Ji et al v. Naver Corporation et al

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United States
 District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
RANELA SUNGA, et al.,
Plaintiffs,
v.
NAVER CORPORATION, et al.,
Defendants.
Case No. 21-cv-05143-HSG
AMENDED ORDER GRANTING IN
PART AND DENYING IN PART
MOTIONS TO SEAL
Re: Dkt. Nos. 299, 302, 311, 316, 317, 328,
330, 338
Pending before the Court are the motions to seal related to the Second Amended
Complaint (“SAC”) and the parties’ briefing for the motions to dismiss. Dkt. Nos. 299, 302, 311,
316, 317, 328, 330, and 338. The Court GRANTS IN PART AND DENIES IN PART the
motions.
I. LEGAL STANDARD
Courts generally apply a “compelling reasons” standard when considering motions to seal
documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (quoting Kamakana
v. City & Cty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)). “This standard derives from the
common law right ‘to inspect and copy public records and documents, including judicial records
and documents.’” Id. (quoting Kamakana, 447 F.3d at 1178). “[A] strong presumption in favor of
access is the starting point.” Kamakana, 447 F.3d at 1178 (quotations omitted). To overcome this
strong presumption, the moving party must “articulate compelling reasons supported by specific
factual findings that outweigh the general history of access and the public policies favoring
disclosure, such as the public interest in understanding the judicial process.” Id. at 1178–79
(citations, internal quotation marks, and alterations omitted). For example, a court may order
sealing under the “compelling reasons” standard of confidential and proprietary business
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information when public disclosure of such information “could result in improper use by business
competitors.” See Hyams v. CVS Health Corp., No. 18-CV-06278-HSG, 2023 WL 2960009, at *2
(N.D. Cal. Mar. 15, 2023).
Records attached to motions that are only “tangentially related to the underlying cause of
action” must meet the lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil
Procedure. See Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1099 (9th Cir. 2016);
Kamakana, 447 F.3d at 1179–80. The “good cause” standard requires a “particularized showing”
that “specific prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates
of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002); see also Fed. R. Civ. Proc.
26(c). “Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning”
will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992)
(quotation omitted).
When a party seeks to seal a document that has been designated as confidential by another
party or non-party, the party filing the sealing motion need not satisfy the showing described
above. See Civ. L.R. 79-5(f)(1). Instead, within seven days of the motion’s filing, the designating
party must file a statement or declaration justifying the reasons for keeping the document or
information under seal. Id. 79-5(f)(3). A failure to file a statement or declaration may result in the
unsealing of the provisionally sealed material without further notice to the designating party. Id.
II. DISCUSSION
Because the parties seek to seal documents related to the operative complaint and motions
to dismiss that are more than “tangentially related to the merits of the case,” the Court applies the
“compelling reasons” standard. See Ctr. for Auto Safety, 809 F.3d at 1101.
A. Dkt. Nos. 299, 302
Plaintiffs filed two related administrative motions to consider whether another party’s
materials should be sealed. See Dkt. Nos. 299, 302.1 Each concerns the Second Amended
Complaint, Dkt. No. 326, which Plaintiffs filed in redacted form because it references materials
1 Plaintiffs’ first request, Dkt. No. 299, was replaced by its subsequent request, Dkt. No. 302. See
Dkt. No. 300.
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produced in jurisdictional discovery that were designated confidential or highly confidential under
the parties’ stipulated protective order. Dkt. No. 302 at 2–3. Defendant LY Corporation (“LY
Corp.”) filed a timely response proposing narrower redactions. Dkt. No. 307.
LY Corp. asks the Court to seal three lines from the second amended complaint. Dkt. No.
307 ¶ 3. Specifically, LY Corp. seeks to seal a reference to the percentage of net sales it receives
as part of its ongoing revenue-sharing agreement with LINE Plus, as well as the number of servers
located at a single data center and their specific purpose. Id. ¶ 4. LY Corp. argues that these
allegations contain confidential information that would give rivals an advantage to which they
would not otherwise have access, because it operates in a highly competitive and rapidly evolving
market where “even marginal informational advantages can significantly impact competitive
positioning.” Id. ¶ 5. Having reviewed the complaint, the Court agrees that disclosing this
information could reveal Defendants’ proprietary information and put them at a competitive
disadvantage. Cf. Guzik Tech. Enters., Inc. v. W. Digit. Corp., 2013 WL 6576266, at *7 (N.D.
Cal. Dec. 13, 2023) (redacting sales volume information, sales revenue information, and
associated profits). However, the Court finds that one of the proposed redactions to the complaint
is overly broad to accomplish this legitimate purpose: LINE Corp.’s redaction to Paragraph 149 of
the complaint should be limited to the actual percentage of net sales.
