all documents submitted or filed by the parties, however, fall within the ambit of the constitutional right of access. NBC Subsidiary hastened to add the courts have held, “the First Amendment does not compel public access to discovery materials that are neither used at trial nor submitted as a basis for adjudication.” (NBC Subsidiary, supra, 20 Cal.4th at p. 1208, fn. 25; see Mercury, supra, 158 Cal.App.4th at p. 84 [“our high court enunciated a rule under which a certain class of court-filed documents is subject to a presumption of a First Amendment right of public access”].)
Thus, “different levels of protection may attach to the various records and documents involved in [a given] case,” depending on whether access is predicated on the First Amendment or the common law. (Stone v. University of Maryland Medical System Corp. (4th Cir. 1988) 855 F.2d 178, 180; see U.S. v. McVeigh (10th Cir. 1997) 119 F.3d 806, 812 [“[B]oth the common law and First Amendment standards ultimately involve a balancing test, and the First Amendment right of access receives more protection than the common law right. Thus, if we find the district court orders satisfy the First Amendment standard, as we do, we will necessarily find that the orders satisfy the common law standard as well.”]; Mercury, supra, 158 Cal.App.4th at pp. 91, 106-107 [1st Amend, applies to a “narrower class of filed documents,” while “good cause” Civil Discovery Act standard applies to discovery materials not subject to sealed records rules].)
3. The Sealed Records Rules
In response to NBC Subsidiary, the Judicial Council promulgated “the sealed records rules,” rules 2.550, 2.551 (Mercury, supra, 158 Cal.App.4th at p. 84.) The rules expressly implement the First Amendment principles espoused in NBC Subsidiary and establish a presumption that “court records ... be open” unless the law requires confidentiality. (Rule 2.550(c); see Advisory Com. com., rule 2.550; In re Marriage of Nicholas, supra, 186 Cal.App.4th at p. 1575.)
The rules “apply to records sealed or proposed to be sealed by court order” (rule 2.550(a)(1)) and, more specifically, to “discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings” (rule 2.550(a)(3)). The rules are inapplicable to “discovery motions and records filed or lodged in connection with discovery motions or proceedings.” (Ibid.) Nor do they apply “to records that are required to be kept confidential by law.” (Rule 2.550(a)(2).)
a. Sealing Records
“[S]ubject to certain exceptions ... a court ‘record must not be filed under seal without a court order.’ (Rule 2.551(a).) Further, a ‘court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.’ (Rule 2.551(a).)” (Mercury, supra, 158 Cal.App.4th at p. 84.)
“A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify tibe sealing.” (Rule 2.551(b)(1).) In so doing, the moving party must lodge with the court the record for which the sealing order is sought. The court holds the record “conditionally under seal” until it rules on the motion or application. (Rule 2.551(b)(4).)
Often a party will want to file documents obtained during discovery that an adversary or third party has designated as confidential pursuant to a protective order. (See rule 2.551(b)(3).) In such a case, the party seeking to file the confidential documents must lodge them with the court in unredacted form, as well as lodge, in unredacted form, any pleadings, motions, memoranda or other court documents disclosing their contents. (Rule 2.551(b)(3)(A)(i), (d).) The party must also publicly file redacted copies of the documents and other court materials. (Rule 2.551(b)(3)(A)(ii).) In addition, the party must give written notice to whoever produced the confidential documents that the lodged, unredacted documents “will be placed in the public court file unless that party files a timely motion or application to seal the records under this rule.” (Rule 2.551(b)(3)(A)(iii).) If the producing party is properly served with notice and fails to request sealing within 10 days, or fails to request an extension of time to seek sealing, “the clerk must promptly . . . place the [unredacted documents] in the public file.” (Rule 2.551(b)(3)(B).)
The court may order a record sealed only upon making express findings that “(1) There exists an overriding interest that overcomes the right of public access to the record; [][] (2) The overriding interest supports sealing the record; [¶] (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; [][] (4) The proposed sealing is narrowly tailored; and [][] (5) No less restrictive means exist to achieve the overriding interest.” (Rule 2.550(d).) In its order, the court must identify the facts supporting its issuance. (Rule 2.550(e)(1)(A); Mercury, supra, 158 Cal.App.4th at p. 84.) The findings themselves, however, may be set forth in fairly cursory terms. (See, e.g., McGuan v. Endovascular Technologies, Inc. (2010) 182 Cal.App.4th 974, 988 [106 Cal.Rptr.3d 277].) If the trial court fails to make the required findings, the order is deficient and cannot support sealing. (See Providian, 96 Cal.App.4th at pp. 301-302.)
