Rako v. VMware LLC (2), No. 25-cv-05142-SVK (Feb. 4, 2026)

Case details
Full caption
Sebastian Rako v. VMware LLC (2)
Country
United States
Jurisdiction
Federal
Decided
Feb. 4, 2026
Disposition
Motion Granted
SEBASTIAN RAKO, Plaintiff, v. VMWARE LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 296452Only the Westlaw citation is currently available.United States District Court, N.D. California.SEBASTIAN RAKO, Plaintiff,v.VMWARE LLC, et al., Defendants.Case No. 25-cv-05142-SVK|Filed 02/04/2026ORDER ON DEFENDANTS' MOTION TOSEAL PORTIONS OF FIRST AMENDEDCOMPLAINT AND RELATED MOTIONSSUSAN VAN KEULEN United States Magistrate Judge*1 On November 25, 2025, the Court granted withleave to amend Defendants' motion to dismiss the originalComplaint. Dkt. 66. Plaintiff Sebastian Rako thereaftertimely filed a First Amended Complaint. Dkt. 67 (“FAC”).1Now before the Court is the joint administrative motionof Defendants VMware LLC (“VMware”) and KaiserAluminum Corporation (“Kaiser”) to seal certain portions ofand attachments to the FAC (Dkt. 68 - “Motion to Seal”),which Plaintiff opposes (Dkt. 74). The Motion to Seal hasspawned several other motions: Defendants' joint motion forleave to file a reply in support of the Motion to Seal (Dkt. 76– “Motion to File Reply”), which Plaintiff opposes (Dkt. 79);Plaintiff's motion to strike Defendants' Motion to Seal andMotion to File Reply (Dkt. 83); and a motion by Plaintiff thatis styled as a motion to compel Defendants to produce email,data, and metadata concerning an email cited in connectionwith Defendants' Motion to File Reply (Dkt. 82). The Courtfinds that all of these motions are suitable for determinationwithout further briefing and without a hearing. See Civ. L.R.7-1(b).I. DEFENDANTS' MOTION TO SEALIn the Motion to Seal, Defendants contend that Plaintiff, aformer sales employee of VMware who was involved invarious activities in connection with a license from VMwareto its customer Kaiser, includes allegations, exhibits, andappendices in the FAC that are or include confidentialbusiness records of VMware and/or Kaiser. Dkt. 68.2Courts recognize a “general right to inspect and copypublic records and documents, including judicial records anddocuments.” Kamakana v. City & Cnty. Of Honolulu, 447F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. WarnerCommuns., Inc., 435 U.S. 589, 597 & n.7 (1978)). A request toseal court records therefore starts with a “strong presumptionin favor of access.” Kamakana, 447 F.3d at 1178 (quotingFoltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122,1135 (9th Cir. 2003)). The standard for overcoming thepresumption of public access to court records depends onthe purpose for which the records are filed with the court. Aparty seeking to seal court records relating to motions thatare “more than tangentially related to the underlying cause ofaction” must demonstrate “compelling reasons” that supportsecrecy. Ctr. For Auto Safety v. Chrysler Grp., 809 F.3d 1092,1099 (9th Cir. 2016). For records attached to motions that re“not related, or only tangentially related, to the merits of thecase,” the lower “good cause” standard of Rule 26(c) applies.Id.; see also Kamakana, 447 F.3d at 1179. Civil Local Rule79-5 sets forth this District's procedures for motions to seal.Here, the “compelling reasons” standard applies because theinformation Defendants seek to seal was submitted to theCourt in connection with the FAC, rather than a filing thatis not related or only tangentially related to the merits ofthe case. See In re NVIDIA Corp. Derivative Litig., No.06–cv–06110–SBA, 2008 WL 1859067, at *3 (N.D.Cal.Apr. 23, 2008) (applying “compelling reasons” standard torequest to seal complaint). Defendants acknowledge andaddress the compelling reasons standard. Dkt. 68 at 4-6. Theinformation Defendants seek to seal includes informationabout VMware's products, revenue, and data analyses, as wellas information about Kaiser's servers, data usage, productneeds, and license payments. See Dkt. 68, 68-1, 69. It appearsthat Plaintiff had access to this information by virtue ofhis employment with VMware. Declarations submitted byVMware employee Michael Brewster and Kaiser employeeTammy Mills establish that certain of the information soughtto be sealed is normally kept confidential by Defendantsand that revealing such information publicly poses a risk ofcompetitive harm to Defendants. Dkt. 68-1 (Brewster Decl.);Dkt. 69 (Mills Decl.).*2 Plaintiff disputes that Defendants have showncompelling reasons to seal the relevant portions of andattachments to the FAC, arguing that Defendants rely on“hypothesis and conjecture.” Dkt. 74 at 4, 6-11, 19-20.Plaintiff also argues that some of the information sought
