Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 1 of 13 PageID# 35767
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`ALEXANDRIA DIVISION
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`
`
`v.
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`RAI STRATEGIC HOLDINGS, INC. and
`R.J. REYNOLDS VAPOR COMPANY,
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`Plaintiffs and Counterclaim Defendants,
`
`
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`ALTRIA CLIENT SERVICES LLC; PHILIP
`MORRIS USA INC.; and PHILIP MORRIS
`PRODUCTS S.A.,
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`Defendants and Counterclaim Plaintiffs.
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`Case No. 1:20-cv-00393-LO-TCB
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`
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`REYNOLDS’S MEMORANDUM IN RESPONSE TO, AND IN SUPPORT OF,
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`PMP’s MOTION TO SEAL (DKT. 1408)
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 2 of 13 PageID# 35768
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`Pursuant to Rule 5.2(d) of the Federal Rules of Civil Procedure and Rule 5(C) of the Local
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`Civil Rules, RAI Strategic Holdings, Inc. and R.J. Reynolds Vapor Company (collectively,
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`“Reynolds”) respectfully submit this memorandum in response to, and in support of, Philip Morris
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`Products S.A.’s (“PMP’s”) Motion to Seal portions of Philip Morris’ Brief in Support of Philip
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`Morris’ Motion For a Permanent Injunction or, Alternatively, an Ongoing Royalty (“Brief”) and
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`accompanying exhibits (Dkt. 1408).
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`The proposed sealed material includes (1) confidential and proprietary information made
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`available to FDA as part of the regulatory process, and Reynolds’s internal documents related to
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`its confidential regulatory strategies; and (2) internal financial projections, costs data, and
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`information about Reynolds’s future business plans, and historical forecasts or business plans
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`regarding its Vuse products. The Court previously granted Reynolds’s motion to seal certain trial
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`exhibits containing these same types of confidential information. (See Dkt. 1266.)
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`Specifically, Reynolds supports filing under seal copies of PMP’s Brief, accompanying
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`Exhibits 4, 13, 14, 17-19, 30, 34-36, 38, 40-44, 47, and 51, and certain portions of accompanying
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`Exhibits 15 and 48.1 For at least Exhibits 17, 38, 41, 42, 43, and the redacted portions of Exhibits
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`15 and 48, as well as the portions of PMP’s Brief citing thereto, this information was not admitted
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`into evidence at trial. And for all of the above-listed documents that Reynolds supports sealing,
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`the information falls within the scope of the Stipulated Protective Order. (Dkt. 103.) These
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`confidential materials should remain under seal.
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`If the Court agrees, Reynolds respectfully requests that the Court grant PMP’s motion to
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`seal (Dkt. 1408) and order PMP to file an amended public redacted copy of Exhibits 15 and 48
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`with only the limited redactions identified in Exhibits A-B attached hereto.
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`1 Reynolds’s proposed redactions to Exhibits 15 and 48 are attached hereto as Exhibits A-B.
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`2
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 3 of 13 PageID# 35769
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`I.
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`LEGAL STANDARD
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`The law of the regional circuit applies to non-substantive issues of patent law, including
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`the question whether to seal district court records. See Uniloc 2017 LLC v. Apple, Inc., 964 F.3d
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`1351, 1357 (Fed. Cir. 2020). A motion to seal implicates both substantive and procedural
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`requirements. Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 576 (4th Cir. 2004).
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`Substantively, the Court must determine the nature of the information and the public’s right
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`to access. Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 180-81 (4th Cir. 1988). “The right
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`of public access to documents or materials filed in a district court derives from two independent
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`sources: the common law and the First Amendment.” Va. Dep’t of State Police, 386 F.3d at 575.
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`“While the common law presumption in favor of access attaches to all ‘judicial records and
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`documents,’ the First Amendment guarantee of access has been extended only to particular judicial
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`records and documents.” Stone, 855 F.2d at 180 (internal citation omitted). Moreover, the
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`common law right to inspect records and documents “is not absolute.” Nixon v. Warner
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`Communications, Inc., 435 U.S. 589, 598 (1978). Accordingly, some documents “fall within the
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`common law presumption of access, while others are subject to the greater right of access provided
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`by the First Amendment. Still others may not qualify as ‘judicial records’ at all.” U.S. v.