“If the court denies the motion or application to seal, the clerk must return the lodged record to the submitting party and must not place it in the case file unless that party notifies the clerk in writing within 10 days after the order denying the motion or application that the record is to be filed.” (Rule 2.551(b)(6).)
b. Unsealing Records
The sealing rules also allow a party, members of the public, or even the court on its own initiative, to seek the unsealing of documents under seal. (Rule 2.551(h)(2).) “Notice of any motion, application, or petition to unseal must be filed and served on all parties in the case.” (Ibid.) “The motion, application, or petition and any opposition, reply, and supporting documents must be filed in a public redacted version and a sealed complete version if necessary” if such documentation reveals the content of the sealed documents. (Ibid.)
While the court must consider the same criteria pertinent to a motion to seal when ruling on a request to unseal (rule 2.551(h)(4)), an order to unseal — as well as an order denying sealing — does not require express factual findings by the trial court. (Providian, supra, 96 Cal.App.4th at p. 302.) The order must specify, however, whether the records are unsealed in whole or in part. (Rule 2.551(h)(5).)
c. Media’s Involvement
The sealed records rules expressly permit the public, which includes members of the press, to seek the unsealing of court records. (Rule 2.551(h)(2).) Rule 2.551 “provides procedural flexibility to third parties seeking to unseal court records, including” — in addition to noticed proceedings in the trial court — “the vehicle of initiating an original proceeding in the reviewing court by way of a petition for writ of mandate to compel the lower court to unseal records that were improperly sealed.” (Savaglio, supra, 149 Cal.App.4th at pp. 601-603.) Rule 2.551(h)(2), thus, reflects the Judicial Council’s implementation of NBC Subsidiary’s admonition that “ ‘representatives of the press and general public “must be given an opportunity to be heard on the question of their exclusion.” ’ ” (NBC Subsidiary, supra, 20 Cal.4th at p. 1217, fn. 36.)
Here the media asserts, as it has in other cases, that it also has a right to participate in proceedings to seal court records and further contends it is entitled to do so as an intervener. And some cases have noted in passing the media was allowed to intervene to oppose a motion to seal. (E.g., In re Marriage of Burkle (2006) 135 Cal.App.4th 1045, 1050 [37 Cal.Rptr.3d 805] (Burkle); Fagan v. Superior Court (2003) 111 Cal.App.4th 607, 611 [4 Cal.Rptr.3d 239].)
However, after examining the nature and parameters of intervention, Savaglio concluded it was not the proper procedure for media participation, even in connection with the unsealing of court records. (Savaglio, supra, 149 Cal.App.4th at p. 602.) The newspaper seeking leave to intervene in that case “mistakenly equate[d] intervention with pursuing a motion to seal. They are not the same. The right to intervene, whether conditional or unconditional, is the right to become a party to pending litigation. As applied to matters of law, ‘to intervene’ means ‘ “[t]o interpose in a lawsuit so as to become a party to it.” ’ (Estate of Ghio (1910) 157 Cal. 552, 559-560 [108 P. 516].) In civil law intervention is ‘ “[t]he act by which a third party becomes a party in a suit pending between other persons.” ’ (Id. at p. 560.) By allowing a member of the public to file a motion to unseal records, rule 2.551(h) provides a mechanism for third parties to correct overbroad or unsubstantiated sealing orders, but it does not transform that member of the public into a party to the lawsuit.” (Savaglio, at pp. 602-603.)
We agree with Savaglio that intervention pursuant to Code of Civil Procedure section 387 is not a means by which nonparties can participate in proceedings to seal or unseal court records. This does not mean, however, media participation in proceedings to seal court records is improper, even though the sealing rules provide for participation only in proceedings to unseal court records. The courts have ample authority to allow media participation as amici curiae. (See, e.g., In re Marriage Cases (2008) 43 Cal.4th 757, 791-792, fn. 10 [76 Cal.Rptr.3d 683, 183 P.3d 384] [superior courts retain “broad discretion over the conduct of pending litigation” and have “the authority to determine the manner and extent of . . . entities’ participation as amici curiae that would be of most assistance to the court”]; Cromer v. Superior Court (1980) 109 Cal.App.3d 728, 731 [167 Cal.Rptr. 671] [court “aided by briefs of amici curiae representing interests of the news media and the public generally”]; Apple Inc. v. Samsung Electronics Co., Ltd. (Fed. Cir. 2013) 727 F.3d 1214, 1220 (Apple) [trial court denied motion to intervene on sealing issues, but both it and appellate court granted media leave to appear as amici curiae].)
