“Public disclosure cannot be undone because . . . we simply do not have the power, even were we of the mind to use it if we had, to make what has thus become public private again.” (cleaned up)
How later courts described this case
- “Public disclosure cannot be undone because . . . we simply do not have the power, even were we of the mind to use it if we had, to make what has thus become public private again.” (cleaned up)
Written by the judges who cited it.
The opinion
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
Nos. 23-2954 & 24-2265
________________
In re: ESML HOLDINGS INC, DBA Mesabi Metallics
Company LLC, et al.,
Debtors
MESABI METALLICS COMPANY LLC, FKA Essar Steel
Minnesota LLC
v.
CLEVELAND-CLIFFS, INC., FKA Cliffs Natural
Resources, Inc.;
CLEVELAND-CLIFFS MINNESOTA LAND
DEVELOPMENT LLC;
GLACIER PARK IRON ORE PROPERTIES LLC
CLEVELAND-CLIFFS, INC., FKA Cliffs Natural
Resources, Inc.;
CLEVELAND-CLIFFS MINNESOTA LAND
DEVELOPMENT LLC
v.
CHIPPEWA CAPITAL PARTNERS; THOMAS M.
CLARKE
Cleveland-Cliffs, Inc.,
Appellant in 23-2954
Cleveland-Cliffs, Inc.; Cleveland-Cliffs Minnesota Land
Development LLC,
Appellants in 24-2265
________________
On Appeal from the United States Bankruptcy Court
for the District of Delaware
(Bankruptcy Ct. Nos. 16-11626, 17-51210)
Bankruptcy Judge: Honorable Craig T. Goldblatt
________________
Argued on September 24, 2024
Before: KRAUSE, BIBAS, and AMBRO, Circuit Judges
(Opinion filed: April 16, 2025)
Robert S. Faxon
Kristin S.M. Morrison
James R. Saywell [ARGUED]
Jones Day
901 Lakeside Avenue East
Cleveland, Ohio 44114
Counsel for Appellant
2
David H. Suggs [ARGUED]
Martin M. Toto
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Counsel for Appellee Mesabi Metallics Co. LLC
David L. Finger [ARGUED]
Finger & Slanina
One Commerce Center
1201 N. Orange Street, 7th Fl.
Wilmington, Delaware 19801
Counsel for Appellee Greg A. Heyblom
________________
OPINION OF THE COURT
________________
KRAUSE, Circuit Judge.
Even before the Founders enshrined a robust right of
public access to the courts in the First Amendment, the
common law protected the public’s right to inspect public
records, including documents filed in judicial
proceedings. And in the modern era, Congress has codified a
statutory right of access for certain categories of public
records. But whether the right of access is viewed through the
lens of the common law, the First Amendment, or legislation,
it reflects a long tradition of open judicial proceedings,
enabling litigants and the public to evaluate the work of the
3
courts and imposing a heavy burden on those who seek to seal
judicial records.
We consider here whether the public right of access in
bankruptcy proceedings is governed by common law or by
statute. The Bankruptcy Court believed itself bound by our
precedent to conclude that the common law controls and,
applying that standard, held that Appellant Cleveland-Cliffs,
Inc. (Cliffs) had not carried its burden to keep various judicial
records under seal. But astutely recognizing that this precedent
could be interpreted otherwise, it certified the question for
direct appeal to this Court. We now clarify that the sealing of
documents in bankruptcy cases is governed not by the common
law right of access, but by § 107 of the Bankruptcy Code,
which imposes a heavy, but distinct, burden for a party to keep
docketed records from the public eye. Whether Cliffs has
satisfied that burden, however, is properly left to the
Bankruptcy Court in the first instance, so as to that issue, we
will vacate and remand.
I. Background
A. Mesabi’s Adversary Proceeding
ESML Holdings, Inc. and its debtor affiliate
(collectively, Mesabi) petitioned for Chapter 11 bankruptcy in
the United States Bankruptcy Court for the District of
Delaware in 2016 and emerged successfully the following
year. During the course of those bankruptcy proceedings,
4
Mesabi initiated an adversary proceeding against Cliffs, 1
alleging tortious interference with contract, federal and state
antitrust violations, violation of the Bankruptcy Code’s
automatic stay provision, and civil conspiracy. Those claims
stemmed from Cliffs’ alleged anticompetitive conduct that
Mesabi asserts was “designed to interfere with and impede
Mesabi’s contracts and business relationships and prevent . . .
Mesabi from completing” an iron ore pellet production facility
in northern Minnesota. 2 M. App. 95. 2 And that still-pending
adversary proceeding underlies the present appeal.
Importantly for this case, to facilitate the extensive
discovery in the adversary proceeding, the parties entered, and
the Bankruptcy Court approved, a stipulated protective order
(the Protective Order). That order permitted the party
producing a document to designate it as confidential if that
1
For the uninitiated, “[a]dversary proceedings are separate
lawsuits within the context of a particular bankruptcy case and
have all of the attributes of a district court lawsuit . . . with
certain modifications.” 10 Collier on Bankruptcy ¶ 7001.01
(16th ed. 2024). Within the context of an adversary
proceeding, a party may, among other things, “recover money
or property,” subject to certain exceptions; “determine the
validity, priority, or extent of a lien or other interest in
property”; “object to or revoke a discharge”; “obtain an
injunction or other equitable relief”; and “determine a claim or
cause of action removed under 28 U.S.C. § 1452,” which
permits the removal of claims related to bankruptcy cases. Fed.
