1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-2-1994

Pansy v. Borough of Stroudsburg, et al.

Precedential or Non-Precedential:

Docket 93-7396

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Recommended Citation

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1 

United States Court of Appeals 

for the Third Circuit 

 

No. 93-7396 

 

JOHN A. PANSY, 

 Plaintiff/Appellee, 

 v. 

BOROUGH OF STROUDSBURG; HAROLD A. BENTZONI; 

KATHRYN MIKELS; JOHN W. OSBORNE, II; 

WILLIAM REBER; MARY JEAN KNAPIK; MARYANN 

WEST KOWALSHYN; RICHARD F. OSSWALD; 

CARL R. ROGERS 

 Defendants/Appellees, 

v. 

OTTAWAY NEWSPAPERS, INC. t/a POCONO RECORD, 

RONALD F. BOUCHARD; PENNSYLVANIA 

NEWSPAPER PUBLISHERS ASSOCIATION, 

 Intervenors/Appellants. 

 

On Appeal from the United States District Court 

for the Middle District of Pennsylvania 

(D.C. Civ. No. 91-00682) 

 

Argued January 11, 1994 

Before: STAPLETON, COWEN and ALITO, 

Circuit Judges. 

(Filed May 2, 1994) 

George W. Westervelt, Jr. (argued) 

304 Park Avenue, P.O. Box 549 
2 

Stroudsburg, PA 18360 

 Counsel for Appellants 

 Ottaway Newspapers, Inc. 

 t/a Pcono Record and 

 Ronald F. Bouchard 

 

James A. Swetz 

Cramer, Swetz & McManus 

711 Sarah Street 

Stroudsburg, PA 18360 

 Counsel for Appellee 

 John A. Pansy 

Ralph A. Matergia, Esq. (argued) 

Matergia & Dunn 

530 Main Street 

Stroudsburg, PA 18360 

 Counsel for Appellees 

 Borough of Stroudsburg 

 Harold A. Bentzoni 

 Kathryn Mikels 

 John W. Osborne, II 

 William Reber 

 Mary Jean Knapik 

 Maryann West Kowalyshyn 

 Richard F. Osswald 

 Carl R. Rogers 

 

 

OPINION OF THE COURT

 

COWEN, Circuit Judge. 

 This appeal raises several questions of first 

impression in this court concerning the ability of intervenors to 

challenge orders of confidentiality pertaining to settlement 

agreements. These questions are extremely important in light of 

the widespread and increasing use by district courts of 
3 

confidentiality orders to facilitate settlements, and the 

consequential sacrifice of public access to the information 

deemed confidential by such orders. 

 Ottaway Newspapers, Inc. ("Ottaway"), The Pocono Record 

("the Record"), Ronald F. Bouchard and the Pennsylvania Newspaper 

Publishers Association (collectively, "the Newspapers") filed 

this action in the district court seeking to intervene in an 

action that had been settled between John A. Pansy and the 

Borough of Stroudsburg ("the Borough"). The Newspapers' purpose 

for intervening was to gain access to the Settlement Agreement 

which was entered into between Pansy and the Borough. The 

Newspapers argued that either the Agreement was a judicial record 

to which it had a right of access, or that the Order of 

Confidentiality which the court entered concerning the Agreement 

should be modified or vacated. The district court ruled that the 

Newspapers' motion for intervention was untimely. In the 

alternative, the district court held that the Agreement was not a 

judicial record, and therefore not accessible under the right of 

access doctrine. The district court denied the Newspapers' 

Motion to Intervene and Motion to Reconsider, Vacate or Modify 

the Order of Confidentiality. This appeal followed. 

 For the reasons stated below, we will reverse the order 

of the district court and direct that the Newspapers be permitted 

to intervene. We will remand the case to the district court for 

proceedings consistent with this opinion. 
4 

JURISDICTION AND STANDARD OF REVIEW

 The district court entered a final order denying the 

Motion to Intervene and the Motion to Amend, Vacate or Modify by 

the Newspapers. Accordingly, we have jurisdiction under 28 

U.S.C. § 1291. See Bank of Am. Nat'l Trust and Sav. Ass'n v. 

Hotel Rittenhouse Assocs., 800 F.2d 339, 341 n.2 (3d Cir. 1986). 