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`Moussaoui, 65 F. App’x 881, 889 (4th Cir. 2003) (internal citation omitted).2
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`Although “the Supreme Court has not addressed whether the First Amendment’s right of
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`access extends to civil trials or other aspects of civil cases . . . , the Fourth Circuit[ ] ha[s]
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`recognized that the First Amendment right of access extends to civil trials and some civil filings.”
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`Am. Civil Liberties Union v. Holder, 673 F.3d 245, 252 (4th Cir. 2011). Even so, public access to
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`2 “Judicial records” are “documents filed with the court [that] play a role in the adjudicative
`process, or adjudicate substantive rights.” In re U.S. for an Order Pursuant to 18 U.S.C. Section
`2703(D), 707 F.3d 283, 290 (4th Cir. 2013).
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`3
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 4 of 13 PageID# 35770
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`civil trial records “is not absolute,” and restrictions can be justified by concerns that such records
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`“might . . . become a vehicle for improper purposes,” such as where the records serve “as sources
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`of business information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at
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`598.
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`As set forth in the Fourth Circuit’s decision in Ashcraft v. Conoco, Inc., a court has the
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`authority to seal court documents “if the public’s right of access is outweighed by competing
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`interests.” 218 F.3d 288, 302 (4th Cir. 2000). Before granting a motion to seal, a court must
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`consider the following: “(1) provide public notice of the request to seal and allow interested parties
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`a reasonable opportunity to object, (2) consider less drastic alternatives to sealing the documents,
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`and (3) provide specific reasons and factual findings supporting its decision to seal the documents
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`and for rejecting the alternatives.” Id.; Adams v. Object Innovation, Inc., No. 3:11CV00272-REP-
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`DWD, 2011 WL 7042224, at *4 (E.D. Va. Dec. 5, 2011), report & recommendation adopted, 2012
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`WL 135428 (E.D. Va. Jan. 17, 2012).
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`Procedurally, Local Civil Rule 5(C) requires that, when a party moves to file material under
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`seal that another party has designated as confidential, “the party designating the material as
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`confidential must file a response to the motion complying with requirements (2), (3), and (4) above
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`along with a proposed order” that “shall recite the findings required by governing case law to
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`support the proposed sealing.” Loc. R. Civ. P. 5(C). These requirements are: “(2) A statement
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`why sealing is necessary, and why another procedure will not suffice, as well as appropriate
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`evidentiary support for the sealing request; (3) References to the governing case law, an analysis
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`of the appropriate standard to be applied for that specific filing, and a description of how that
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`standard has been satisfied; [and] (4) Unless permanent sealing is sought, a statement as to the
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`4
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 5 of 13 PageID# 35771
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`period of time the party seeks to have the matter maintained under seal and how the matter is to be
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`handled upon unsealing.” Id.
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`II.
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`DESCRIPTION OF MATERIALS SOUGHT TO BE SEALED
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`PMP seeks leave to file under seal un-redacted versions of its Brief and accompanying
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`Exhibits 4-5, 11, 13-20, 22-24, 26-27, 30-31, 34-36, 38, 40-44, 47-48, 51, and 56 to PMP’s Brief.
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`(Dkt. 1408). Reynolds supports filing under seal copies of the following documents (see Dkt. 1409
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`at 1-4):
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`• Unredacted version of PMP’s Brief; and
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`• Exhibit 4 to Philip Morris’ Brief, which includes excerpts from the June 8, 2022
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`a.m. trial transcript, which has not yet been publicly released.
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`• Exhibit 13 to Philip Morris’ Brief, which includes excerpts from the June 9, 2022
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`p.m. trial transcript, which has not yet been publicly released.
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`• Exhibit 14 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Certain portions of Exhibit 15 to PMP’s Brief, which includes excerpts from the
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`deposition transcript of Nicholas Gilley, dated December 1, 2020, that Reynolds
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`designated as confidential business information subject to the Protective Order.
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`(Reynolds’s proposed redactions are attached as Exhibit A.)
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`• Exhibit 17 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`5
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`• Exhibit 18 to PMP’s Brief, which includes excerpts from a design document that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 19 to PMP’s Brief, which includes excerpts from the July 21, 2022 hearing
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`transcript, which has not yet been publicly released.
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`• Exhibit 34 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 35 to PMP’s Brief, which includes excerpts from a report that Reynolds
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`produced and designated as confidential business information subject to the
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`Protective Order.
