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Genscape, Inc. v. Live Power Intelligence Company NA, LLC

United States District Court, D. Colorado

September 5, 2019

GENSCAPE, INC., Plaintiff,


          Kristen L. Mix, United States Magistrate Judge.

         This matter is before the Court on Plaintiff's Motion to Restrict in Part Access to Plaintiff's Notice of Identification of Representative Trade Secrets [#110][1] (the “Motion”). Defendants filed a Response [#112] in opposition to the Motion and Plaintiff filed a Reply [#116]. The Motion [#110] has been referred to the undersigned for disposition pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.L.CivR 72.1(c). See [#114]. For the reasons set forth below, the Motion [#110] is GRANTED.

         I. Background

         The background relevant to the Motion [#110] is as follows. Plaintiff[2] initiated this action to protect its alleged trade secrets on October 3, 2018, against Defendants Live Power Intelligence Company NA, LLC (“LPI”) and William P. Townsend (“Townsend”). See Compl. [#1]. Subsequently, Plaintiff filed its First Amended Complaint [#78] on May 14, 2019, naming Yes Energy LLC (“Yes Energy”) as an additional Defendant. Plaintiff asserts several claims against Defendants, both individually and collectively, based on Defendant Townsend's previous employment with Plaintiff and Defendants' alleged misappropriation of Plaintiff's trade secrets. See First Am. Compl. [#78] ¶¶ 21-23, 26-28, 39-43. These claims include violations of the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq., the Colorado Uniform Trade Secrets Act, Colo. Rev. Stat. § 7-74-101 et seq., the Kentucky Uniform Trade Secrets Act, Ky. Rev. Stat. § 365.880 et seq., and the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 by all Defendants; violations of the New Jersey Computer Related Offenses Act, N.J. Stat. Ann. § 2A:38A-3 by Defendants LPI and Townsend; civil theft pursuant to Colo. Rev. Stat. § 18-4-405 by Defendants LPI and Townsend; conversion by Defendants LPI and Townsend; breach of contract and breach of fiduciary duty by Defendant Townsend; aiding and abetting breach of fiduciary duty by Defendants LPI and Yes Energy; and civil conspiracy by all Defendants. See Id. [#78] ¶¶ 57-168.

         On May 2, 2019, Magistrate Judge Nina Y. Wang[3] held a Telephonic Discovery Conference with counsel for Plaintiff and Defendants LPI and Townsend. Courtroom Minutes/Minute Order [#76] at 2. During that Conference, Judge Wang ordered Plaintiff to file a list with the Court, identifying 25 “representative trade secrets” to assist the parties in defining the scope of discovery in this case. Id. Magistrate Judge Wang further ordered Plaintiff to file this list on or before June 14, 2019, and in compliance with D.C.COLO.L.Civ. R. 7.2(c). Id. Pursuant to Judge Wang's Order, Plaintiff filed its Notice of Identification of Representative Trade Secrets [#100] (the “Notice”) on June 14, 2019, under Level 2 Restriction. Level 2 restriction limits access to the filing party and the Court. D.C.COLO.LCivR 7.2(b).

         Pursuant to D.C.COLO.L.Civ. R. 7.2, Plaintiff filed the instant Motion [#110] on June 28, 2019. In the Motion, Plaintiff seeks to maintain its Notice [#100] under Level 2 Restriction on the grounds that the Notice contains: (1) information regarding Plaintiff's trade secrets and confidential proprietary business information; (2) confidential and sensitive business information from a subpoenaed third-party; and (3) reference to material that Defendants have designated as, or likely would designate as, “Confidential” or “Attorneys' Eyes Only” pursuant to the Protective Order [#27] in this case, as amended [#65]. Motion [#110] at 2-3. With respect to the first category, Plaintiff argues that its “interest in maintaining the confidentiality of commercially and competitively sensitive information outweighs the presumption of public access to this information.” Id. Plaintiff further avers that Level 2, rather than Level 1, Restriction is appropriate because “allowing Defendants themselves (Plaintiff's competitors)-as opposed to their counsel, as provided under the Protective Order-to access the restricted information would cause competitive injury to Plaintiff.” Motion [#110] at 2. Plaintiff represents that on June 14, 2019, it provided an unredacted version of the Notice to Defendants' counsel via email, in accordance with the Protective Order. Motion [#110] at 2-3.