 The standard of review for each issue raised in this 

appeal will be discussed in the analysis of the issue. Where 

this appeal raises a legal question, we exercise plenary review. 

Prisco v. Talty, 993 F.2d 21, 24 (3d Cir. 1993). 

DISCUSSION

A. BACKGROUND

 In May, 1991, Pansy filed an action in the district 

court pursuant to 42 U.S.C. § 1983 alleging that the Borough 

violated his civil rights. Prior to Pansy's filing that action, 

he had been Chief of the Borough's Police Department. While 

Chief, he was investigated and later arrested by agents of the 

Pennsylvania Attorney General's Office. Pansy was charged with 

offenses relating to the alleged improper handling of parking 

meter money. The Borough subsequently suspended him from the 

force and demoted him to patrolman. The demotion and suspension, 

in turn, led to Pansy's filing a civil rights action. Ultimately, 

Pansy was tried and acquitted of all criminal charges. 

 Pansy and the Borough agreed to settle the civil rights 

action and the Settlement Agreement was presented to and reviewed 

by the district court. The Newspapers were not involved with the 
5 

settlement. On June 5, 1992, the district court entered an order 

indicating that it had reviewed the terms of settlement and 

directing that the case be considered dismissed with prejudice 

upon the expiration of sixty days or consummation of settlement. 

The order also stated that "the terms of settlement are 

confidential and the parties hereby are ordered and directed to 

abide by the order of confidentiality." App. at 54-55. The 

Settlement Agreement was never filed with the district court. 

 On October 22, 1992, the Record sent the Borough a 

request for information pursuant to the Pennsylvania Right to 

Know Act ("the Act"), Pa. Stat. Ann. tit. 65, §§ 66.1-.4. (1959 & 

Supp. 1993). The request sought information and documents 

pertaining to the civil rights case, including the Settlement 

Agreement. 

 On November 25, 1992, the Borough sent a response to 

the Record which included some information concerning the 

monetary cost to the Borough in settling the case. However, the 

Borough refused to provide access to the Settlement Agreement 

itself, and related documents, ostensibly because the district 

court's June 5, 1992 Order of Confidentiality prohibited its 

divulgence. The Borough has continued to refuse to provide the 

Settlement Agreement to the Newspapers. 

 On December 23, 1992, the Newspapers filed a petition 

in the Court of Common Pleas of Monroe County, Pennsylvania, 

challenging the Borough's refusal to produce documents pursuant 

to §§ 66.3 and 66.4 of the Right to Know Act. By order of that 
6 

court, the state court litigation has been stayed pending the 

resolution of this case. 

 On December 23, 1992, the Newspapers also filed the 

motions in the district court which are the subject of this 

appeal. They filed a Motion to Intervene in the settled civil 

rights action between Pansy and the Borough, as well as a Motion 

to Reconsider, Vacate, or Modify the district court's June 5, 

1992 Order. Specifically, the Newspapers sought the Settlement 

Agreement as a judicial record. In the alternative, they sought 

to modify or vacate the June 5, 1992 Order of Confidentiality so 

they could obtain the Settlement Agreement pursuant to the 

Pennsylvania Right to Know Act. 

 The district court concluded that the Motion to 

Intervene was untimely. Alternatively, the district court 

addressed the merits of the right of access claim. It found that 

even if intervention was proper, the Settlement Agreement was not 

a judicial record because it was never filed with the court and, 

therefore, the Newspapers had no right to obtain the Settlement 

Agreement under the right of access doctrine. The district court 

also denied the Motion to Reconsider, Vacate or Modify the Order 

of Confidentiality. 

B. ANALYSIS

1. Standing

 The appellees have not challenged the Newspapers' 

standing in this appeal. Nevertheless, we are obliged to 

consider whether the Newspapers have standing to intervene in 
7 

this action to either obtain the sought-after Settlement 

Agreement under the right of access doctrine, or to attack the 

Order of Confidentiality so that they may seek access to the 

document under the Pennsylvania Right to Know Act. The 

requirements for an Article III case or controversy were stated 

in Valley Forge Christian College v. Americans United for 

Separation of Church and State, Inc., 454 U.S. 464, 102 S. Ct. 

752 (1982): 

Art. III requires the party who invokes the court's 

authority to show that he personally has suffered some 

actual or threatened injury as a result of the 

putatively illegal conduct of the defendant, and that 

the injury fairly can be traced to the challenged 

action and is likely to be redressed by a favorable 

decision. 