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`• Exhibit 36 to PMP’s Brief, which includes excerpts from the June 8, 2022 p.m. trial
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`transcript, which has not yet been publicly released.
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`• Exhibit 38 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 40 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 41 to PMP’s Brief, which includes excerpts from document that Reynolds
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`produced and designated as confidential business information subject to the
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`Protective Order.
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`6
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`• Exhibit 42 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 43 to PMP’s Brief, which includes excerpts from a presentation that
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`Reynolds produced and designated as confidential business information subject to
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`the Protective Order.
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`• Exhibit 44 to PMP’s Brief, which is the Declaration of Paul K. Meyer, dated August
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`12, 2022, that was designated by Philip Morris as including information produced
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`by Reynolds as confidential under the Protective Order.
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`• Exhibit 47 to PMP’s Brief, which includes excerpts from a document that Reynolds
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`produced and designated as confidential business information subject to the
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`Protective Order.
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`• Certain portions of Exhibit 48 to PMP’s Brief, which includes excerpts from the
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`deposition transcript of Dr. James Figlar, dated June 3, 2022, that Reynolds
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`designated as containing confidential business information subject to the Protective
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`Order. (Reynolds’s proposed redactions are attached as Exhibit B.)
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`• Exhibit 51 to PMP’s Brief, which includes excerpts from the June 14, 2022 a.m.
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`trial transcript, which has not yet been publicly released.
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`For at least Exhibits 17, 38, 41, 42, 43, and the redacted portions of Exhibits 15 and 48, as
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`well as the portions of PMP’s Brief citing thereto, this information was not admitted into evidence
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`at trial. And for all of the above-listed documents (or portions thereof) that Reynolds supports
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`sealing, the information falls within the scope of the Stipulated Protective Order. (Dkt. 103.) These
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`confidential materials should remain under seal.
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`7
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 8 of 13 PageID# 35774
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`III.
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`ARGUMENT
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`
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`Reynolds supports PMP’s motion to seal (Dkt. 1408) as the documents identified above
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`contain confidential business information of Reynolds, including (1) confidential and proprietary
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`information made available to FDA as part of the regulatory process, and Reynolds’s internal
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`documents related to its confidential regulatory strategies (PMP’s Brief and Exhibit 47); and (2)
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`financial projections, costs data, and information about Reynolds’s future business plans, and
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`historical forecasts or business plans regarding its Vuse products (PMP’s Brief; Exhibits 14, 17,
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`18, 34, 35, 38, 40, 41, 42, and 43; and redacted portions of Exhibits 15 and 48). The Court
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`previously granted Reynolds’s motion to seal certain trial exhibits containing these same types of
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`confidential information. (Dkt. 1266.)
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`“Judicial records” are “documents filed with the court [that] play a role in the adjudicative
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`process, or adjudicate substantive rights.” In re U.S. for an Order Pursuant to 18 U.S.C. Section
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`2703(D), 707 F.3d at 290. Because the material sought to be sealed in Exhibits 17, 38, 41, 42, 43,
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`and the redacted portions of Exhibits 15, 31, and 48 were not admitted into evidence at trial, they
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`did not play a role in the adjudicative process or adjudicate substantive rights. They are therefore
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`not “judicial records.” Accordingly, there is no presumption of public access under either the
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`common law standard or the First Amendment. See United States v. Amodeo, 44 F.3d 141, 145
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`(2d Cir. 1995) (“We think that the mere filing of a paper or document with the court is insufficient
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`to render that paper a judicial document subject to the right of public access.”).
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`Regardless, all the substantive and procedural factors are met and PMP’s Brief,
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`accompanying Exhibits 4, 13, 14, 17-19, 30, 34-36, 38, 40-44, 47, and 51, and the limited portions
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`of accompanying Exhibits 15 and 48 should be sealed.
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`8
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 9 of 13 PageID# 35775
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`A. THE PUBLIC HAS HAD AMPLE NOTICE.
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`The public has received notice of the request to seal and has had reasonable opportunity to
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`object. PMP’s sealing motion was publicly docketed in accordance with Local Civil Rule 5, and
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`Reynolds now files this memorandum in support of sealing. The “public has had ample
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`opportunity to object” to PMP’s motion and, since “the Court has received no objections,” the first
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`requirement under Ashcraft, 218 F.3d at 302, has been satisfied. GTSI Corp. v. Wildflower Int’l,
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`Inc., No. 1:09CV123 (JCC), 2009 WL 1248114, at *9 (E.D. Va. Apr. 30, 2009); United States. ex
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`rel. Carter v. Halliburton Co., No. 1:10CV864 (JCC/TCB), 2011 WL 2077799, at *3 (E.D. Va.
