Revelry Vintners LLC v. Mackay Restaurant Management Group Inc et al, No. 4:2021cv05110 - Document 141 (E.D. Wash. 2024)
Court Description: ORDER denying 98 Motion for Preliminary Injunction; and granting in part and denying in part 105 Motion to Unseal. Signed by Judge Thomas O. Rice. (BF, Paralegal)
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1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 REVELRY VINTNERS, LLC, NO. 4:21-CV-5110-TOR 8 9 10 Plaintiff, v. 18 MACKAY RESTAURANT MANAGEMENT GROUP, INC.; FIRE & VINE HOLDINGS, LLC; EL GAUCHO BELLEVUE, LLC; EL GAUCHO PORTLAND, LLC; EL GAUCHO SEATTLE, LLC; EL GAUCHO TACOMA, LLC; EL GAUCHO VANCOUVER, LLC; WILSON MACKAY 1, LLC; WATERFRONT, LLC; DENIM HOSPITALITY LLC; WALLA WALLA STEAK CO, LLC; WALLA WALLA STEAK CO WOODINVILLE, LLC; T-POST TAVERN WW LLC; and YELLOWHAWK RESORT WW, LLC, 19 Defendants. 11 12 13 14 15 16 17 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL 20 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 1 1 BEFORE THE COURT is Plaintiff’s Motion for Preliminary Injunction 2 (ECF No. 98) and Motion to Seal Declaration in Support of Motion (ECF No. 3 105). These matters were submitted for consideration without oral argument. The 4 Court has reviewed the record and files herein and is fully informed. For the 5 reasons discussed below, Plaintiff’s Motion for Preliminary Injunction (ECF No. 6 98) is DENIED and Motion to Seal Declaration in Support of Motion (ECF No. 7 105) is GRANTED in part and DENIED in part. 8 BACKGROUND 9 This request for preliminary injunction and to unseal related portions of 10 the record arise out a claim for trademark infringement. Plaintiff, a Walla Walla 11 Washington based winery, which has been using the mark “REVELRY” since its 12 founding in 2005 and gained official trademark rights in 2009. ECF Nos. 98 at 6, 13 100-1 at 2. Plaintiff later named its flagship red wine “THE REVELER” which it 14 began selling in 2009 and gained a trademark for in 2020. Id., 100-2 at 2. Plaintiff 15 began its business relationship with Defendant Mackay Restaurant Management 16 Group, in 2011, selling Defendant wines for its affiliated restaurants. Id., ECF No. 17 120 at 5. Defendant later expanded its group to Walla Walla in 2018, and Plaintiff 18 continued to supply its wines. ECF No. 98 at 7. The parties’ recitation of facts 19 diverges at this point. 20 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 2 1 Plaintiff asserts that in late 2018, it learned that Defendant was operating a 2 restaurant dining and loyalty program called the “Revelers Club,” and in 2019 3 discovered that Defendant was selling “Revelers Red” wine and “Revelers’” 4 branded whiskey. ECF No. 98 at 7. After speaking with Defendant, Plaintiff 5 states that it was under the impression that both sides had come to an 6 understanding that Defendant would cease using the mark. Id. However, Plaintiff 7 asserts that in 2021, Defendant acquired a winery, named Yellowhawk Resort, less 8 than mile from Plaintiff. Id. As part of this expansion, Plaintiff asserts that 9 Defendant expanded the “Revelers Club” to Yellowhawk Resort and used the 10 Reveler(s) mark to promote and sell its own wine. Id. In 2022, Plaintiff asserts 11 that Defendant took infringement even further by starting a dedicated Revelers 12 Club wine club, called SIP with a “REVELER” tier. Id. As part of this expansion, 13 Defendant began selling Revelers-branded wine related merchandise, and gift 14 cards. Id. at 8. 15 Defendant, which brands itself as the largest purchaser of wine in 16 Washington State, contends that it initially launched its “Revelers Club” rewards 17 program in 2012. ECF No. 120 at 5. The Revelers Club now contains fourteen 18 properties and 154,000 members. Id. According to Defendant, the Revelers Club 19 was initially launched as a mechanism to support and promote the local wine 20 industry through Defendant’s affiliated restaurants. Id. at 6. Defendant argues that ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 3 1 Plaintiff was fully aware of the Revelers Club over the course of their business 2 relationship. Id. Further, it maintains that the agreement between itself and 3 Plaintiff over the use of the mark amounted to Defendant’s ability to sell the 4 remaining inventory of “revel” labeled wine and thereafter cease use on alcohol 5 beverage labels, but that the agreement did not include any mention of the Revelers 6 Club. Id. at 6–7. 