Overstock.com, Inc. v. Goldman Sachs Group, Inc.

Filed 11/13/14
CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

OVERSTOCK.COM, INC. et al.,
Plaintiffs and Appellants, A133487

v. (San Francisco City & County
THE GOLDMAN SACHS GROUP, INC. Super. Ct. No. CGC07460147)
et al.,
Defendants and Respondents;
THE ECONOMIST NEWSPAPER et al.,
Interveners and Appellants.

OVERSTOCK.COM INC. et al.,
Plaintiffs and Respondents, A135180
v.
MERRILL LYNCH, PIERCE FENNER & (San Francisco City & County
SMITH INC. et al., Super. Ct. No. CGC07460147)
Defendants and Appellants;
THE ECONOMIST NEWSPAPER et al.,
Interveners and Respondents.

I. INTRODUCTION
In this consolidated appeal, we address two “sealing” orders. The first granted
motions by defendants to seal documents submitted in connection with plaintiffs’ efforts
to file a Fifth Amended Complaint. The second denied, in substantial part, motions by
defendants to seal documents submitted in connection with defense motions for summary

*
Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion
is certified for publication with the exception of parts III(D), III(E)(2)(a)–(c), (e) and
III(F)–(G).

1
judgment. The second order overlapped the first, since the materials underlying the
proffered amended pleading resurfaced in opposition to the summary judgment motions.
Accordingly, the second sealing order is the trial court’s final call as to the propriety of
sealing these discovery materials, and the parties have ultimately focused on this order, as
do we.
We affirm most of the trial court’s sealing decisions. But there are key exceptions,
a principal one being thousands of pages of documentation plaintiffs submitted to the
court, but which they never cited and which were irrelevant to the issues raised by the
summary judgment motions. Under the plain terms of the protective order in place, these
irrelevant materials never should have burdened the trial court or this court. Nor should
they have been subjected to analysis under the sealing rules, since irrelevant materials
have no bearing on the trial court’s adjudicatory function and, thus, are not within the
ambit of the public’s right of access to court records. Rather, these discovery materials
should have been struck from the record and remained confidential pursuant to the
provisions of the protective order. As for the materials that were relevant to the summary
judgment proceedings, some contain confidential financial information of third parties
and should have been sealed under the sealed records rules.
On our way to reaching these conclusions, we address several issues pertaining to
sealing orders that have remained unsettled, including the reach of California Rules of
Court, rules 2.550 and 2.551, and media participation in sealing hearings. We also
discuss tools available to the trial courts to deal with abusive litigation tactics impacting
the handling of sealing issues. Indeed, we are appalled at the burden the parties foisted
on the trial court here and view this case as a companion to the decision of our brethren in
Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 289–290, decrying
unnecessary and oppressive summary judgment tactics.
II. BACKGROUND
Plaintiffs are Overstock.Com, Inc., an online retailer, and several of its investors.
In their Fourth Amended Complaint, plaintiffs alleged defendants, Merrill Lynch, Pierce
Fenner & Smith Inc. and Merrill Lynch Professional Clearing Corp. (collectively Merrill)

2
and Goldman Sachs & Co. and Goldman Sachs Execution & Clearing L. P. (collectively
Goldman), intentionally depressed the price of Overstock stock by effecting “naked short
sales”—that is, sales of shares the brokerage houses and their clients never actually
owned or borrowed. This practice, plaintiffs claimed, artificially increased the supply
and short sales of the stock, while decreasing its value. Plaintiffs alleged this conduct
violated Corporations Code sections 25400 and 25500, Business and Professions Code
sections 17200 and 17500, and New Jersey’s RICO statute (N.J. Stat. 2C:41-2(c)–(d)).
A. The Protective Order
The parties’ discovery demands were extensive, and in May 2008, pursuant to a
stipulation, the trial court issued a protective order. The order allowed the parties to
designate certain produced materials as “Protected Material,” and to further classify this
material as either “Confidential” or “Highly Confidential.” Paragraph 13 of the order
specified: “If a party seeks to file Protected Material, the party must seek to do so under
seal pursuant to California Rules of Court 2.550 and 2.551.”1 Paragraph 14 required the
parties to “endeavor in good faith to restrict their . . . submissions to Confidential
Information . . . reasonably necessary for the Court[’s deliberations].”
Two years later, in June 2010, the trial court entered a second protective order to
“modif[y] and extend[] the [May 30, 2008]” order to confidential information pertaining
to third parties. The parties acknowledged in this order that information identifying
specific client transactions “may be protected by rights of privacy or other confidentiality
rights.” “[T]o avoid undue delay, burden, and expense in document production,” the
parties also agreed to “produce documents containing information of Third Parties
without redaction of such information.” We refer to both orders, collectively, as the
protective order.
B. The Proposed Fifth Amended Complaint and Related Motions to Seal
In February 2011, defendants successfully demurred to the New Jersey RICO
cause of action in the Fourth Amended Complaint. The trial court allowed plaintiffs to

1
All further rule references are to the California Rules of Court.

3
propose a Fifth Amended Complaint with a reworked RICO claim, stating if they did so,
the court would order an expedited briefing and hearing schedule. In May, plaintiffs
submitted a proposed new pleading. The publicly filed document was heavily redacted;
an un-redacted version was conditionally lodged under seal.
Defendants opposed allowing the Fifth Amended Complaint on three grounds: a
California court should not apply New Jersey RICO law; plaintiffs had not, in any event,
stated a claim under that law; and granting leave to amend so late in the case would
prejudice defendants. The publicly filed opposition papers were redacted; un-redacted
versions were conditionally lodged under seal. Plaintiffs then submitted papers in
support of their proposed pleading, and defendants thereafter submitted reply papers.
Again, the publicly filed documents were redacted; un-redacted versions were
conditionally lodged under seal.
In connection with these substantive filings, defendants made ten separate motions
to seal. Plaintiffs opposed five of the motions, including two motions to seal certain
allegations of the proposed Fifth Amended Complaint based on discovery materials
designated “Confidential” or “Highly Confidential” under the parties’ protective order.
Plaintiffs contended the allegations did not reveal trade secrets or implicate significant
privacy interests. The media also filed, without court permission, opposition to the
sealing motions, including requesting the court to unveil the “88 paragraphs of the
proposed Fifth Amended Complaint” defendants wished to seal in whole or part.
After a lengthy hearing, the trial court ruled from the bench and denied leave to
file the proposed Fifth Amended Complaint on two grounds: (1) granting leave to add a
new, complex RICO claim would prejudice defendants on the eve of trial; and (2) the
RICO claim “would be futile because the facts as alleged . . . do not warrant the
application of New Jersey RICO [law] to this case under California choice-of-law
principles.”
Two days later, on August 3, 2011, the court issued a written order granting the
motions to seal. It first determined the sealed records rules applied, and then made the
express findings required under the rules and ordered the clerk to file, under seal, the un-

4
redacted materials that had been conditionally lodged with the court. The court also ruled
the media had not sought to intervene in conformance with Code of Civil Procedure
section 387 or under rule 2.551 and therefore denied intervention and struck the media’s
memorandum opposing sealing. The court noted, however, it had allowed the media to
participate in the hearing. Plaintiffs and the media appealed (appeal No. A133487).2
C. The Summary Judgment Motions and Related Motions to Seal
The following month, defendants moved for summary judgment on the remainder
of plaintiffs’ causes of action (under Corporations Code sections 25400 and 25500 and
Business and Professions Code sections 17200 and 17500) on multiple grounds.
Plaintiffs’ opposition would eventually fill 38 banker’s boxes and included
thousands of pages of discovery materials that had been designated “Confidential” or
“Highly Confidential” pursuant to the protective order. The materials were ostensibly
proffered to show defendants knowingly employed a strategy of naked short sales to
devalue Overstock, and did so in California. The trial court, at the parties’ urging,
approved lodging all of these confidential materials conditionally under seal and
deferring disposition of any sealing motions until after it ruled on the summary judgment
motions.
The trial court heard three days of argument on evidentiary objections to the
materials filed in connection with the summary judgment motions and a full day of
argument on the merits of the motions. In an order dated January 10, 2012, the trial court
granted the motions. As to the Corporations Code claim, the court ruled only conduct in
California was actionable and plaintiffs “failed to raise [any] triable issue of material fact
supportive of a finding that any act by any defendant foundational to liability, causation,
or damages occurred in California.” The court declined to reach any of the other grounds
for judgment defendants had urged in connection with this claim. As to the Business and
Professions Code claim, the court noted plaintiffs sought only injunctive relief and ruled

2
Orders concerning the sealing and unsealing of documents are appealable as
collateral orders. (Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1064 (Oiye)); Mercury
Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 77 (Mercury).)

5
such relief was unavailable since defendants had ceased the complained-of conduct as of
2008, and it was not likely to recur given new Securities and Exchange Commission rules
prohibiting it. Again, the court did not consider other grounds urged by defendants. The
court issued a final, comprehensive order on April 11, setting forth, as required by Code
of Civil Procedure section 437c, subdivision (g), “the evidence proffered in support of,
and if applicable in opposition to, the motion which indicates that no triable issue exists.”
Shortly after the initial summary judgment order in January, Merrill and Goldman
each filed a motion to seal copious amounts of the materials plaintiffs had submitted in
opposition to the summary judgment motions.3 Plaintiffs opposed both motions. The
media also sought, and was granted leave, to intervene in opposition to the motions.
After a lengthy hearing, the trial court largely denied the motions by written order
filed March 6, 2012. The court again determined the sealed records rules applied. It also
concluded the rules applied to all of the discovery materials submitted in connection with
the summary judgment motions, not just those materials related to the limited grounds on
which the court ultimately ruled. The court next concluded, as to a significant number of
the materials, defendants’ declarations were “conclusory” and “unpersuasive,” and lacked
the “specific facts” necessary to support sealing. The court additionally concluded
plaintiffs had “persuasively show[n]” many of the documents no longer had sufficient
indicia of confidentiality to warrant sealing. In sum, “[g]iven (1) that this case was filed
in February 2007, more than five years ago, (2) that most, if not all, of the transactions
reflected in the documents are at least four years old, (3) that many of the allegedly
confidential business practices and trading strategies are outdated due to changes in
federal law, and (4) that much of the material at issue was publicly disclosed at the
January 5, 2012 hearing on the motions for summary judgment,” the trial court observed,
“defendants’ failure to present specific facts to justify sealing the documents at issue is
understandable.”

3
Defendants filed several other joint motions to seal portions of their moving and
reply papers, but these motions and related orders are not at issue on appeal.

6
 Still, the trial court ordered a significant number of the discovery materials sealed.
These generally fell into three categories: (1) documents “laced with identifying
information about hundreds of thousands of financial transactions of third parties who
have no connection to this litigation”; (2) non-public regulatory documents having no
direct connection to this action, the sealing of which plaintiffs did not oppose; and
(3) approximately 200 exhibits plaintiffs submitted, but never cited.
While the March 2012 sealing order did not expressly revisit the 2011 order, when
the trial court and parties discussed sealing the summary judgment materials at a
December 8, 2011, case management conference, they agreed to a “holistic hearing that
would apply not only to the [summary judgment sealing motions], but also would involve
reconsideration of the court’s previous sealing rulings.” As the court observed, the
“overlap is inseparable.” At a later case management conference, on December 23, 2011,
the court reiterated it was “prepared holistically to consider these sealing issues with
respect to past and present and future motions at the same time” and again noted “the
information that is sought to be sealed in the currently pending motions overlaps largely
with the previous rulings.” This holistic, evolving view of the propriety of sealing was
well taken. (See In re Marriage of Nicholas (2010) 186 Cal.App.4th 1566, 1569 [“well-
established constitutional, case, and statutory authority subject[s] sealing orders to
continuing review and modification by the trial judge”].)
Merrill and Goldman filed notices of appeal to the extent the March 2012 order
denied their motions to seal and allowed the media to intervene (appeal No. A135180),
and we subsequently ordered the appeals consolidated. As we noted at the outset, the
parties have focused on the 2012 order.4

4
Plaintiffs and the media have not expressly abandoned their appeal from the
2011 order, and in their reply brief on appeal, plaintiffs’ urge “[t]he proposed Fifth
Amended Complaint should be filed in the public record.” As to the discovery materials,
however, none of the parties has identified any material covered by the 2011 sealing
order not addressed by the 2012 order. Accordingly, we, like the trial court, take a
“holistic,” view of the sealing dispute in this case (see In re Marriage of Nicholas, supra,
186 Cal.App.4th at p. 1569), and our determination as to the propriety of sealing the

7
 III. DISCUSSION
A. Background: Access to Records in Civil Cases
1. Common Law Right of Access
Nearly all jurisdictions, including California, have long recognized a common law
right of access to public documents, including court records. (See Nixon v. Warner
Communications, Inc. (1978) 435 U.S. 589, 597 (Nixon) [it “is clear that the courts of this
country recognize a general right to inspect and copy public records and documents”];
IDT Corp. v. eBay, Inc. (8th Cir. 2013) 709 F.3d 1220, 1222 (IDT Corp.) [noting most
federal circuits have embraced a common law right of access to court records]; Craemer
v. Superior Court (1968) 265 Cal.App.2d 216, 220, fn.3 [“right of a citizen to inspect
public writings has its origin in the common law”].)
This common law right is effectuated through a presumption of access. (See
Nixon, supra, 435 U.S. at p. 602 [“on respondents’ side is the presumption—however
gauged—in favor of public access to judicial records”].) As articulated by California’s
courts, this presumption means court records are “open to the public unless they are
specifically exempted from disclosure by statute or are protected by the court itself due to
the necessity of confidentiality.” (McGuire v. Superior Court (1993) 12 Cal.App.4th
1685, 1687; accord, Estate of Hearst (1977) 67 Cal.App.3d 777, 782–783.)
The weight accorded to the common law presumption of access depends, in any
particular case, on the “role of the material at issue in the exercise of . . . judicial power
and the resultant value of such information to those monitoring the . . . courts. Generally,
the information will fall somewhere on a continuum from matters that directly affect an
adjudication to matters that come within a court’s purview solely to insure their
irrelevance.” (Lugosch v. Pyramid Co. of Onondaga (2d Cir. 2006) 435 F.3d 110, 119
(Lugosch).) Accordingly, when evaluating whether records should be sealed under the
common law, courts engage in a balancing analysis, weighing the presumption of access
against a variety of competing interests. (See H.B. Fuller Co. v. Doe (2007)

summary judgment materials covered by the 2012 order is controlling as to those
materials initially addressed by the 2011 order.

8
151 Cal.App.4th 879, 894 (H.B. Fuller) [weighing harm of disclosing confidential
information against any countervailing considerations].)
As a practical matter, this has meant documents subject to a protective order often
remain outside public purview on a “good cause” showing akin to that which supported
issuance of the protective order in the first place. (See Phillips v. General Motors Corp.
(9th Cir. 2002) 307 F.3d 1206, 1213 [“When a court grants a protective order for
information produced during discovery, it already has determined that ‘good cause’ exists
to protect this information from being disclosed to the public by balancing the needs for
discovery against the need for confidentiality.”]; Chicago Tribune Co. v.
Bridgestone/Firestone, Inc. (11th Cir. 2001) 263 F.3d 1304, 1313 [“the Press’s common-
law right to the Firestone documents filed in connection with the motion for summary
judgment may be resolved by the [Federal Rules of Civil Procedure, r]ule 26 good cause
balancing test”]; Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 107–108
(Mercury) [concluding discovery material was not protected by constitutional right of
access and remanding for determination of whether documents should remain
confidential under protective order].)
2. First Amendment Right of Access
More recently, many jurisdictions, including California, have recognized a
constitutional right of access to certain court documents grounded in the First
Amendment. (NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th
1178, 1208, fn. 25 (NBC Subsidiary).)
NBC Subsidiary addressed the outright closure of court proceedings and concluded
the trial court infringed on First Amendment rights by barring the media from the
courtroom in the absence of explicit findings of an overriding interest that was likely to
be prejudiced and could not be protected by less restrictive means. (NBC Subsidiary,
supra, 20 Cal.4th at pp. 1222–1223.) However, the Supreme Court additionally
observed, in what is now an oft-cited footnote, that: “Numerous reviewing courts
likewise have found a First Amendment right of access to civil litigation documents filed
in court as a basis for adjudication. (See Brown & Williamson Tobacco Corp. v. F.T.C.

