Prism Data Technologies, Inc. v. TomoCredit, Inc.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
PRISM DATA TECHNOLOGIES, INC.,
Plaintiff,
v.
TOMOCREDIT, INC.,
Defendant.
Case No.: 24-cv-2300-RSH-MMP
ORDER (1) DENYING MOTIONS TO
SEAL AND (2) DENYING REQUEST
TO FILE SURREPLY
[ECF Nos. 47, 49, 53, 55, 57]
Pending before the Court are: (1) motions to seal filed by the Parties in connection
with briefing on the motion by plaintiff Prism Data Technologies, Inc. (“Prism”) to enforce
a settlement agreement; and (2) a motion by defendant TomoCredit, Inc. (“Tomo”) for
leave to file a sur-reply in opposition to that same motion to enforce. As set forth below,
the Court denies the motions.
I. 	BACKGROUND
On December 10, 2024, Prism filed this lawsuit against Tomo, bringing claims for
trademark infringement and unfair competition. ECF No. 1. On February 10, 2025, Tomo
filed its answer. ECF No. 6. On April 17, 2025, Tomo filed an amended answer with
counterclaims seeking cancellation of Prism’s trademark registration and a declaration that
the mark is invalid. ECF No. 17. Prism moved to dismiss the counterclaims. ECF No. 21.
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The Parties thereafter engaged in extensive settlement discussions before U.S.
Magistrate Judge Michelle M. Pettit. On June 2, 2025, Judge Pettit advised by minute order
that “[o]n May 23, 2025, the Court held a continued Early Neutral Evaluation (ENE)
followed by the delivery of a mediator’s proposal that was accepted by all parties by the
May 30, 2025 deadline. The Parties are now in the process of finalizing their settlement.”
ECF No. 28. On July 30, 2025, Judge Pettit further advised that the Parties “have requested
a conference regarding disagreement of the settlement terms discussed at the Court’s Early
Neutral Evaluation.” ECF No. 32. Following numerous further conferences, Judge Pettit
set a scheduling order for Prism to file a motion to enforce a settlement agreement. ECF
No. 40.
On January 16, 2026, Prism filed its motion to enforce. ECF No. 46. Tomo timely
filed a response, and Prism a reply. ECF Nos. 51, 52. On February 19, 2026, Tomo filed a
motion requesting leave to file a sur-reply, attaching a copy of the proposed sur-reply brief.
ECF No. 57.
In connection with each of the four briefs, the Parties have filed motions to seal. ECF
Nos. 47, 49, 53, 55. The first of these motions to seal, filed by Prism, seeks to redact
references to or discussion of the terms of the alleged settlement agreement, on the grounds
that the “public disclosure of the terms … could result in injury to Prism by unilaterally
constituting a breach of the agreement and, potentially, orders of the Court.” ECF No. 47
at 5-6. Prism acknowledged the strong presumption in favor of access to public records,
and stated that the redacted material did not contain trade secrets. Id. at 6. Prism further
stated that “while it has no interest in breaching promises it made to the defendant and the
Court, or violating instructions expressly stated on transcripts, the documents should be
filed under seal only either: unless and until (1) the defendant in this action sufficiently
explains why and to what extent they should remain sealed; or (2) the Court determines
sua sponte that the documents subject to this Application should be filed publicly and in
full in light of the presumptive right of public access to court records.” Id. at 7.
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Tomo did not respond to Prism’s motion to seal, but filed its own motion to seal in
connection with its opposition brief to Prism’s motion to enforce. ECF No. 49. Tomo’s
motion to seal sought to redact similar material, citing the confidentiality term, and urging
that “public disclosure of the terms contained therein could result in injury to the parties
by making it impossible later to enter into a settlement agreement whose terms are
confidential.” Id. at 6. Tomo further noted that the information under seal relates to the
proceedings of early neutral evaluation conferences that, as provided Civil Local Rule
16.1(c)(1)(B), “will be informal, off the record, privileged, and confidential.” Id. Tomo
argued that “[i]t would undermine the policy of this Court with respect to the ENE
procedure if transcripts and documents exchanged pursuant to the proceedings of an ENE
were made available in a public filing.” Id.
The Parties’ subsequent motions to seal—filed by Prism in connection with its reply
brief, and by Tomo in connection with its motion for leave to file a sur-reply brief—
advanced the same rationales as those previously offered by each Party. ECF Nos. 53, 55.
II. 	MOTIONS TO SEAL
Courts have historically recognized a “general right to inspect and copy public
records and documents, including judicial records.” Nixon v. Warner Commc’ns, Inc., 435
U.S. 589, 597 & n.7 (1978). “Unless a particular court record is one ‘traditionally kept
secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City
& Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm
Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). “The presumption of access is
‘based on the need for federal courts, although independent—indeed, particularly because
they are independent—to have a measure of accountability and for the public to have
confidence in the administration of justice.’” Ctr. for Auto Safety v. Chrysler Grp., LLC,
809 F.3d 1092, 1096 (9th Cir. 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048
(2d Cir. 1995)).