R. Bankr. P. 7001.
2
To differentiate between the appendices in these consolidated
appeals, we use “M. App.” for No. 23-2954 and “H. App.” for
No. 24-2265.
5
party “believe[d] in good faith” that it “constitute[d] or
contain[d] trade secrets, confidential or proprietary
information, information that is believed to unreasonably
invade the privacy of any individual, information that could
cause injury to a person or entity’s business or reputation, or
such other sensitive commercial or financial information that
is not publicly available.” Id. at 182–83. If a counterparty
disagreed with a particular designation, it could lodge a
challenge, and the producing party would “have the burden to
show that its designation was proper pursuant to Fed. R. Civ.
P. 26 or other applicable rule or law.” Id. at 200.
At the close of discovery, Mesabi moved for a
preliminary injunction to prevent Cliffs from acquiring several
mineral leases in Minnesota that the state had previously
awarded to Mesabi but then terminated and awarded to Cliffs.
In support of that motion, Mesabi attached certain documents
(the Documents) it obtained from Cliffs during discovery, and
because those Documents had been designated as confidential
under the Protective Order, it filed them under seal. After a
hearing, the Bankruptcy Court declined to preliminarily enjoin
the award of the contracts to Cliffs and denied Mesabi’s
motion.
Undeterred, Mesabi then petitioned for a writ of
mandamus from the Minnesota Court of Appeals to reverse
Minnesota’s award of the disputed mineral leases to Cliffs. As
it had before the Bankruptcy Court, Mesabi sought to use the
Documents to support its petition, so it moved the Bankruptcy
Court to unseal them (the Mesabi Case). Invoking the common
law right of access to court filings—which carries a
presumption of openness for judicial records—Mesabi argued
to the Bankruptcy Court that the public is entitled to that
6
information in light of Cliffs’ alleged anti-competitive
conduct. Cliffs opposed Mesabi’s motion, arguing that it
defied the Protective Order, that Mesabi was judicially
estopped from moving to unseal the Documents, and that § 107
of the Bankruptcy Code, not the common law, governs the
sealing of judicial records in bankruptcy cases.
Relying on our decision in In re Avandia Marketing,
Sales Practices & Products Liability Litigation, which held
that, in order to seal papers filed on a court docket, the party
seeking closure “must show ‘that the material is the kind of
information that courts will protect and that disclosure will
work a clearly defined and serious injury,’” 924 F.3d 662, 672
(3d Cir. 2019) (quoting Miller v. Ind. Hosp., 16 F.3d 549, 551
(3d Cir. 1994)), the Bankruptcy Court sided with Mesabi and
held that the Documents should be disclosed because Cliffs had
not overcome the common law presumption of openness. It
interpreted Avandia to apply because in that case, much like
this one, a party to a protective order moved to unseal judicial
records filed under seal, and our Court concluded that the
common law right of access attached to the party’s request
despite its stipulation to the protective order. In re Essar Steel
Minn. LLC, No. 17-51210, 2023 WL 6202448, at *5–6 (Bankr.
D. Del. Sept. 22, 2023). While the Bankruptcy Court was “not
without some sympathy for Cliffs’ arguments as a matter of
first principles,” it concluded that “it would be unduly
presumptuous for it—a lower court bound by Third Circuit
precedent—to distinguish that precedent away based on facts
that were equally applicable in Avandia.” Id. at *5.
Recognizing the uncertainty of the law on this point, the
Bankruptcy Court stayed its decision for thirty days and
certified that decision pursuant to 28 U.S.C. § 158(d)(2)(A),
7
authorizing Cliffs to petition this Court for permission to
directly appeal the Bankruptcy Court’s order. We granted
Cliffs’ petition and extended the stay pending disposition of
this appeal.
B. Heyblom’s Motion to Intervene
Four months after we granted Cliffs’ petition for direct
appeal, Appellee Greg Heyblom moved to intervene in the
adversary proceeding in the Bankruptcy Court and to unseal
the Documents (the Heyblom Case). Heyblom identified
himself as “a resident of Nashwauk, MN,” which he asserted
is “near enough” to where Mesabi “plan[ed] to build a plant . . .
to have a beneficial impact on areas such as employment and
taxes,” giving him “a specific interest in th[e] litigation.” 2 H.
App. 186–87.
Advancing arguments that echoed Mesabi’s, Heyblom
maintained that Bankruptcy Code § 107 merely codified the
common law standard for sealing judicial records and that
Cliffs had not carried its burden to overcome the common law
right of access. Cliffs opposed Heyblom’s intervention,
arguing the Bankruptcy Court lacked jurisdiction while the
appeal in the Mesabi Case remained pending before us, that
Heyblom lacked standing, and that Heyblom’s motion was
procedurally defective.