9
(6th Cir. 1983) 710 F.2d 1165, 1179 (Brown & Williamson) [documents filed in civil
litigation; ‘[i]n either the civil or criminal courtroom, secrecy insulates the participants,
masking impropriety, obscuring incompetence, and concealing corruption’]; Rushford v.
New Yorker Magazine, Inc. (4th Cir. 1988) 846 F.2d 249 (Rushford) [summary judgment
pleadings]; Matter of Continental Illinois Securities Litigation (7th Cir. 1984) 732 F.2d
1302 (Continental Illinois Securities) [records related to ‘hybrid summary judgment
motion’]; cf. Grove Fresh Distributors, Inc. v. Everfresh Juice Co. (7th Cir. 1994)
24 F.3d 893 [assuming both a First Amendment and a common law right of access to
civil litigation documents].)” (NBC Subsidiary, supra, 20 Cal.4th at p. 1208, fn. 25.)
Since NBC Subsidiary, the California courts of appeal have regularly employed a
constitutional analysis in resolving disputes over public access to court documents. (E.g.,
In re Marriage of Nicholas, supra, 186 Cal.App.4th at p. 1575 [sealing orders implicate
public’s right of access under the First Amendment]; Savaglio v. Wal-Mart Stores, Inc.
(2007) 149 Cal.App.4th 588, 596 (Savaglio) [public has First Amendment right to access
civil litigation documents filed in court and used at trial or submitted as basis for
adjudication].)5
Not all documents submitted or filed by the parties, however, fall within the ambit
of the constitutional right of access. NBC Subsidiary hastened to add the courts have held
“the First Amendment does not compel public access to discovery materials that are
neither used at trial nor submitted as a basis for adjudication.” (NBC Subsidiary, supra,
20 Cal.4th at p. 1208 fn. 25; see Mercury, supra, 158 Cal.App.4th at p. 84 [“our high
court enunciated a rule under which a certain class of court-filed documents is subject to
a presumption of a First Amendment right of public access”].)

5
While most federal circuit courts of appeals have also recognized a First
Amendment right of access to court documents, the United States Supreme Court has not
yet done so. (See Alvarez v. Superior Court (2007) 154 Cal.App.4th 642, 654 [“the
United States Supreme Court has not specifically extended the First Amendment right of
access beyond judicial proceedings to judicial records”]; IDT Corp., supra, 709 F.3d at
p. 1222 [same].)

10
 Thus, “different levels of protection may attach to the various records and
documents involved in [a given] case,” depending on whether access is predicated on the
First Amendment or the common law. (Stone v. University of Maryland Medical System
Corp. (4th Cir. 1988) 855 F.2d 178, 180; see United States v. McVeigh (10th Cir. 1997)
119 F.3d 806, 812 [“both the common law and First Amendment standards ultimately
involve a balancing test, and the First Amendment right of access receives more
protection than the common law right. Thus, if we find the district court orders satisfy the
First Amendment standard, as we do, we will necessarily find that the orders satisfy the
common law standard as well.”]; Mercury, supra, 158 Cal.App.4th at pp. 91, 106–107
[First Amendment applies to a “narrower class of filed documents,” while “good cause”
Civil Discovery Act6 standard applies to discovery materials not subject to sealed records
rules].)
3. The Sealed Records Rules
In response to NBC Subsidiary, the Judicial Council promulgated “the sealed
records rules,” rules 2.550, 2.551.7 (Mercury, supra, 158 Cal.App.4th at p. 84.) The
rules expressly implement the First Amendment principles espoused in NBC Subsidiary
and establish a presumption that “court records . . . be open” unless the law requires
confidentiality. (Rule 2.550(c); Advisory Com. com. to rule 2.550; In re Marriage of
Nicholas, supra, 186 Cal.App.4th at p. 1575.)
The rules “apply to records sealed or proposed to be sealed by court order”
(rule 2.550(a)(1)) and, more specifically, to “discovery materials that are used at trial or
submitted as a basis for adjudication of matters other than discovery motions or
proceedings.” (Rule 2.550(a)(3).) The rules are inapplicable to “discovery motions and
records filed or lodged in connection with discovery motions or proceedings.” (Ibid.)

6
Code of Civil Procedure section 2016.010 et seq.
7
These rules replaced former rules 243.1 and 243.2 and “do not differ materially
from the sealed records rules as originally adopted.” (Mercury, supra, 158 Cal.App.4th
at p. 68, fn. 1.)

11
Nor do they apply “to records that are required to be kept confidential by law.”
(Rule 2.550(a)(2).)
a. Sealing Records
“[S]ubject to certain exceptions . . . a court ‘record must not be filed under seal
without a court order.’ (Rule 2.551(a).) Further, a ‘court must not permit a record to be
filed under seal based solely on the agreement or stipulation of the parties.’
(Rule 2.551(a).)” (Mercury, supra, 158 Cal.App.4th at p. 84.)
“A party requesting that a record be filed under seal must file a motion or an
application with an accompanied by a memorandum and a declaration containing facts
sufficient to justify the sealing.” (Rule 2.551(b)(1).) In so doing, the moving party must
lodge with the court the record for which the sealing order is sought.8 The court holds the
record “conditionally under seal” until it rules on the motion or application.
(Rule 2.551(b)(4).)
Often a party will want to file documents obtained during discovery that an
adversary or third party has designated as confidential pursuant to a protective order.
(See rule 2.551(b)(3).) In such a case, the party seeking to file the confidential
documents must lodge them with the court in unredacted form, as well as lodge, in
unredacted form, any pleadings, motions, memoranda or other court documents
disclosing their contents. (Rules 2.551(b)(3)(A)(i), 2.551(d).) The party must also
publicly file redacted copies of the documents and other court materials.
(Rule 2.551(b)(3)(A)(ii).) In addition, the party must give written notice to whomever
produced the confidential documents that the lodged, unredacted documents “will be
placed in the public court file unless that party files a timely motion or application to seal
the records under this rule.” (Rule 2.551(b)(3)(A)(iii).) If the producing party is properly
served with notice and fails to request sealing within 10 days, or fails to request an
8
“A ‘lodged’ record is a record that is temporarily placed or deposited with the
court but not filed.” (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 311
(Providian).) “Filing a document makes it a part of the permanent court file, whereas
lodging a document makes it only temporarily a court record.” (Mao's Kitchen, Inc. v.
Mundy (2012) 209 Cal.App.4th 132, 150–151.)

12
extension of time to seek sealing, “the clerk must promptly . . . place the [unredacted
documents] in the public file.” (Rule 2.551(b)(3)(B).)
The court may order a record sealed only upon making express findings that:
“(1) There exists an overriding interest that overcomes the right of public access to the
record; [¶] (2) The overriding interest supports sealing the record; [¶] (3) A substantial
probability exists that the overriding interest will be prejudiced if the record is not sealed;
[¶] (4) The proposed sealing is narrowly tailored; and [¶] (5) No less restrictive means
exist to achieve the overriding interest.” (Rule 2.550(d).) In its order, the court must
identify the facts supporting its issuance. (Rule 2.550(e)(1)(A); Mercury, supra,
158 Cal.App.4th at p. 84.) The findings themselves, however, may be set forth in fairly
cursory terms. (See, e.g., McGuan v. Endovascular Technologies, Inc. (2010)
182 Cal.App.4th 974, 988 (McGuan).) If the trial court fails to make the required
findings, the order is deficient and cannot support sealing.9 (See Providian,
96 Cal.App.4th at pp. 301–302.)
“If the court denies the motion or application to seal, the clerk must return the
lodged record to the submitting party and must not place it in the case file unless that
party notifies the clerk in writing within 10 days after the order denying the motion or
application that the record is to be filed.” (Rule 2.551(b)(6).)10
b. Unsealing Records
The sealing rules also allow a party, members of the public, or even the court on
its own initiative, to seek the unsealing of documents under seal. (Rule 2.551(h)(2).)

9
If a party believes such findings are insufficiently detailed, as opposed to totally
nonexistent, the party must raise the asserted deficiency in the trial court to ensure
preservation of the right to challenge the sufficiency of the findings on appeal. (See
Oiye, supra, 211 Cal.App.4th at pp. 1065–1066 [challenge to sealing findings forfeited; it
is “ ‘clearly unproductive to deprive a trial court of the opportunity to correct such a
purported defect by allowing a litigant to raise the claimed error for the first time on
appeal’ ”].)
10
Here, it appears the trial court simply ordered lodged documents publicly filed,
rather than returned to the proffering party. This was without consequence, however,
since plaintiffs both proffered the documents and opposed their sealing.

13
“Notice of any motion, application, or petition to unseal must be filed and served on all
parties in the case.” (Ibid.) “The motion, application, or petition and any opposition,
reply, and supporting documents must be filed in a public redacted version and a sealed
complete version if necessary” if such documentation reveals the content of the sealed
documents. (Ibid.)
While the court must consider the same criteria pertinent to a motion to seal when
ruling on a request to unseal (rule 2.551(h)(4)), an order to unseal—as well as an order
denying sealing—does not require express factual findings by the trial court. (Providian,
supra, 96 Cal.App.4th at p. 302.) The order must specify, however, whether the records
are unsealed in whole or in part. (Rule 2.551(h)(5).)
c. Media’s Involvement
The sealed records rules expressly permit the public, which includes members of
the press, to seek the unsealing of court records. (Rule 2.551(h)(2).) Rule 2.551
“provides procedural flexibility to third parties seeking to unseal court records,
including”—in addition to noticed proceedings in the trial court—“the vehicle of
initiating an original proceeding in the reviewing court by way of a petition for writ of
mandate to compel the lower court to unseal records that were improperly sealed.”
(Savaglio, supra, 149 Cal.App.4th at pp. 601–603.) Rule 2.551(h)(2), thus, reflects the
Judicial Council’s implementation of NBC Subsidiary’s admonition that
“ ‘representatives of the press and general public “must be given an opportunity to be
heard on the question of their exclusion.” ’ ” (NBC Subsidiary, supra, 20 Cal.4th at
p. 1217, fn. 36.)
Here the media asserts, as it has in other cases, that it also has a right to participate
in proceedings to seal court records and further contends it is entitled to do so as an
intervenor. And some cases have noted in passing the media was allowed to intervene to
oppose a motion to seal. (E.g., In re Marriage of Burkle (2006) 135 Cal.App.4th 1045,
1050 (Burkle); Fagan v. Superior Court (2003) 111 Cal.App.4th 607, 611.)
However, after examining the nature and parameters of intervention, Savaglio
concluded it was not the proper procedure for media participation, even in connection

14
with the unsealing of court records. (Savaglio, supra, 149 Cal.App.4th at p. 602.) The
newspaper seeking leave to intervene in that case “mistakenly equate[d] intervention with
pursuing a motion to seal. They are not the same. The right to intervene, whether
conditional or unconditional, is the right to become a party to pending litigation. As
applied to matters of law, ‘to intervene’ means ‘ “[t]o interpose in a lawsuit so as to
become a party to it.” ’ (Estate of Ghio (1910) 157 Cal. 552, 559–560.) In civil law
intervention is ‘ “[t]he act by which a third party becomes a party in a suit pending
between other persons.” ’ (Id. at p. 560.) By allowing a member of the public to file a
motion to unseal records, rule 2.551(h) provides a mechanism for third parties to correct
overbroad or unsubstantiated sealing orders, but it does not transform that member of the
public into a party to the lawsuit.” (Savaglio, at pp. 602–603.)
We agree with Savaglio that intervention pursuant to Code of Civil Procedure
section 397 is not a means by which non-parties can participate in proceedings to seal or
unseal court records. This does not mean, however, media participation in proceedings to
seal court records is improper, even though the sealing rules provide for participation
only in proceedings to unseal court records. The courts have ample authority to allow
media participation as amicus curiae. (See, e.g., In re Marriage Cases (2008) 43 Cal.4th
757, 791 [superior courts retain “broad discretion over the conduct of pending litigation”
and have “the authority to determine the manner and extent of . . . entities’ participation
as amici curiae that would be of most assistance to the court”]; Cromer v. Superior Court
(1980) 109 Cal.App.3d 728, 731 [court “aided by briefs of amici curiae representing
interests of the news media and the public generally”]; Apple Inc. v. Samsung Electronics
Co., Ltd. (Fed. Cir. 2013) 727 F.3d 1214, 1220 (Apple Inc.) [trial court denied motion to
intervene on sealing issues, but both it and appellate court granted media leave to appear
as amici].)
Here, the trial court rejected the media’s attempt to intervene in connection with
the sealing motions pertaining to plaintiffs’ effort to file a Fifth Amended Complaint on
the ground the media had not properly applied to intervene, but granted applications to
intervene in connection with the sealing motions pertaining to defendants’ summary

15
judgment motions. Allowing the media to intervene in connection with the second round
of sealing motions was, for the reasons we have explained, improper. For the same
reason, there is no merit to the media’s claim the court erred in not allowing them to
intervene in connection with the first round of sealing motions filed in connection with
the proposed Fifth Amended Complaint. As to the initial motions, however, the media
was essentially allowed to participate as amicus curiae, and it was not entitled to any
other status.
B. Standard of Review
1. If Common Law Right of Access Applies
When the common law right of access applies, appellate courts generally employ
the abuse of discretion standard in reviewing sealing orders. (E.g., Nixon, supra,
435 U.S. at p. 599; Ameziane v. Obama (D.C. Cir. 2012) 699 F.3d 488, 494 [“we review
a district court’s decision to seal or unseal documents, or to issue or refuse to issue a
protective order, for abuse of discretion” but “review de novo any errors of law upon
which the court relied in exercising its discretion”]; Media General Operations, Inc. v.
Buchanan (4th Cir. 2005) 417 F.3d 424, 429 [“Common law rights provide the press and
the public with less access than First Amendment rights,” and decision to seal or grant
access to warrant papers “ ‘is committed to the sound discretion of the judicial officer
who issued the warrant’ ” and “reviewed for abuse of discretion.”].)
2. If the Sealed Records Rules Apply (Constitutional Right of Access)
When the constitutionally-based sealed records rules apply, the California courts
have taken varying approaches to the standard of review.
In Providian, one of the early watershed cases applying the sealed records rules,
the court reviewed an order unsealing documents, which it characterized as the
“functional equivalent” of an order denying sealing. (Providian, supra, 96 Cal.App.4th
at p. 302.) The court nevertheless addressed the standard of review both for orders
sealing and unsealing records. (Id. at pp. 299–303.) Noting that an order sealing records
is proper “only if [the trial court] expressly finds facts that establish” the five findings
required by rule 2.550(d)(1)–(5), Providian concluded the first task in reviewing an order

16
to seal is to “examine the express findings of fact required by [the] rule . . . to determine
if they are supported by substantial evidence.” (Providian, at p. 302.) Next, because the
language of the rule is permissive (the “court may order that a record be filed under seal”
if the factual requisites are met (rule 2.550(d)), the appellate court must ask “whether, in
light of and on the basis of [the] findings, the trial court abused its discretion in ordering a
record sealed.” (Providian, at p. 302.) As for an order to unseal, which differs from an
order to seal because the trial court need not make express findings, Providian concluded
the reviewing court examines the record for substantial evidence supporting the trial
court’s implied findings that the requirements for sealing are not met. (Id. at pp. 301–
303.)11
However, in People v. Jackson (2005) 128 Cal.App.4th 1009, 1019–1020
(Jackson), the court took a different approach as to orders sealing court records, pointing
out Providian actually dealt with an order unsealing records. Jackson concluded an order
sealing records is subject to “independent review” because it implicates First Amendment
rights.12 (Jackson, at p. 1020; see also United States v. Doe (2d Cir. 2009)

