A Futile Endeavor: Defining "Scandalous" in the Bankruptcy Code

Authors

Bradley Simon

Document Type

Note

Abstract

(Excerpt)

This Note addresses the various, sometimes contradictory, approaches courts have taken in interpreting what constitutes scandalous material under § 107(b)(2) of the Code. Part I traces the right of public access to documents and records in bankruptcy courts to its common-law and First Amendment origins and discusses why transparency is particularly important in the bankruptcy context. Part II addresses the split of authority among the circuit courts regarding the appropriate way to define scandalous, focusing on the United States Court of Appeals for the First Circuit’s “truthfulness and relevance” approach, the Eighth Circuit’s “context-sensitive” approach, and the Ninth Circuit’s “plain-meaning” approach. Part III explores the pros and cons of these approaches and formulates a new rule to resolve this interpretive split. This rule fuses the context-sensitive and plain-meaning approaches to create a hybrid rule where courts first look at the purpose of a filed document before analyzing whether it is “disgraceful, offensive, shameful and the like.” Under this approach, commonly filed papers are less likely to be sealed under § 107(b)(2) while rare, strategic filings are more likely to be withheld from the public.