7 Plaintiff commenced this lawsuit on July 29, 2021. ECF No. 1. Since that 8 time, there has been extensive motions practice, in which Plaintiff has amended its 9 complaint twice, and the Court has issued seven scheduling orders. Plaintiff now 10 seeks a preliminary injunction against all Defendants on the basis that the use of 11 the mark is causing confusion among customers and industry professionals. ECF 12 No. 98 at 8. Defendant opposes on the basis that Plaintiff is not likely to succeed 13 on the merits and the request for injunction is untimely. ECF No. 120 at 7. 14 Plaintiff replied. ECF No. 133. 15 Plaintiff also seeks to unseal ECF Nos. 99-16, 99-17, 99-18, and 99-23, 16 which Defendant has sealed under a “Confidential” and “Highly Confidential – 17 Attorney’s Eyes Only,” label. ECF No. 105 at 2. Defendant responded, requesting 18 the Court maintain the seal. ECF No. 115 at 2. 19 20 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 4 1 DISCUSSION 2 I. Preliminary Injunctions Standard 3 A preliminary injunction is “an extraordinary remedy that may only be 4 awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. 5 Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); see also All. for the Wild 6 Rockies v. Cottrell, 632 F.3d 1127, 1131–32 (9th Cir. 2011). “A plaintiff seeking a preliminary injunction must establish [1] that he is 7 8 likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the 9 absence of preliminary relief, [3] that the balance of equities tips in his favor, and 10 [4] that an injunction is in the public interest.” Winter, 555 U.S. at 20. 11 “[P]laintiffs must establish that irreparable harm is likely, not just possible, in 12 order to obtain a preliminary injunction.” All. for the Wild Rockies, 632 F.3d at 13 1131. 14 The Ninth Circuit has also developed a “sliding scale approach,” which 15 balances the elements of the Winter test. Id. Under this approach, ““a preliminary 16 injunction could issue where the likelihood of success is such that ‘serious 17 questions going to the merits were raised and the balance of hardships tips sharply 18 in [plaintiff’s] favor.’” Id. (quoting Clear Channel Outdoor, Inc. v. City of Los 19 Angeles, 340 F.3d 810, 813 (9th Cir. 2003)); see also Farris v. Seabrook, 677 F.3d 20 858, 864 (9th Cir. 2012) (“We have also articulated an alternate formulation of the ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 5 1 Winter test, under which serious questions going to the merits and a balance of 2 hardships that tips sharply towards the plaintiff can support issuance of a 3 preliminary injunction, so long as the plaintiff also shows that there is a likelihood 4 of irreparable injury and that the injunction is in the public interest.” (internal 5 quotation marks and citation omitted)). 6 A preliminary injunction can either be prohibitory or mandatory. Marlyn 7 Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 878 (9th Cir. 8 2009). A prohibitory injunction preserves the status quo which is the “last, 9 uncontested status which preceded the pending controversy.” Id. at 879. A 10 mandatory injunction “orders a responsible party to take action.” Id. at 878. 11 Mandatory injunctions are disfavored and require a higher showing that the “facts 12 and law clearly favor the moving party.” Garcia v. Google, 786 F.3d 733, 740 (9th 13 Cir. 2015). Plaintiff requests the Court enjoin Defendant to cease use of 14 derivatives of “Revel,” and therefore is seeking a mandatory injunction. 15 A. Likelihood of Success on the Merits 16 Plaintiff asserts that will succeed on the merits of the case, given the 17 required showing for trademark infringement: (1) it owns a valid trademark, and 18 that (2) it shows the defendant's mark is likely to cause confusion. 15 U.S.C. § 19 1114(1); Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1046 20 (9th Cir. 1999). Plaintiff has demonstrated that it has owned a trademark for ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 6 1 REVELRY since 2009 and THE REVELER since 2020. ECF Nos. 100-1 and 100- 2 2. It filed for each mark in 2008 and 2017, respectively. ECF No. 100 at 2. 3 Plaintiff must also demonstrate a likelihood of consumer confusion by a 4 showing of: (1) the strength of the mark; (2) defendant’s use of the mark; (3) the 5 similarity of the marks; (4) evidence of actual confusion; (5) defendant’s intent; (6) 6 marketing channels; (7) degree of customer care; and (8) likelihood of expansion. 