11
Providian thus leaves intact the trial court’s discretion with respect to
evidentiary rulings and gives due deference to the court’s credibility determinations and
resolution of conflicting evidence and inferences. (Providian, supra, 96 Cal.App.4th at
p. 301.)
12
Jackson relied on Bose Corp. v. Consumers Union of U.S., Inc. (1984) 466 U.S.
485, 499 (Bose), a defamation case, in which the Supreme Court observed “ ‘in cases
raising First Amendment issues [the court] has repeatedly held that an appellate court has
an obligation to “make an independent examination of the whole record” in order to make
sure that “the judgment does not constitute a forbidden intrusion on the field of free
expression.” ’ ” (Jackson, supra, 128 Cal.App.4th at p. 1020.) Jackson also cited In re
George T. (2004) 33 Cal.4th 620 (George T.), in which the California Supreme Court,
citing to Bose, stated independent review is not limited to “specific First Amendment
contexts.” (George T., supra, 33 Cal.4th at p. 632.) Rather, the heightened standard is
broadly applied “ ‘both to be sure that the speech in question actually falls within the
unprotected category and to confine the parameters of any unprotected category within
acceptably narrow limits in an effort to ensure that protected expression will not be
inhibited.’ ” (Id. at p. 633; see also Bose, supra, 466 U.S. at p. 508 [independent review
serves goal of assuring proper “line” between protected and unprotected speech].)
George T., thus, independently considered whether the minor’s poem constituted a

17
356 Fed.Appx. 488, 489 [distinguishing between orders sealing and unsealing records;
“where, as here, we review a district court decision denying sealing, the decision presents
no First Amendment concerns, and we will affirm unless the district court ‘based its
ruling on an erroneous view of the law or on a clearly erroneous assessment of the
evidence’ ”].) As to orders unsealing court records, the court considered Providian’s
standard of review discussion “arguably persuasive.” (Jackson, at p. 1020.)
In Oiye, the court declined to follow Jackson’s view on the standard of review
applicable to orders sealing court records and adopted the approach laid out in Providian,
stating it would “ ‘review the trial court’s decision to order the documents sealed under
the abuse of discretion standard, and any factual determinations made in connection with
that decision will be upheld if they are supported by substantial evidence.’ ” (Oiye,
supra, 211 Cal.App.4th at p. 1067.) Oiye distinguished Jackson as involving an
uncontested record. (Oiye, at p. 1067.) We do not agree Jackson employed independent
review because the record was uncontradicted. Rather, it seems apparent the court did so
because the sealed records rules are grounded on the First Amendment right of access.
We need not, however, resolve whether Providian or Jackson most accurately sets
forth the standard of review for orders sealing court records. Although the trial court’s
first order granted defendants’ motions to seal, its second order, embracing the same
discovery materials, largely denied defendants’ motions to seal, and only defendants have
appealed from that order. Accordingly, the ultimate record status of the discovery
materials at issue here is subject to review in the context of an order denying sealing. In
this context, the courts have consistently employed the approach articulated in Providian.
We therefore review de novo whether the sealed records rules apply to a given set of
discovery materials (a question of law). And when they do, we determine whether
substantial evidence supports the trial court’s express or implied findings that the
requirements for sealing are not met. (Providian, supra, 96 Cal.App.4th at pp. 301–303.)

criminal threat falling outside the protection of the First Amendment, and concluded it
did not. (George T., at p. 639.)

18
C. Applicability of the Sealed Records Rules to the Documents at Issue
The sealed records rules apply, as we have discussed, to “discovery materials that
are used at trial or submitted as a basis for adjudication of matters other than discovery
motions or proceedings.” (Rule 2.550(a)(3); NBC Subsidiary, supra, 20 Cal.4th at
p. 1208, fn. 25.) While the first category of materials, discovery materials “used at trial,”
might relatively straightforward, the second category, discovery materials “submitted as a
basis for adjudication,” is not. Defendants contend the latter category embraces only
materials relevant to the ground or grounds on which a trial court ultimately rules.
Plaintiffs maintain it includes all discovery materials submitted to a court in support of
and in opposition to a pending motion. We conclude the broader view is correct—with
the important caveat irrelevant discovery materials or materials as to which evidentiary
objections are sustained, are not “submitted as a basis for adjudication” and thus are not
within the ambit of the constitutional right of access and, concomitantly, not subject to
the sealed records rules.
1. Discovery Materials “Submitted as a Basis for Adjudication”
Defendants base their narrow reading of the phrase “submitted as a basis for
adjudication” on Mercury. The issue in that case was whether exhibits to a complaint
(obtained through discovery and subject to a protective order) were subject to the sealed
records rules and properly ordered unsealed by the trial court. (Mercury, supra,
158 Cal.App.4th at pp. 68, 103.) After the defendants successfully demurred to the
complaint solely on standing grounds, the media successfully urged that the complaint
and exhibits be unsealed. (Id. at p. 71.) The Court of Appeal reversed, concluding the
exhibits had not been submitted as a basis for adjudication and therefore were not subject
to the sealed records rules. Accordingly, the materials should have remained sealed
pending further proceedings to determine whether they were properly classified as
confidential under the protective order. (Id. at pp. 105–108.)
Mercury posited two plausible meanings of the phrase “submitted as a basis for
adjudication.” (Mercury, supra, 158 Cal.App.4th at pp. 89–90.) Under a broad
interpretation, “the right of access would apply to any discovery material filed with the

19
court, with the sole exception under rule 2.550(a)(3) of documents filed in connection
with discovery motions or proceedings. Public access would be inherent in the mere
filing of the discovery material because the placing of the document in the court file
would make it potentially something that would be used ‘as a basis for adjudication.’ ”
(Id. at p. 89, fn. omitted.) Under a narrower view, discovery material would be “subject
to public access (and therefore governed by the rules) when . . . filed with the court and
. . . used in some manner by the court ‘as a basis for adjudication’ of a material
controversy.” (Id. at pp. 89–90, italics added;13 see also Rosado v. Bridgeport Roman
Catholic Diocesan Corp. (2009) 292 Conn. 1, 38–40 (Rosado) [postulating three views:
a narrow approach that presumes access only to documents relevant to adjudication of a
litigant’s “substantive right,” a middling approach that presumes access to all documents
relevant to a court’s adjudicatory function, and a broad approach that presumes access to
all documents filed in connection with a pending matter].)
Mercury rejected the broader interpretation, stating “[i]t cannot be said that public
access to any court-filed civil discovery documents—regardless of their relevance to the
issues in the case, the circumstances of their filing, or the extent of their use in the
proceedings—promotes” the objective of public access. (Mercury, supra,
158 Cal.App.4th at pp. 96–97.) “Public access to a discovery document that is not
considered or relied on by the court in adjudicating any substantive controversy does
nothing to (1) establish the fairness of the proceedings, (2) increase public confidence in
the judicial process, (3) provide useful scrutiny of the performance of judicial functions,
or (4) improve the quality of the truthfinding process.” (Ibid.)
Thus, while recognizing “the importance of a complaint in framing the claims and
issues presented in civil litigation,” Mercury “disagree[d] that any material attached to

13
The Mercury court also noted “a third potential interpretation,” under which
discovery material would be subject to access if “the filing party intends that it be used
‘as a basis for adjudication’ of some matter other than a discovery motion.” (Mercury,
supra, 158 Cal.App.4th at p. 90, fn. 26.) The court rejected this view because “such a
standard requiring a determination of a litigant’s intent would be cumbersome and would
lead to uncertain and contradictory results.” (Ibid.)

20
it—such as the discovery material designated confidential pursuant to a duly entered
protective order here—necessarily is ‘submitted as a basis for adjudication.’ The
pleadings, including complaints, are not typically evidentiary matters that are submitted
to a jury in adjudicating a controversy.” (Mercury, supra, 158 Cal.App.4th at p. 103.)
The demurrer only addressed the threshold question of standing and “in no sense dealt
with the underlying factual claims of stock options backdating alleged in the Complaint
or concerned the exhibits appended to that pleading.” (Id. at p. 104.) The court
observed, however, “there may exist instances in which an attachment to a complaint to
which a demurrer is interposed may constitute a document submitted as a basis for
adjudication and thereby fall within the presumption of public access discussed in NBC
Subsidiary. For instance, a challenged complaint in which a contract is attached and in
which the demurrer concerns the viability of the contract would probably pose such a
case.” (Id. at p. 104, fn. 34.)
Defendants maintain Mercury sets forth a bright-line standard: confidential
discovery material merely filed (or, more accurately, lodged) with the court, but not
actually “considered or relied on” by the court in connection with the basis on which it
rules, is not “submitted as a basis for adjudication” and, thus, is not subject to the sealed
records rules. We do not agree Mercury can or should be boiled down to such a limited
view.
Mercury involved the unsealing of exhibits to a complaint, challenged at the outset
on a single, threshold procedural ground. While the complaint identified the claims to be
tried, neither its substantive allegations, nor its exhibits, had been submitted to the court
as a basis for adjudicating the merits of the case. Given these circumstances, Mercury’s
discussion of the scope of the sealed records rules is on solid ground. However, the court
was not confronted with, nor did it discuss, any other context, including discovery
materials submitted in connection with a summary judgment motion seeking judgment on
multiple, alternative grounds. Accordingly, Mercury does not answer the issue presented
here.

21
 We therefore turn to the language of the sealed records rules. Rule 2.550 applies
to “discovery materials that are used at trial or submitted as a basis for adjudication of
matters other than discovery motions or proceedings.” (Rule 2.550(a)(3), italics and
underlining added.) The plain language thus distinguishes between documents that are
“used” at trial and documents that are “submitted” as a basis for adjudication of pretrial
motions. Had the drafters intended to limit the applicability of the sealed records rules to
only discovery materials “used by the court” in its ultimate disposition of substantive
pretrial motions, they could have, and undoubtedly would have, said so. But they did not.
Further, both the words “used” and “submitted,” in context, most reasonably refer to the
parties’ conduct—that is, “used at trial” by the parties and “submitted as a basis for
adjudication” by the parties. These words do not reasonably refer to the trial court’s
conduct, deciding on which ground, of several, to base its decision. In short, defendants’
proffered construction of “discovery materials that are used at trial or submitted as a
basis for adjudication” would require us to effectively delete the word “submitted” from
the rule and insert in its place the phrase “by the court,” an exercise in redrafting we
decline to undertake. (See Providian, supra, 96 Cal.App.4th at p. 302 [“it is not our
function to rewrite the rules”].)
As we have discussed, the language of rule 2.550 derives directly from NBC
Subsidiary’s footnote 25, which states “the First Amendment does not compel public
access to discovery materials that are neither used at trial nor submitted as a basis for
adjudication.” (NBC Subsidiary, supra, 20 Cal.4th at pp. 1208–1209, fn. 25.) The
Supreme Court cited several cases in support of this proposition; none suggests the
constitutional right of access to court records is limited to discovery materials relevant to
the ground or grounds on which on a court ultimately rules. (E.g., Rushford, supra,
846 F.2d at p. 253 [“the more rigorous First Amendment standard should also apply to
documents filed in connection with a summary judgment motion in a civil case”], italics
added.)
Additionally, we must heed the mandate of article I, section 3, subdivision (b)(1),
of the California Constitution, which provides: “The people have the right of access to

22
information concerning the conduct of the people’s business, and therefore, the meetings
of public bodies and the writings of public officials and agencies shall be open to public
scrutiny.” (Ibid.) Subdivision (b)(2) expressly states, “[a] statute, court rule, or other
authority, including those in effect on the effective date of this subdivision, shall be
broadly construed if it furthers the people’s right of access, and narrowly construed if it
limits the right of access.” (Cal. Const., art. I, § 3, subd. (b)(2).) Thus, unless we discern
a clear requirement otherwise, we must interpret the sealed records rules broadly to
further the public’s right of access. (See Sierra Club v. Superior Court (2013) 57 Cal.4th
157, 166 [citing the constitutional provision and noting “our usual approach to statutory
construction is supplemented by a rule of interpretation that is specific to the issue before
us”]; Savaglio, supra, 149 Cal.App.4th at p. 600 [“Lest there be any question, Proposition
59 requires us to broadly construe a statute or court rule ‘if it furthers the people’s right
of access.’ ”].)
Finally, defendants’ narrow construction would necessarily mean sealing decisions
would be made after-the-fact—that is, after the trial court issues its substantive ruling—
because only then would the ground or grounds on which the court rules be known. This,
in turn, would mean that until the court rules, documents would remain lodged and out of
the purview of the public, and the public would necessarily have a constricted
opportunity to observe the judicial process as it unfolded.
The plain language of the sealed records rules indicates, however, the drafters did
not envision an inherently delayed resolution of sealing issues. The rules provide that
upon notice by a party seeking to use confidential discovery materials, a party opposing
disclosure must, within 10 days, file a motion or application to seal or obtain an extension
of time to do so. (Rule 2.551(b)(3)(B).) Thus, the rules provide for prompt disposition of
sealing issues in the first instance, while providing the flexibility to delay motions to seal
through the granting of an extension. Given the short timeframe that governs absent an
extension, we cannot read other language, and specifically the phrase “submitted as a
basis for adjudication,” in a way that necessarily delays the resolution of sealing issues
until after a trial court rules on the merits.

23
 Indeed, the courts have expressed concern about delayed rulings on sealing issues.
(See Mercury, supra, 158 Cal.App.4th at p. 92 [approving of Seventh Circuit case stating
“ ‘access should be immediate and contemporaneous’ ”]; Savaglio, supra,
149 Cal.App.4th at p. 601 [“any reading of rules 2.550 and 2.551 that encourages an
open-ended time frame for filing a motion to seal records long after the underlying
substantive matter has been decided would defeat the purpose of the rules”]; see also
Lugosch, supra, 435 F.3d at p. 121 [concluding district court erred when it postponed
sealing decision “until it had ruled on the underlying summary judgment motion”].)
We recognize some courts have adopted the view defendants urge—that the right
of access pertains only to discovery materials relevant to the ground or grounds on which
a court actually rules. (E.g., In re Policy Management Systems Corp. (4th Cir. 1995)
67 F.3d 296 (unpublished table case) [documents filed in connection with motion to
dismiss “did not play any role in the district court’s adjudication of the motion” and court
“did not convert the motion into a motion for summary judgment, and thus excluded the
documents from consideration”]; Verona v. U.S. Bancorp (E.D.N.C., Mar. 29, 2011, No.
7:09-CV-057-BR) 2011 WL 1252935 *1, *21 [“Although these documents were filed in
support of the motions for summary judgment and reviewed by the court, the court did
not rely upon them in reaching its decision. Accordingly, the court will not presume a
public right of access to the documents and will allow the motion to seal.”].) However,
these courts did not engage in an extensive analysis of the issue. Nor were they required
to heed our Supreme Court’s discussion in NBC Subsidiary’s footnote 25, bound by the
language of the sealed records rules, or bound by article I, section 3, subdivision (b)(1) of
the California Constitution.
We therefore reject the narrow definition of the phrase “submitted as a basis for
adjudication” defendants urge and conclude it embraces discovery materials submitted in
support of and in opposition to substantive pretrial motions, regardless of the ground on
which the trial court ultimately rules.