SEBASTIAN RAKO, Plaintiff, v. VMWARE LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2to be sealed has been public for months because it wascontained in the original Complaint, Plaintiff's opposition tothe motion to dismiss the original Complaint, the Court'sNovember 25, 2025 order on the motion to dismiss, and/orelsewhere in the FAC, and yet Defendants waited monthsbefore raising the sealing issue. Id. at 4-5. Plaintiff furtherargues that Defendants' motion improperly cites Federal Ruleof Civil Procedure 12 and fails to comply with the proceduralrequirements of Civil Local Rule 79-5. Id. at 1, 3.The Court begins by addressing whether the Motion toSeal is procedurally proper. Plaintiff is right that Defendantsincorrectly cite Federal Rule of Civil Procedure 12 in theirnotice of the Motion to Seal. See Dkt. 68 at 1. Nevertheless,the instant Motion to Seal arose in the unusual situation whereDefendants seek to seal their own information contained indocuments filed by Plaintiff but for which Plaintiff had notfiled an administrative motion under Civil Local Rule 79-5(f)(3) to consider whether Defendants' information should besealed. Despite the incorrect reference to Rule 12, the Motionto Seal also contains several references to Civil Local Rule79-5, which is the relevant rule regarding sealing motions. Seeid. at 2, 7. Moreover, the Court's Order to Plaintiff to Respondto the Motion to Seal was clear that the Court would treat theMotion to Seal as having been filed under Civil Local Rule79-5(f)(3). Dkt. 70. In addition, and importantly, Plaintiff'sopposition to the Motion to Seal recognizes the applicabilityof Civil Local Rule 79-5 and addresses the relevant issues.See Dkt. 74 at 1, 3-11.The Court notes that Plaintiff also ran afoul of proceduralrequirements by filing an overly-long opposition to theMotion to Seal without prior leave of court. The Court'sOrder to Respond stated that pursuant to Civil Local Rule79-5(f)(4), Plaintiff's response to the Motion to Seal could notexceed five pages absent prior leave of court. Dkt. 70. Plaintiffnevertheless filed a 21-page opposition brief (not includingdozens of pages of appendices and exhibits). Dkt. 74.As cautioned in section III below, in the future the Courtexpects and will require more careful compliance by bothsides with applicable rules and orders. However, for thereasons stated and in light of the somewhat convolutedcircumstances in which the present sealing dispute arose, theCourt will consider both Defendants' Motion to Seal andPlaintiff's opposition to that motion on the merits. Havingconsidered the briefing, the supporting declarations, thepleadings on file, and the applicable law, the Court findsthat Defendants have demonstrated compelling reasons toseal only certain information contained in and attached to theFAC and that Defendants' proposed sealing and redactions arenarrowly tailored to protect such information. The sealableinformation includes detailed information about Kaiser'spayments under its license from VMware, the technicalconfiguration of Kaiser's data centers, and VMware's businessstrategies. Information such as “pricing terms, royaltyrates, and guaranteed minimum payment terms” as wellas “business practices, such as product rates and purchaserequirements” meet the compelling reasons standard forsealing, particularly when that information is associated withidentified customers. See In re Elec. Arts, Inc., 298 Fed.App'x 568, 569 (9th Cir. 2008); Microsoft Corp. v. Hon HaiPrecision Indus. Co., Ltd., No. 19-cv-01279-LHK, 2020 WL8991707, at * 3 (N.D. Cal. Feb. 21, 2020); Nicolisi Distrib.,Inc. v. Finishmaster, Inc., No. 18-cv-03587-BLF, 2018 WL3932554, at *3 (N.D. Cal. Aug. 16, 2018).*3 With respect to other information, Plaintiff has shownthat sealing would be inappropriate because the informationhas been available in the public record in this case for severalmonths without any previous efforts by Defendants to seal theinformation.Accordingly, Defendants' Motion to Seal is GRANTED INPART AND DENIED IN PART as follows:Document First Amended Complaint(FAC) FAC FAC FAC FAC FACFAC Appendix B – Kaiser DataCenter Diagram Appendix C – MasterTimeline & Tables of Events Exhibit A– Kaiser renewal email thread ExhibitD – ROBO purchase dates and licensetables Exhibit M – Audit Map ExhibitO – Operating System Map TextSought to be Sealed Page 12:5-10(i.e., FAC 44) 45; line 1 15:14-17(i.e., FAC 57) 25:4-15 (portion ofFAC 99) 25:17-19 (i.e., FAC 100)25:20-24 (i.e., FAC 101) 42:19-24(i.e., FAC 179(c)) Seal in its entiretySection 1 Page 4 Seal in its entiretySeal in its entirety Seal in its entiretyParty Seeking Sealing VMware asto lines 5-10 (see Brewster Decl. 8); Kaiser as to lines 6-10 (see MillsDecl. 4) Kaiser (see Mills Decl.