7 AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979), abrogated in 8 part, on other grounds recognized by Mattel, Inc. v. Walking Mountain Prods., 353 9 F.3d 792, 810 n.19 (9th Cir. 2003). These are nonexclusive factors, and a party 10 need not incorporate all factors to make a requisite showing for injunction. 11 Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 631 (9th Cir. 2005). 12 1. Strength of the Mark 13 Trademarks are generally categorized as generic (the least distinctive), 14 descriptive, suggestive, and arbitrary or fanciful (the most distinctive). Two Pesos, 15 Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, (1992). “The more distinctive a 16 mark, the greater its conceptual strength; in other words, a mark's conceptual 17 strength is proportional to the mark’s distinctiveness.” M2 Software, Inc., a 18 Delaware corporation v. Madacy Ent., a corporation, 421 F.3d 1073, 1080 (9th 19 Cir. 2005). Plaintiff argues that the REVELRY and REVELER mark are each 20 strong because the company has invested a great deal of capital into protecting the ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 7 1 marks and for marketing of the overall wine brand. ECF No. 98 at 9–10. Further, 2 Plaintiff argues that because the marks are at least arbitrary, in that “revel” is a 3 common word that invokes celebration, and thus the marks are entitled to a 4 stronger protection. Id. In support of this notion, Plaintiff offers the history of the 5 company’s award-winning wines as evidence of strength in the mark. Id.; see M2 6 Software, Inc., a Delaware corporation, 421 F.3d at 1081 (internal citations 7 omitted) (“A mark's overall strength is relative and cannot be determined by 8 mechanistically assessing its conceptual or commercial strengths. Our court has 9 previously recognized that a suggestive or descriptive mark, which is conceptually 10 weak, can have its overall strength as a mark bolstered by its commercial 11 success.”). 12 Defendant asserts that Plaintiff’s marks are weak, as evidenced by the fact 13 that the words “revelry” and “reveler” are associated with celebrations surrounding 14 wine, and therefore should be classified as “suggestive” on the spectrum of 15 trademark strength. ECF No. 120 at 12. Further, Defendant contends that 16 Plaintiff’s failure to police the use of the mark for “over a decade” weakens the 17 identification function of the mark. Id. “Use of similar marks by third-party 18 companies in the relevant industry weakens the mark at issue.” M2 Software, Inc., 19 a Delaware corporation v. Madacy Ent., a corporation, 421 F.3d 1073, 1088 (9th 20 Cir. 2005); see also Arcona, Inc. v. Farmacy Beauty, LLC, 976 F.3d 1074, 1081 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 8 1 (9th Cir. 2020) (holding that evidence common use of a phrase in the beauty 2 industry underscored that a mark held by a beauty and skincare company 3 containing the phrase was not so “unique or strong”). While Plaintiff contends that 4 it learned about Defendant’s infringement in 2018, evidence in the record suggests 5 that it was understood Defendant may have been infringing for much longer by 6 reference to the fact the Plaintiff had attempted to acquire the trademark for 7 “Reveler” but were “blocked.” ECF No. 121-1 at 26. Plaintiff’s inaction against 8 Defendant in protection of “Reveler(s)” indicates that the mark is weak. 9 10 11 2. Use of the Mark, Similarity in Mark, Parties Use of Identical Channels, and Evidence of Actual Confusion. “Where goods are related or complementary, the danger of consumer 12 confusion is heightened.” E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 13 1280, 1291 (9th Cir. 1992). Defendant and Plaintiff operate in related industries 14 and use derivatives of “revel” in relation to similar spaces. They both advertise 15 wine through email distributions, social media, and wine events. ECF No. 98 at 16 12. Plaintiff contends that although Defendant has paused labelling wine with the 17 REVELERS name, it has nevertheless expanded the use of REVELERS to include 18 advertising for its restaurants and winery, using the name on wine menus in 19 affiliated restaurants, and launching a wine club with a REVELERS tier, which 20 also sells competing wine labels. ECF No. 98 at 10. Further, Plaintiff contends ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 9 1 that the actual use of the REVELERS logo is nearly identical to that of REVELRY 2 and THE REVELER. Both appear, according to Plaintiff, with lettering in bold 3 font and dark colors, few or no serifs, and sound similar. ECF No. 98 at 11. 