The Bankruptcy Court again rejected Cliffs’ arguments
and granted both Heyblom’s motion to intervene and his
motion to unseal the Documents. As for the threshold question
of its jurisdiction to decide these motions, the Bankruptcy
Court explained that it viewed the subject matter of the appeal
in the Mesabi Case as distinct from the subject matter of
8
Heyblom’s request because the question of whether Mesabi—
“a party to the case that already has the documents it seeks to
unseal, but has them subject to a protective order”—may
invoke the common law right of public access does not
implicate whether Heyblom, “a genuine third party,” could
access the Documents. In re Essar Steel Minn. LLC, No. 17-
51210, 2024 Bankr. LEXIS 856, at *21 (Bankr. D. Del. Apr. 8,
2024). Proceeding with caution, however, the Bankruptcy
Court also stayed its decision to unseal the Documents in
Heyblom’s case and again certified its order for direct appeal.
Before us, these appeals have been consolidated for
disposition.
II. Jurisdiction and Standard of Review
The Bankruptcy Court had jurisdiction under 28 U.S.C.
§ 1334 and § 157(c)(1), and we have jurisdiction under 28
U.S.C § 158(d)(2). We review the application of judicial
estoppel, the grant of a motion to unseal, and the grant of a
motion to intervene for abuse of discretion. See Anjelino v.
N.Y. Times Co., 200 F.3d 73, 100 (3d Cir. 1999); LEAP Sys.,
Inc. v. MoneyTrax, Inc., 638 F.3d 216, 220 (3d Cir. 2011);
United States v. Territory of Virgin Islands, 748 F.3d 514, 519
(3d Cir. 2014).
In contrast, we review a bankruptcy court’s subject
matter jurisdiction de novo. See In re Essar Steel Minn., LLC,
47 F.4th 193, 196 (3d Cir. 2022). And “[w]hether an incorrect
legal standard has been used is an issue of law to be reviewed
de novo,” as well. In re Hydrogen Peroxide Antitrust Litig.,
552 F.3d 305, 312 (3d Cir. 2008) (quoting In re Initial Pub.
Offering Sec. Litig., 471 F.3d 24, 32 (2d Cir. 2006)).
9
III. Discussion
We proceed in four parts, as the Bankruptcy Court
recognized that this case calls for resolution of several
questions that we have not previously addressed. First, as a
preliminary matter, we address Mesabi’s contention that this
case is moot. Moving on to the merits, we then consider Cliffs’
contention that Mesabi is judicially estopped from seeking to
unseal the Documents; whether Bankruptcy Code § 107
displaces the common law standard governing sealing of
judicial records in bankruptcy proceedings; and, finally,
whether the Bankruptcy Court had jurisdiction to decide
Heyblom’s motions while this appeal was pending.
A. Mootness
As always, we must assure ourselves of jurisdiction at
the outset. See George v. Rushmore Serv. Ctr., LLC, 114 F.4th
226, 234 (3d Cir. 2024). Federal courts may only decide live
cases or controversies. See Hartnett v. Pa. State Educ. Ass’n,
963 F.3d 301, 305 (3d Cir. 2020). So when an intervening
development makes it “impossible for us to grant any effectual
relief whatever to the prevailing party,” we have no choice but
to dismiss the case for lack of jurisdiction. Clark v. Governor
of N.J., 53 F.4th 769, 775 (3d Cir. 2022) (quotation omitted).
After the parties completed briefing in this matter,
Mesabi filed a suggestion of mootness, arguing that because
“the bankruptcy court ruled on Cliffs’ motion for summary
judgment,” prompting the withdrawal of the reference by the
District Court for a jury trial on Mesabi’s antitrust claims, the
dispute over what standard governs the sealing of documents
is moot. Mesabi Suppl. Br. 1. It maintains that “[b]y its own
10
terms, section 107(b) concerns only when ‘the bankruptcy
court’ unseals judicial records” and thus “has no bearing on
when the district court unseals judicial records.” Id. at 3.
Here, we agree with Cliffs that the Bankruptcy Court’s
summary judgment decision has not rendered this case moot.
The United States District Court for the District of Delaware
has since withdrawn the reference from the Bankruptcy Court.
But the question before us is whether the Documents were
properly sealed on the Bankruptcy Court’s docket, and transfer
of this adversary proceeding to a district court does not
automatically unseal documents on a bankruptcy court docket.
Rather, “[e]very court has supervisory power over its own
records and files,” Littlejohn v. BIC Corp., 851 F.2d 673, 678
(3d Cir. 1988) (quoting Nixon v. Warner Commc’ns, Inc., 435
U.S. 589, 598 (1978)), so the Documents will remain sealed on
the Bankruptcy Court’s docket unless and until unsealed by the
Bankruptcy Court. And when those Documents have not
become available to the public, a live controversy exists for
which we can order effective relief. See Constand v. Cosby,
833 F.3d 405, 410 (3d Cir. 2016). In short, this appeal is not
moot, and we may proceed to Cliffs’ arguments for sealing. 3
3
Cliffs also raises the possibility “that § 107 continues to
govern in this bankruptcy case even after the reference has
been withdrawn.” Cliffs Suppl. Br. 9. Because we conclude
this case is not moot for alternative reasons, we need not
consider this argument and leave for another day both whether
§ 107 applies to district courts when they exercise bankruptcy
jurisdiction, and whether a bankruptcy court’s prior sealing
decision continues to control under the law of the case doctrine.