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`May 24, 2011) (“[T]he parties provided public notice of the request to seal that allowed interested
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`parties a reasonable opportunity to object—nearly two weeks.”).
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`B. REYNOLDS SEEKS THE LEAST DRASTIC MEASURES.
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`Reynolds seeks to seal and redact from the public record only information that the parties
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`must keep confidential pursuant to the Stipulated Protective Order. (Dkt. 103.) PMP has already
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`filed a publicly redacted version of its Brief (Dkt. 1406), and Reynolds is attaching to this
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`memorandum publicly redacted versions of Exhibits 15 and 48 to PMP’s Brief.
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`This selective and narrow protection of confidential material constitutes the least drastic
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`method of shielding the information at issue. Adams, 2011 WL 7042224, at *4 (The “proposal to
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`redact only the proprietary and confidential information, rather than seal the entirety of his
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`declaration, constitutes the least drastic method of shielding the information at issue.”). The public
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`has no legitimate interest in information that is confidential to Reynolds. Id. The information that
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`Reynolds seeks to seal includes confidential, proprietary, and competitively sensitive business
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`information of Reynolds, which could face harm if such information were to be released publicly.
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`No procedure other than filing this information under seal is sufficient to preserve the confidential
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`and sensitive nature of the information.
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`9
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 10 of 13 PageID# 35776
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` C. THE MATERIALS ARE HIGHLY SENSITIVE AND CONFIDENTIAL.
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`There is support for filing certain portions of PMP’s Brief and accompanying Exhibits 15
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`and 48 under seal with a publicly filed version containing strictly limited redactions, and for filing
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`accompanying Exhibits 4, 13, 14, 17-19, 30, 34-36, 38, 40-44, 47, and 51 to PMP’s Brief under
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`seal. The redacted material in PMP’s Brief and accompanying Exhibits 15 and 48, as well as the
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`material in Exhibits 4, 13, 14, 17-19, 30, 34-36, 38, 40-44, 47, and 51, contain material that falls
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`within the scope of the Stipulated Protective Order. (Dkt. 103.) Placing these materials under seal
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`is proper because the public’s interest in access is outweighed by a party’s interest in “preserving
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`confidentiality” of the limited amount of confidential information that is “normally unavailable to
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`the public.” Flexible Benefits Council v. Feltman, No. 1:08CV00371 (JCC), 2008 WL 4924711,
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`at *1 (E.D. Va. Nov. 13, 2008); United States ex rel. Carter, 2011 WL 2077799, at *3. As
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`Reynolds previously explained in its Motion to Seal Trial Exhibits (Dkt. 1243) that was granted
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`by the Court (Dkt. 1266), materials concerning (1) Vuse PMTAs, regulatory strategy, and related
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`testimony (Dkt. 1243 at 4-8; Dkt. 1243-2 at ¶¶ 6-8); (2) non-party settlement agreements and
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`related documents, technical documents and related testimony (Dkt. 1243 at 10-13; Dkt. 1243-2 at
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`¶¶ 10-11); and (3) financial forecasts, cost analyses, future business plans and related testimony
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`(Dkt. 1243 at 10-13; Dkt. 1243-2 at ¶¶ 6-8, 12) contain information that is confidential (Dkt. 1243
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`at 17-18; Dkt. 1243-2 at ¶¶ 5, 6, 10), and disclosure of such information would harm Reynolds’s
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`competitive standing and business interests (Dkt. 1243 at 18-23; Dkt. 1243-2 at ¶¶ 6-8, 10-12),
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`such that Reynold’s interests in confidentiality heavily outweigh the public’s interest in disclosure
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`(Dkt. 1243 at 24-26). In granting motions to seal exhibits to dispositive and non-dispositive
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`10
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 11 of 13 PageID# 35777
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`briefing, this Court and others have recognized that the type of information at issue here is
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`confidential that requires sealing from public access.3
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`IV.
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`CONCLUSION
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`For the foregoing reasons, Reynolds respectfully requests that PMP’s Motion to Seal (Dkt.