4 Outside of the name itself, Defendant’s physical wine bottle labels1 are notably 5 6 7 8 9 10 11 12 1 13 14 15 16 17 18 19 20 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 10 1 different from Plaintiff’s award winning label.2 ECF Nos. 100 at 5, 100-3 at 5. 2 However, the name and its relation to the alcohol-driven industry, could reasonably 3 be thought to be misleading. 4 This use by Defendants has caused actual confusion according to Plaintiff. 5 Customers, industries professionals, and members of Defendant’s staff have 6 experienced confusion due to the similarity in name and proximity in industry. 7 ECF No. 98 at 11. However, proving actual confusion is difficult, and courts have 8 9 2 10 11 12 13 14 15 16 17 18 19 20 ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 11 1 often discounted such evidence because it was unclear or insubstantial. AMF Inc., 2 599 F.2d at 352 (internal citation omitted). Here, Plaintiff has a handful of 3 instances where retail customers and industry members have considered “the 4 Revelers Club” an extension of Plaintiff’s company. ECF Nos. 99 at 7, 9, ¶ 7 b–d, 5 ¶ 9a, 101 at 2–3, 102 at 2. Together, these sub-factors weigh in favor of finding for 6 confusion, albeit weakly. 7 3. Defendant’s Intent 8 Plaintiff contends that Defendant Mackay intentionally used REVELERS 9 knowing it infringed on REVELRY’s mark, as Plaintiff had notified Defendant 10 about the infringement. ECF No. 98 at 12. Plaintiff further argues that Defendant 11 should have been on notice that promoting a wine club and selling wine with a 12 similar name, in a small wine-based community like Walla Walla, would likely 13 expose consumers to confusions. Id. Defendant offers that Plaintiff concedes that 14 there was no infringement, as Revelry wines were offered in connection to the 15 Revelers Club when the two entities were in business together. ECF No. 120 at 13. 16 Neither argument is persuasive as to the intent of Defendant, and thus this sub- 17 factor weighs neutrally. 18 4. Degree of Consumer Care 19 In general, the expectation how reasonably prudent a consumer is depends 20 on the circumstance, but typically courts find that individuals are more likely to be ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 12 1 discerning when making expensive purchases. Brookfield Commc'ns, Inc. v. W. 2 Coast Ent. Corp., 174 F.3d 1036, 1060 (9th Cir. 1999). Items like wine and cheese 3 have historically been deemed inexpensive, and therefore consumers are likely to 4 exercise less care. Id. (quoting E. & J. Gallo Winery, 967 F.2d at 1293). Plaintiff 5 contends that their potential customers have been confused by the similarity in 6 marks, given the nature of the wine market. ECF No. 98 at 13. 7 Defendant contends that the risk of consumers confusion decreases when 8 wine costs more than $14. ECF No. 120 at 13; see also Sazerac Co., Inc. v. Fetzer 9 Vineyards, Inc., 265 F. Supp. 3d 1013, 1038 (N.D. Cal. 2017), aff'd, 786 F. App'x 10 662 (9th Cir. 2019). This argument is more persuasive as to the Defendant’s use of 11 “revel” derivatives on wine bottles, though it is noted that consumers of wine 12 would likely be alerted to the difference between the award-winning variety 13 produced by Plaintiff. ECF No. 98 at 10. However, it may be difficult for 14 consumers to distinguish between Plaintiff’s wine and Defendant’s use of 15 “revelers” as it relates to wine-adjacent business opportunities, such as wine clubs. 16 5. Likelihood of Expansion 17 Plaintiff presents evidence of Defendants’ continued expansion, including 18 the addition of the wine club with a “REVELERS” tier, acquisition of a winery, 19 and selling wine and other alcohol in Walla Walla establishments without 20 Plaintiff’s wine. ECF No. 98 at 13. Defendant argues that both entities operate in ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 13 1 separate spheres, and therefore, presumptively, any risk of expansion would be 2 negligible. ECF No. 120 at 13. The Court does not agree that the fields each party 3 operates in are entirely separate, and therefore this factor weighs in favor of 4 finding confusion. 