Here, the trial court rejected the media’s attempt to intervene in connection with the sealing motions pertaining to plaintiffs’ effort to file a fifth amended complaint on the ground the media had not properly applied to intervene, but granted applications to intervene in connection with the sealing motions pertaining to defendants’ summary judgment motions. Allowing the media to intervene in connection with the second round of sealing motions was, for the reasons we have explained, improper. For the same reason, there is no merit to the media’s claim the court erred in not allowing them to intervene in connection with the first round of sealing motions filed in connection with the proposed fifth amended complaint. As to the initial motions, however, the media were essentially allowed to participate as amici curiae, and they were not entitled to any other status.
B. Standard of Review
1. If Common Law Right of Access Applies
When the common law right of access applies, appellate courts generally employ the abuse of discretion standard in reviewing sealing orders. (E.g., Nixon, supra, 435 U.S. at p. 599; Ameziane v. Obama (D.C. Cir. 2012) 403 U.S. App.D.C. 19 [699 F.3d 488, 494] [“we review a district court’s decision to seal or unseal documents, or to issue or refuse to issue a protective order, for abuse of discretion” but “review de nova any errors of law upon which the court relied in exercising its discretion”]; Media General Operations, Inc. v. Buchanan (4th Cir. 2005) 417 F.3d 424, 429 [“Common law rights provide the press and the public with less access than First Amendment rights,” and decision to seal or grant access to warrant papers “ ‘is committed to the sound discretion of the judicial officer who issued the warrant’ ” and “reviewed for abuse of discretion.”].)
2. If the Sealed Records Rules Apply (Constitutional Right of Access)
When the constitutionally based sealed records rules apply, the California courts have taken varying approaches to the standard of review.
In Providian, one of the early watershed cases applying the sealed records rules, the court reviewed an order unsealing documents, which it characterized as the “functional equivalent” of an order denying sealing. (Providian, supra, 96 Cal.App.4th at p. 302.) The court nevertheless addressed the standard of review both for orders sealing and unsealing records. (Id. at pp. 299-303.) Noting that an order sealing records is proper only if the trial court expressly finds facts that establish the five findings required by rule 2.550(d)(l)-(5), Providian concluded the first task in reviewing an order to seal is to “examine the express findings of fact required by [the] rule ... to determine if they are supported by substantial evidence.” (Providian, at p. 302.) Next, because the language of the rule is permissive (the “court may order that a record be filed under seal” if the factual requisites are met (rule 2.550(d)), the appellate court must ask “whether, in light of and on the basis of [the] findings, the trial court abused its discretion in ordering a record sealed.” (Providian, at p. 302.) As for an order to unseal, which differs from an order to seal because the trial court need not make express findings, Providian concluded the reviewing court examines the record for substantial evidence supporting the trial court’s implied findings that the requirements for sealing are not met. (Id. at pp. 301-303.)
However, in People v. Jackson (2005) 128 Cal.App.4th 1009, 1019-1020 [27 Cal.Rptr.3d 596] (Jackson), the court took a different approach as to orders sealing court records, pointing out Providian actually dealt with an order unsealing records. Jackson concluded an order sealing records is subject to “independent review” because it implicates First Amendment rights. (Jackson, at p. 1020; see U.S. v. Doe (2d Cir. 2009) 356 Fed. Appx. 488, 489 [distinguishing between orders sealing and unsealing records; “where, as here, we review a district court decision denying sealing, the decision presents no First Amendment concerns, and we will affirm unless the district court ‘based its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence . . .’”].) As to orders unsealing court records, the court considered Providian’s standard of review discussion “arguably . . . persuasive.” (Jackson, at p. 1020.)