SEBASTIAN RAKO, Plaintiff, v. VMWARE LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3 4) VMware (see Brewster Decl. 8) VMware (see Brewster Decl. 8) VMware (see Brewster Decl. 8) VMware (see Brewster Decl. 8); Kaiser (see Mills Decl. 4)VMware (see Brewster Decl. 8);Kaiser (see Mills Decl. 4) VMware(see Brewster Decl. 8) VMware(see Brewster Decl. 8) VMware(see Brewster Decl. 8) VMware(see Brewster Decl. 8) VMware (seeBrewster Decl. 8); Kaiser (see MillsDecl. 5) VMware (see BrewsterDecl. 8); Kaiser (see Mills Decl. 5) Ruling DENIED. Information infirst and second sentences of FAC 44: Defendants' claim of compellingreasons to seal this information iscontradicted by their failure to timelyseek to seal the same or similarinformation in original Complaint (seeDkt. 1 ¶¶ 25, 36). Remaining portionsof FAC ¶¶ 44: contain argument byPlaintiff, not confidential informationof Defendants. DENIED. Defendants'claim of compelling reasons to sealthis information is contradicted bytheir failure to timely seek to sealthe same or similar information inoriginal Complaint (see Dkt. 1 ¶¶24, 27), Plaintiff's opposition toKaiser's motion to dismiss (Dkt. 34at 5:7-2), and the Court's orderon motion to dismiss (Dkt. 66at 8:3-7). GRANTED. Narrowlytailored to protect confidential andcompetitively sensitive information.GRANTED. Narrowly tailored toprotect confidential and competitivelysensitive information. GRANTED.Narrowly tailored to protectconfidential and competitivelysensitive information. GRANTED.Narrowly tailored to protectconfidential and competitivelysensitive information. DENIED.Defendants' claim of compellingreasons to seal this information iscontradicted by their failure to timelyseek to seal the same or similarinformation in original Complaint (seeDkt. 1 ¶¶ 35, 37, 52(c), 60(c)) andelsewhere in the FAC (see Dkt. 67¶¶ 74-76). GRANTED. Narrowlytailored to protect confidential andcompetitively sensitive information.GRANTED. Narrowly tailored toprotect confidential and competitivelysensitive information. GRANTED.Narrowly tailored to protectconfidential and competitivelysensitive information. Althoughexhibit was attached to theoriginal Complaint, the chartsought to be sealed wasillegible. GRANTED. Narrowlytailored to protect confidential andcompetitively sensitive information.GRANTED. Narrowly tailored toprotect confidential and competitivelysensitive information. GRANTED.Narrowly tailored to protectconfidential and competitivelysensitive information.*4 Plaintiff has noted in the briefing related to the Motionto Seal that he is a pro se litigant who lacks Defendants'resources. See, e.g., Dkt. 74 at 3. Accordingly, the Courtwill assign to Defendants the responsibility for preparing aredacted version of the FAC and its attachments. Within 7days of the date of this Order, Defendants shall file redactedversion of the FAC and its attachments that conforms to thisOrder on the public docket. The unredacted version of theFAC and attachments at Dkt. 67 shall remain under seal.II. OTHER MOTIONSBecause the Court has ruled on Defendants' Motion to Seal,Defendants' Motion to File Reply at Dkt. 72 is DENIED ASMOOT.In ruling on the Motion to Seal, the Court has considered thearguments made in Plaintiff's motion to strike at Dkt. 83 andfinds that they do not merit striking the Motion to Seal or theMotion to File Reply. Accordingly, the motion to strike at Dkt.83 is DENIED.