5 It is not overwhelmingly clear that Plaintiff would succeed on the merits. 6 However, tipping the scales in favor of Plaintiff, and using the sliding scale 7 approach, the analysis continues. Farris, 677 F.3d at 864. 8 9 B. Irreparable Harm Absent Relief Plaintiff has not demonstrated that it would suffer irreparable harm absent 10 relief, and its inaction weighs against granting a preliminary injunction. “A 11 preliminary injunction is sought upon the theory that there is an urgent need for 12 speedy action to protect the plaintiff's rights. By sleeping on its rights, a plaintiff 13 demonstrates the lack of need for speedy action.” Lydo Enterprises, Inc. v. City of 14 Las Vegas, 745 F.2d 1211, 1213 (9th Cir. 1984) (quoting Gillette Co. v. Ed Pinaud, 15 Inc., 178 F.Supp. 618, 622 (S.D.N.Y.1959); accord Manhattan State Citizens' 16 Group, Inc. v. Bass, 524 F.Supp. 1270, 1275–76 (S.D.N.Y.1981)). Further, a delay 17 in bringing a motion for a preliminary injunction can undercut a party’s argument 18 for irreparable harm. Garcia v. Google, Inc., 786 F.3d 733, 746 (9th Cir. 2015). 19 20 Plaintiff contends that Defendant’s continued use of its trademark will further dilute the Revelry brand, and thus it faces irreparable harm absent relief. ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 14 1 ECF No. 98 at 14. However, as Defendant point out, this action has been pending 2 since July 29, 2021, and evidence in the record suggests that Plaintiff has known 3 about the infringement for much longer. ECF No. 120 at 7. While the Court 4 accepts Plaintiff’s contention that discovery uncovered areas of use of the mark 5 that were previously unknown, Plaintiff still offers no explanation for why, over 6 two and half years later, it faces the kind of “urgent need for speedy action,” that a 7 preliminary injunction provides. ECF No. 133 at 5. The crux of this matter is 8 Defendant’s alleged encroachment on Plaintiff’s trademark, thereby diluting the 9 Revelry brand, and thus Plaintiff has not shown the irreparable harm suddenly 10 11 faced after the extensive motion practice involved in this lawsuit. C. Balance of Equities 12 Similarly, Plaintiff’s argument as to the balance of equities hinges on 13 potential consumer confusion related to Defendant’s use of “revel” derivatives, but 14 this was evident at the outset of this suit. ECF No. 98 at 14. In contrast, 15 Defendant assert that should injunctive relief be granted, it faces economic loss and 16 disruption in operation. ECF No. 120 at 14. Based on the information before the 17 Court, it does not appear that the balance of equities weighs in favor of Plaintiff 18 given the late date in seeking a preliminary injunction. 19 D. Public Interest 20 “In each case, courts must balance the competing claims of injury and must ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 15 1 consider the effect on each party of the granting or withholding of the requested 2 relief.” Winters, 555 U.S. at 24 (internal quotation marks and citation omitted). 3 The Court will not grant a preliminary injunction unless the public interests in 4 favor of granting an injunction “outweigh other public interests that cut in favor of 5 not issuing the injunction.” All. for the Wild Rockies, 632 F.3d at 1138. Plaintiff 6 argues that the balance of hardship tips in its favor because allowing Defendants to 7 continue infringement would result in further confusion. ECF No. 98 at 14. 8 Further, Plaintiff argues that enforcing a trademark is in the public interest. ECF 9 No. 133 at 11 (quoting Am. Rena Int’l Corp. v. Sis-Joyce Int’l Co., 534 F. App’x 10 633, 636 (9th Cir. 2013)). Defendant argues customers would face “public 11 consequences” if an injunction is granted. ECF No. 120 at 14. Precedent in the 12 Ninth Circuit supports the public interest in protecting consumers from confusion 13 as it relates to similar marks. Am. Rena Int'l Corp., 534 F. App'x at 636; Internet 14 Specialties W., Inc. v. Milon–DiGiorgio Enterprises, Inc., 559 F.3d 985, 993 (9th 15 Cir.2009); Brookfield Commc'ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1066 16 (9th Cir. 1999). On the other hand, “delay weakens a claim of likelihood of 17 confusion, because the public may learn to distinguish between similar marks over 18 time, so that any real likelihood of confusion gradually dissipates.” Grupo Gigante 19 SA De CV v. Dallo & Co., 391 F.3d 1088, 1104 (9th Cir. 2004) (internal citation 20 omitted). In weighing the public interest, it does not appear that preventing further ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 16 1 customer confusion is outweighed by the significant amount of time Defendants 2 have used the mark. Thus, this factor also does not support a grant of injunction. 