See Saint-Jean v. Palisades Interstate Park Comm’n, 49 F.4th
11
B. Judicial Estoppel
On the merits, Cliffs first asserts that Mesabi’s motion
to unseal the Documents should have been denied under the
doctrine of judicial estoppel. Because Mesabi agreed to be
bound by the terms of the Protective Order, Cliffs argues, it
should not be permitted to circumvent those terms by filing
confidential documents on the Bankruptcy Court’s docket,
thereby converting them into judicial records and subjecting
them to a heightened standard for sealing. We disagree and
conclude that the terms of the Protective Order and Mesabi’s
conduct do not warrant application of judicial estoppel.
The doctrine of judicial estoppel “is one arrow in the
quiver of sanctions at a court’s disposal . . . to protect the
integrity of the court’s processes.” Klein v. Stahl GMBH & Co.
Maschinefabrik, 185 F.3d 98, 109 (3d Cir. 1999). Unlike other
types of estoppel, “judicial estoppel is concerned with the
relationship between litigants and the legal system, and not
with the way that adversaries treat each other.” Montrose Med.
Grp. Participating Sav. Plan v. Bulger, 243 F.3d 773, 781 (3d
Cir. 2001). Its purpose is intuitive—“to prevent parties from
playing fast and loose with the courts by asserting inconsistent
positions” in different judicial proceedings. Ryan Operations
G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 361 (3d
Cir. 1996).
To warrant judicial estoppel, three elements must exist:
“(1) the party to be estopped is asserting a position that is
830, 836 (3d Cir. 2022) (“Law of the case may counsel against,
but does not prevent, a . . . court from reconsidering its prior
rulings.”).
12
irreconcilably inconsistent with one [it] asserted in a prior
proceeding; (2) the party changed [its] position in bad faith,
i.e., in a culpable manner threatening to the court’s authority or
integrity; and (3) the use of judicial estoppel is tailored to
address the affront to the court’s authority or
integrity.” Montrose Med. Grp., 243 F.3d at 777–78.
Additionally, judicial estoppel does not apply when a party’s
initial position was not “accepted or adopted by a court or
agency.” Id. at 782.
While judicial estoppel emerges from a party’s taking
different positions, the doctrine is “not intended to eliminate
all inconsistencies no matter how slight or inadvertent they
may be.” Krystal Cadillac-Oldsmobile GMC Truck, Inc. v.
Gen. Motors Corp., 337 F.3d 314, 319 (3d Cir. 2003). Rather,
a litigant’s change in position must demonstrate a degree of
culpability amounting to an “assault[] [on] the dignity or
authority of the court,” Montrose Med. Grp., 243 F.3d at 781,
and because “judicial estoppel is often the harshest
remedy,” Klein, 185 F.3d at 110, it “should only be applied to
avoid a miscarriage of justice,” Krystal Cadillac-Oldsmobile,
337 F.3d at 319.
Here, Mesabi’s alleged change in position does not
cross that threshold. It is simply not the case that, by
stipulating to the Protective Order, Mesabi took the position
that the Documents would remain sealed indefinitely. To the
contrary, while the Protective Order allows a party to
“designate the documents or information” confidential if it
“believes in good faith” that the document falls within the
specific categories, meaning that the document will be initially
sealed if filed on the docket, 2 M. App. 182–83, the
counterparty can dispute that designation by “mov[ing] the
13
[Bankruptcy] Court for an order seeking [such] relief,” and the
Bankruptcy Court will then resolve the dispute, id. at 193.
Thus, the Protective Order does not provide that any
particular documents warrant sealing or that the parties agree
that certain categories of documents or information will remain
shielded from the public. Instead, it establishes a system
whereby the party producing the document may, at the
discovery stage, designate a document as confidential,
triggering the protection of the Protective Order. But a party
can rebut that protection by showing that redaction or sealing
is not warranted. In essence, then, the Protective Order is
prophylactic: The Bankruptcy Court permitted the parties to
maintain under seal documents containing information
designated by the producing party as confidential, subject to
later challenges to the propriety of those designations. It did
not license sealing of all designated documents in perpetuity.
So Mesabi’s later motion to unseal the Documents does not
amount to a position that is “irreconcilably inconsistent” with
the Protective Order. Montrose Med. Grp., 243 F.3d at 777.
We also reject Cliffs’ argument that Mesabi’s
stipulation to the Protective Order is a position that the
Bankruptcy Court “adopted” for purposes of judicial estoppel.