In Oiye, the court declined to follow Jackson’s view on the standard of review applicable to orders sealing court records and adopted the approach laid out in Providian, stating it would “ ‘review the trial court’s decision to order the documents sealed under the abuse of discretion standard, and any factual determinations made in connection with that decision will be upheld if they are supported by substantial evidence.’ ” (Oiye, supra, 211 Cal.App.4th at p. 1067.) Oiye distinguished Jackson as involving an uncontested record. (Oiye, at p. 1067.) We do not agree Jackson employed independent review because the record was uncontradicted. Rather, it seems apparent the court did so because the sealed records rules are grounded in the First Amendment right of access.
We need not, however, resolve whether Providian or Jackson most accurately sets forth the standard of review for orders sealing court records. Although the trial court’s first order granted defendants’ motions to seal, its second order, embracing the same discovery materials, largely denied defendants’ motions to seal, and only defendants have appealed from that order. Accordingly, the ultimate record status of the discovery materials at issue here is subject to review in the context of an order denying sealing. In this context, the courts have consistently employed the approach articulated in Providian. We therefore review de nova whether the sealed records rules apply to a given set of discovery materials (a question of law). And when they do, we review the ultimately discretionary decision to deny sealing by inquiring whether substantial evidence supports the trial court’s express or implied findings that the requirements for sealing are not met. (Providian, supra, 96 Cal.App.4th at pp. 301-303.)
C. Applicability of the Sealed Records Rules to the Documents at Issue
The sealed records rules apply, as we have discussed, to “discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.” (Rule 2.550(a)(3); see NBC Subsidiary, supra, 20 Cal.4th at p. 1208, fn. 25.) While the first category of materials, discovery materials “used at trial,” might be relatively straightforward, the second category, discovery materials “submitted as a basis for adjudication,” is not. Defendants contend the latter category embraces only materials relevant to the ground or grounds on which a trial court ultimately rules. Plaintiffs maintain it includes all discovery materials submitted to a court in support of and in opposition to a pending motion. We conclude the broader view is correct — with the important caveat that irrelevant discovery materials or materials as to which evidentiary objections are sustained, are not “submitted as a basis for adjudication” and thus are not within the ambit of the constitutional right of access and, concomitantly, not subject to the sealed records rules.
1. Discovery Materials “Submitted as a Basis for Adjudication’’
Defendants base their narrow reading of the phrase “submitted as a basis for adjudication” on Mercury. The issue in that case was whether exhibits to a complaint (obtained through discovery and subject to a protective order) were subject to the sealed records rules and properly ordered unsealed by the trial court. (Mercury, supra, 158 Cal.App.4th at pp. 68, 103.) After the defendants successfully demurred to the complaint solely on standing grounds, the media successfully urged that the complaint and exhibits be unsealed. (Id. at p. 71.) The Court of Appeal reversed, concluding the exhibits had not been submitted as a basis for adjudication and therefore were not subject to the sealed records rules. Accordingly, the materials should have remained sealed pending further proceedings to determine whether they were properly classified as confidential under the protective order. (Id. at pp. 105-108.)
Mercury posited two plausible meanings of the phrase “submitted as a basis for adjudication.” (Mercury, supra, 158 Cal.App.4th at pp. 89-90.) Under a broad interpretation, “the right of access would apply to any discovery material filed with the court, with the sole exception under rule 2.550(a)(3) of documents filed in connection with discovery motions or proceedings. Public access would be inherent in the mere filing of the discovery material because the placing of the document in the court file would make it potentially something that would be used ‘as a basis for adjudication.’ ” (Id. at p. 89, fn. omitted.) Under a narrower view, discovery material would be “subject to public access (and therefore governed by the rules) when . . . filed with the court and . . . used in some manner by the court ‘as a basis for adjudication’ of a material controversy.” (Id. at pp. 89-90, italics added; see Rosado v. Bridgeport Roman Catholic Diocesan Corp. (2009) 292 Conn. 1, 38-40 [970 A.2d 656] (Rosado) [postulating three views: a narrow approach that presumes access only to documents relevant to adjudication of a litigant’s “substantive rights,” a middle approach that presumes access to all documents relevant to a court’s adjudicatory function, and a broad approach that presumes access to all documents filed in connection with a pending matter].)
