Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19935 Page 1 of 6
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`NUVASIVE, INC.,
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`v.
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`Plaintiff,
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`ALPHATEC HOLDINGS, INC. et al.,
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` Case No.: 3:18-CV-347-CAB-MDD
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`ORDER DENYING MOTION TO
`FILE UNDER SEAL
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`Defendants.
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`[Doc. No. 245]
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`Plaintiff NuVasive, Inc. has filed a motion seeking an order requiring Defendants
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`Alphatec Holdings, Inc., and Alphatec Spine, Inc. (together, “Alphatec”), to file under seal
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`certain portions of the deposition transcripts of:
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`1. Matthew Link;
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`2.
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`3.
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`4.
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`Blake Inglish;
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`Eric Finley; and,
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`Jim A. Youssef, M.D. (“Youssef Deposition”),
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`along with portions of Inglish’s expert reports in connection with the motions for summary
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`judgment and to exclude expert testimony that Alphatec intends to file. NuVasive contends
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`that compelling reasons exist to seal portions of these documents. As discussed below, the
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`motion is denied.
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`3:18-CV-347-CAB-MDD
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`Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19936 Page 2 of 6
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`I.
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`Legal Standards
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`“When discovery material is filed with the court [] its status changes.” Foltz v. State
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`Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1134 (9th Cir. 2003). “[T]he public policy
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`reasons behind a presumption of access to judicial documents (judicial accountability,
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`education about the judicial process etc.) apply.” Id. (internal citation omitted). Both the
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`common law and the Constitution afford the public a qualified right of access to judicial
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`records and proceedings. Times Mirror Co. v. U.S., 873. F.2d 1210, 1211 n.1 (9th Cir.
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`1989); Pintos v. Pacific Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010).
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`In the Ninth Circuit there is a strong presumption in favor of access to court records
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`and a party must show compelling reasons to file materials under seal as part of a non-
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`discovery motion, even if they were produced subject to a discovery protective order. See
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`Foltz, 331 F.3d at 1135-36; see also Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172,
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`1179 (9th Cir. 2006) (“[C]ompelling reasons must be shown to seal judicial records
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`attached to a dispositive motion.”). Once the protected discovery documents are made part
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`of a dispositive motion, “they lose their status of being raw fruits of discovery” and no
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`longer enjoy protected status without some overriding interests in favor of keeping the
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`material sealed. Foltz, 331 F.3d at 1136.
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`Court records should be sealed to keep confidential only what must be kept secret,
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`temporarily or permanently, as the situation requires. The party seeking to file under seal
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`must provide articulable facts showing a compelling reason to limit public access to court
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`filings. That a litigant might be embarrassed or exposed to additional liability or litigation,
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`without more, is not sufficient. Id. at 1136. A court’s decision to seal material must be
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`based on a compelling reason and the order allowing a filing under seal must articulate the
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`factual basis for its ruling without relying on hypothesis or conjecture. Pintos, 605 F.3d at
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`679. “A ‘good cause’ showing will not suffice to fulfill the ‘compelling reasons’ standard
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`that a party must meet to rebut the presumption of access to dispositive pleadings and
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`attachments.” Id. (citing Kamakana, 447 F.3d at 1180).
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`3:18-CV-347-CAB-MDD
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`Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19937 Page 3 of 6
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`II. Discussion
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`According to NuVasive, the information it contends should be sealed falls into three
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`categories: (1) financial information related to NuVasive’s XLIF product; (2) future
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`product development and product improvement projects; and (3) surgeon consultancy
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`agreements.
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`A. XLIF Financial Information
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`NuVasive argues that this category of information includes “past XLIF revenues,
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`costs, and expenditures, [as well as] future projections of XLIF revenues, costs, and
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`expenditures.” NuVasive argues that this information should be sealed because NuVasive
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`keeps the information confidential because it would “permit competitors to access
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`NuVasive’s confidential XLIF-specific financial information and thereby be able to
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`determine NuVasive’s XLIF-related profits and profit margin which is highly confidential,
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`non-public information and can be used by competitors to NuVasive’s disadvantage. This
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`could allow competitors to undercut NuVasive’s pricing and sales efforts thereby unfairly
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`competing with NuVasive using this confidential information.” [Doc. No. 245 at 4.]
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`NuVasive also argues that this category includes “confidential sales and financial
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`information for surgeons and other purchasers of NuVasive’s products.” [Id.] NuVasive
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`contends that this information about purchasers of NuVasive’s products should be sealed
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`because NuVasive does not publicly disclose it and because “[i]f NuVasive’s competitors
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`had access this to this information, they could unfairly compete with NuVasive for business
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`from these customers targeting surgeons they may not otherwise target because of the
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`dollar amounts earned from these surgeons.” [Id.] Further, according to NuVasive, “[s]uch
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`information may also enable competitors to infer NuVasive’s short- and long-term business
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`strategies thereby providing others in the marketplace an unfair competitive advantage that
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`would allow competitors to undercut NuVasive’s sales efforts.” [Id.]