As a general matter, judicial estoppel most readily applies
when courts or agencies base factual findings or legal
conclusions on the position advanced by the party to be
estopped. See, e.g., Detz v. Greiner Indus., Inc., 346 F.3d 109,
119–20 (3d Cir. 2003). But for the reasons described above,
when the Bankruptcy Court entered the Protective Order, it did
not make any factual or legal conclusions. Instead, it
established a mechanism to control the exchange of sensitive
information during discovery in this sprawling antitrust
14
adversary proceeding, leaving for later the decision whether to
seal challenged documents. For this reason, too, the
Bankruptcy Court correctly declined to apply judicial
estoppel. 4
C. Mesabi’s Motion to Unseal
We next turn to Cliffs’ primary argument—that § 107
of the Bankruptcy Code displaces the common law standard
for sealing documents filed in bankruptcy cases, and that the
Bankruptcy Court thus erred by concluding that “Avandia
provides the applicable standard.” In re Essar Steel Minn.,
2023 WL 6202448, at *5. Below, we review (1) the common
law right of access, and (2) the requirements of § 107, before
turning to (3) its application to this case.
4
To the extent Cliffs maintains that “Mesabi took the position
that documents marked confidential would be used only in this
litigation,” Opening Br. 18, all indications suggest that Mesabi
has complied with this provision of the Protective Order.
Regardless, the Protective Order lets each party use protected
documents in other litigation if they obtain “further agreement
of the Parties” or a “Court order.” 2 M. App. 186. An order
unsealing the Documents for public inspection and use might
qualify as such a court order. We take no position on whether
it does or on whether a breach of the Protective Order would
warrant judicial estoppel or any other sanction. For now, we
note only that Cliffs points to no evidence that Mesabi has used
information or documents obtained through this adversary
proceeding for other purposes.
15
1. The Common Law Right of Access
The common law right of access “antedates the
Constitution,” Bank of Am. Nat’l Tr. & Sav. Ass’n v. Hotel
Rittenhouse Assocs., 800 F.2d 339, 343 (3d Cir. 1986), and
“promotes public confidence in the judicial system by
enhancing testimonial trustworthiness and the quality of justice
dispensed by the court,” Littlejohn, 851 F.2d at 678. Its
historical pedigree runs deep, dating to at least the seventeenth
century, when “Sir John Hawles commented that open
proceedings were necessary so that truth may be discovered in
civil as well as criminal matters.” Gannett Co., Inc. v.
DePasquale, 443 U.S. 368, 386 n.15 (1979) (emphasis and
internal quotation marks omitted). And courts have repeatedly
reaffirmed “the principle that the public holds a common law
right of access to judicial proceedings and judicial records.”
Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d
653, 659 (3d Cir. 1991).
That tradition continues. Today, the common law right
of access protects the “general right to inspect and copy public
records and documents, including judicial records and
documents.” Nixon, 435 U.S. at 597 (footnote omitted). The
scope of this common law right thus “turns on whether [a
particular document] is considered to be a ‘judicial
record.’” Avandia, 924 F.3d at 672 (quoting In re Cendant
Corp., 260 F.3d 183, 192 (3d Cir. 2001)). We have held that
judicial records include those “document[s] that ‘ha[ve] been
filed with the court . . . or otherwise somehow incorporated or
integrated into a district court’s adjudicatory
proceedings.’” Id. (omission in original) (quoting In re
Cendant Corp., 260 F.3d at 192). For that reason, “pretrial
motions of a nondiscovery nature, whether preliminary or
16
dispositive, and the material filed in connection therewith,” id.
(quoting In re Cendant Corp., 260 F.3d at 192), enjoy a
“presumption of [public] access,” id., and the party seeking
closure bears the burden of demonstrating “that the material is
the kind of information that courts will protect and that
disclosure will work a clearly defined and serious injury to the
party seeking closure,” id. (quoting Miller, 16 F.3d at 551).
To be clear, the common law right of access is distinct
from the First Amendment right of access, with which it is
often confused. The First Amendment is even more robust.
While the common law right of access protects access to
documents and filings, see id., the First Amendment’s
protections extend to judicial proceedings themselves, see
Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1070 (3d Cir.
1984). It protects the public’s right of “access to information”
about “what occur[s]” in the halls of justice, “not only by
witnessing a proceeding firsthand, but also learning about it
through a secondary source.” United States v. Antar, 38 F.3d
1348, 1360 (3d Cir. 1994). And the First Amendment demands
access not for access’s own sake, but “to ensure that th[e]
constitutionally protected discussion of governmental affairs is
an informed one.” 5 Globe Newspaper Co. v. Superior Ct., 457
U.S. 596, 605 (1982) (internal quotation marks omitted).
5
In other words, the First Amendment extends beyond in-
person attendance and embodies a commitment to the public’s
access to sources of information of “what occurred” during the
proceedings, ensuring the public’s ability to “monitor, observe,
and comment upon the activities of the judge and the judicial
process.” United States v. Antar, 38 F.3d 1348, 1360–61 (3d
Cir. 1994) (quoting United States v. Smith, 787 F.2d 111, 115
(3d Cir. 1986)).
17
Where it attaches, 6 “[t]he First Amendment right of access
requires a much higher showing than the common law right
before a judicial proceeding can be sealed.” In re Cendant
Corp., 260 F.3d at 198 n.13. We have characterized this
showing as an “overriding interest based on findings that
closure is essential to preserve higher values,” Publicker
Indus., 733 F.2d at 1073 (quoting Press-Enterprise Co. v.