Mercury rejected the broader interpretation, stating, “It cannot be said that public access to any court-filed civil discovery documents — regardless of their relevance to the issues in the case, the circumstances of their filing, or the extent of their use in the proceedings — promotes” the objective of public access. (Mercury, supra, 158 Cal.App.4th at pp. 96-97.) “Public access to a discovery document that is not considered or relied on by the court in adjudicating any substantive controversy does nothing to (1) establish the fairness of the proceedings, (2) increase public confidence in the judicial process, (3) provide useful scrutiny of the performance of judicial functions, or (4) improve the quality of the truth-finding process.” (Ibid.)
Thus, while recognizing “the importance of a complaint in framing the claims and issues presented in civil litigation,” Mercury “disagree[d] that any material attached to it — such as the discovery material designated confidential pursuant to a duly entered protective order here — necessarily is ‘submitted as a basis for adjudication.’ The pleadings, including complaints, are not typically evidentiary matters that are submitted to a jury in adjudicating a controversy.” (Mercury, supra, 158 Cal.App.4th at p. 103.) The demurrer only addressed the threshold question of standing and “in no sense dealt with the underlying factual claims of stock options backdating alleged in the Complaint or concerned the exhibits appended to that pleading.” (Id. at p. 104.) The court observed, however, “there may exist instances in which an attachment to a complaint to which a demurrer is interposed may constitute a document submitted as a basis for adjudication and thereby fall within the presumption of public access discussed in NBC Subsidiary. For instance, a challenged complaint in which a contract is attached and in which the demurrer concerns the viability of the contract would probably pose such a case.” (Id. at fn. 34.)
Defendants maintain Mercury sets forth a bright-line standard; confidential discovery material merely filed (or, more accurately, lodged) with the court, but not actually “considered or relied on” by the court in connection with the basis on which it rules, is not “submitted as a basis for adjudication” and, thus, is not subject to the sealed records rules. We do not agree Mercury can or should be boiled down to such a limited view.
Mercury involved the unsealing of exhibits to a complaint, challenged at the outset on a single, threshold procedural ground. While the complaint identified the claims to be tried, neither its substantive allegations, nor its exhibits, had been submitted to the court as a basis for adjudicating the merits of the case. Given these circumstances, Mercury's discussion of the scope of the sealed records rules is on solid ground. However, the court was not confronted with, nor did it discuss, any other context, including discovery materials submitted in connection with a summary judgment motion seeking judgment on multiple, alternative grounds. Accordingly, Mercury does not answer the issue presented here.
We therefore turn to the language of the sealed records rules. Rule 2.550 applies to “discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.” (Rule 2.550(a)(3), italics & underscoring added.) The plain language thus distinguishes between documents that are “used” at trial and documents that are “submitted” as a basis for adjudication of pretrial motions. Had the drafters intended to limit the applicability of the sealed records rules to only discovery materials “used by the court” in its ultimate disposition of substantive pretrial motions, they could have, and undoubtedly would have, said so. But they did not. Further, both the words “used” and “submitted,” in context, most reasonably refer to the parties’ conduct — that is, “used at trial” by the parties and “submitted as a basis for adjudication” by the parties. These words do not reasonably refer to the trial court’s conduct in deciding on which ground, of several, to base its decision. In short, defendants’ proffered construction of “discovery materials that are used at trial or submitted as a basis for adjudication” would require us to effectively delete the word “submitted” from the rule and insert in its place the phrase “by the court,” an exercise in redrafting we decline to undertake. (See Providian, supra, 96 Cal.App.4th at p. 302 [“it is not our function to rewrite the rules . . .”].)
As we have discussed, the language of rule 2.550 derives directly from NBC Subsidiary’s footnote 25, which states, “the First Amendment does not compel public access to discovery materials that are neither used at trial nor submitted as a basis for adjudication.” (NBC Subsidiary, supra, 20 Cal.4th at pp. 1208-1209, fn. 25.) The Supreme Court cited several cases in support of this proposition; none suggests the constitutional right of access to court records is limited to discovery materials relevant to the ground or grounds on which a court ultimately rules. (E.g., Rushford v. New Yorker Magazine, Inc., supra, 846 F.2d at p. 253 [“the more rigorous First Amendment standard should also apply to documents filed in connection with a summary judgment motion in a civil case” (italics added)].)
