It is a well-established principle of First Amendment and common law jurisprudence that a proceeding before and all papers filed with a court, particularly in the criminal context, are open to the public. Subsection 107(a) of the Bankruptcy Code codifies this public access doctrine by creating a presumption in favor of public access to all papers filed in a bankruptcy case. The subsection 107(a) presumption is, however, rebuttable. As a result, if a party in interest shows that the material sought to be protected contains a trade secret or confidential information, or is scandalous or defamatory, the bankruptcy court must protect the requesting party under subsection 107(b) of the Bankruptcy Code.
Although subsection 107(b) states that the bankruptcy court "shall" protect the party in interest, the bankruptcy court retains the discretion to decide if any given material falls within one of the two subsection 107(b) exceptions, and to fashion an appropriate remedy. This exercise of discretion, coupled with the fact that the subsection 107(b) exceptions are those situations traditionally recognized by courts as falling outside the First Amendment and common law public access doctrine, allows a bankruptcy court to fulfill its subsection 107(b) duty within constitutional bounds.
William T. Bodoh and Michelle M. Morgan,
Protective Orders in the Bankruptcy Court: The Congressional Mandate of Bankruptcy Code Section 107 and Its Constitutional Implications,
24 Hastings Const. L.Q. 67
Available at: https://repository.uchastings.edu/hastings_constitutional_law_quaterly/vol24/iss1/2