24
 2. Irrelevant Materials Are Not “Submitted As a Basis for Adjudication”
This does not mean the mere act of submitting discovery materials in support of or
in opposition to a pretrial motion imbues the materials with constitutional import,
triggering the sealed records rules. As every court to consider the question has observed,
the right of access applies only to discovery materials that are relevant to the matters
before the trial court. (See Mercury, supra, 158 Cal.App.4th at p. 96 [access to irrelevant
documents does not promote goals of public access]; see also United States v. Kravetz
(1st Cir. 2013) 706 F.3d 47, 59, fn. 9 [no presumptive access to “an irrelevant document,
that neither was nor should have been relied on”]; Apple, supra, 727 F.3d at pp. 1222–
1223 [“evidence which a trial court rules inadmissible—either as irrelevant or
inappropriate—seems particularly unnecessary to the public’s understanding of the
court’s judgment”]; E.E.O.C. v. Dial Corp. (N.D. Ill., Nov. 29, 2000, No. 99 C 3356)
2000 WL 33912746 *1, *1 [“public has no interest in gaining access to information that
has failed to pass the threshold tests of relevance and admissibility”].)14
3. Curbing Abusive Litigation Tactics Impacting Sealing Proceedings
We are compelled at this juncture to address the negative impact abusive litigation
practices have on sealing issues, a problem that is heightened, we acknowledge, by a
14
See also Newsday, supra, 730 F.3d at page 167 [no First Amendment
presumption of access unless “parties could reasonably have been expected to make” use
of the document]; United States v. Snyder (N.D.N.Y. 2002) 187 F.Supp.2d 52, 62–63
[“ ‘mere filing of a paper or document with the court is insufficient to render that paper a
judicial document subject to the right of public access . . . item filed must be relevant to
the performance of the judicial function’ ”]; G&C Auto Body Inc v. Geico General Ins.
Co. (N.D. Cal., Mar. 11, 2008, No. C06-04898 MJJ) 2008 WL 687372 *1, *2
[confidential financial information “ ‘irrelevant to the Court’s resolution of the legal
challenges’ ”]; Young v. Actions Semiconductor Co., Ltd. (S.D. Cal., July 27, 2007,
No. Civ. 06CV1667-L(AJB)) 2007 WL 2177028 *1, *5 [to the extent not relevant to a
motion to dismiss, “moving the court to review voluminous exhibits for purposes of
sealing is an inefficient use of judicial resources”]; Bridgeport Music, Inc. v. Smith (E.D.
Mich., Feb. 22, 2012, No. 03-cv-72211) 2012 WL 579710 *1, *6 [“72 pages of royalty
statements” for clients other than client at issue were irrelevant]; Cohen v. Gerson
Lehrman Group, Inc. (S.D.N.Y., Sept. 15, 2011, No. 09 Civ. 4352(PKC)) 2011 WL
4336679 *1, *2 [individual contact information, such as e-mail addresses, home
addresses and phone numbers, not relevant and would remain redacted].

25
broad reading of the phrase “discovery materials . . . submitted as a basis for
adjudication.” (Rule 2.550(a); see Rosado, supra, 292 Conn. at p. 48 [broad presumptive
access to documents “creates the potential for parties to harass others by attaching private
material with little to no relevance to the issues to underlying motions, thus rendering that
material public”].)
The problem is two-fold—parties who fail to exercise any discipline as to the
confidential documents with which they inundate the courts, and parties who
indiscriminately insist every document satisfies the rigorous requirements of the sealed
records rules. This case exemplifies both.
Plaintiffs submitted a veritable mountain of confidential materials in opposition to
defendants’ motions for summary judgment.15 Entire documents were submitted, when
only a page or two were identified as containing matter relevant to the issues.16 Multiple
documents were submitted to support a claim, when one would have sufficed.17 No

15
The 95-volume appendix in the appeal from the 2012 sealing order (No.
A135180) exceeds 22,000 pages. The 17-volume appendix in the appeal from the 2011
order (No. A133487) exceeds 4,375 pages. Plaintiffs’ attempt at oral argument to brush
aside the magnitude of their document dump, by claiming defendants’ appeal implicates
only two banker’s boxes of the documents, is stunningly disingenuous, as was their
assertion they were forced to over-document their summary judgment opposition in light
of defendants’ evidentiary objections, which, of course, were nonexistent at the time
plaintiffs prepared and filed their opposing papers.
16
For example, plaintiffs submitted large swaths of 16 deposition transcripts and
all 791 of defendants’ responses to requests for admission, but cited only minimal
excerpts of the transcripts and a handful of mundane responses authenticating documents.
They similarly submitted entire documents, but cited only a page or two, sometimes only
a line or two. This glut of material was inexcusable—only the face sheets and handful of
relevant pages of the deposition transcripts, discovery responses and documents should
have been submitted. (Rule 3.1116(b) [“the exhibit must contain only the relevant pages
of the transcript”]; Cal. Civ. Ctrm. Hbook. & Desktop Ref. § 17:19 (2014 ed.) [“The
relevant portions of the document are usually excerpted in the moving or opposing papers
and then attached as an exhibit.”].)
17
For example, plaintiffs submitted four documents (Sommer Exhibits 80, 10, 55,
& 230) to argue that important Goldman policies were written down and an unwritten
policy was unusual. Only two of these cited documents, Exhibits 80 and 55, were

26
mention at all was made of hundreds of the exhibits. Inundating the trial court with this
deluge of confidential materials was brute litigation overkill. (See Nazir v. United
Airlines, Inc., supra, 178 Cal.App.4th at pp. 289–290.)
While defendants’ umbrage at plaintiffs’ shock and awe document strategy was
understandable, their motions to seal were, in turn, breathtaking in scope.
The courts need not, and should not, put up with this kind of abuse. Every
protective order should include language obligating the parties to be as sparing as
possible in their use of protected materials. Paragraph 14 of the protective order in this
case specifically required the parties to “endeavor in good faith to restrict their . . .
submissions to Confidential Information . . . reasonably necessary for the Court[’s]”
deliberations. Courts should not hesitate to enforce such provisions through sanctions for
egregious violations. (Code Civ. Proc., § 128.5 [sanctions available for “bad-faith
actions or tactics that are frivolous”]; see, e.g., Wallis v. PHL Associates, Inc. (2008)
168 Cal.App.4th 882, 900 [affirming sanctions for violation of protective order]; see also
Reid v. Google, Inc. (2010) 50 Cal.4th 512, 532 [in making evidentiary objections to
summary judgment materials, litigants should focus on objections “that really count”
rather than swamping the trial court with hundreds of stock objections; “[o]therwise, they
may face informal reprimands or formal sanctions for engaging in abusive practices”].)
Motions to strike can also be of utility. The court in Mercury observed, for
example, that because the exhibits to the complaint appeared “to have been entirely
unnecessary to the pleading,” the “sealing controversy could have been avoided by either
a stipulation or an order amending the Complaint to strike the exhibits.” (Mercury,
supra, 158 Cal.App.4th at p. 104, fn. 35.) In fact, “the attached exhibits, as well as the
quotes and references to them in the body of the Complaint, could have been stricken by
the court either upon a motion by defendant or on its own motion. [Citations.]” (Ibid.;

actually policy documents. Further, the proffered policy documents were wholly
duplicative for the purpose for which they were submitted, particularly in light of a
declaration plaintiffs submitted making the precise point that unwritten policies were
unusual without referring to a single provision of even one of the purported written
policies.

27
see also Oiye, supra, 211 Cal.App.4th at p. 1070 [courts “have inherent authority to strike
scandalous and abusive statements in pleadings”].) Even where materials are not
connected with a pleading (making a statutory motion to strike under Code of Civil
Procedure sections 435 and 436 unavailable), “[t]he court’s files and records are . . .
subject to the court’s control.” (Oiye, at p. 1070; see also Nazir, supra, 178 Cal.App.4th
at p. 290 [urging courts to use their inherent power to deal with unduly burdensome
evidentiary materials and objections in connection with summary judgment motions];
Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App.4th 95, 106 [trial courts “have the
inherent power to strike proposed ‘undisputed facts’ that fail to comply with the statutory
requirements and that are formulated so as to impede rather than aid an orderly
determination whether the case presents triable material issues of fact”]; Warner v.
Warner (1955) 135 Cal.App.2d 302, 303 [affirming striking and sealing of scurrilous
affidavit].)
Thus, when a party submits a tsunami of discovery materials subject to a
protective order, the trial court should welcome a well-honed motion to strike to winnow
down the material to that which is relevant to the contentions advocated by the proffering
party. The public’s right of access to court records exists only as to such materials. It
does not extend to irrelevant materials submitted to the court out of laziness in reviewing
and editing evidentiary submissions, or worse, out of a desire to overwhelm and harass an
opponent. (See discussion and cases cited, supra, at p. 25; Roman Catholic Diocese of
Lexington v. Noble (Ky. 2002) 92 S.W.3d 724, 733 [“there is nothing to indicate that the
public and the press historically have had access to sham, immaterial, impertinent,
redundant or scandalous material that is without ‘legal effect;’” in fact, “allowing access
to such material serves a negative rather than a positive role”].)
Here, the trial court could have stricken thousands of pages of the confidential
discovery materials plaintiffs submitted but never referenced in their opposing papers (or
during the hearing on the motions). Had it done so, these irrelevant materials would have

28
effectively been removed from the court’s file, eliminating the need to address any
sealing issues as to these materials.18 (See Mercury, supra, 158 Cal.App.4th at p. 104.)
Finally, on the other side of the equation, the trial courts can, and should, view
overly inclusive sealing efforts with a jaundiced eye, and impose sanctions as
appropriate. (See Providian, supra, 96 Cal.App.4th at p. 309 [“In light of defendants’
history of defining confidential material as broadly as possible, it would not be improper
for the trial court to view their latest effort with considerable skepticism and conclude
that the scope of their proposed record sealing was neither ‘narrowly tailored’ nor the
least restrictive means to protect any interest against disclosure”]; Williams v. U.S. Bank
Nat. Assn. (E.D. Cal. 2013) 290 F.R.D. 600, 607 [threatening sanctions when “defendant
made no effort at all to seal only those portions of the substantive exhibits that it actually
wanted to protect as confidential”]; Young v. Actions Semiconductor Co., Ltd., supra,
2007 WL 2177028 at *6 [“Should either party again file a motion to seal which is
inadequate or overbroad . . . the court may impose sanctions.”].)
D. Evidentiary Requirements for Sealing
A party seeking to have records sealed under the sealed records rules must make
an evidentiary showing sufficient to support the findings required by those rules.
(Rule 2.551(b)(1).) While “conclusory or otherwise unpersuasive” declarations that
parrot statutory or rule-based requirements are generally inadequate (Providian,
96 Cal.App.4th at p. 301), the privacy interest in some documents, like medical records,
is so apparent a declaration is not required (Oiye, supra, 211 Cal.App.4th at p. 1070).
Providian concluded the following declaration statements were not sufficient to
support sealing: “ ‘Each of the documents at issue is considered proprietary and

18
As a practical matter, such “removal” from the court’s file may need to be
effectuated by an order sealing the irrelevant, confidential material, for example, when a
party anticipates challenging a court’s irrelevancy determination on appeal. This
removes the material from the public record, but physically leaves it in the court file for
future appellate review. This is not a sealing order that implicates any right of access to
court records (or, concomitantly, the sealed records rules), since there is no such right
with respect to irrelevant discovery materials. (See cases cited, supra, at p. 25.)

29
confidential by Providian. Providian has developed the information contained in the
documents at issue over a number of years—at a very significant cost and by taking very
significant risks—to allow Providian to compete effectively in the market place for credit
cards and related products.’ ” (Providian, 96 Cal.App.4th at p. 305.) “ ‘[I]n my opinion,
the documents . . . would have significant value to Providian competitors. . . . In general
these documents represent information which is not known outside the business, which
has value to both the business and competitors, which has required a substantial amount
of effort and money to develop, and which could not otherwise be acquired or duplicated
by competitors.’ ” (Ibid.) This showing, said the court, was “conclusionary and lacking
in helpful specifics.” (Ibid.)
H.B. Fuller Co. similarly criticized a declaration that stated: “ ‘I am careful to
inform H.B. Fuller employees of this obligation [not to disclose the documents at issue]
given that H.B. Fuller is a publicly traded company whose stock price and competitive
position could be affected by the public disclosure of confidential business
information.’ ” The court characterized this statement as “strikingly vague on the
relevant points.” (H.B. Fuller Co., supra, 151 Cal.App.4th at p. 896.) It was “notable not
only for its abstract and generic character—it says nothing at all about the actual contents
of the posted messages—but also its odd attenuation through hearsay. All it really
purports to establish is what [the declarant] says to employees. Strikingly absent is a
direct statement that such disclosures do, or even that they can, injure plaintiff.” (Ibid.)
“Nowhere does the declaration identify specific facts . . . that were confidential in any
legally significant sense, or were not available to the public.” (Id. at p. 895.) There was
no “simpl[e] stat[ement of] what information . . . was damaging, and how or why.” (Id.
at p. 897.) “[W]ithout a clear enumeration of specific facts alleged to be worthy of the
extraordinary measure of maintaining our records under seal, there is simply no basis to
conclude that unsealing the records will actually infringe any interest of plaintiff’s or
inflict any harm on it.” (Id. at p. 898.)
In contrast, McGuan concluded the following employee declaration sufficed:
“[T]he records [to be sealed] discuss the details of defendants’ ‘quality system

30
procedures, complaint handling procedures, device tracking procedures, process
validation procedures, and corrective action procedures.’ . . . [T]hese records ‘would
have economic value to many medical device manufacturers, including Defendants’
competitors, because they reveal the business methods and processes Defendants have
developed to comply with the requirement of very technical FDA regulations.’ . . . [T]he
‘value and utility of this information is not completely dependent on the specific design
of the device being manufactured, but could have application across a range of different
Class III medical devices . . . [and . . . these records] are maintained as confidential and
disseminated within Defendants’ organization on a limited basis.’ ” (McGuan, supra,
182 Cal.App.4th at pp. 988–989.)
In Universal City Studios, a “fact-specific declaration” by a senior vice-president
and controller of defendant would have carried the day, had the financial records at issue
(revealing the proceeds in different markets for 25 different films) not already have been
made public. “Mr. Martinez’s declaration argues disclosure will cause ‘competitive
harm’ to defendant in its negotiations with competitors and customers. Based upon
Mr. Martinez’s declaration and the nature of the financial data, we ordinarily would order
sealing of such matters.” (Universal City Studios, supra, 110 Cal.App.4th at p. 1286.)
In this case, because of plaintiffs’ bloated evidentiary submission, defendants
faced a difficult challenge in making the requisite showing for sealing and resorted to a
combination of declarations and lengthy charts identifying every document they claimed
should be sealed and the basis for doing so. This approach made sense given the
magnitude of the discovery materials at issue. However, the declarations still had to be
sufficiently detailed to demonstrate the materials were confidential and disclosure would
be prejudicial, and the defendants’ interest in maintaining confidentiality should override
the public’s constitutional right of access. (See H.B. Fuller Co., supra, 151 Cal.App.4th
at pp. 895–897; Providian, 96 Cal.App.4th at p. 308.) As we discuss in the next section,
addressing the specific discovery materials at issue, the defendants’ declarations varied in
their detail and were adequate in some regards, but not others. In addition, plaintiffs
submitted counter-declarations, which the trial court was entitled to credit with respect to

31
many of the defendants’ claims of proprietary confidentiality. (See Clark v. Superior
Court (2011) 196 Cal.App.4th 37, 46 [under substantial evidence review, “ ‘ “conflicts in
the declarations must be resolved in favor of the prevailing party” ’ ”].)
E. The 2012 Sealing Order: Discovery Materials Submitted in Opposition to the
Summary Judgment Motions
1. Overview of the Parties’ Evidentiary Showing
Goldman submitted declarations by two individuals in support of its sealing
motion—Joseph Floren, its litigation attorney, and Beverly Dunphy, a vice president in
its Global Compliance Department. Floren’s declaration included a chart, Exhibit A, of
which the first 11 pages discussed the bases for sealing by category (e.g., “The Strategies
of the Hedging Strategies Group Are Non-Public and Represent Trade Secrets of
Goldman Sachs,” “Client Information and Communications”). The remaining 143 pages,
in chart form, identified each exhibit at issue as to Goldman and referenced the claimed
bases for sealing discussed in the first 11 pages, as well as identified additional bases,
such as irrelevancy. Dunphy averred the importance of safeguarding various confidences
of the firm and its clients, and outlined procedures for keeping client information from
leaving the firm and from spreading broadly within it. She also stated the materials
“identified in Exhibit A to the Floren Declaration . . . include confidential client and firm
proprietary information and related communications, which are confidential for the
reasons detailed therein.” She supplied a supplemental declaration discussing policies
and procedures still in use at Goldman and reflected in plaintiffs’ opposition exhibits.
Merrill similarly submitted declarations by two individuals—Flora Vigo, its
litigation attorney, and Peter Melz, a Managing Director at the Merrill entities and
President and Chief Operating Officer of Merrill Lynch Professional Clearing
Corporation (Merrill Pro.). The pivotal component of Vigo’s declaration, like that of
Floren’s declaration, was a chart, Exhibit A, setting forth, for each exhibit at issue, the
claimed basis for sealing. Melz, in turn, stated Merrill considers its internal policies and
procedures to be proprietary confidential information. “Safeguarding the confidentiality”
of its client business plans and financial transactions “is critically important” and a