Superior Ct., 464 U.S. 501, 510 (1984)), and any such
restriction must survive strict scrutiny, see PG Publ’g Co. v.
Aichele, 705 F.3d 91, 104 (3d Cir. 2013).
Notwithstanding their differences, however, both the
common law and First Amendment serve a common goal:
They protect the public’s right to “acquir[e] information about”
judicial proceedings, Richmond Newspapers, Inc. v. Virginia,
448 U.S. 555, 572 (1980) (plurality opinion), “contribut[ing]
to public understanding of the rule of law and to
comprehension of the functioning of the entire . . . justice
system,” id. at 573 (quoting Neb. Press Ass’n v. Stuart, 427
U.S. 529, 587 (1976) (Brennan, J., concurring)). Together, the
common law right of access and the First Amendment enable
“‘the free discussion of governmental affairs’ . . . ensur[ing]
that the individual citizen can effectively participate in and
contribute to our republican system of self-government.”
6
We review challenges to access under the First Amendment
using a two-prong, experience-and-logic test: “(1) the
experience prong asks ‘whether the place and process have
historically been open to the press’; and (2) the logic prong
evaluates ‘whether public access plays a significant positive
role in the functioning of the particular process in question.’”
Avandia, 924 F.3d at 673 (quoting N. Jersey Media Grp. Inc.
v. United States, 836 F.3d 421, 429 (3d Cir. 2016)).
18
Globe Newspaper, 457 U.S. at 604 (quoting Mills v. Alabama,
384 U.S. 214, 218 (1966)).
2. Bankruptcy Code § 107
Against the backdrop of this longstanding common law
presumption of public access, Congress has passed legislation
protecting access to certain categories of documents, 7
including in 11 U.S.C. § 107. The first subsection declares
that, with limited exceptions, “paper[s] filed in a case under
[the Bankruptcy Code] and the dockets of a bankruptcy court
are public records and open to examination by an entity.” 11
U.S.C. § 107(a). Thus, § 107, like the common law right of
access, triggers a presumption that records filed in judicial
proceedings are subject to public review and inspection. The
next subsection, however, identifies two circumstances in
which the sealing of such papers is appropriate:
(b) On request of a party in interest, the
bankruptcy court shall, and on the bankruptcy
court’s own motion, the bankruptcy court may—
(1) protect an entity with respect to a trade
secret or confidential research,
development, or commercial information;
or
7
See, e.g., Freedom of Information Act, Pub. L. 89-487 (1966)
(codified at 5 U.S.C. § 552); Presidential Records Act, Pub. L.
95-591 (1978) (codified as amended at 44 U.S.C. §§ 2201–
2209).
19
(2) protect a person with respect to
scandalous or defamatory matter
contained in a paper filed in a case under
this title.
So § 107 certainly resembles the common law in that it
“evidences [C]ongress’s strong desire to preserve the public’s
right of access to judicial records in bankruptcy proceedings,”
In re Orion Pictures Corp., 21 F.3d 24, 26 (2d Cir. 1994). And
some courts have described § 107 as “codifying” the common
law. See, e.g., id.; In re Motions Seeking Access to 2019
Statements, 585 B.R. 733, 746 (D. Del. 2018); see also 2
Collier on Bankruptcy ¶ 107.02 (16th ed. 2024) (“[S]ection
107(a) codifies the public’s general right under common law
to inspect and copy public documents, including judicial
records.”). But whether it merely codifies the common law
doctrine or diverges from it is not a question we have yet
addressed precedentially. We do so today.
3. Application to This Case
This case presents the question of whether the common
law public right of access and § 107 are coextensive and, if not,
whether § 107 displaces the common law in bankruptcy
proceedings. It is a longstanding rule that where Congress has
enacted a provision to govern a particular question, the
common law yields to that statute. See City of Milwaukee v.
Illinois, 451 U.S. 304, 316–17 (1981). But it is an equally
“longstanding [rule] . . . that ‘[s]tatutes which invade the
common law . . . are to be read with a presumption favoring the
retention of long-established and familiar principles.’” United
States v. Texas, 507 U.S. 529, 534 (1993) (quoting Isbrandtsen
Co. v. Johnson, 343 U.S. 779, 783 (1952)). For that reason,
20
“[i]n order to abrogate a common-law principle, the statute
must ‘speak directly’ to the question addressed by the common
law.” Id. (quoting Mobil Oil Corp. v. Higginbotham, 436 U.S.
618, 625 (1978)).
To determine whether § 107 speaks directly to the
question addressed by the common law and sufficiently differs
from the common law to abrogate it, we look to the statute’s
text. As recounted above, § 107(a) sets out a general
presumption of access for “paper[s] filed in a case under [the
Bankruptcy Code] and the dockets of a bankruptcy court,” and
then goes on to lay out several exceptions to this presumption.