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`1408) be granted with respect to PMP’s Brief, accompanying Exhibits 4, 13, 14, 17-19, 30, 34-36,
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`38, 40-44, 47, and 51, and certain portions of accompanying Exhibits 15 and 48, and that such
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`sealing be maintained until further Order of this Court. Reynolds respectfully requests, however,
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`that the Court order PMP to file amended public redacted copies of Exhibits 15 and 48 with only
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`the limited redactions identified in Exhibits A-B attached hereto.
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`
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`3 See, e.g., LifeNet Health v. LifeCell Corp., No. 2:13cv486, 2015 WL 12517430, at *4 (E.D. Va.
`Feb. 12, 2015 (granting motion to redact trial transcripts to seal future product plans, licensing
`agreements with third-parties, and financial information as “trade secret[s]” “significant enough
`to outweigh the First Amendment right of access in this case”); In re Genworth Fin. Sec. Litig.,
`No. 3:14-cv-682-JAG, 2015 WL 12830373, at *2 (E.D. Va. Dec. 10, 2015) (granting motions to
`seal exhibits to a declaration and portions of a motion to compel containing commercially sensitive
`information such as business strategy, product development strategy, and future business
`planning); ATI Indus. Automation, Inc. v. Applied Robotics, Inc., No. 1:09CV471, 2014 WL
`2607364, at *5 (M.D.N.C. June 11, 2014) (granting motion to seal information concerning
`customers, customer purchase history, pricing, and costs); SMD Software, Inc. v. EMove Inc., No.
`5:08-CV-403-FL, 2013 WL 1091054, at *6 (E.D.N.C. Mar. 15, 2013) (granting motion to seal
`financial, market share, pricing, and marketing information).
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`11
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 12 of 13 PageID# 35778
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`Dated: August 19, 2022
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`
`
`Stephanie E. Parker
`JONES DAY
`1221 Peachtree Street, N.E.
`Suite 400
`Atlanta, GA 30361
`Telephone: (404) 521-3939
`Facsimile: (404) 581-8330
`Email: separker@jonesday.com
`
`
`Anthony M. Insogna
`JONES DAY
`4655 Executive Drive
`Suite 1500
`San Diego, CA 92121
`Telephone: (858) 314-1200
`Facsimile: (844) 345-3178
`Email: aminsogna@jonesday.com
`
`William E. Devitt
`JONES DAY
`110 North Wacker
`Suite 4800
`Chicago, IL 60606
`Telephone: (312) 269-4240
`Facsimile: (312) 782-8585
`Email: wdevitt@jonesday.com
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`
`
`Respectfully submitted,
`
`
`
`
`
`
`
` /s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`Ryan B. McCrum
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`Email: rbmccrum@jonesday.com
`
`John J. Normile
`JONES DAY
`250 Vesey Street
`New York, NY 10281
`Telephone: (212) 326-3939
`Facsimile: (212) 755-7306
`Email: jjnormile@jonesday.com
`
`
`Alexis A. Smith
`JONES DAY
`555 South Flower Street
`Fiftieth Floor
`Los Angeles, CA 90071
`Telephone: (213) 243-2653
`Facsimile: (213) 243-2539
`Email: asmith@jonesday.com
`
`Charles B. Molster, III Va. Bar No. 23613
`THE LAW OFFICES OF
`CHARLES B. MOLSTER, III PLLC
`2141 Wisconsin Avenue, N.W. Suite M
`Washington, DC 20007
`Telephone: (703) 346-1505
`Email: cmolster@molsterlaw.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
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`12
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`Case 1:20-cv-00393-LMB-TCB Document 1417 Filed 08/19/22 Page 13 of 13 PageID# 35779
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`CERTIFICATE OF SERVICE
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`
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`I hereby certify that on this 19th day of August, 2022, a true and correct copy of the
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`foregoing was served using the Court’s CM/ECF system, with electronic notification of such filing
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`to all counsel of record.
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`
`
`
`
`/s/ David M. Maiorana
`David M. Maiorana (VA Bar No. 42334)
`JONES DAY
`901 Lakeside Ave.
`Cleveland, OH 44114
`Telephone: (216) 586-3939
`Facsimile: (216) 579-0212
`Email: dmaiorana@jonesday.com
`
`Counsel for RAI Strategic Holdings, Inc. and
`R.J. Reynolds Vapor Company
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`