32
competitive advantage to the firm. The firm implements safeguards and ethical codes
meant to keep this information from leaving Merrill and even from being widely
disseminated within the firm. Melz also asserted the materials “[a]s described in detail in
the chart attached as Exhibit A to the Vigo Declaration . . . reflect competitively sensitive
information concerning [Merrill’s] business, processes, procedures, systems, plans,
strategies, clients, and transactions . . . not intended to be known to [Merrill’s]
competitors, is subject to reasonable efforts to maintain its confidentiality, and has actual
or potential competitive value.” In addition, Melz supplied a supplemental declaration
clarifying the materials he reviewed, and a second supplemental declaration related to the
confidentiality of Merrill’s policies and procedures.
Plaintiffs maintain defendants’ declarations are lacking in specifics and most of
the information defendants want sealed is already in the public domain or lacks indicia of
protectable information.19 They also submitted an opposing declaration by Michael
Manzino, a former employee of Morgan Stanley with over 20 years of Wall Street and
securities lending experience. At Morgan Stanley, Manzino worked for almost 14 years
at the securities lending desk, eventually becoming an executive director and the desk’s
second in command. His responsibilities included ensuring “an adequate supply of stock
to support short selling by Morgan Stanley clients,” and he developed “experience in all
facets of the securities lending business.” The security lending desks at Morgan Stanley,
Merrill and Goldman were direct competitors. Manzino opined some of the information
defendants sought to seal was stale and of no present economic value, including:
information concerning opportunities for profitable shorting of stocks from 2005–2006;
trading strategies employed by two former clients of defendants—Scott Arenstein and
Steven Hazan—disclosed in public sanctions orders issued by the Securities and

19
Plaintiffs also assert defendants’ litigation counsel, Floren and Vigo, lack
sufficient personal knowledge to provide testimony about the competitive value and
confidential nature of their clients’ documents. Any shortcoming in this regard, however,
was corrected by the clients’ own declarations adopting the attorneys’ assertions as their
own. (See Snider v. Snider (1962) 200 Cal.App.2d 741, 749 [“John Snider’s affidavit,
adopting the affidavit of Mathew, corroborates Mathew’s statements.”].)

33
Exchange Commission (SEC) and several exchanges; strategies related to naked short
selling as part of “conversions” and strategies for “failing trades” that were no longer
possible in light of 2008 changes to a federal securities regulation (called Regulation
SHO); and compliance policies from 2005–2006 that were outdated because of
significant changes in the regulatory environment. He also opined the identities of
employees within securities lending desks at clearing firms such as defendants were well
known and not confidential.20 In addition, plaintiffs provided the trial court with a
number of publicly available documents to show the extent to which information
contained in their opposition papers was already in the public domain.
2. The Discovery Materials at Issue
Most of the discovery materials at issue were attached as exhibits to the
declarations of Jonathan Sommer or Ellen Cirangle, two of plaintiffs’ attorneys. For ease
of reference, we refer to materials by declaration name and exhibit number. As a further
aid to the trial court and parties, we identify in bold those exhibits, or portions thereof, we
conclude should have been sealed.
a. Documents Containing Proprietary Business Information
i) Goldman’s Documents
Goldman contends the trial court should have sealed numerous documents
containing “details of its internal operations and business strategies.” On appeal,
Goldman has not discussed each of these documents and, instead, has discussed

20
The trial court overruled defendants’ objections to Manzino’s declaration,
stating they went to the weight of his statements, not their admissibility. Defendants do
not take issue with the court’s evidentiary ruling on appeal, but assert the court did not
rely on the declaration. That is not what the court said. After overruling the objections
the court stated even if it “were to sustain each objection, the Court’s ruling on these
sealing motions would be the same.” So from the trial court’s perspective the Manzino
declaration was not outcome determinative, but this is not tantamount to a statement the
court disregarded the evidence. Manzino’s declaration was hardly a model declaration,
however. While Manzino discussed many types of information, he did not specifically
reference any of the exhibits at issue. Such linkage would have been extremely helpful to
the trial court and this court, and should be done as a matter of practice in such
declarations.

34
illustrative documents, which we presume are the most egregious examples of the trial
court’s assertedly erroneous failure to seal.
Exhibit 2 to the Sommer Declaration. This is a one-page, 2005 policy on
“shortened settlement” that Floren’s Exhibit A chart states is “an example of an internal
. . . policy that should not be made public” because it would divulge “procedures
regarding early settlement of equities transactions” not known to competitors. No
specifics are provided as to the competitive value of this policy or the harm Goldman
would suffer from its disclosure. Manzino’s opposing declaration, in turn, states the 2005
policy “has no value” today, given the changes in the regulatory environment.
Accordingly, the trial court’s implicit finding that there is no “overriding interest that
overcomes the right of public access” (rule 2.550(d)(1)) as to Exhibit 2 is supported by
substantial evidence. 21 (See H.B. Fuller, supra, 151 Cal.App.4th at p. 896; Providian,
supra, 96 Cal. App. 4th at p. 301, 305; see also Hotels Nevada, LLC v. L.A. Pacific
Center, Inc. (2012) 203 Cal.App.4th 336, 348 [“ ‘we must “ ‘accept the trial court’s
resolution of disputed facts when supported by substantial evidence . . . and defer to its
determination of the credibility of the witnesses and the weight of the evidence’ ” ’ ”].)
Exhibit 55 to the Sommer Declaration. This is a 20-plus-page, 2005 policy
Floren’s Exhibit A chart states “outlines supervisory procedures for Goldman Sachs’s
securities lending group, including provisions for supervising trading and complying with
various laws and regulations, that were developed internally. . . at considerable effort and
expense and are not known to competitors.” While Goldman contends the policy is still
in use today, it identifies no particular provisions of competitive value. Manzino’s
opposing declaration indicates the policy has no continued competitive value.
21
McGuan, supra, 182 Cal.App.4th at pages 988–989, which Goldman cites in
support of sealing, is distinguishable. In that case, the trial court sealed a company policy
implementing complex FDA regulations on the basis of somewhat similar declarations,
and the Court of Appeal affirmed, deferring to the trial court’s factual findings since there
was some evidence to support them. (Id. at p. 988.) Here, the trial court resolved the
factual issues differently, on a different record, and our review is limited to determining
whether the court’s implicit findings are supported by substantial evidence. (See
discussion and cases cited, supra, at 17–19.)

35
Accordingly, if the only issue as to Exhibit 55 was whether substantial evidence
supported the denial of sealing, we would conclude sealing was properly denied.
However, in addition to contending it made a sufficient showing to seal, Goldman
also asserts Exhibit 55 was irrelevant to the summary judgment proceedings.22 Goldman
is correct on this score. As best we can discern, plaintiffs submitted the exhibit to support
their assertion certain alleged unwritten policies were unusual. However, plaintiffs’
declarant made this point without citing a single provision of the written policy. Thus,
the content of the 2005 policy—as opposed to the mere fact Goldman had a written
policy—appears to have had no relevance whatsoever to the summary judgment motions.
Indeed, on appeal, plaintiffs make no effort to explain Exhibit 55’s relevance.
Accordingly, this irrelevant exhibit could not, and did not, serve a basis of adjudication,
and the sealed records rules do not apply. It therefore should have been struck from the
record and either removed from the record or sealed for good cause.23
Exhibit 159 to the Sommer Declaration. This is a November 2006 securities
lending policy document, apparently an updated version of Exhibit 55. Unlike Exhibit
55, plaintiffs at least cited to the contents of Exhibit 159—but only to a section labeled
subdivision “(d),” which occupied part of only two pages (GS0000144-45) of the nearly
30-page document. While there was evidence supporting the trial court’s denial of
sealing of these two pages (Manzino’s opposing declaration), the remainder of the exhibit
was irrelevant and part of the excessive documentation plaintiffs needlessly dumped on

22
Goldman and Merrill both made extensive relevancy objections during the
summary judgment proceedings, and they continued to complain about the deluge of
irrelevant material during the sealing proceedings.
23
Given that the sealed records rules do not apply to irrelevant discovery
materials and no issue has been raised as to the propriety of the protective order or the
confidential classification of the document, there is no need for remand and further
consideration of sealing of any irrelevant materials by the trial court. (Compare Mercury,
supra, 158 Cal.App.4th at pp. 106–107 [on remand trial court was to consider whether
documents were properly designated confidential under the protective order].) This point
pertains to all discovery materials we conclude were irrelevant and should have been
struck or sealed for good cause.

36
the trial court. Accordingly, these irrelevant pages and portions of pages of Exhibit
159, to which plaintiffs made no reference at all, should have been struck and either
removed from the record or sealed (by redaction if appropriate) for good cause.
(See Apple, supra, 727 F.3d at pp. 1226–1228 [only 12 out of 500 pages were submitted
as basis for adjudication].)
Exhibit 80 to the Sommer Declaration. This is another 2005 policy document,
which Floren’s Exhibit A chart describes as containing proprietary information about the
use of conversion trades. While the initial pages of Floren’s Exhibit A generally suggest,
and Dunphy’s declarations obliquely suggest, aspects of Goldman’s use of conversions
remains a confidential business practice, neither declaration identifies these aspects or
correlates them with any particular document, including Exhibit 80. Manzino’s opposing
declaration, in turn, indicates otherwise, stating such trades “are a well-known trading
strategy . . . to persons in securities lending” and are known to be used “as a source of
supply” for “hard-to-borrow” securities. In addition, the public SEC sanctions orders
against Arenstein and Hazan disclose the use of conversions to create the appearance of
stock supply to facilitate shorts. There are also references to conversion trades in the
public summary judgment reporter’s transcript. Accordingly, substantial evidence
supports the trial court’s refusal to seal the portion of this exhibit relevant to the summary
judgment proceedings—a single sentence on one page (GS0012092) of the 17-page
exhibit.24

24
The deposition testimony of David Santina, cited by Goldman, does not
advance Goldman’s case. In fact, Santina testified he came across the concept of
conversions “in the marketplace” and did not know if they gave Goldman any
competitive advantage, viewing conversions as “just another source of supply.”
Santina’s testimony does not prove the concept of conversions was unknown to others in
the industry—especially given the Manzino declaration—and certainly does not show the
concept has any present value.
We also reject Goldman’s assertion the trial court was required to discount
Manzino’s view of conversion trades because he stated at deposition, in an out-of-context
fashion, that he is not an “expert” on them. Although not a self-proclaimed “expert” on
the method’s mechanics, he oversaw others making such trades, discussed those trades
these individuals, and offered descriptions of the purpose and general process of the

37
 The remainder of the exhibit, however, as Goldman points out, was wholly
irrelevant to plaintiff’s summary judgment opposition and, save for the first page, never
should have been submitted to the court. Accordingly, these irrelevant pages and
portions thereof of Exhibit 80 should have been struck and either removed from the
record or sealed (by redaction if appropriate) for good cause. (See Apple, supra,
727 F.3d at pp. 1226–1228.)
Exhibit 95 to the Sommer Declaration. This is a 2006, 52-page manual which
Floren’s Exhibit A chart describes as stating “the firm’s policy prohibiting manipulative
actions—essentially spell[ing] out how [Goldman] does all aspects of its business.”
Floren additionally asserts public disclosure of the manual “would provide a roadmap to
its competitors.” Again, the trial court did not err in determining these conclusory
assertions did not suffice to support a sealing order. (See H.B. Fuller, supra,
151 Cal.App.4th at pp. 895–897; Providian, supra, 96 Cal.App.4th at p. 305.)
However, apart from the single page with the two paragraphs to which they cited,
plaintiffs have offered no defense for submitting the other 51 pages of this exhibit. All of
the exhibit, save for the two paragraphs plaintiffs referenced, were wholly irrelevant to
their summary judgment opposition. Accordingly, these irrelevant pages and portions
thereof of Exhibit 95 should have been struck and either removed from the record
or sealed (by redaction if appropriate) for good cause. (See Apple, supra, 727 F.3d at
pp. 1226–1228.)
Exhibits 10, 20, 65, 134 and 156 to the Sommer Declaration. Goldman asserts
these exhibits were largely irrelevant and thus not submitted as a basis for adjudication.
Goldman contends Exhibits 10 and 20, in part, concern securities other than Overstock;
Exhibit 65, in part, addresses compliance matters unchallenged and not pertinent to
plaintiffs’ claims; Exhibit 134 discloses detailed securities performance data that, with
the exception of one small grouping of data, has no relation to Overstock; and Exhibit

method, claiming knowledge of the overall idea describing the trades as used for
“bringing new supply into the market for the purposes of increasing your short book.”
This deposition testimony does not undermine his declaration.

38
156 contains a list of fails to deliver having nothing to do with Overstock. In the trial
court, plaintiffs made no response to these relevancy arguments, except as to Exhibit 10.
On appeal, they have made no response at all to Goldman’s assertion the lion’s share of
this discovery material was irrelevant.
It is apparent significant portions of Exhibits 20, 65, 134 and 156 were wholly
irrelevant to plaintiffs’ summary judgment opposition. Accordingly, the irrelevant
portions of Exhibits 20 (all but the top two e-mails in the chain), 65 (the unrelated
and un-cited compliance items), 134 (non-Overstock related data, making up most
of the exhibit), and 156 (the eight-page underlying e-mail with the list of “fails to
deliver” not mentioning Overstock) should have been struck and either removed
from the record or sealed (by redaction if appropriate) for good cause. (Apple,
supra, 727 F.3d at pp. 1226–1228.) As for the remaining portions of these exhibits and
Exhibit 10, to which plaintiffs cited in their summary judgment opposition, the trial
court’s denial of sealing is supported by substantial evidence, including Manzino’s
opposing declaration.
Exhibits 15–16, 18, 63, 108, 115, 118, 122, 124, and 131 to the Sommer
Declaration. As to these documents, the trial court again did not err in concluding the
general assertions in the Floren and Dunphy declarations did not adequately specify the
confidential business practices that purportedly needed to be protected or the harm that
would result to Goldman from disclosure. (See H.B. Fuller, supra, 151 Cal.App.4th at
pp. 895-897; Providian, supra, 96 Cal.App.4th at p. 305.) Further, Exhibits 15–16 and
18 are short e-mails that appear to be routine communications disclosing no obvious
“trade secrets” or other crucial confidences of Goldman. To the extent the documents
contain lists of “fails to deliver,” such as Exhibits 108, 115, 118, 122, and 124,
Manzino’s opposing declaration stated, “[i]nformation concerning the supply of demand
for, and fails-to-deliver in hard-to-borrow stocks in the 2005–2006 time period has no
value whatsoever to a clearing firm today.” Similarly, to the extent Exhibit 63, an e-mail,
and other exhibits discussed various uses of “conversions,” Manzino’s opposition
declaration stated, after the issuance of the public SEC sanctions orders, conversions

39
were “a well-known trading strategy . . . to persons in securities lending” and known to
be used “as a source of supply” for “hard-to-borrow” securities.
However, as to Exhibits 108, 115, 118, 122, and 124, Goldman also claims large
portions of the “fails to deliver” lists, specifically those portions with no relation to
Overstock, were irrelevant. Plaintiffs made no response to Goldman’s irrelevancy claims
in the trial court. Nor have they done so on appeal—understandably, since out of these
exhibits (which, alone, totaled 218 pages) plaintiffs cited to a pittance, highlighting only a
line or two in spreadsheets spanning many dozens of pages.25 Accordingly, all of the
portions of Exhibits 108, 115, 118, 122, and 124 Goldman identified as irrelevant
should have been struck and either removed from the record or sealed (by redaction
if appropriate) for good cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.)
As for Exhibit 63, Goldman points out it contains figures in four lines, just above
the signature line, that reflect internal business metrics (such as profitability), of which
plaintiffs made no mention. Accordingly, this confidential economic information in
Exhibit 63 was also irrelevant and should have been struck and either removed
from the record or sealed (by redaction) for good cause.
Exhibit 131 is another multi-page document—a midyear review with financial
data and a strategic outlook—that plaintiffs cited for only a single data point, a dollar
amount associated with a certain type of conversion transaction by Goldman in
Overstock. As to the cited information pertaining to Overstock, Goldman failed to justify
sealing—Floren’s declaration that the document contains “internal financial information
regarding . . . operations . . . which is not available publicly” simply does not address the
particular figure or any particular harm from disclosure. (See H.B. Fuller, supra,
151 Cal.App.4th at pp. 895–897; Providian, supra, 96 Cal. App. 4th at p. 305.)
However, the remainder of Exhibit 131 was irrelevant to plaintiffs’ summary
25
This is another example of plaintiffs’ oppressive summary judgment
opposition. We cannot fathom why, after highlighting a mere line or two of these
documents (and countless others, such as Sommer Exhibits 55 and 95 (policy manuals),
and 207–222 (deposition transcripts)) as relevant, plaintiffs burdened the court with
hundreds of additional pages that were wholly irrelevant.