Accordingly, the Court DENIES the motion with respect to the current proposed redaction
regarding the percentage of net sales and DIRECTS LY Corp. to submit a renewed declaration
identifying narrower redactions consistent with the direction above within 7 days of this Order.2
The Court finds compelling reasons to GRANT motion as to the remainder of redactions
identified by LY Corp. The Court DENIES the remainder of the motion to seal addressing the
other excerpts in the complaint, as LY Corp. has not argued that this material is confidential and
2 The Court also DIRECTS LY Corp. to harmonize redactions in response to Dkt. No. 302 with
those in response to Dkt. No. 317, since those motions concern redactions to the SAC and a
redlined version of the SAC, respectively. For example, LY Corp. does not consistently ask for
redactions to ¶ 121 of the complaint. Cf. Dkt. No. 307-1 (proposing no redactions) and Dkt. No.
321 ¶ 4 (proposing redactions). The Court suspects that the inconsistency in the sealing requests is
due to the volume of material at issue. However, the Court will take any further inconsistencies
into account as it considers whether sealing is appropriate.
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subject to seal. Additionally, because Plaintiffs’ filing of Dkt. No. 302 replaced Dkt. No. 299, the
Court TERMINATES AS MOOT Dkt. No. 299.
B. Dkt. No. 317
Defendants NAVER Corporation, NAVER Cloud Corporation, and SNOW Corporation
and SNOW Inc. filed an administrative motion to consider whether another party’s materials
should be sealed. Dkt. No. 317. They ask that the Court consider sealing certain exhibits to a
declaration filed in support of their motion to dismiss, because those exhibits were designated as
confidential or highly confidential by co-Defendant LY Corporation. See Dkt. No. 317 at 2. LY
Corp. filed a timely response. Dkt. No. 321. LY Corp. asks the Court to consider sealing portions
of a redlined version of Plaintiffs’ second amended complaint and fully sealing another exhibit,
both of which were filed in support of its motion to dismiss.
As to the redlined version of the SAC, LY Corp. again seeks to seal references to the
percentage of net sales it receives as part of its ongoing revenue-sharing agreement with LINE
Plus, as well as the number of servers located at a single data center and their specific purpose.
LY Corp. argues that it would face competitive harm from disclosure of this information.
Consistent with the Court’s analysis above, the Court agrees. However, the Court again finds that
the proposed redactions to paragraphs 121 and 149 are overly broad and should be limited to the
actual percentage of net sales, and also that they are inconsistent with the proposed redactions in
response to Dkt. No. 302. See supra.
LY Corp. also asks the Court to fully seal an exhibit filed in support of its motion to
dismiss, which contains proprietary information about 31 data centers. LY Corp. asserts that
disclosure of the document would reveal the addresses, purposes, and internal code of each data
center, as well as the number of servers and operators and access control restrictions at each,
which is not publicly known. Dkt. No. 321 ¶¶ 5, 9. LY Corp. also argues that the disclosure of
this information “would create security threats to the data centers and their operators.” Id. ¶ 8.
The Court agrees that disclosing this information could reveal highly sensitive, confidential, and
proprietary business information that would result in harm to LY Corp.’s competitive standing.
And the Court is persuaded that narrower redactions could harm LY Corp. and would grant the
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public only minimal additional access.
Accordingly, the Court DENIES the motion with respect to the current proposed redaction
regarding the percentage of net sales and DIRECTS LY Corp. to submit a renewed declaration
identifying narrower redactions within consistent with the direction above 7 days of this Order.
The Court finds compelling reasons to GRANT the motion as to the remainder of redactions
identified by LY Corp. The Court DENIES the remainder of the motion to seal addressing the
other excerpts in the redlined complaint, as LY Corp. has not argued that this material is
confidential and subject to seal.
C. Dkt. Nos. 328 and 330
Plaintiffs filed two more administrative motion to consider whether another party’s
materials should be sealed. Dkt. No. 317. See Dkt. No. 328 at 2; Dkt. No. 330 at 2. The first
request concerns Plaintiffs’ opposition to NAVER’s motion to dismiss, which contained
information that LY Corp. designated as confidential during jurisdictional discovery. The second
request concerns their opposition to the LINE Defendants’ motion to dismiss. Defendant LY
Corp. filed a timely response. Dkt. Nos. 334, 335.
LY Corp. first asks the Court to seal information in Plaintiffs’ opposition to its motion to
dismiss reflecting the number of U.S. LINE Messenger users and the percent of global sticker
sales from the United States. Dkt. No. 334 ¶ 6. Disclosure of this information would cause
competitive harm, LY Corp. argues, by allowing rivals to assess the company’s current and
historic market penetration and financial performance metrics, and the effectiveness of certain
income streams. Id. Consistent with its earlier analysis, the Court agrees that disclosure of this
information could pose competitive harm to LY Corp. However, the Court finds that the proposed
redaction of the percent of global sticker sales is not narrowly tailored, and that only the numerical
value should be sealed.