3 With Plaintiff’s likelihood of success on the merits weighs weakly in its 4 favor, and the remaining three factors, irreparable harm faced, balance of equities, 5 and public interest, weighs against it, the Court declines to grant a preliminary 6 injunction. 7 II. 8 In support of the motion a preliminary injunction, Plaintiff seeks to unseal 9 Motion to Seal ECF Nos. 99-16, 99-17, 99-18, and 99-23 (sealed at ECF No. 104). ECF Nos. 103 10 and 105 at 2. Defendant has designated these documents as sealed under 11 “Confidential” and “Highly Confidential – Attorney’s Eyes Only,” pursuant to the 12 labelling outlined in the Court’s Stipulated Amended Protective Order: 13 14 15 16 17 18 19 20 2.1 “Confidential” material shall include information that is not publicly available, the disclosure of which could cause harm to the disclosing party. Such information includes, but is not limited to, the following documents and tangible things produced or otherwise exchanged: sales information and other financial data; private account information of third parties; vendor information and pricing; confidential business communications and agreements with third parties; information or materials that identify potential or current customers or vendors of a party; and marketing and business strategies. 2.2 "Highly Confidential - Attorneys' Eyes Only" material shall include information that the party believes is of such an extremely sensitive or secret nature that disclosure of such information to any other party or non-party reasonably poses the risk of competitive injury and may compromise and/or jeopardize its business interests even if protected by a Confidential designation. ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 17 1 ECF No. 48 at 2. 2 As a preliminary matter, parties stipulated to maintaining the “High 3 Confidential – Attorney’s Eyes Only,” sealed labelling for ECF No. 99-23 (Exhibit 4 W). However, after meeting to confer, Plaintiff seeks to unseal ECF Nos. 99-16, 5 99-17, and 99-18. ECF No. 105 at 4. 6 The Ninth Circuit distinguishes between dispositive and non-dispositive 7 motions when determining the standard to apply for sealing and unsealing portions 8 of the record. Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th 9 Cir. 2003). To maintain the sealed status of records related to dispositive motions, 10 a party must show that “compelling reasons” exist to maintain the secrecy of the 11 records. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 12 2006). “Unless a particular court record is one ‘traditionally kept secret,’ a ‘strong 13 presumption in favor of access’ is the starting point.” Id. at 1178 (quoting Foltz, 14 331 F.3d at 1135). “[T]he strong presumption of access to judicial records applies 15 fully to dispositive pleadings, including motions for summary judgment and related 16 attachments.” Id. at 1179 (“[R]esolution of a dispute on the merits . . . is at the 17 heart of the interest in ensuring the public’s understanding of the judicial process 18 and of significant public events.”) (internal quotation marks and citation omitted). 19 “The ‘compelling reasons’ standard is invoked even if the dispositive motion, or its 20 attachments, were previously filed under seal or protective order.” Id. (citation ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 18 1 2 omitted). However, a “good cause” showing under Rule 26(c) will suffice to seal 3 documents produced in discovery or in relation to non-dispositive motions. Id. at 4 1180. “[This] less exacting ‘good cause’ standard applies to private materials 5 unearthed during discovery, and to previously sealed discovery attached to a 6 nondispositive motion.” Oliner v. Kontrabecki, 745 F.3d 1024, 1026 (9th Cir. 7 2014) (internal quotation marks and citation omitted). As the Ninth Circuit has 8 explained, “the public has less of a need for access to [these court records] because 9 [they] are often unrelated, or only tangentially related, to the underlying cause of 10 action.” Id. (quoting Kamakana, 447 F.3d at 1179). 