40
judgment opposition and should have been struck and either removed from the
record or sealed (by redaction if appropriate) for good cause. (Apple, supra,
727 F.3d at pp. 1226–1228.)
Exhibits 19, 59, 53 to the Sommer Declaration. In its opening brief, Goldman
referred to several “other” examples of documents containing confidential, internal
material it contends should have been sealed. However, it provided only record cites
without mentioning exhibit numbers, forcing this court to go through the record simply to
identify the document being discussed and making it extremely difficult to locate and
correlate arguments being made about any given document. It turns out the record pages
cited refer to Exhibits 2, 19, 53, 59, 63, 80, 95, 159, and 207 to the Sommer declaration.
Exhibits 2, 63, 80, 95, 159, and 207, however, are addressed elsewhere in Goldman’s
briefing and in this opinion. As for Exhibit 53, the trial court sealed the last two pages,
thus protecting the confidential client list about which Goldman was concerned. No
argument or analysis has been provided as to Exhibits 19 and 59, and we refuse to
examine them without any assistance by the party advocating error. (Advanced Choices,
Inc. v. Department of Health Services (2010) 182 Cal.App.4th 1661, 1671 [“ ‘ “[E]very
brief should contain a legal argument with citation of authorities on the points made. If
none is furnished on a particular point, the court may treat it as waived.” ’ ”];
rule 8.204(a)(1)(B) [a brief must “support each point by argument”].) In any case, we
note that while Goldman describes Exhibit 59 as a “complete copy” of an internal policy
or procedure manual, it is not—rather, it is a short, three-page e-mail chain. To the extent
it discusses how Goldman operates, it simply discusses compliance with public
regulations and bears no indicia of confidentiality.
Remaining Exhibits Assertedly Containing Goldman’s Propriety Information. As
for the rest of the exhibits Goldman claims contain proprietary business information and
should have been sealed, it has provided no specific discussion but simply a footnote

41
string cite of the exhibits.26 Ordinarily, we would deem any issues waived as to these
exhibits for lack of any analysis. However, Goldman has demonstrated sufficient error in
connection with the exhibits it has specifically addressed to allow an inference the trial
court employed an erroneous view of the scope of the sealed records rules. Specifically,
it appears the court concluded that if any portion of an exhibit was relevant and an
insufficient showing was made to seal that portion, then sealing would be denied as to the
entire exhibit, regardless of whether the rest of the exhibit was relevant.
The sealed records rules do not take a wholesale, document-only approach. (See
rule 2.551(h)(5) [order unsealing record must specify whether record is unsealed in whole
or in part].) Understandably, since that would facilitate the kind of blunderbuss approach
plaintiffs took here and largely vitiate the protections afforded entire documents by a
protective order. Moreover, the constitutional right of access to court records and, in
turn, the sealed records rules, apply only to discovery materials that are relevant, and to
the extent plaintiffs burdened the trial court with thousands of pages of confidential
materials that were irrelevant, the rules did not apply, and those irrelevant pages and
portions thereof should have been struck and sealed for good cause. We therefore
reverse the sealing order as to these exhibits and remand for the limited purpose of
identifying any part of them as to which evidentiary objections were sustained or which
were irrelevant to plaintiffs’ summary judgment opposition (e.g., not cited by plaintiffs).
Any such parts of these exhibits were not submitted as a basis for adjudication, and are to
be struck and either removed from the record or sealed (by redaction if appropriate) for
good cause.
The trial court, however, is not to be saddled with this task in the first instance.
Rather, on remand, Goldman and plaintiffs are to proceed as follows: (a) review each of

26
The footnote lists: Sommer Declaration exhibits 2, 4, 7, 10, 15-16, 18-21, 33,
35-36, 47, 51, 55, 59, 63, 65, 69-70, 74-76, 80, 86-87, 89, 95, 104-106, 108, 111-13, 115-
18, 122, 124, 131, 134-40, 149-50, 156, 159, 166-67, 177, 179, 181, 201, 205-07, 209-14,
216-22, 225-27, 229, 231-38, 240; Cirangle Declaration exhibits 188, 202-03; Allaire
Declaration exhibit E; Banks Declaration in Support of Defendants’ Reply and exhibits 1,
5, 6, 9-10, 12, 16, 19-20, 25, and 29.

42
the string cited exhibits in light of our discussion of exhibits containing proprietary
information; (b) reach agreement to the extent possible as to those exhibits (or pages
thereof) that were irrelevant to plaintiffs’ summary judgment opposition (e.g., not cited
by plaintiffs, or having no bearing on the point in connection with which the exhibits
were cited by plaintiffs, or as to which an objection was sustained) and which therefore
should have been struck and either removed from the record or sealed for good cause, and
(c) return to the trial court on a further motion to seal that is focused and limited
accordingly.
ii) Merrill’s Documents
Merrill contends 141 documents should have been sealed because they contain
proprietary business information. Like Goldman, Merrill has specifically identified and
addressed only some of these documents. We therefore focus on them, again assuming
they are the most egregious examples of the trial court’s allegedly erroneous failure to
seal.
The documents fall into two categories—those concerning a Merrill process called
“do not flip” (Cirangle Declaration, Exhibits 39 and 115) and those containing excerpts
of regulatory compliance manuals (Cirangle Declaration, Exhibits 21, 23, 147 and 157).
Exhibits 39 and 115 to the Cirangle Declaration. The “do not flip” process is no
secret. It was discussed publicly by Merrill’s counsel during the summary judgment
hearing on January 5, 2012, and described as a means for intentionally failing trades,
including trades by “market makers”27 in negative rate securities such as Overstock.
Further, according to plaintiffs’ expert Manzino, “[b]ecause of the large-scale changes in
Regulation SHO in 2008, any past practices of Goldman Sachs and Merrill Lynch related
to failing trades and then working to avoid the requirement that fails-to-deliver be closed

27
Federal statute defines “market maker” as “any specialist permitted to act as a
dealer, any dealer acting in the capacity of block positioner, and any dealer who, with
respect to a security, holds himself out (by entering quotations in an inter-dealer
communications system or otherwise) as being willing to buy and sell such security for
his own account on a regular or continuous basis.” (15 U.S.C. § 78c(a)(38); see generally
In re Xcelera.com Securities Litigation (1st Cir. 2005) 430 F.3d 503, 515.)

43
out within thirteen days have no economic value today.” While Melz’s supplemental
declarations assert some aspects of the process remain secret and valuable Exhibits 39, a
two-page email, and 115, a two-page form, reveal little more than what was disclosed in
open court. Additionally, Melz articulates no specific basis for sealing any alleged
confidential information not disclosed at summary judgment. (See H.B. Fuller, supra,
151 Cal.App.4th at p. 898 [emphasizing need for “specific facts” to justify sealing].) The
trial court was not required, in any event, to credit Melz, over Manzino, as to the
continuing value of aspects of the “do not flip” process. In sum, given the public in-court
statements, the lack of specificity of the Merrill declarations, and Manzino’s opposing
declaration, the trial court’s denial of sealing as to Exhibit Nos. 39 and 115 is supported
by substantial evidence. (See H.B. Fuller, at pp. 895–897; Providian, supra,
96 Cal.App.4th at p. 305.)
Exhibits 147 and 157 to the Cirangle Declaration. Exhibit 147 outlines
Regulation SHO procedures Merrill adopted in 2005 and 2006. Exhibit 157 is a heavily
redacted (even under seal) July 2006 “trading desk compliance manual.” Merrill’s
declarations again fail to explain with specificity the true competitive value in, or the
expected harm from the release of, the policies or procedures disclosed in these dated
materials. Vigo’s declaration states only that the documents are “competitively sensitive”
or “internal business and strategy” because the documents discuss “Reg SHO-related
compliance policies and procedures” and Merrill’s undefined “proprietary operational
systems.” Melz’s declaration does specifically mention Exhibits 147 and 157, but only
states these “are excerpts of Merrill Lynch’s compliance manuals that contain detailed
descriptions of Merrill Lynch’s procedures and operations and reflect Merrill Lynch’s
processes, procedures, systems, plans, and strategies for implementing and complying
with particular regulations.” Nothing specific is said about the harm from disclosure of
any particular information. Manzino, in turn, declared that primarily because of the
adoption of Regulation SHO and subsequent changes to it, “[c]ompliance policies for
securities lending group from the 2005–2006 time period also have no value to a clearing
firm today.” Given the absence of specifics in the Merrill declarations and Manzino’s

44
opposing declaration, substantial evidence supports the trial court’s denial of sealing as to
Exhibits Nos. 147 and 157. (See H.B. Fuller, supra, 151 Cal.App.4th at pp. 895–897;
Providian, supra, 96 Cal.App.4th at p. 305.)
Exhibits 21 and 23 to the Cirangle Declaration. We reach a different conclusion,
however, as to these exhibits to which the trial court sustained evidentiary objections on
hearsay grounds. As a result, these documents could not, and did not, serve as a basis for
adjudication, and the sealed records rules do not apply. The documents thus remain
subject to the provisions of the protective order, and excluded Exhibits 21 and 23
should have been sealed for good cause. (Cf. Mercury, supra, 158 Cal.App.4th at
pp. 107–108.)
Remaining Exhibits Assertedly Containing Merrill’s Propriety Information. As
for the rest of the 141 exhibits Merrill claims contain proprietary business information
and should have been sealed, it, like Goldman, provides no specific discussion and a
footnote string cite to the exhibits at issue.28 Again, while we ordinarily would not
consider claims of error as to these documents given the lack of any analysis by Merrill,
as we have discussed above in connection with the exhibits Goldman string cited, there
has been a sufficient showing the trial court employed an inaccurate analysis to warrant a
remand as to these exhibits. We therefore reverse the sealing order as to these exhibits
and remand for the limited purpose of identifying any part of these exhibits as to
which evidentiary objections were sustained or which were irrelevant to plaintiffs’
summary judgment opposition (e.g., not cited by plaintiffs). Any such parts of these
exhibits, by definition, were not submitted as a basis for adjudication, and are to be struck
or sealed (by redaction if appropriate) for good cause.

28
This footnote list is as follows: “Cirangle exhibits 5-16, 18-21, 23-30, 33, 34,
36-41, 43-45, 47, 49-55, 57-60, 65, 69-72, 74, 76, 78-80, 84, 86-94, 99, 100, 110-15, 117-
19, 129, 134, 136, 138-41, 143, 147, 151, 156-59, 161, 169, 171-74, 175-84, 187, 201,
202, and 204-213 (see 13-32 CA CC 7375); Sommer exhibit 223 (43 CA C010427-36);
Banks exhibits 2 11, 15, 22-24, and 26-28 (see 60-61 CA C014694-872); and Power
exhibits 1-3 (60 CA C014570-616).”

45
 Again, the trial court is not to be burdened with this task in the first instance.
Rather, on remand, Merrill and plaintiffs are to proceed as follows: (a) review each of
the string cited exhibits in light of our discussion above of exhibits containing proprietary
information; (b) reach agreement to the extent possible as to those exhibits (or pages
thereof) that were irrelevant to plaintiffs’ summary judgment opposition (e.g., not cited
by plaintiffs, or having no bearing on the point in connection with which the exhibits
were cited by plaintiffs, or as to which an objection was sustained) and which therefore
should have been struck and either removed from the record or sealed for good cause, and
(c) return to the trial court on a further motion to seal that is focused and limited
accordingly.
b. Materials Designated Confidential by Third Parties
Goldman and Merrill also complain the trial court failed to seal confidential
discovery materials produced by third parties. Goldman identifies six such exhibits,
Merrill, 16 exhibits. If a party wishes to file material a third party has produced during
discovery and which the third party has designated as confidential under a protective
order, the party submitting the confidential material must “[g]ive written notice to the
party that produced the records that the records and the other documents lodged . . . will
be placed in the public court file unless that party files a timely motion or application to
seal the records under this rule.” (Rule 2.551(b)(3)(A)(iii).)
Exhibits 62 and 63 to the Cirangle Declaration. These exhibits are instant
message communications produced by another broker. Plaintiffs concede they gave no
notice to the broker who produced them and on appeal request that the exhibits be sealed.
This is not tantamount to a stipulation to seal prohibited under the sealed records rules.
Rather, the rules impose, for due process purposes, a procedural threshold that must be
crossed before confidential materials produced by a third party can be made public—
timely and adequate notice. Given plaintiffs’ admission they failed to give the required
notice, Exhibits 62 and 63 remain subject to the protective order and must either be
removed from the record or sealed for good cause.

46
 Exhibits 40 and 69 of the Cirangle Declaration and Exhibits 48, 76 and 228 of the
Sommer Declaration. Plaintiffs also concede they gave no notice to the NYSE or FINRA
as to these documents, but contend no notice was necessary because the documents,
while submitted to and in the possession of these regulatory bodies, were generated by
Goldman or Merrill. Since neither Goldman nor Merrill suggest the NYSE or FINRA
could have advanced any additional arguments in support of sealing defendants’ own
materials not already made by defendants, we conclude plaintiffs’ failure to give notice is
a moot point. We discuss defendants’ other arguments in connection with these exhibits
elsewhere in this opinion.
Exhibit 169A to the Cirangle Declaration. Plaintiffs also failed to notify Deutsche
Bank when they submitted the bank’s confidential material (the deposition of a Deutsche
Bank employee) to the court. They eventually did give some form of notice just before
the hearing on the sealing motions, but this notice is not in the record on appeal. We
have only Deutsche Bank’s responsive letter, which it filed one day before the hearing,
stating it had not received a copy of plaintiffs’ summary judgment submissions and did
not consent to the unsealing of its material. While Deutsche Bank might well be faulted
for taking no further steps in the trial court to protect its information and for not
participating in this appeal, the sealed records rules provide important protections to third
parties, and on this record, we cannot say Deutsche Bank was afforded proper notice
under them.
Nonetheless, we have reviewed the three lines of deposition testimony plaintiffs
cited (out of the 14 pages of deposition transcript they submitted). These three lines do
not even relate to Deutsche Bank. Thus, there is no conceivable confidentiality interest in
that material, and no purpose would be served by reversing and remanding for adequate
notice. The rest of the exhibit, however, was irrelevant to the summary judgment
proceedings—another example of plaintiff’s abusive approach in their opposition papers.
This irrelevant material should have been struck and either removed from the
record or sealed (by redaction if appropriate) for good cause. (See Apple, supra,
727 F.3d at pp. 1226–1228.)

