If You Want to Have Court Filings Sealed, Don’t “Treat[] a Motion to Seal as an Afterthought”

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From Judge Joshua Wolson’s opinion yesterday in Alchem Inc. v. Cage (E.D. Pa.), the background:

In this case, Alchem USA Inc. {[which] sells and markets liquid nicotine under the brand name “Nicselect”} knows that its former salesperson—and self-proclaimed “Nicotine Queen”—Terianne T. Cage, lured away some of its customers when she went to work for a competitor, North America Nicotine Inc. But Alchem can only guess how Ms. Cage solicited those customers and what information she used to do it, including whether she shared any of that information with NAN.

As a result, Alchem bases many of its claims on assumptions about what Alchem believes must have happened between NAN and Ms. Cage and between Ms. Cage and customers. But no matter how much Alchem believes the narrative it has crafted, it cannot overcome summary judgment based on a hunch.

The court therefore “grant[s] summary judgment on Alchem’s claims for misappropriation of trade secrets, unauthorized access of a computer, and tortious interference with a contract,” but also says this about sealing:

Alchem has not offered a basis for the Court to reconsider its prior order denying the Motion to Seal. It does not point to any new evidence, change in law, or legal error as a basis for reconsideration.

Instead, it claims injustice. When Alchem sought leave to file Exhibit 10 to its Opposition under seal, it made no effort to satisfy its burden to persuade the Court to seal the exhibit. It did not explain why Exhibit 10 was a trade secret, nor did it explain what harm would come from its public disclosure. It did not even cite the applicable legal standard. Instead, it admits that it “presupposed that the facts and arguments contained in [its summary judgment] Opposition would be included and referenced for the purposes of the analysis of Alchem’s Motion for Seal.” That type of conduct—treating a motion to seal as an afterthought—has led the Court to deny motions to seal several times, and this case is no different.

Alchem’s reconsideration motion tries to make the showing that Alchem should have tried to make when it first filed its sealing motion. That is, Alchem wants a do-over. Alchem has not shown that the public disclosure of Exhibit 10—a static report derived from Salesforce—will cause a manifest injustice.

The common law presumes that the public has a right of access to judicial materials. To overcome that presumption, a movant must show that an interest in secrecy outweighs the presumption by demonstrating that the material is the kind of information that courts will protect and that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury prong requires a party seeking to file material under seal to make a specific showing; “[b]road allegations of harm, bereft of specific examples or articulated reasoning, are insufficient.” It is true that “an interest in safeguarding a trade secret may overcome a presumption of openness.” And the Court will assume (for purposes of resolving the Motion for Reconsideration only) that the Salesforce data in Exhibit 10 constitutes Alchem’s trade secrets. But Alchem has not shown a clearly defined, serious injury.

According to Alchem, if Exhibit 10 becomes public, “all confidentiality and competitive value attributable to the trade secrets therein will be irredeemably and irrevocably lost.” This attorney argument is not a specific, clearly-defined injury that warrants the Court shielding information from public view. Salesforce is a dynamic database, and its value comes in part from that dynamism. Exhibit 10 is a report that Alchem generated from that database. It contains information that Alchem might treat as confidential. But Alchem has not made any showing about how its competitors might use the data in that report to Alchem’s disadvantage.

The Court would likely hold that Alchem’s failure in this regard does not satisfy its burden to seal Exhibit 10 in the first instance. But the Court does not need to go that far. Instead, it need only conclude that Alchem has not carried the heavier burden of showing that a manifest injustice will result if the Court does not reconsider its prior ruling. It has not overcome that heavy burden to show that this is the sparing type of case warranting reconsideration.

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