11 While the Ninth Circuit has not drawn a definitive line between what 12 constitutes a dispositive versus non-dispositive motion, it has determined that the 13 crux of the issue is “whether the motion at issue is more than tangentially related to 14 the underlying cause of action.” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 15 F.3d 1092, 1099 (9th Cir. 2016) (collecting cases). A preliminary injunction often 16 requires a court to address the merits of a case, and often includes evidence 17 produced in the record. Id. (citing Stormans v. Selecky, 586 F.3d 1109, 1127 (9th 18 Cir. 2009)). Thus, a preliminary injunction may be, but is not always, dispositive. 19 20 Here, the preliminary injunction would effectively be dispositive as the motion required the Court to consider the merits of the claim. As such, the burden ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 19 1 is on the Defendant as the party sealing ECF Nos. 99-16, 99-17, and 99-18, to 2 produce a compelling reason to maintain the seal. Kamakana, 447 F.3d at 1178. 3 In support of sealing ECF No. 99-16 (Exhibit P), Defendant asserts that the 4 document contains confidential and non-public information regarding a vendor. 5 ECF No. 115 at 4. However, the Court finds nothing inherently private about the 6 communication as it seemingly deals with the internal review of a decorative or 7 branding seal under Defendants’ umbrella of brands. ECF No. 104-1 at 2–3. 8 Defendant does not assert that the seal itself is protected information. ECF Nos. 9 115 at 5, 116 at 2, ¶ 4. In the interest of protecting vendor identity, ECF No. 99-16 10 (Exhibit P), shall be unsealed on the condition that all identifying information as it 11 relates to vendors, including vendor name and contact information, be redacted. 12 In support of sealing ECF No. 99-17 (Exhibit Q), Defendant asserts that it 13 contains confidential and non-public information with one of its vendors 14 surrounding the marketing and planning of an event. ECF No. 115 at 4. The Court 15 finds, pursuant to Federal Rule of Civil Procedure 26(c)(1)(G), that exposing the 16 information contained in ECF No. 99-17 would amount to disclosing commercial 17 information. ECF No. 104-2 at 2–4. Therefore, ECF No. 99-17 (Exhibit Q) shall 18 remained sealed. 19 20 In support of sealing ECF No. 99-18 (Exhibit R), Defendant asserts that it contains confidential and non-public information with one of its investors in ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 20 1 Yellowhawk Resort. ECF No. 115 at 5. However, the Court again finds nothing 2 inherently private about the communication other than the investor’s name and 3 contact information. ECF No. 104-3 at 2–3. In the interest of protecting the 4 investor’s privacy ECF No. 99-18 (Exhibit R), shall be unsealed on the condition 5 that the name, contact information, and all other defining features, including the 6 email signature block, of the investor be redacted. 7 // 8 // 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 21 1 ACCORDINGLY, IT IS HEREBY ORDERED: 2 1. Plaintiff’s Motion for Preliminary Injunction (ECF No. 98) is DENIED. 3 2. Plaintiff’s Motion to Unseal (ECF No. 105) is GRANTED in part and 4 DENIED in part. 5 a. ECF No. 99-16 (Exhibit P) shall be unsealed pursuant to a 6 redaction of the vendor’s name and contact information. 7 b. ECF No. 99-17 (Exhibit Q) shall remain sealed. 8 c. ECF No. 99-18 (Exhibit R) shall be unsealed pursuant to a 9 10 11 12 13 redaction of the investor’s name, contact information, and all other identifying features. d. Pursuant to the parties’ agreement, ECF No. 99-23 (Exhibit W) shall remain sealed. e. Defendant shall redact ECF Nos. 99-16 and 99-18 consistent with 14 this Order and re-file the redacted documents on the record on or 15 before March 7, 2024. 16 17 18 The District Court Executive is directed to enter this Order and furnish copies to counsel. DATED February 29, 2024. 19 20 THOMAS O. RICE United States District Judge ORDER DENYING PRELIMINARY INJUNCTION AND GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO SEAL ~ 22
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