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`After review of the specific deposition testimony NuVasive states contains the
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`aforementioned information, which NuVasive lodged with the Court after filing its motion,
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`the Court does not find compelling reasons to permit such information to be filed under
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`Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19938 Page 4 of 6
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`seal. First, NuVasive’s description of the testimony is generally inconsistent with the
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`testimony itself. Almost none of the testimony contains any specific financial
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`information.1 Nor does the testimony contain any specific financial figures attributable to
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`specific surgeons or purchasers of NuVasive products. Rather, it appears that NuVasive
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`simply wants to keep sealed the mere identity of a handful of surgeons that use NuVasive
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`products. NuVasive concedes as much when it appears to ask that the Inglish deposition
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`transcript be sealed in its entirety because it contains “[r]eferences to specific surgeons and
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`customers throughout.” [Id. at 5.] In other words, the Court is not persuaded that the
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`specific transcript designations and expert reports that NuVasive asks to be sealed actually
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`contain any specific XLIF financial information or specific financial information for
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`surgeons or other purchasers of NuVasive products. Further, regardless of NuVasive’s
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`characterization of the specific transcript designations and expert reports that it asks to be
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`sealed on this ground, the Court is not persuaded that NuVasive would suffer material
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`competitive harm2 if the information revealed in those transcript designations and expert
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`reports is publicly disclosed. Accordingly, NuVasive’s motion to file under seal is denied
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`B.
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`Product Development and Product Improvement Information
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`NuVasive argues that this category of information work performed by consulting
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`surgeons regarding product development and improvement. As with the previous category
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`1 Indeed, in one of the sections of the Link deposition transcripts that NuVasive wants sealed because it
`purportedly contains specific financial information, Link actually repeatedly states: “I don’t know a
`specific dollar amount.” Link Tr. at 280:5-21.
`2 In this regard, the NuVasive has not persuaded the Court that its desire to keep secret the identity of a
`handful of surgeons using NuVasive’s products is a compelling reason to seal this information. A
`competitor offering its products to such surgeons or “undercutting” NuVasive’s prices is simply
`competition, not “unfair” competition, as NuVasive argues. Disclosure of such a relatively small number
`of surgeons does not sufficiently harm NuVasive’s competitive standing to be a compelling reason to seal
`the information. See, e.g., Ctr. For Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1097 (9th Cir.
`2016) (noting that an example of a compelling reason may be “sources of business information that might
`harm a litigant’s competitive standing.”) (quoting Nixon v. Warner Commnc’ns, Inc., 435 U.S. 589, 598-
`99 (1978)).
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`Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19939 Page 5 of 6
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`of purportedly confidential information, the specific deposition transcript designations
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`NuVasive identifies in its motion either do not contain such information or are so general
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`that they could not possibly cause material competitive harm to NuVasive if disclosed. In
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`reality, the transcript designations reveal little more than the identity of some of
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`NuVasive’s consultants and that NuVasive is in fact improving its products or developing
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`new ones. The Court is not persuaded that such general information is even confidential,
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`let alone that disclosure of if in the public record of this case would cause NuVasive
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`competitive harm. Accordingly, NuVasive has not shown compelling reasons to seal the
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`deposition transcript designations identified in its motion, and the motion to seal is denied
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`C.
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`Surgeon Consultancy Agreements
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`Finally, NuVasive asks the Court to allow to be filed under seal what NuVasive
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`describes as “details of its strategic internal business decision making processes” because
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`such information would give surgeon consultants “an unfair advantage over NuVasive in
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`their contract negotiations,” and give “competitors insight into NuVasive’s short- and long-
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`term business model and strategy. [Id. at 7.] Once again, however, NuVasive’s
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`characterization is inconsistent with the actual information disclosed in the deposition
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`transcript designations identified in NuVasive’s motion. To that end, the actual testimony
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`in question concerns the identity of some of NuVasive’s consultants, the scope of work
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`described in some of their agreements with NuVasive, and their compensation for such
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`work. Although the Court can appreciate NuVasive’s preference that such information
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`remain confidential, the Court is not persuaded that such preference, and any leverage this
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`information might provide surgeons negotiating consultancy agreements with NuVasive,
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`are compelling reasons to seal the record of such information to the extent it is relevant in
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`this case. Accordingly, NuVasive’s motion is denied as to this category of information as
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`Case 3:18-cv-00347-CAB-MDD Document 247 Filed 01/15/20 PageID.19940 Page 6 of 6
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`III. Conclusion
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`For the foregoing reasons, NuVasive’s motion to file under seal is DENIED.
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`Alphatec may refer to the deposition transcript designations and expert reports identified
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`in NuVasive’s motion in publicly filed versions of any motions for summary judgment or
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`to exclude experts that it intends to file.
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`It is SO ORDERED.
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`Dated: January 15, 2020
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