Additionally, we must heed the mandate of article I, section 3, subdivision (b)(1), of the California Constitution, which provides; “The people have the right of access to information concerning the conduct of the people’s business, and therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny.” (Ibid.) Subdivision (b)(2) expressly states, “[a] statute, court rule, or other authority, including those in effect on the effective date of this subdivision, shall be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access.” (Cal. Const., art. I, § 3, subd. (b)(2).) Thus, unless we discern a clear requirement otherwise, we must interpret the sealed records rules broadly to further the public’s right of access. (See Sierra Club v. Superior Court (2013) 57 Cal.4th 157, 166 [158 Cal.Rptr.3d 639, 302 P.3d 1026] [citing the constitutional provision and noting, “our usual approach to statutory construction is supplemented by a rule of interpretation that is specific to the issue before us”]; Savaglio, supra, 149 Cal.App.4th at p. 600 [“Lest there be any question, Proposition 59 requires us to broadly construe a statute or court rule ‘if it furthers the people’s right of access ....’”].)
Finally, defendants’ narrow construction would necessarily mean sealing decisions would be made after the fact — that is, after the trial court issues its substantive ruling — because only then would the ground or grounds on which the court rules be known. This, in turn, would mean that until the court rules, documents would remain lodged and out of the purview of the public, and the public would necessarily have a constricted opportunity to observe the judicial process as it unfolded.
The plain language of the sealed records rules indicates, however, the drafters did not envision an inherently delayed resolution of sealing issues. The rules provide that upon notice by a party seeking to use confidential discovery materials, a party opposing disclosure must, within 10 days, file a motion or application to seal or obtain an extension of time to do so. (Rule 2.551(b)(3)(B).) Thus, the rules provide for prompt disposition of sealing issues in the first instance, while providing the flexibility to delay motions to seal through the granting of an extension. Given the short timeframe that governs absent an extension, we cannot read other language, and specifically the phrase “submitted as a basis for adjudication,” in a way that necessarily delays the resolution of sealing issues until after a trial court rules on the merits.
Indeed, the courts have expressed concern about delayed rulings on sealing issues. (See Mercury, supra, 158 Cal.App.4th at p. 92 [approving of Seventh Circuit case stating “ ‘access should be immediate and contemporaneous’ ”]; Savaglio, supra, 149 Cal.App.4th at p. 601 [“any reading of rules 2.550 and 2.551 that encourages an open-ended timeframe for filing a motion to seal records long after the underlying substantive matter has been decided would defeat the purpose of the rules”]; see also Lugosch, supra, 435 F.3d at p. 121 [concluding district court erred when it postponed sealing decision “until it had ruled on the underlying summary judgment motion”].)
We recognize some courts have adopted the view defendants urge — that the right of access pertains only to discovery materials relevant to the ground or grounds on which a court actually rules. (E.g., In re Policy Management Systems Corp. (4th Cir. 1995) 67 F.3d 296 [documents filed in connection with motion to dismiss “did not play any role in the district court’s adjudication of the motion” and court “did not convert the motion into a motion for summary judgment, and thus excluded the documents from consideration”]; Verona v. U.S. Bancorp (E.D.N.C., Mar. 29, 2011, No. 7:09-CV-057-BR) 2011 WL 1252935, pp. *1, *20 [“Although these documents were filed in support of the motions for summary judgment and reviewed by the court, the court did not rely upon them in reaching its decision. Accordingly, the court will not presume a public right of access to the documents and will allow the motion to seal.”].) However, these courts did not engage in an extensive analysis of the issue. Nor were they required to heed our Supreme Court’s discussion in NBC Subsidiary’s footnote 25, bound by the language of the sealed records rules, or bound by article I, section 3, subdivision (b)(1) of the California Constitution.
We therefore reject the narrow definition of the phrase “submitted as a basis for adjudication” defendants urge and conclude it embraces discovery materials submitted in support of and in opposition to substantive pretrial motions, regardless of the ground on which the trial court ultimately rules.