SEBASTIAN RAKO, Plaintiff, v. VMWARE LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4Plaintiff's motion to compel at Dkt. 82 appears to concerna discovery dispute that has arisen during the briefing onDefendants' Motion to File Reply. As discussed above, afterPlaintiff filed an opposition to the Motion to Seal, Defendantsfiled the Motion to File Reply, to which they attached theirproposed reply brief. Dkt. 76, 76-2. Referred to and attachedto the proposed reply brief was a January 9, 2026 email fromVMware's counsel, Eric Amdursky, to Plaintiff in which Mr.Amdursky raised the issue of sealing portions of the FAC.Ex. A to Dkt. 76-2. In Plaintiff's opposition to Defendants'Motion to File Reply, he stated that he had never receivedthe January 9 email. Dkt. 79. Mr. Amdursky thereafter fileda declaration in support of the Motion to Seal that stated thathe had investigated the issue and learned that the January 9email was not delivered to Plaintiff, apparently due to sizelimitations for receiving attachments on his email account.Dkt. 80. Another addressee on the January email, Erik Puknys(counsel for Defendant Kaiser), filed a declaration stating thathe had received it. Dkt. 81. Plaintiff's motion to compel atDkt. 82 argues that Defendants' explanation as to why he didnot receive the January 9 email is “facially implausible.” Dkt.82. Plaintiff's motion to compel seeks production of variousmaterials from defense counsel on this issue. Id.Under the undersigned's Civil and Discovery Referral MattersStanding Order, the parties must engage in a robust, goodfaith meet and confer on any discovery disputes and presentany remaining disputes to the Court in a joint statementthat complies with the requirements of the Standing Order.Accordingly, the Court TERMINATES the motion to compelat Dkt. 82 for failure to comply with the Standing Order,without prejudice to Plaintiff's ability to raise the discoverydispute with the Court in a manner and format that complieswith the Standing Order.III. DIRECTIONS AND ADMONITIONS TO THEPARTIES REGARDING FUTURE PROCEEDINGSDespite being at a relatively early stage, this litigation hasalready produced more than its fair share of contentiousdisputes that do nothing to move the case forward on itsmerits. As discussed above, neither Defendants' Motion toSeal nor Plaintiff's opposition thereto fully complied withthe applicable rules. The Motion to Seal spawned severalother motions, including a motion for additional briefing byDefendants, a motion to strike by Plaintiff, and a discovery-related motion that did not comply with the Court's StandingOrder. In short, one motion to seal a limited amount ofinformation in the FAC resulted in a total of four motionswith hundreds of pages of briefing and exhibits. This isnot a good use of the limited time and resources of theParties or the Court. In the future, the Court expects andwill enforce compliance by all Parties with applicable rulesand procedures. The Court will not hesitate to strike non-conforming pleadings.*5 Another issue that has multiplied proceedings in thiscase relates to the Parties' use (actual or alleged) ofArtificial Intelligence (AI). In an order dated November25, 2025, the Court ordered that the Parties are not to fileor otherwise present to the Court any briefs, pleadings,materials, other documents, or argument which contain AI-hallucinated citations to law, case or legal citations which arefictitious or non-existent, or any asserts of law or fact thatcannot be corroborated. Dkt. 66. The Court further orderedPlaintiff to comply with certain additional requirements inlight of his previous citations to non-existent cases in thislitigation. Id. More recently, the Court has revised its Civiland Discovery Referral Matters Standing Order to imposeadditional requirements with respect to the use of AI in allcases.Unfortunately, despite the Court's efforts to head off problemsstemming from the use of AI, the Parties have now engaged inrepeated and extensive disputes over whether and how theiropponents have used AI in connection with Court filings.See, e.g., Dkt. 58 (VMware's response to Plaintiff's notice oferrata in connection with oppositions to motions to dismiss,asserting that cases cited by Plaintiff “were likely hallucinatedby AI”); Dkt. 74 at 11-18 (argument in Plaintiff's oppositionto Motion to Seal that Defendants' motion is “AI-generated”);Dkt. 76-1 (Defendants' proposed reply brief addressing theseaccusations). In other words, the Parties are now weaponizingaccusations regarding the use of AI. To avoid future disputesand to allow the Court and the Parties to devote their time andresources to the merits of the litigation, the Court imposes thefollowing additional requirement in this case:ALL DISPUTES OVERWHETHER A PARTY HASPROPERLY USED AI IN THISCASE ARE SUBJECT TOTHE MEET AND CONFERAND JOINT STATEMENTREQUIREMENTS THAT APPLYTO DISCOVERY DISPUTESUNDER THE UNDERSIGNED'SCIVIL AND DISCOVERY
SEBASTIAN RAKO, Plaintiff, v. VMWARE LLC, et al., Defendants., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.5REFERAL MATTERS STANDINGORDER. DISPUTES THATCANNOT BE RESOLVEDTHROUGH A ROBUST, GOODFAITH MEET AND CONFERMUST BE PRESENTED IN THEFORM OF A JOINT STATEMENT,NOT TO EXCEED 5 PAGES,AND A NON-ARGUMENTATIVECHART SETTING FORTH EACHPARTY'S POSITION.The existing requirements in the Court's order at Dkt. 66, aswell as the AI provisions in the Court's Standing Order, alsoremain in place.SO ORDERED.All CitationsSlip Copy, 2026 WL 296452Footnotes1Defendants' motions to dismiss the FAC are pending and will be addressed in a future order.2The Court previously ordered the Clerk of Court to lock the FAC on ECF pending a ruling on the Motion toSeal. Dkt. 70.End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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