As relevant here, § 107(b) provides that, when sought by a
party in interest, the bankruptcy court “shall” protect “an entity
with respect to a trade secret or confidential research,
development, or commercial information” and “a person with
respect to scandalous or defamatory matter.” 11 U.S.C.
§ 107(b). So by its terms, § 107 governs the sealing of
information and documents filed in bankruptcy cases, and thus
“‘speak[s] directly’ to the question addressed by the common
law,” Texas, 507 U.S. at 534 (quoting Mobil Oil Corp., 436
U.S. at 625), namely, whether and under what circumstances
judicial records may be sealed.
The only remaining question is whether § 107 diverges
from the common law such that it displaces, rather than merely
“codifies,” that doctrine. We conclude that it does in two major
respects.
First, § 107(b)(1) permits sealing of “a trade secret or
confidential research, development, or commercial
information.” Such information is broader than the
information that could be protected under the common law
21
doctrine, 8 which requires the proponent of sealing to show not
only a protected category of information—which would
include trade secrets or other confidential commercial
information—but also that the disclosure of this information
“will work a clearly defined and serious injury to the party
seeking closure.” Avandia, 924 F.3d at 672 (quoting Miller,
16 F.3d at 551).
Second, § 107(b) uses the mandatory term “shall” to
direct the bankruptcy court’s protection of the categories of
information that follow, meaning the bankruptcy court lacks
discretion to decline to protect covered information. See In re
FTX Trading Ltd., 91 F.4th 148, 153 (3d Cir. 2024). The
common law doctrine, on the other hand, permits courts to
exercise their discretion by weighing whether “the
[proponent’s] interest in secrecy outweighs the presumption
[of public access].” Bank of Am., 800 F.2d at 344. The statute
thus “eliminates the balancing of public and private interests
required by the common law rule,” rendering “the strength of
the public’s interest in a particular judicial record . . .
8
At oral argument, Cliffs asserted that “confidential” in
§ 107(b)(1) modifies each of “research, development, or
commercial information.” See Oral Arg. Tr. 10:16–21. We
agree. We generally read modifiers preceding an enumeration
as modifying each noun or verb in the series. See United States
v. Jumper, 74 F.4th 107, 113 (3d Cir. 2023); Antonin Scalia &
Bryan Garner, Reading Law 147 (2012). Section 107(b)(1)’s
straightforward construction lends itself to application of this
series-modifier canon, distributing “confidential” to modify
each type of “information.” Thus, to qualify for § 107(b)(1)’s
protection, a party’s “commercial information” must be
“confidential.”
22
irrelevant.” In re Roman Cath. Archbishop, 661 F.3d 417,
430–31 (9th Cir. 2011). Put differently, with § 107, Congress
has struck its own balance by which the courts must abide.
Given these differences, we hold today that § 107 does
not “codify” Avandia in the sense that it brings with it all of the
common-law soil in which that decision is rooted, but rather
differs from and displaces the common law standard for sealing
judicial records in bankruptcy cases. With this holding, we
join our sister circuits that have reached similar conclusions.
See id. at 431; In re Neal, 461 F.3d 1048, 1053 (8th Cir. 2006);
In re Gitto Glob. Corp., 422 F.3d 1, 8 (1st Cir. 2005); In re
Orion Pictures, 21 F.3d at 27.
But we do not go so far as to accept Cliffs’ subsidiary
argument—that § 107’s protection for confidential commercial
information permits sealing of records whose disclosure would
work no harm at all. Indeed, we emphatically reject it.
In order to give effect to—and avoid eviscerating—
§ 107(b)’s limitation to information qualifying as “trade
secrets” or “research, development, or commercial
information” that is “confidential,” the disclosure of a judicial
record must still “cause ‘an unfair advantage to competitors,’”
In re Orion Pictures, 21 F.3d at 27 (quoting In re Itel Corp., 17
B.R. 942, 944 (B.A.P. 9th Cir. 1982)). The ordinary meaning
of § 107(b)’s terms confirm this requirement. See In re Roman
Cath. Archbishop, 661 F.3d at 432–33. “Trade secret” is
defined as “[a] formula, process, device, or other business
information that is kept confidential to maintain an advantage
over competitors.” Trade Secret, Black’s Law Dictionary
(12th ed. 2024). Relatedly, in this context, “confidential”
means information “meant to be kept secret.” Confidential,
23
Black’s Law Dictionary, supra. Thus, by their plain terms, the
categories of information protected by § 107(b) entail that their
disclosure would cause competitive injury.
To be clear, this qualifier is not as onerous as the
common law requirement that disclosure “will work a clearly
defined and serious injury to the party seeking closure.”
Avandia, 924 F.3d at 672 (quoting Miller, 16 F.3d at 551). But
there still must be a substantial risk that disclosure would
detrimentally affect the producing party’s competitive
standing—a showing that differs from the common law
doctrine in degree, rather than kind. See In re Orion Pictures,
21 F.3d at 27. And such a risk of competitive injury still must
be actual and objective, not speculative or subjective. Cf. In re
Roman Cath. Archbishop, 661 F.3d at 432–33 (holding that the
test for sealing “scandalous” material under § 107(b)(2) is
objective, requiring “the party seeking non-disclosure” to show
the material is “scandalous as that word is commonly
understood”). So bankruptcy courts must evaluate requests to
seal through this objective lens and may not simply credit a
party’s assertion of competitive injury. See In re Orion
Pictures, 21 F.3d at 27.