2. Irrelevant Materials Are Not “Submitted as a Basis for Adjudication”
This does not mean the mere act of submitting discovery materials in support of or in opposition to a pretrial motion imbues the materials with constitutional import, triggering the sealed records rules. As every court to consider the question has observed, the right of access applies only to discovery materials that are relevant to the matters before the trial court. (See Mercury, supra, 158 Cal.App.4th at p. 96 [access to irrelevant documents does not promote goals of public access]; see also U.S. v. Kravetz (1st Cir. 2013) 706 F.3d 47, 59, fn. 9 [no presumptive access to “an irrelevant document, that neither was nor should have been relied on”]; Apple, supra, 727 F.3d at pp. 1222-1223 [“evidence which a trial court rules inadmissible — either as irrelevant or inappropriate — seems particularly unnecessary to the public’s understanding of the court’s judgment”]; E.E.O.C. v. Dial Corp. (N.D.Ill., Nov. 29, 2000, No. 99 C 3356) 2000 WL 33912746, p. *1 [“public has no interest in gaining access to information that has failed to pass the threshold tests of relevance and admissibility”].)
3. Curbing Abusive Litigation Tactics Impacting Sealing Proceedings
We are compelled at this juncture to address the negative impact abusive litigation practices have on sealing issues, a problem that is heightened, we acknowledge, by a broad reading of the phrase “discovery materials . . . submitted as a basis for adjudication.” (Rule 2.550(a)(3); see Rosado, supra, 970 A.2d at p. 683 [broad presumptive access to documents “creates the potential for parties to harass others by attaching private material with little to no relevance to the issues to underlying motions, thus rendering that material public”].)
The problem is twofold — parties that fail to exercise any discipline as to the confidential documents with which they inundate the courts, and parties that indiscriminately insist every document satisfies the rigorous requirements of the sealed records rules. This case exemplifies both.
Plaintiffs submitted a veritable mountain of confidential materials in opposition to defendants’ motions for summary judgment. Entire documents were submitted, when only a page or two were identified as containing matter relevant to the issues. Multiple documents were submitted to support a claim, when one would have sufficed. The parties made no mention at all of hundreds of the exhibits. Inundating the trial court with this deluge of confidential materials was brute litigation overkill. (See Nazir v. United Airlines, Inc., supra, 178 Cal.App.4th at pp. 289-290.)
While defendants’ umbrage at plaintiffs’ “shock and awe” document strategy was understandable, their motions to seal were, in turn, breathtaking in scope.
The courts need not, and should not, put up with this kind of abuse. Every protective order should include language obligating the parties to be as sparing as possible in their use of protected materials. Paragraph 14 of the protective order in this case specifically required the parties to “endeavor in good faith to restrict their . . . submissions to Confidential Information . . . reasonably necessary for the Court[’s]” deliberations. Courts should not hesitate to enforce such provisions through sanctions for egregious violations. (Code Civ. Proc., § 128.5 [sanctions available for “bad-faith actions or tactics that are frivolous”]; see, e.g., Wallis v. PHL Associates, Inc. (2008) 168 Cal.App.4th 882, 900 [86 Cal.Rptr.3d 297] [affirming sanctions for violation of protective order]; see also Reid v. Google, Inc. (2010) 50 Cal.4th 512, 532 [113 Cal.Rptr.3d 327, 235 P.3d 988] [in making evidentiary objections to summary judgment materials, litigants should focus on objections “that really count” rather than swamping the trial court with hundreds of stock objections; “[otherwise, they may face informal reprimands or formal sanctions for engaging in abusive practices”].)
Motions to strike can also be of utility. The court in Mercury observed, for example, that because the exhibits to the complaint appeared “to have been entirely unnecessary to the pleading,” the “sealing controversy could have been avoided by either a stipulation or an order amending the Complaint to strike the exhibits . . . .” (Mercury, supra, 158 Cal.App.4th at p. 104, fn. 35.) In fact, “the attached exhibits, as well as the quotes and references to them in the body of the Complaint, could have been stricken by the court either upon a motion by defendant or on its own motion. [Citations.]” (Ibid.; see Oiye, supra, 211 Cal.App.4th at p. 1070 [courts “have inherent authority to strike scandalous and abusive statements in pleadings”].) Even where materials are not connected with a pleading (making a statutory motion to strike under Code Civ. Proc., §§ 435 and 436 unavailable), “[t]he court’s files and records are . . . subject to the court’s control.” (Oiye, at p. 1070; see Nazir v. United Airlines, Inc., supra, 178 Cal.App.4th at p. 290 [urging courts to use their inherent power to deal with unduly burdensome evidentiary materials and objections in connection with summary judgment motions]; Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 106 [16 Cal.Rptr.3d 717] [trial courts “have the inherent power to strike proposed ‘undisputed facts’ that fail to comply with the statutory requirements and that are formulated so as to impede rather than aid an orderly determination whether the case presents triable material issues of fact”]; Warner v. Warner (1955) 135 Cal.App.2d 302, 303 [287 P.2d 174] [affirming striking and sealing of scurrilous affidavit].)