47
 Exhibits 5, 7, 36, 45, 104, 110, 156, 159, 174A and 201 to the Cirangle
Declaration. In its opening brief, Merrill asserted these exhibits are also third party
confidential documents as to which no notice was given, but made no specific arguments
as to the documents.29 In their respondents’ brief, plaintiffs claimed the documents were
not third-party documents, noting many have Bates numbers identifying the documents as
originating with Merrill. Merrill made no response in its reply brief. Given the lack of
specific argument and its failure to address the presence of Bates numbers, we conclude
Merrill has not demonstrated any error in the trial court’s refusal to seal these documents.
c. Documents Related to Non-Public Regulatory Investigations
Merrill contends 41 exhibits should have been sealed because they “reference non-
public regulatory matters.” These are documents Merrill produced, not documents
produced by the SEC. Merrill fails to describe or differentiate any of the 41 documents,
illuminate their origin, or explain the harm from their disclosure. (See H.B. Fuller,
supra, 151 Cal.App.4th at pp. 895–897; Providian, supra, 96 Cal.App.4th at p. 305.)
Furthermore, the regulation on which Merrill relies—governing non-public SEC
investigations—authorizes that agency to “respectfully decline” to produce materials
gathered during certain investigations. (17 C.F.R. § 240.0-4.) Merrill has not shown that
this SEC regulation even applies to the 41 documents Merrill itself produced. (See
Westinghouse Elec. Corp. v. Republic of Philippines (3d Cir. 1991) 951 F.2d 1414, 1427
[discussing regulation]; see also In re Home Unity Shareholder Litigation (E.D. Pa., May
19, 1988, No. Civ.A. 87-5609) 1988 WL 52014 [“Plaintiffs are seeking documents in the
possession of Home Unity. They are not seeking documents from the SEC of which
Home Unity is unaware.”].) Accordingly, we conclude Merrill has not demonstrated any
error in the trial court’s refusal to seal these documents.
d. Documents Containing Client Financial Information

29
It made the same argument as to Cirangle Exhibit 23, but as we have already
observed, supra, at page 45, the trial court sustained a hearsay objection to it, and this
non-evidentiary document should have been sealed for good cause.

48
 Goldman and Merrill contend numerous exhibits should have been sealed because
they contain confidential client financial information, such as trades, positions, and
account data.
The right to privacy under article I, section 1 of the California Constitution “
extends to one’s confidential financial affairs . . . . .” (Valley Bank, supra, 15 Cal.3d at
p. 657.) This right embraces confidential financial information in “whatever form it
takes, whether that form be tax returns, checks, statements, or other account
information.” (Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 481
(Fortunato).) Thus, in Valley Bank, the Supreme Court held that before a bank discloses
customer financial information in civil discovery proceedings, it “must take reasonable
steps to notify its customer of the pendency and nature of the proceedings and to afford
the customer a fair opportunity to assert his interests by objecting to disclosure, by
seeking an appropriate protective order, or by instituting other legal proceedings to limit
the scope or nature of the matters sought to be discovered.” (Valley Bank, supra,
15 Cal.3d at p. 658; see also Fortunato, supra, 114 Cal.App.4th at pp. 480–481
[protective order should have issued as to tax returns submitted to bank as part of loan
application].) A financial institution, “as custodian of . . . relevant documents,” has
“standing to assert the privacy interests of its customers in the identifying information
they” provide. (Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360,
368; see also Gov. Code, §§ 7461, subd. (b), 7465, subd. (a) [regulating state-run
investigations of customers of banks, savings associations, trust companies, industrial
loan companies, and credit unions, and recognizing the “confidential relationships
between [such] financial institutions and their customers are built on trust and must be
preserved and protected”].)
Valley Bank made only passing reference to the sealing of financial information as
a tool to protect privacy interests, and the case pre-dates NBC Subsidiary and the sealed
records rules. Thus, the question in the context of sealing is whether the state recognized
privacy interest in financial information overrides the federal constitutional right of
access to court records. This is necessarily a balancing inquiry, dependent on the facts

49
and circumstances of the particular case. (See NBC Subsidiary, supra, 20 Cal.4th at
pp. 1201, 1206; rule 2.550(d).)
Two Court of Appeal opinions have considered the sealing of financial
information under the NBC Subsidiary rubric. In Burkle, supra, 135 Cal.App.4th at page
1045, the court considered the validity of Family Code section 2024.6, which required, at
the request of either party, the sealing of any pleading in a divorce case listing
information about the financial assets and liabilities of the parties and providing the
location or identifying information about such assets and liabilities. (Burkle, at pp. 1052–
1070.) Focusing on the Legislature’s stated finding the statute was necessary to protect
parties from identify theft and other economic crimes, the court concluded the statute was
not narrowly tailored to achieve that compelling objective. (Id. at pp. 1069–1070.) The
court drew a distinction, for example, between highly sensitive identifying information,
such as account and social security numbers or asset locations, that can facilitate criminal
activity, and more general information, such as the mere existence and stated value of an
asset or liability, which does not create such a risk but which was nevertheless subject to
mandatory sealing under the statute. (Id. at pp. 1065–1066.) As to the latter sort of
information, the court concluded mandatory sealing at the request of a party was at odds
with the statute’s stated purpose and with the analysis required to support sealing under
NBC Subsidiary, and so invalidated the statute. (Id. at pp. 1066, 1070.)
In Universal City Studios, supra, 110 Cal.App.4th at page 1275, the appellate
court addressed the petitioner’s motion to seal two groups of documents in the appellate
court record, a settlement agreement (id. at p. 1283) and papers related to a motion to
dismiss (id. at p. 1284). As to the settlement agreement, the financial information in that
document had been redacted, and the defendant failed to present any evidence it would be
damaged by the disclosure of the document in that form. (Id. at pp. 1283–1284.)
Turning to the motion to dismiss papers, the defendant similarly failed to justify sealing
the lion’s share of them. (Id. at pp. 1284–1285.) As to “20 pages of financial and
accounting data” within those papers, however, the court concluded petitioner had made a
sufficient showing. (Id. at pp. 1285–1286.) These pages contained the “proceeds in

50
different markets for 25 different films” and the defendant submitted a “fact-specific”
declaration by its controller and senior vice-president that disclosure of this data would
cause “competitive harm” to the defendant in “negotiations with competitors and
customers.” (Ibid.) Even though the court “ordinarily would order sealing” given the
facts, it ultimately denied sealing because the financial data had already been loosed into
the public domain in another case. (Id. at p. 1286.)
Here, defendants made a showing of injury from the disclosure of client financial
information at least as strong as that made in Universal City. Melz, a Managing Director
of Merrill entities and President and COO of Merrill Pro, stated “safeguarding the
confidentiality of client information is critically important to Merrill Lynch, and Merrill
Lynch has several policies in place to protect” information such as “clients’ identities,
trading activity, trading or business strategies or plans, account information, policies,
procedures, practices, . . . and their confidential communications.” Merrill considers
client information to be “proprietary and confidential.” This policy is expressed in the
firm’s written Code of Ethics, confidentiality training is required for all employees, and
Merrill has procedures—such as “systematic information barriers”—so information is
shared only on a “need to know” basis. Dunphy, a Vice President of Goldman’s Global
Compliance Department, similarly stated Goldman derives a competitive advantage and
reputational benefit from its “strong commitment to confidentiality” with respect to client
identities and trade data. “Protecting the confidentiality of client information,” stated
Dunphy, “is a matter of fundamental importance” and also a matter of SEC regulations.
Numerous written policy documents implement protection of client data and breaches
would be “unthinkable.” We also observe that, unlike Universal City and Burkle, the
confidential financial information at issue here is that of third parties.
Thus, the confidential financial information in question in this case implicates
significant privacy interests. Plaintiffs, in fact, acknowledged in the protective order that
client transaction data “may be protected by rights of privacy or other confidentiality
rights” and agreed not to contact any third party disclosed in produced documents
without consent. The parties thus agreed to forego redactions “to avoid undue delay,

51
burden, and expense in document production.” Relying on this stipulation, defendants
produced “millions of pages” “in unredacted form.”
During the sealing proceedings, plaintiffs argued clients who had been sanctioned
for their trading behavior, including Arenstein and Hazan, had no remaining privacy
interest. They conceded, however, “to the extent any remaining customer information
exists in the documents Defendants seek to seal, any privacy concerns could easily be
addressed through simple redaction of any such information.” Thus, “if an email string
. . . makes mention of unrelated client confidential information, that portion of the email
could be redacted.” On appeal, plaintiffs reiterate redaction would have been the “simple
solution” and do not suggest anything would be lost in terms of the public’s
understanding of the summary judgment proceedings if information linking individuals to
their private financial data (other than that already publicly known) were redacted.
Nevertheless, they claim defendants failed to preserve the right to redact by seeking the
sealing of entire exhibits. Not so. Goldman and Merrill made sufficient offers to redact
the documents and, at the hearing on their sealing motions, made clear an “all-or-
nothing” approach “is absolutely not our position.” Thus, this is not a case like
Providian, in which the party seeking to seal documents “actually opposed redacting
when the subject was raised,” “spurned” a more nuanced approach, and led the trial court
to ignore the issue of redactions—conduct which lead the appellate court to conclude the
option to redact had been waived. (Providian, supra, 96 Cal.App.4th at p. 309.) We also
question whether waiver of redaction predicated solely on a financial institution’s
conduct could ever be appropriate where third party confidential financial information is
at issue.
With this background, we turn to the exhibits assertedly containing confidential
client financial information, and for ease of discussion, have grouped like exhibits. We
conclude the trial court should have ordered much of this confidential third party
financial information sealed—largely because it was irrelevant to plaintiffs’ summary
judgment opposition.

52
 i) Documents Not Cited and Lengthy Documents of Which Only
Scant Portions Were Cited
Exhibits 48 and 139 to the Sommer Declaration. These exhibits consist,
respectively, of a client account statement and an e-mail with an attachment. In the trial
court, defendants objected to these exhibits as uncited and irrelevant. Further, Goldman,
in Floren’s Exhibit A, asserted Exhibit 48 had no relation to Overstock. Plaintiffs, as best
we can glean from the record, made no response to these relevance issues in the trial
court, and they have made no response on appeal. Moreover, our review of the record
confirms plaintiffs made no specific mention of either exhibit in their summary judgment
opposition. Accordingly, these exhibits were irrelevant and should have been struck
and either removed from the record or sealed for good cause. (See Apple, supra,
727 F.3d at pp. 1226–1228.)
Exhibits 25 and 86 to the Cirangle Declaration. These exhibits each consist of a
cover page followed by a lengthy report containing information about the trades of one or
more clients. In their summary judgment opposition, plaintiffs cited and quoted only
from the cover pages, and did not cite to or make any mention of the contents of the
reports. The trial court correctly refused to order the cover pages sealed since they reveal
no client confidential financial information. However, the rest of pages were irrelevant
and should have been struck and either removed from the record or sealed for good
cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.)
ii) Document With No Client-Identifying Information
Exhibit 164 to the Cirangle Declaration. This exhibit is a 17-page spreadsheet
reporting “trade information” pertaining to Overstock shares. Merrill contends it contains
“client account numbers and short stock positions.” However, the spreadsheet was
discussed at the summary judgment hearing, without objection, and it is clear it does not
represent the trades of any one client. Rather, it references a particular Merrill account
that sweeps in, but does not identify, multiple Merrill clients. Accordingly, the exhibit
does not contain client identifiable confidential financial information, and the trial court
correctly refused to order it sealed.

53
 iii) Documents Concerning Publicly Known Clients
As we have observed, Scott Arenstein and Steven Hazan have been publicly
identified in connection with defendants, and their trading methods—naked short selling,
flex options, conversions—were discussed numerous times during the leave to amend
and summary judgment hearings. Even the parties’ public, redacted trial court briefing
connects these clients and their trading activities to defendants. Additionally, the SEC
and other regulatory entities discussed Arenstein’s and Hazan’s trading methods in detail
in lengthy orders sanctioning these clients for these trading practices. Manzino thus
stated in his opposing declaration “there is no economic value to Merrill Lynch or
Goldman Sachs in any emails and other communications involving [these clients] that I
reviewed.”
Exhibits 4 and 18 to the Sommer Declaration, and Exhibit 4 to the Cirangle
Declaration. Exhibit 4 to the Sommer Declaration is a one-page Goldman email chain
concerning a supposed “market maker” client of both defendants, Arenstein, and a
trading strategy already publicly associated with him. Exhibit 18 is a two-page Goldman
email chain, also discussing Arenstein and his publicly known trading strategies. Exhibit
4 to the Cirangle Declaration is a one-page Merrill email discussing Arenstein and his
interest in opening an account with Merrill. In light of the public disclosures concerning
Arenstein and the Manzino declaration, the trial court’s refusal to seal these exhibits is
amply supported. Indeed, defendants’ continued requests to seal them obdurately ignores
the realities of the state of public record.
Exhibits 8, 15 and 16 to the Sommer Declaration and Exhibit 88 to the Cirangle
Declaration. Exhibits 8, 15 and 16 also refer to Arenstein and Hazan and the rudiments
of their now-publicly known trading strategies. For the reasons we have just discussed,
the trial court’s refusal to seal these documents is supported by substantial evidence.
Exhibit 46 to the Sommer Declaration. This exhibit is an e-mail string that
references Arenstein’s Merrill Lynch account numbers, the size of a wire sent into that
account, and his net liquidity. Although much information about Arenstein is publicly
known, this financial information is not. Nor did plaintiffs cite to it. Instead, they cited

54
to other parts of the email. Accordingly, this financial information was irrelevant and
should have been ordered struck and either removed from the record or sealed (by
redaction if appropriate) for good cause. (See Apple, supra, 727 F.3d at pp. 1226–
1228.)
This exhibit additionally discloses Arenstein’s overall short position and leverage
in January 2005, which plaintiffs did mention in their opposition papers. They claim
these numbers relate to whether defendants were merely following customer instructions
on certain Overstock related trades, or acting willfully. The trade numbers, themselves,
have no demonstrable relation to Overstock trades, particularly, or to the issue of
“instruction following,” and were therefore irrelevant and should have been struck
and either removed from the record or sealed (by redaction if appropriate) for good
cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.) The leverage ratio, however,
does appear to have some colorable connection to defendants’ knowledge. That 2005
figure also reflects the already-known trading strategy of Arenstein, and the trial court
properly refused to order this information sealed.
Exhibit 8 to the Cirangle Declaration. This is a two-part document. Part two is
Merrill’s new client form for Arenstein, which divulges his opening balance, estimated
annual revenue, stock and option volumes, total combined equity, and affiliations with
other financial firms. Again, while considerable information about Arenstein is publicly
known, the items just listed are not. Nor did this information have any relevance to the
summary judgment proceedings. Accordingly, this irrelevant information should have
been struck and either removed from the record or sealed (by redaction if
appropriate) for good cause. On the other hand, Arenstein’s identity, trading strategies
and use of certain computer software were discussed at the summary judgment hearing,
where this document was explicitly referenced. Accordingly, the trial court correctly
refused to order this information sealed. As for the first part of the exhibit—emails that
identify numerous new clients and accounts—plaintiffs made no mention of it at all.
Accordingly, this part of the exhibit was also irrelevant and should have been struck