To overcome this presumption of access, a party must show either “good cause” or
“compelling reasons” to seal a record, depending on the motion to which the record relates.
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Id. at 1096-97. The Ninth Circuit has made it “clear that public access to filed motions and
their 	attachments 	does 	not 	merely 	depend 	on 	whether 	the 	motion 	is 	technically
‘dispositive.’” 	Id. 	at 	1100–01 	(“[O]ur 	circuit 	looks 	past 	the 	literal
dispositive/nondispositive label.”). “Rather, public access will turn on whether the motion
is more than tangentially related to the merits of a case.” Id. If the motion is “more than
tangentially related to the merits of a case,” the movant must show “compelling reasons”
for overcoming the presumption in favor of public access. Id. at 1096-99. Otherwise, a
party need only show good cause. Id.; see, e.g., Baker v. SeaWorld Ent., Inc., No. 14-cv-
2129-MMA-AGS, 2017 WL 5029612, at *2 (S.D. Cal. Nov. 3, 2017). “[T]he ‘compelling
reasons standard applies to most judicial records.’” Ctr. for Auto Safety, 809 F.3d at 1098
(quoting Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 677–78 (9th Cir. 2010)).
Here, the Parties are in agreement that the “compelling reasons” standard applies to
Prism’s motion to enforce the settlement agreement. See ECF No. 47 at 6 (Prism’s motion
to seal); ECF No. 49 at 3 (Tomo’s motion to seal). “Under this stringent standard, a court
may seal records only when it finds ‘a compelling reason and articulate[s] the factual basis
for its ruling, without relying on hypothesis or conjecture.’” Ctr. for Auto Safety, 809 F.3d
at 1096-97 (alteration in original) (quoting Kamakana, 447 F.3d at 1179). “The mere fact
that the production of records may lead to a litigant’s embarrassment, incrimination, or
exposure to further litigation will not, without more, compel the court to seal its
records.” Kamakana, 447 F.3d at 1180 (citing Foltz, 331 F.3d at 1136). Once a party
articulates their compelling reasons, “[t]he court must then ‘conscientiously balance[ ] the
competing interests of the public and the party who seeks to keep certain judicial records
secret.’” Ctr. for Auto Safety, 809 F.3d at 1097 (alteration in original) (quoting Kamakana,
447 F.3d at 1179). “What constitutes a ‘compelling reason’ is ‘best left to the sound
discretion of the trial court.’” Id. (quoting Nixon, 435 U.S. at 599).
“Trial courts have authority . . . to protect confidential settlement agreements.”
United Tactical Sys., LLC v. Real Action Paintball, Inc., No. 14-CV-04050-MEJ, 2015 WL
1534003, at *3 (N.D. Cal. Apr. 2, 2015). But “[p]roffering only the fact that the parties
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agreed to keep the settlement agreement confidential is an insufficient basis for the Court
to seal a court record.” Gagliolo v. Kaweah Manor, Inc., Case No. 1:20-cv-01719-NONE-
SAB, 2021 WL 1549687, at *5 (E.D. Cal. Apr. 20, 2021); see also Ambrosino v. Home
Depot U.S.A., Inc., Civil No. 11cv1319 L(MDD), 2014 WL 931780, at *2 (S.D. Cal. Mar.
10, 2014) (“[T]he parties contend that the agreement should be filed under seal because
they agree that it should be. This is woefully insufficient to meet the parties’ burden.”)
Here, neither Party wishes to run afoul of a confidentiality term contained in a
settlement agreement, or a local rule governing confidentiality of early neutral evaluation
conferences. The Court acknowledges the caution undertaken by the Parties in this regard.
However, neither Party has presented compelling reasons to seal the material at issue here.
Neither Party identifies any harm or risk of harm—of any kind, even hypothetical or
conjectural—that would result from the Court’s denial of the motion. The Parties have not
overcome the strong presumption in favor of public access to judicial records. The motions
to seal are therefore denied.
III. 	MOTION FOR LEAVE TO FILE SUR-REPLY
Tomo moves to file a two-page sur-reply, in order “to respond to a single assertion
made by Plaintiff in its Reply.” ECF No. 57 at 1. Tomo’s proposed sur-reply does not
contain any additional factual material or legal authority, but instead offers further
argument as to how a certain provision, contained in a draft of the settlement agreement,
should be characterized. In short, Tomo simply seeks to have the last word. This is not a
valid basis for a sur-reply, and the Court is able to understand the issues in dispute without
further clarification from Tomo’s sur-reply. Tomo’s request is therefore denied.
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IV. 	CONCLUSION
For the foregoing reasons, the Parties’ motions to seal [ECF Nos. 47, 49, 53, 55] are
DENIED. Within five (5) days of this order, the Parties shall file on the docket unredacted
versions of their briefing and exhibits.
Tomo’s motion to file a sur-reply brief [ECF No. 57] is DENIED. No further
briefing on the motion to enforce will be accepted unless ordered by the Court.
IT IS SO ORDERED.
Dated: February 20, 2026
____________________
Hon. Robert S. Huie
United States District Judge
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