LY Corp. next asks the Court to seal portions of Plaintiffs’ opposition to its motion to
dismiss and certain exhibits (in part or in full) because they discuss specific contract terms or
constitute contracts or contract negotiations that are competitively sensitive. Id. ¶ 7 (seeking to
seal Plaintiff’s Opp. at 6:9–10 and 6:19–7:3, Nye Decl. Exs. F, I, M, and T in full, and portions of
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Nye Decl. Exs. J and N). Disclosure of this information, LY Corp. argues, could allow
competitors to unfairly interfere with or undermine its current business relationships, or impact its
prospective business relationships. Id. LY Corp. also argues that the fully executed business
contracts should remain fully sealed because, even though they were executed between 2013–
2018, they contain information that would give rivals insights into proprietary business practices
and certain of their terms remain confidential. Id. Additionally, LY Corp. argues that all the
contracts “continue to have competitive value” because, for example, the contracts reflect
negotiating strategies and financial information related to pricing. Id. Having reviewed the
documents, the Court agrees there are compelling reasons to seal documents that reference the
contract terms, reflect negotiations concerning those terms, or constitute the contracts themselves.
See DeMartini v. Microsoft Corp., No. 22-cv-08991-JSC, 2023 WL 4205770, at *3 (N.D. Cal.
June 26, 2023) (sealing entire contracts, as well as excerpts of deposition testimony reflecting
contract terms).
Third, LY Corp. asks the Court to seal narrow portions of Plaintiffs’ oppositions to the
motions to dismiss, as well as an exhibit with information about 31 data centers. Dkt. No. 334
¶¶ 4, 8 (seeking redactions of NAVER Opp. 21:4, LY Corp. Opp. 8:5–6, and Nye Decl. Ex. G).
Specifically, LY Corp. seeks to redact Plaintiffs’ references in its briefing to the number of servers
located at one data center and the specific purpose of another data center. Id. Additionally, LY
Corp. asks that an exhibit be redacted in full because it contains a chart that would disclose the
address, purpose, and internal code for each data center, as well as the number of servers, number
of operators, and access control restrictions at each data center. Id. ¶ 8. Consistent with the
analysis above, the Court agrees that LY Corp. would face competitive harm from the disclosure
of this information and that the proposed redactions are sufficiently narrowly tailored.
Finally, LY Corp. asks the Court to seal three exhibits in their entirety, which each
“comprise internal business strategy presentations” that contain detailed and proprietary analysis
and prospective business proposals. Id. ¶ 9 (seeking redactions to Nye Decl. Exs. H, K, and L).
Although these exhibits reflect historical proposals, LY Corp. argues, they remain competitively
sensitive because if disclosed, rivals could use these documents to assess how it prioritizes various
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markets, allocates resources, and plans for growth. Id. And although some of the strategies
proposed in these presentations were not ultimately implemented, LY Corp. argues, their
disclosure would still pose competitive harm because they offer a “roadmap” of its contemplated
initiatives and criteria for evaluating its business strategy, which competitors could exploit to their
advantage. Id. Having reviewed the documents, the Court agrees that disclosing this information
could reveal highly sensitive and proprietary business information that would result in competitive
harm to LY Corp. See Krieger v. Atheros Commc’ns, Inc., 2011 WL 2550831, at *1 (N.D. Cal.
June 25, 2011) (sealing presentation that contained “long-term financial predictions, discussions
of business strategy, and competitive analyses”). The Court is once more persuaded that narrower
redactions could harm Defendants and would grant the public only minimal additional access.
Accordingly, the Court DENIES the motion with respect to the current proposed redaction
regarding the percentage of global sticker sales and DIRECTS LY Corp. to submit a renewed
declaration identifying narrower redactions consistent with the direction above within 7 days of
this order. The Court finds compelling reasons to GRANT the motions as to the remainder of the
redactions identified by LY Corp. The Court DENIES the remainder of the motion to seal
addressing the other excerpts in Plaintiffs’ opposition briefing, since LY Corp. has not argued that
this material is confidential and subject to seal.
D. Dkt. No. 311
Defendant LY Corporation (“LY Corp.”) asks the Court to seal limited portions of its
motion to dismiss and two declarations filed in support of that motion. Dkt. No 311 at 3.
According to LY Corp., these documents disclose the percentage of net sales it receives as part of
the ongoing revenue sharing agreement with LINE Plus, as well as revenue from the sale of
Stickers, themes, and emojis. Id.