55
and either removed from the record or sealed (by redaction if appropriate) for good
cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.)
Exhibit 88 to the Cirangle Declaration. This exhibit is a transcript of a telephone
conversation between Arenstein and Merrill, wherein a Merrill employee tells Arenstein
he needs to take action to meet Regulation SHO requirements. On the whole, the
transcript simply shows Arenstein’s publicly known trading strategy in action, and the
trial court properly refused to seal this information.
Exhibit 161 to the Cirangle Declaration. This exhibit is a lengthy spreadsheet
showing trades in Overstock by Arenstein and Hazan. At the summary judgment
hearing, the salient features of the spreadsheet with respect to Hazan were discussed,
namely that he had a short position of 2,500 shares on August 2, 2005, 415,000 shares on
August 15, 2005, 515,000 shares a day later, and stayed over six figures in shares for a
year, occasionally topping a million shares. Accordingly, this can no longer be
considered confidential financial information, and the trial court correctly refused to
order it sealed. Given that such information as to Hazan was not treated as confidential,
we see no reason why the court should have treated the same information as to Arenstein
any differently, particularly given all the other publicly disclosed information about
Arenstein’s trading. Accordingly, the trial court also correctly refused to order this
information sealed.
Exhibits 59, 105, 106, 137 and 233-236 to the Sommer Declaration. These
exhibits all contain information about short sales and related “buy ins” or settlement
obligations of numerous clients, including Arenstein and Hazan. The documents mention
stock names, quantities, and prices. Some, such as Exhibits 105 and 106, concern trades
in Overstock. Many of the documents are voluminous and recount many trades.
Although the SEC sanctions orders reveal the overall scope of some clients’ short selling
practices by noting total profits gained (in the millions of dollars) and explaining the per-
share profit the clients derived (in one example, $1.40 per share), the orders do not reveal
the stocks in which the clients traded or the amount of trading in any one stock. Outside
of the sanctions orders, only one security, Overststock stock, has been publicly linked to

56
just two clients, Arenstein and Hazan. (Gullo, Goldman, Merrill E-Mails Show Naked
Shorting, Filing Says, Bloomberg (May 16, 2012), available at
http://www.bloomberg.com/news/2012-05-15/goldman-merrill-e-mails-show-naked-
shorting-filing-says.html [“fails to deliver in Overstock shares correspond to market-
makers Scott Arenstein and Steven Hazan, Overstock’s lawyers said in the filing”].)
To the extent these exhibits concern Arenstein, Hazen and Overstock, the trial
court properly refused to seal this information, given the extent of the public information
about Arenstein’s and Hazan’s trading. However, other third party identifying
information was of scant, if any, relevance to plaintiffs’ summary judgment opposition,
and the public’s understanding of the adjudicative process is not enhanced by the
disclosure of this confidential financial information. Accordingly, client identifying
information (other than as to Arenstein and Hazan) in these exhibits should have
been sealed (by redaction if appropriate) under the sealed records rules.
iv) Documents With Irrelevant Client-Identifying Information
Exhibit 140 to the Sommer Declaration. This exhibit is a lengthy spreadsheet
reporting details about numerous client trades. Plaintiffs cited to the exhibit to
demonstrate the great volume of “fails to deliver” and also to highlight certain trades.
Thus, portions of the exhibit were relevant to their summary judgment opposition.
However, the client-identifying information in the exhibit was irrelevant and should
have been struck and either removed from the record or sealed (by redaction if
appropriate) for good cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.)
Exhibit 150 to the Sommer Declaration. This exhibit lists five Goldman clients
and their short positions in Overstock. Plaintiffs cited to this exhibit, but only to show
the fees charged by Goldman. Accordingly, the client-identifying information in the
exhibit was irrelevant and should have been struck and either removed from the
record or sealed (by redaction if appropriate) for good cause. (See Apple, supra,
727 F.3d at pp. 1226–1228.)
Exhibit 166 to the Sommer Declaration. Plaintiffs cited to this exhibit, an email
chain, to show that one Goldman client, who had been sanctioned for unlawful short

57
selling, did not became a paying client. The particular identity of the client, however,
was irrelevant to plaintiffs’ point, as were the short positions listed. Accordingly, the
client-identifying information in the exhibit was irrelevant and should have been
struck and either removed from the record or sealed (by redaction if appropriate)
for good cause. (See Apple, supra, 727 F.3d at pp. 1226–1228.)
v) Other Documents Containing Client Financial Information
Defendants once again string cite to other exhibits they contend should have been
sealed, but provide no separate analysis.30 Given the significance of the privacy interest
at stake, and the fact we have concluded, as to the exhibits defendants have separately
discussed, much of the information was irrelevant to plaintiffs’ summary judgment
opposition and therefore should have been struck or sealed for good cause, we are
persuaded defendants have shown a sufficiently erroneous approach prejudicing third
parties, requiring reversal and remand for further consideration of these exhibits.
Again, the parties may not simply dump these discovery materials back into the
lap of the trial court. On remand, they are to proceed as follows: (a) review each of the
string cited exhibits in light of the our discussion above of exhibits containing third party
confidential financial information; (b) reach agreement to the extent possible as to
(1) those exhibits (or pages thereof) that were irrelevant to plaintiffs’ summary judgment
opposition (e.g., not cited by plaintiffs, or having no bearing on the point in connection
with which the exhibits were cited by plaintiffs) and which therefore should have been

30
Goldman cites to: “Sommer Declaration exhibits 4, 7-8, 15-16, 18, 20-21, 33,
46-48, 59, 70, 75-76, 105-06, 111-12, 116-17, 135, 137-40, 149-50, 166-67, 193, 207,
209-10, 214, 216, 220, 222, 227-28, 232-38, 243-44 (CA 32:C7445-44:C10677); Allaire
Declaration and exhibits B, C-1-C-5, C-8-C-12, C-18, C-19, F (CA 3:C647-9:C2061);
and those portions of the other opposition and reply papers that disclose their content.”
Merrill cites to: “Cirangle exhibits 4, 5, 7, 8, 10, 11, 13-18, 21, 23-31, 34, 36-40,
44, 45, 47, 49, 50, 53-55, 57-60, 62, 63, 65, 70-72, 74, 76, 78-80, 84, 86-94, 99, 102-04,
108, 111, 117-19, 121, 129, 134, 136, 138-41, 151, 161, 164-67, 171, 172, 174, 175-83,
187, 201, 204, 206, 208, 210, and 211; (see 13-32 CA C003083-7360); Sommer exhibit
107 (34 CA C008025-28); Banks exhibits 1, 3, 11, 15, 18, 21, and 27; (see 60-61 CA
014653-867) and Powers exhibits 1 and 2 (60 CA C014570-612).”

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struck and either removed from the record or sealed for good cause, and (2) those exhibits
(or pages thereof) that were relevant and contain confidential third party financial
information (i.e., information not already in the public domain) and as to which a sealing
determination must be made under the sealed records rules; and (c) return to the trial
court on further motions to seal that are focused and limited according.
e. Other Lengthy and Almost Entirely Irrelevant Documents
Exhibits 207–222 to the Sommer Declaration and Exhibits 192–193 to the
Cirangle Declaration. Exhibits 207–222 are excerpts of 16 deposition transcripts, and
Exhibits 192–193 are the entirety of Goldman’s responses to all of plaintiffs’ 791
requests for admission. In their summary judgment opposition, plaintiffs cited to only
snippets of the deposition testimony and a handful of perfunctory admissions. Otherwise,
plaintiffs made no reference to this 1,800-plus pages of discovery material. While
plaintiffs made a blanket request that the trial court review the “Declarations of
[numerous other declarants] . . . and Jonathan Sommer and all exhibits attached thereto
and Request for Judicial Notice and all exhibits attached thereto,” this sweeping
invitation was utterly unhelpful to the court and certainly did not demonstrate any
relevancy of the uncited pages of deposition transcripts and admissions. Nor have
plaintiffs made any attempt on appeal to explain how the uncited material was relevant to
any point they advanced in opposition to the motions for summary judgment.
Accordingly, these irrelevant pages should have been struck and either removed
from the record or sealed for good cause.31 (See Apple, supra, 727 F.3d at pp. 1226–
1228.)
F. The 2011 Sealing Order: The Sealed Allegations of the Proposed Fifth
Amended Complaint
As we observed in footnote four, supra, the sealing status of the allegations in the
proposed Fifth Amended Complaint is properly addressed in connection with the more-
comprehensive 2012 sealing order since the allegations are based on some of the
31
In fact, although the parties fail to mention it in their briefs, the trial court
sealed Sommer Exhibits 208 and 215 because they were not cited at all by plaintiffs.

59
discovery materials covered by that order. We therefore reverse the 2011 sealing order to
the extent it sealed allegations based on summary judgment materials properly ordered
not sealed by the 2012 sealing order. In other words, unless the 2012 sealing order, or
our disposition on appeal of that order and further remand proceedings, concludes the
summary judgment materials underlying the allegations are properly subject to sealing
(under either the common law good cause standard or the sealed records rules), then the
allegations should not be sealed.
As with other matters to be addressed on remand, the trial court is not to be
burdened in the first instance with the task of indentifying which allegations should no
longer be sealed. Rather, after all further proceedings on remand are concluded as to the
discovery materials addressed by the 2012 sealing order, the parties are to proceed as
follows as to the allegations of the proposed Fifth Amended Complaint: (a) review the
sealed allegations and reach agreement to the extent possible as to which allegations are
based on discovery materials either we have concluded were properly ordered not sealed
by the 2012 sealing order or materials determined on remand that should not be sealed,
and (b) present the trial court with a focused application to unseal any such allegations.
G. Inadvertent Disclosure of Plaintiffs’ Trial Court Opposition Memorandum
We lastly consider whether the inadvertent public disclosure of plaintiffs’ trial
court memorandum opposing the motions to seal the summary judgment materials has
any impact on defendants’ appeal from the 2012 order.
By way of background, on April 26, 2012, plaintiffs filed a motion in this court to
vacate the trial court’s stay of its 2012 order.32 On May 11, 2012, defendants filed
opposition, which included an unredacted copy of “Plaintiffs’ Consolidated Opposition
to Defendants’ Motion to Seal Summary Judgment Papers,” which had been lodged
conditionally under seal in the trial court. At pages 14–20, the consolidated opposition
cataloged “facts defendants improperly seek to seal.” Defendants served their opposition

32
Given the size of the record in this case, the significance of the issues, and the
discretion committed to the trial court in granting a stay, this motion was wholly without
merit.

60
to the motion to lift the stay, including the unredacted copy of plaintiffs’ consolidated
opposition memorandum, on counsel for the media intervenors.
The media immediately took notice. On May 15 and 16, 2012, articles about the
unredacted consolidated opposition memorandum appeared on the websites of Rolling
Stone, The Economist, and Bloomberg.33 Plaintiffs attached copies of these articles to
their May 16, 2012, reply in support of their motion to lift the stay.
Meanwhile, by letter dated May 15, 2012, defendants notified this court of the
error in appending the un-redacted copy of the consolidated opposition memorandum.
And on June 1, 2012, they moved for permission to file a “corrected,” redacted version of
it. We granted that motion on June 11, 2012. We also stated, however, the “propriety of”
the media’s disclosure of the unredacted opposition was “not at issue” in connection with
the pending motion to file a corrected, redacted copy, and further advised it would be “a
subject for the appeal” whether “disclosure of the contents of Exhibit No. 19 [the
unredacted consolidated opposition memorandum] renders the appeal moot as to Exhibit
No. 19 or its contents.” Finally, we ordered “any further references to the contents of the
unredacted version of Exhibit 19 shall comply with Rule 8.46(g).” (See former
rule 8.46(g) [“A record filed publicly in the reviewing court must not disclose material
contained in a record that is sealed, lodged conditionally under seal, or otherwise subject
to a pending motion to file under seal.”].)
In their appellate briefs, the parties did not address the inadvertent disclosure of
the unredacted consolidated opposition memorandum. Accordingly, we sought

33
The Economist’s Web site included a copy of the unredacted consolidated
opposition, and both The Economist and Rolling Stone articles provided a hyperlink to it.
These articles and the unredacted consolidated opposition remain available on the
Internet. Further, while attempting to locate the materials online pursuant to the citations
plaintiffs provided, the court found additional news articles about the unredacted
opposition and found another copy of it at the scribd.com document repository. In
addition, a journal article uses the consolidated opposition to draw conclusions about
Hazan and Overstock. (See Charles F. Walker, Colin D. Forbes, Sec Enforcement
Actions and Issuer Litigation in the Context of A “Short Attack” (2013) 68 Bus. Law.
687, 738.)

61
supplemental briefing on the impact of its disclosure on the pending appeals in light of
court decisions refusing to seal materials already in the public domain, including
materials inadvertently disclosed. (See Doe v. United States Swimming, Inc. (2011)
200 Cal.App.4th 1424, 1431–1432; Mercury, supra, 158 Cal.App.4th at p. 106; Jackson,
supra, 128 Cal.App.4th at p. 1014; accord, Hoechst Diafoil Co. v. Nan Ya Plastics Corp.
(4th Cir. 1999) 174 F.3d 411, 419; Kamakana v. City & County of Honolulu (9th Cir.
2006) 447 F.3d 1172, 1184.)
We conclude the inadvertent disclosure only minimally impacts our analysis, since
sealing was properly denied as to most of the documents discussed in the consolidated
opposition. The only exceptions are Sommer Exhibits 20, 53, 63 and 115.
Sommer Exhibit 20. We concluded, supra at page 39, that the trial court properly
refused to seal the top two e-mails of this multi-part exhibit. We also concluded the rest
of the exhibit was irrelevant, and thus should have been struck and sealed for good cause.
With respect to this exhibit, the consolidated opposition memorandum states it shows
“Conley and his team are exploring trades with Arenstein on August 19, 2004.” The first
two emails are the only parts of Exhibit 20 that reference Arenstein or convey that
Conley wished to speak with Arenstein about a matter. Accordingly, the inadvertent
disclosure of the consolidated opposition does not compel any further unsealing of the
exhibit. (See Mercury, supra, 158 Cal.App.4th at p. 79 [even where disclosed document
had “references to . . . exhibits and in some instances disclose[d] all or substantially all of
their substance, it [was] equally clear that significant portions of the substance of the
exhibits ha[d] not been revealed” and should not have been automatically unsealed in
full].)
Sommer Exhibit 53. As noted supra at 41, the trial court sealed the final two pages
of Exhibit 53, a chart of clients and their positions in stocks with certain rebate
characteristics. The consolidated opposition memorandum reveals one piece of client
data and one of the “total” figures on that chart. Otherwise, the opposition discloses no
further information. Accordingly, only that data, but no other data on the final two
pages of Exhibit 53, should now be unsealed as a consequence of public disclosure.

62
 Sommer Exhibits 63 and 115. The consolidated opposition memorandum only
quotes short statements from these exhibits, which we have concluded the trial court
properly refused to seal. Accordingly, the inadvertent disclosure of the opposition has no
impact on the outcome as to these two exhibits.
Exhibits to be addressed on remand. As to the exhibits that must be addressed on
remand, see discussion supra at pages 41–43, 45–46 and 58, the trial court will need to
consider the impact of the inadvertent disclosure of the consolidated opposition
memorandum. To the extent any of the information in those exhibits is now in the public
domain as a result of the inadvertent disclosure, sealing must be denied.34
IV. DISPOSITION
The August 3, 2011, sealing order challenged in appeal No. A133487 and the
March 6, 2012, sealing order challenged in appeal No. A135180 are affirmed in part and
reversed in part as specified herein, and limited remands are ordered for further
proceedings consistent with this opinion. The parties are to bear their own costs on
appeal.
_________________________
Banke, J.

We concur:

_________________________
Margulies, Acting P. J.

_________________________
Dondero, J.

34
Plaintiffs’ request for judicial notice filed on October 18, 2012, is hereby
denied.

63
Trial Judge: The Honorable John E. Munter
Trial Court: San Francisco County and City Superior Court

Theodore A. Griffinger, Jr., and Jonathan Edward Sommer and Lubin, Olson,
Niewiadomski LLP for Plaintiffs Overstock.com, Inc., et al.

Joseph Edward Floren and Morgan, Lewis & Bockius for Defendants The Goldman
Sachs Group, Inc., et al.

Matthew David Powers, Andrew J. Frackman, and Abby F. Rudzin and O’Melveny &
Myers for Defendants Merrill Lynch, Pierce Fenner & Smith, Inc.

Karl Olson and Ram, Olson, Cereghino & Kopczynski for Interveners The Economist
Newspaper et al.

64