         Plaintiff attaches to the Motion, at Exhibit A [#110-1], a redacted version of the Notice for public filing (“Plaintiff's First Redacted Notice”). Plaintiff's First Redacted Notice [#110-1] redacts several portions of the Notice which, according to Plaintiff, include “highly sensitive and confidential information relating to, among other things, [Plaintiff's] monitoring locations, methods and capabilities, its calibration processes, business strategies, and its customers.” Motion [#110] at 2.

         In its Response [#112], Defendants do not argue that the Level 2 Restriction on Plaintiff's Notice [#100] should be lifted. Rather, Defendants argue that a majority of the redactions found in Plaintiff's First Redacted Notice [#110-1] are either unnecessary for purposes of business confidentiality or “go far beyond what is needed to protect any purportedly sensitive business information.” Response [#112] at 2. As an alternative, Defendants provide a version of Plaintiff's Notice [#100] at Exhibit A [#113] which proposes fewer redactions (“Defendants' Proposed Redactions”). According to Defendants, their alternative redactions:

[o]mit[ ] reference to [Plaintiff's] customers, information that [Plaintiff] collects from its customers, [Plaintiff's] pricing policies, and any other conceivably sensitive business information of [Plaintiff], while allowing information that is either already publicly available or would cause no competitive harm to [Plaintiff] to be included in the public record of this case.

Response [#112] at 2-3.

         In its Reply [#116], Plaintiff maintains that a majority of its redactions in the First Redacted Notice [#110-1] are appropriate. Nevertheless, Plaintiff accepts many of Defendants' proposed alternative redactions and attaches to its Reply [#116], at Exhibit B [#116-1], a new redacted version of the Notice for public filing (“Plaintiff's Second Redacted Notice”).[4]

         II. Legal Standard

         “The Supreme Court has acknowledged a common law right of the public to access judicial records.” Slivka v. Young Men's Christian Ass'n of Pikes Peak Region, __ F.Supp.3d __, __, No. 19-cv-00313-PAB, 2019 WL 3059905, at *3 (D. Colo. July 11, 2019) (citing Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978)). “This right is premised upon the recognition that public monitoring of the courts fosters important values such as respect for the legal system.” Slivka, 2019 WL 3059905, at *3 (citing In re Providence Journal Co., Inc., 293 F.3d 1, 9 (1st Cir. 2002)). “There is a presumption that documents essential to the judicial process are to be available to the public, but they may be restricted when the public's right of access is outweighed by interests which favor non-disclosure.” Slivka, 2019 WL 3059905, at *3 (citing United States v. McVeigh, 119 F.3d 806, 811 (10th Cir. 1997)). In matters concerning confidential business information, the Tenth Circuit has noted that “a party may overcome the presumption in favor of public access to judicial records by demonstrating the pages [at issue] contain ‘sources of business information that might harm a litigant's competitive standing.'” Deherrera v. Decker Truck Line, Inc., 820 F.3d 1147, 1162 n.8 (10th Cir. 2016) (quoting Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 598, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978)). However, “[t]he decision as to access is one best left to the sound discretion of the trial court, a discretion to be exercised in light of the relevant facts and circumstances of the particular case.” SOLIDFX, LLC v. Jeppesen Sanderson, Inc., No. 11-cv-01468-WJM-BNB, 2012 WL 2917116, at *2 (D. Colo. July 16, 2012) (citing United States v. Hickey, 767 F.2d 705, 708 (10th Cir. 1985)).

         A motion to restrict access must (1) “identify the document or the proceeding for which restriction is sought”; (2) “address the interest to be protected and why such interest outweighs the presumption of public access”; (3) “identify a clearly defined and serious injury that would result if access is not restricted”; (4) “explain why no alternative to restriction is practicable or why only restriction will adequately ...

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