Cliffs asserted at oral argument that it would succeed
under this competitive-injury standard, and that position may
prevail at the end of the day. But the Bankruptcy Court did not
have the opportunity to consider whether disclosure of the
Documents would work even the less onerous competitive
injury that § 107 demands to justify sealing. Accordingly, we
will remand and permit it to apply the correct standard in the
first instance.
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D. Heyblom’s Motion to Intervene
Finally, we consider whether the Bankruptcy Court
properly exercised jurisdiction to grant Heyblom’s motions to
intervene and to unseal the Documents while Cliffs’ appeal
was pending before this Court. We conclude that it did not, so
we will vacate those orders.
When a party files a notice of appeal from a final order,
that filing “is an event of jurisdictional significance” because
“it confers jurisdiction on the court of appeals and divests the
[trial] court of its control over those aspects of the case
involved in the appeal.” Griggs v. Provident Consumer Disc.
Co., 459 U.S. 56, 58 (1982). While this “appellate divestiture”
rule is not ironclad, exceptions to it are appropriately
circumscribed. See, e.g., Sheet Metal Workers’ Int’l Ass’n Loc.
19 v. Herre Bros., Inc., 198 F.3d 391, 394 (3d Cir. 1999). So
“[d]uring the pendency of the appeal the [trial court] retains
only the limited authority to take any steps that will assist the
Court of Appeals in its determination.” SEC v. Invs. Sec.
Corp., 560 F.2d 561, 568 (3d Cir. 1977) (quoting United States
v. Lafko, 520 F.2d 622, 627 (3d Cir. 1975)).
Here, the Bankruptcy Court exceeded its jurisdiction by
granting Heyblom’s motions. We accepted Cliffs’ petition for
direct appeal in the Mesabi Case and thus acquired jurisdiction
over it on October 16, 2023. Yet it was not until over four
months later, on February 26, 2024, that Heyblom filed his
motions. At that point, the Bankruptcy Court’s jurisdiction
was “limited” to matters that would “assist the Court of
Appeals in its determination,” Invs. Sec. Corp., 560 F.2d at 568
(quoting Lafko, 520 F.2d at 627), of “those aspects of the case
25
involved in the appeal,” Coinbase, Inc. v. Bielski, 599 U.S.
736, 740 (2023) (quoting Griggs, 459 U.S. at 58).
The Bankruptcy Court’s grant of Heyblom’s motions
could not “assist” our determination of the issues involved in
the Mesabi Case. Quite the opposite. Granting the relief
Heyblom requested—unsealing of the very information sought
to be disclosed on appeal—would moot the same issues on
appeal and strip us of jurisdiction. See Constand, 833 F.3d at
410 (“Public disclosure cannot be undone because . . . we
simply do not have the power, even were we of the mind to use
it if we had, to make what has thus become public private
again.” (cleaned up)). As a result, the Bankruptcy Court lacked
jurisdiction to consider those motions while Cliffs’ appeal
remained pending.
True, here, the Bankruptcy Court exercised its sound
discretion to stay its order and preserve the sealing issue for
our consideration. But we assess the existence of a court’s
jurisdiction at the outset, not based on what relief it ultimately
grants. So even though the order unsealing the Documents was
later stayed, it “largely defeat[ed] the point of the appeal” for
the Bankruptcy Court to enter that order when that issue “is
precisely what the court of appeals must decide.” Bradford-
Scott Data Corp. v. Physician Comput. Network, Inc., 128 F.3d
504, 505–06 (7th Cir. 1997).
26
The Bankruptcy Court lacked jurisdiction to consider
Heyblom’s motions while we considered Cliffs’ appeal in the
Mesabi Case. 9 Accordingly, we will vacate those orders.
IV. Conclusion
For the foregoing reasons, we will affirm in part, reverse
in part, vacate in part, and remand for further proceedings
consistent with this opinion.
9
We recognize that, in bankruptcy, “[t]he rules are different,”
Bullard v. Blue Hills Bank, 575 U.S. 496, 501 (2015), as they
must be, see 1 Collier on Bankruptcy ¶ 5.08[1][b] (16th ed.
2024) (“[A] bankruptcy case is an aggregation of individual
controversies, sometimes designated as contested matters,
sometimes as adversary proceedings, the resolution of which
must be reached before bankruptcy distribution can be made.”
(footnotes omitted)). Accordingly, our decision today is
appropriately limited to the unique facts of this case—the
issues involved in the Mesabi Case and Heyblom Case so
overlapped that, by granting the relief requested by Heyblom,
the Bankruptcy Court would have prevented our consideration
of Cliffs’ appeal in the Mesabi Case absent imposing a
discretionary stay. We do not doubt that bankruptcy courts
necessarily retain jurisdiction over many aspects of a
bankruptcy case even when discrete disputes may give rise to
final, appealable orders.
27