MOTION TO SEAL THE DECLARATIONS OF JIAN CHEN, EXHIBITS F AND G TO THE DECLARATION OF CHRISTIAN ANDREU-VON EUW

Moving Party: Plaintiff Hong Kong Gree Electric Appliance Sales Ltd.

Respondents: No opposition filed

POS: Moving OK

The Complaint herein alleges that between June 10 and 17, 2013, Defendants converted 28,622,320.81 from Plaintiff by signing seven checks on behalf of Plaintiff which were issued based on fabricated invoices issued to Plaintiff from Defendant MJC Supply Ltd. Plaintiff commenced this action on 6/25/13. The operative First Amended Complaint, filed on 7/19/13, asserts causes of action for:

1. Conversion
2. Conspiracy
3. Breach of Fiduciary Duty
4. Fraudulent Conveyance
5. Fraud
6. Negligent Misrepresentation
7. Constructive Fraud
8. Fraudulent Transfer (CC § 3439 et seq.)
9. Constructive Fraudulent Transfer (CC § 3439 et seq.)
10. Ultra Vires
11. Implied Covenant of Good Faith and Fair Dealing
12. Embezzlement
13. Injunctive Relief
14. Declaratory Relief

On 8/23/13, MJC America Holding Co., Inc. filed a derivative complaint on behalf of Gree USA Sales Ltd. against Dong Mingzhu and Jian Chen in case KC066270. On 8/29/13, KC066270 was consolidated with the instant matter. The operative First Amended Complaint, filed on 9/13/13, asserts a single cause of action for Breach of Fiduciary Duty.

The Case Management Conference is set for 4/30/14.

Plaintiff Hong Kong Gree Electric Appliance Sales Ltd. (“Plaintiff”) moves pursuant to California Rules of Court 2.551 to seal the declarations of Jian Chen and Christian G. Andreu-von Euw (“AvE”) in connection with Plaintiff’s memorandum of points and authorities in support of its motion to appoint a receiver.

Unless confidentiality is required by law, court records are presumed to be open to the public. (CRC 2.550(c)) Therefore, pleadings, motions, discovery documents, and other papers may not be filed under seal merely by stipulation of the parties. A prior court order must be obtained. (CRC 2.551(a); see H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 888.)

A written motion or application is required, accompanied by points and authorities and supported by declarations stating facts supporting the findings required for a sealing order. (CRC 2.551(b)(6),(d),(e).) The documents at issue must be lodged with the clerk, in a separate envelope sealed and labeled “CONDITIONALLY UNDER SEAL.” If the motion or application is denied, the clerk returns the lodged documents, unless the party who submitted the documents notifies the clerk in writing within 10 days after the denial that the documents are to be filed. If the motion or application is granted, the sealed documents remain sealed except upon order of the court. (See CRC 2.551(d),(e).)

At a minimum, a party seeking to seal documents must come forward with a specific list of facts sought to be withheld and specific reasons for withholding them. (H.B. Fuller Co. v. Doe, supra, 151 Cal.App.4th at 894.)

To grant such an order, the court must expressly find that: (1) an overriding interest exists that overcomes the right of public access to the record; (2) the overriding interest supports sealing the records; (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. (CRC 2.550(d); see McGuan v. Endovascular Technologies, Inc. (2010) 182 Cal.App.4th 974, 988.) These findings embody constitutional requirements for a request to seal court records, protecting the First Amendment right of public access to civil trials. (See NBC Subsidiary (KNBC–TV), Inc. v. Sup.Ct. (Locke) (1999) 20 Cal.4th 1178, 1217–1218; People v. Jackson (2005) 128 Cal.App.4th 1009, 1026–1027—in determining whether to seal records, courts must weigh constitutional requirements for disclosure against such factors as privacy rights.)

A sealing order must specifically state facts supporting the above findings and be narrowly tailored—i.e., the order should direct sealing of only those documents and pages that contain the material that needs to be placed under seal; all other portions of each document or page must remain in the public file. (CRC 2.550(e)(1).)

There is no right of public access to, and hence no need to seal, discovery materials exchanged between civil litigants (e.g., pretrial depositions and interrogatories). Nor is there a right of public access to discovery materials filed or lodged in court in connection with discovery motions or proceedings (e.g., privileged material lodged in opposition to motion to compel). (CRC 2.550(a)(3).) The sealed records rules’ presumption of public access applies only to court-filed discovery materials used at trial or as the basis for adjudication of matters other than discovery motions or proceedings. (CRC 2.550(a)(3); see Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 100–101.)

Plaintiff represents that the documents must be sealed under the terms of the protective order entered into in this action. Specifically, Plaintiff represents that the partial testimony of Defendants Charley and Jimmy Loh must be sealed because Defendants have designated the entire transcripts of these depositions confidential under the terms of the protective order; and that the testimony discloses detailed information about Gree USA’s financial status and Plaintiff believes that it should be designated as confidential under the terms of the protective order. (Motion, AvE Decl. ¶¶ 17- 18.)

It appears that there is an interest that overcomes the right of public access to the record, i.e., the testimony of Defendants Jimmy and Charley Loh have been designated “confidential” under the terms of the Protective Order; the overriding interest supports sealing the records; a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; the proposed sealing appears to be narrowly tailored; and that no less restrictive means exist to achieve the overriding interest. Thus, the motion is granted. Plaintiff’s memorandum of points and authorities in support of its motion to appoint receiver and the accompanying declarations of Jian Chen and Christian G. Andreu-von Euw are ordered sealed.