Thus, when a party submits a tsunami of discovery materials subject to a protective order, the trial court should welcome a well-honed motion to strike to winnow down the material to that which is relevant to the contentions advocated by the proffering party. The public’s right of access to court records exists only as to such materials. It does not extend to irrelevant materials submitted to the court out of laziness in reviewing and editing evidentiary submissions, or worse, out of a desire to overwhelm and harass an opponent. (See discussion & cases cited, ante, at p. 497; Roman Catholic Diocese of Lexington v. Noble (Ky. 2002) 92 S.W.3d 724, 733 [“there is nothing to indicate that the public and the press historically have had access to sham, immaterial, impertinent, redundant or scandalous material that is without ‘legal effect’ in fact, “allowing access to such material serves a negative rather than a positive role . . .”].)
Here, the trial court could have stricken thousands of pages of the confidential discovery materials plaintiffs submitted but never referenced in their opposing papers (or during the hearing on the motions). Had it done so, these irrelevant materials would have effectively been removed from the court’s file, eliminating the need to address any sealing issues as to these materials. (See Mercury, supra, 158 Cal.App.4th at p. 104.)
(16) Finally, on the other side of the equation, the trial courts can, and should, view overly inclusive sealing efforts with a jaundiced eye, and impose sanctions as appropriate. (See Providian, supra, 96 Cal.App.4th at p. 309 [“In light of defendants’ history of defining confidential material as broadly as possible, it would not be improper for the trial court to view their latest effort with considerable skepticism and conclude that the scope of their proposed record sealing was neither ‘narrowly tailored’ nor the least restrictive means to protect any interest against disclosure.”]; Williams v. U.S. Bank N.A. (E.D.Cal. 2013) 290 F.R.D. 600, 606, fn. 9, italics omitted [threatening sanctions when “defendant made no effort at all to seal only those portions of the substantive exhibits that it actually wanted to protect as confidential”]; Young v. Actions Semiconductor Co., Ltd., supra, 2007 WL 2177028 at p. *6 [“Should either party again file a motion to seal which is inadequate or overbroad ... the court may impose sanctions.”].)
D. Evidentiary Requirements for Sealing
E. The 2012 Sealing Order: Discovery Materials Submitted in Opposition to the Summary Judgment Motions
1. Overview of the Parties’ Evidentiary Showing
Goldman submitted declarations by two individuals in support of its sealing motion — Joseph Floren, its litigation attorney, and Beverly Dunphy, a vice-president in its Global Compliance Department. Floren’s declaration included a chart, exhibit A, of which the first 11 pages discussed the bases for sealing by category (e.g., “The Strategies of the Hedging Strategies Group Are Non-Public and Represent Trade Secrets of Goldman Sachs,” “Client Information and Communications”). The remaining 143 pages, in chart form, identified each exhibit at issue as to Goldman and referenced the claimed bases for sealing discussed in the first 11 pages, as well as identified additional bases, such as irrelevancy. Dunphy averred the importance of safeguarding various confidences of the firm and its clients, and outlined procedures for keeping client information from leaving the firm and from spreading broadly within it. She also stated the materials “identified in Exhibit A to the Floren Declaration . . . include confidential client and firm proprietary information and related communications, which are confidential for the reasons detailed therein.” She supplied a supplemental declaration discussing policies and procedures still in use at Goldman and reflected in plaintiffs’ opposition exhibits.
Merrill similarly submitted declarations by two individuals — Flora Vigo, its litigation attorney, and Peter Melz, a managing director at the Merrill entities and president and chief operating officer of Merrill Lynch Professional Clearing Corporation (Merrill Pro). The pivotal component of Vigo’s declaration, like that of Floren’s declaration, was a chart, exhibit A, setting forth, for each exhibit at issue, the claimed basis for sealing. Melz, in turn, stated Merrill considers its internal policies and procedures to be proprietary confidential information. “Safeguarding the confidentiality” of its client business plans and financial transactions “is critically important” and a competitive advantage to the firm. The firm implements safeguards and ethical codes meant to keep this information from leaving Merrill and even from being widely disseminat