LY Corp. argues that sealing is appropriate because disclosure of this information would
force it to suffer “specific competitive harm.” Id. First, because competitors could use
information about the precise percentage of net sales to interfere with or undermine LY Corp.’s
business relationships, or disclosure would otherwise have a negative impact on those
relationships. Id. at 4. And second, because disclosure of information about the sale of Stickers,
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themes, and emojis would allow competitors to benchmark their own performance, develop
comparative income streams, or adjust pricing and profitability models. Having reviewed the
documents, the Court is persuaded that disclosing this information could reveal Defendants’
proprietary information and put them at a competitive disadvantage. Cf. Guzik Tech. Enters., Inc.
v. W. Digit. Corp., 2013 WL 6576266, at *7 (N.D. Cal. Dec. 13, 2023) (redacting sales volume
information, sales revenue information, and associated profits). The Court agrees that many of the
proposed redactions are narrowly tailored to seal specific quantitative references to otherwise
internal data. However, the Court finds that the proposed redactions to the motion to dismiss are
overly broad to accomplish this legitimate purpose, and should be limited to the actual percentage
amount of revenue and the geographic location forming the basis for the calculation. See Dkt. No.
312 at 7:22–23; 7:28–8:1.
Accordingly, the Court DENIES the motion with respect to LINE Corp.’s motion to
dismiss. LINE Corp. is ORDERED to submit any renewed motion identifying narrower
redactions in this document within 7 days of this order. The Court finds compelling reasons to
GRANT the remainder of Dkt. No. 311.
E. Dkt. No. 316
Defendants NAVER Cloud Corporation (“NCC”) and SNOW Corporation (“SNOW
Corp.”) filed an administrative motion asking the Court to seal three exhibits in support of their
motion to dismiss. Dkt. No. 316 at 2; Dkt. No. 316-1 ¶ 6 (seeking partial redactions in one exhibit
and complete redactions in two more). NCC and SNOW Corp. seek to seal “confidential and
proprietary information concerning NCC’s and SNOW’s databases and servers,” including their
location. Dkt. No. 316 at 2. Disclosure of this information, they argue, “would cause competitive
harm to [them] by potentially giving bad actors a roadmap to locating sensitive information in its
server systems, causing harm to its customers.” Id. at 3.
Courts have granted similar requests where disclosing information about a party’s server
would risk competitive harm. See 3D Sys., Inc. v. Wynne, 2024 WL 1122377, at *2 (S.D. Cal.
Mar. 14, 2024) (sealing documents that displayed the pathway where information was stored on
servers that “could be a vehicle for improper use of confidential information and access to
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Plaintiff’s trade secrets.”); see also Dkt. No. 279 at 2. Having reviewed the documents, the Court
finds there are compelling reasons to seal them given the risk of competitive harm if NCC’s and
SNOW Corp.’s confidential and proprietary information is divulged. The Court also finds that
narrower redactions that avoid disclosing this information are either not possible or would give
minimal additional access to the public. Accordingly, the Court GRANTS the motion.
F. Dkt. No. 338
Defendant LINE Euro-Americas Corporation (“LINE E-A”) filed an administrative motion
asking the Court to seal limited portions of an exhibit filed with its reply brief in support of its
motion to dismiss. Dkt. No. 338 at 3; Dkt. No. 338-2 ¶ 3. LINE E-A seeks partial redactions of
the dollar amounts of individually negotiated discount rates with specific business partners; dollar
amounts of weekly budges and actual spend for certain media campaigns; detailed metrics for
certain media campaigns, including the number of impressions, cost of the campaigns per user,
and average weekly spend; and data reflecting the weekly percentage changes to user metrics like
daily registered users in connection with specific media campaigns. Id.
LINE-EA argues that this information, even if it concerns past media campaigns, “remains
competitively sensitive.” Dkt. No. 338 at 4. Specifically, they assert that disclosure allow
competitors to gain insights into LINE-EA’s performance metrics for specific campaigns, which
competitors could use to “benchmark their own performance, develop competing strategies, or
adjust their pricing models.” Id. The Court agrees that disclosing the information in these
documents “could reveal [LINE-EA’s] proprietary information and put them at a competitive
disadvantage.” Iron Workers Local 580 Joint Funds, v. NVIDIA Corp., No. 18-CV-07669-HSG,
2026 WL 637331, at *2 (N.D. Cal. Mar. 6, 2026). Further, the Court finds that even though the
information sought to be sealed concerns past media campaigns, the potential competitive harm
posed by its disclosure outweighs any benefit of public access under the circumstances.
Accordingly, the Court GRANTS the motion.
III. CONCLUSION
The Court GRANTS IN PART AND DENIES IN PART Dkt. Nos. 302, 311, 317, 328,
and 330, GRANTS Dkt. Nos. 316, and 338 and TERMINATES AS MOOT Dkt. No. 299.
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Documents filed under seal as to which the administrative motions are granted will remain under
seal. See Civ. L.R. 79-5(g)(1).
IT IS SO ORDERED.
Dated:
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge
3/19/2026
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