United States District Court, W.D. Washington, Seattle
IN RE ZILLOW GROUP, INC. SHAREHOLDER DERIVATIVE LITIGATION.
C. COUGHENOUR, UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Plaintiffs' motion to
seal (Dkt. No. 35). Having thoroughly considered the
parties' briefing and the relevant record, the Court
finds oral argument unnecessary and hereby GRANTS the motion
for the reasons explained herein.
a shareholder derivative action brought for the benefit of
nominal defendant Zillow, Inc., against current and former
members of Zillow's board of directors and executive
officers, seeking to remedy Defendants' breaches of
fiduciary duties and unjust enrichment. (See Dkt.
No. 36-1 at 2.) The case is related to a parallel securities
class action currently before the Court, in which the
plaintiffs allege that Zillow and its executives made
materially false and misleading statements regarding the
legality of its “co-marketing” advertising
program. See In re Zillow Secs. Litig., No.
C17-1387-JCC, Dkt. No. 47 (W.D. Wash. 2018). In that case,
the Court recently denied the defendants' motion to
dismiss the second amended complaint (Dkt. No. 54), and the
defendants have since filed their answer. (Dkt. No. 55.)
action, the parties entered into a non-disclosure agreement
to allow Zillow to designate certain documents it was
producing to Plaintiffs pursuant to a books and record demand
as confidential. (Dkt. No. 35 at 1.) Plaintiffs subsequently
included some of that designated confidential information in
their verified consolidated shareholder complaint.
(Id.; see Dkt. No. 36-1.) Plaintiff's
filed this motion pursuant to Local Civil Rule 5(g), asking
the Court for permission to file and maintain an unredacted
copy of the verified consolidated shareholder complaint under
seal. (Dkt. No. 35 at 1.) Defendants have filed a brief in
support of Plaintiffs' motion. (Dkt. No. 40.)
is a strong presumption of public access to the court's
files.” W.D. Wash. Local Civ. R. 5(g). When a party
wishes to file a document under seal because it contains
information that another party has designated as
confidential, the parties “must meet and confer to
determine whether the designating party will withdraw the
confidential designation or will agree to redact the document
so that sealing is unnecessary.” W.D. Wash. Local Civ.
R. 5(g)(1)(A). If the parties are unable to agree to removal
or redaction of the confidential material, the filing party
may move to file and maintain the document under seal.
See W.D. Wash. Local Civ. R. 5(g)(2)(B).
overcome the presumption of public access to the court's
files, there must be a “compelling reason” for
sealing sufficient to outweigh the public's interest in
disclosure. Ctr. for Auto Safety v. Chrysler Grp.,
LLC, 809 F.3d 1092, 1101 (9th Cir. 2016) (applying the
“compelling reason” test to motions to seal
documents that are “more than tangentially related to
the merits of a case”). Courts in the Ninth Circuit
have employed the “compelling reason” standard to
motions to seal an unredacted copy of a complaint. See,
e.g., Williams & Cochrane, LLP v. Quechan Tribe
of the Fort Yuma Indian Reservation, 2017 WL 7362744,
slip op. at 2 (S.D. Cal. 2017) (“District courts
generally conclude that the ‘compelling reasons'
standard applies because the complaint initiates the civil
Plaintiffs' Motion to Seal
parties have complied with the procedural requirements for
filing an unredacted copy of the verified consolidated
shareholder complaint under seal. See W.D. Wash.
Local Civ. R. 5(g). Plaintiff has redacted a total of 4
paragraphs from the 133-paragraph complaint. (See
Dkt. No. 36-1 at 19-20.) Defendants argue that this
information should remain sealed because it is confidential
business information provided to Zillow's board of
directors during a non-public meeting. (Dkt. No. 40 at 4.)
reviewed the redacted information, the Court concludes that
Defendants have demonstrated a compelling reason to file and
maintain a copy of the unredacted complaint under seal. The
redacted information is confidential business information
presented to Zillow's board of directors the disclosure
of which could adversely affect future deliberations by the
board. Moreover, the redacted information has little public
value aside from the inherent value of allowing complete
access to the Court's records. See Hill v. Xerox
Corp., No. C12-0717-JCC, Dkt. No. 113 (W.D. Wash. 2014).
Finally, the Court finds that the redactions are a small
portion of the overall complaint and will not impair the
public's ability to understand the nature or basis of
foregoing reasons, Plaintiffs' motion to seal (Dkt. No.
35) is GRANTED. The Clerk shall maintain a copy of the
verified consolidated shareholder complaint (Dkt. ...