Id. at 472, 102 S. Ct. at 758 (internal quotations and citations 

omitted). 

 We have routinely found, as have other courts, that 

third parties have standing to challenge protective orders and 

confidentiality orders0 in an effort to obtain access to 

information or judicial proceedings. E.g., Brown v. Advantage 

Eng'g, Inc., 960 F.2d 1013, 1016 (11th Cir. 1992); Public Citizen 

v. Liggett Group Inc., 858 F.2d 775, 787 & n.12 (1st Cir. 1988), 

cert. denied, 488 U.S. 1030, 109 S. Ct. 838 (1989); In re 

Alexander Grant & Co. Litig., 820 F.2d 352, 354 (11th Cir. 1987); 

 

0In this opinion, the term "confidentiality order" will be used 

to denote any court order which in any way restricts access to or 

disclosure of any form of information or proceeding, including 

but not limited to "protective orders", "sealing orders" and 

"secrecy orders". "Protective orders" properly denote court 

orders over information exchanged during discovery. See Fed. R. 

Civ. P. 26(c). 
8 

United States v. Cianfrani, 573 F.2d 835, 845 (3d Cir. 1978); 

City of Hartford v. Chase, 733 F. Supp. 533, 534 (D. Conn. 1990), 

rev'd on other grounds, 942 F.2d 130 (2d Cir. 1991). The 

Newspapers may have standing notwithstanding the fact that "they 

assert rights that may belong to a broad portion of the public at 

large. So long as the 'injury in fact' alleged by each 

intervenor is 'a distinct and palpable injury to himself,' 

standing should not be denied 'even if it is an injury shared by 

a large class of other possible litigants.'" Cianfrani, 573 F.2d 

at 845 (quoting Warth v. Seldin, 422 U.S. 490, 501, 95 S. Ct. 

2197, 2206 (1975)). 

 Moreover, to establish standing, it is not necessary 

for litigants to demonstrate that they will prevail on the merits 

of their claim. See Warth, 422 U.S. at 500, 95 S. Ct. at 2206. 

Therefore, in determining whether the Newspapers have standing, 

we need not determine that the Newspapers will ultimately obtain 

access to the sought-after Settlement Agreement. We need only 

find that the Order of Confidentiality being challenged presents 

an obstacle to the Newspapers' attempt to obtain access. The 

Newspapers have met the standing requirements in this case: they 

have shown that the putatively invalid Confidentiality Order 

which the district court entered interferes with their attempt to 

obtain access to the Settlement Agreement, either under the right 

of access doctrine or pursuant to the Pennsylvania Right to Know 

Act. 

2. Intervention
9 

 The district court denied the Newspapers' Motion for 

Intervention. We normally review the district court's denial of 

the Newspapers' Motion for Intervention for abuse of discretion. 

Harris v. Pernsley, 820 F.2d 592, 597 (3d Cir.), cert. denied, 

484 U.S. 947, 108 S. Ct. 336 (1987). However, because the 

question raised is whether the district court applied the correct 

legal standard for intervention, we exercise plenary review. Cf.

Savarese v. Agriss, 883 F.2d 1194, 1200 (3d Cir. 1989). 

 The district court denied the Newspapers' Motion for 

Intervention for two reasons. First, it determined that the 

Motion for Intervention was untimely because the case had already 

been settled for at least six months. Second, it found that the 

Newspapers did not demonstrate that their interest in the case 

had anything in common with a question of law or fact in the main 

action and therefore did not meet the requirements of Fed. R. 

Civ. P. 24(b)(2).0

 The district court applied incorrect legal standards in 

denying the Newspapers' Motion for Intervention. As to the 

district court's finding that the Newspapers have not shown that 

their claim has anything in common with a question of law or fact 

in the case, the district court ruled contrary to a forming 

consensus in the federal courts. We agree with other courts that 

 

0Fed. R. Civ. P. 24(b) provides in part: 

Permissive Intervention. Upon timely application 

anyone may be permitted to intervene in an action: (1) 

when a statute of the United States confers a 

conditional right to intervene; or (2) when an 

applicant's claim or defense and the main action have a 

question of law or fact in common. 
10 

have held that the procedural device of permissive intervention 

is appropriately used to enable a litigant who was not an 

original party to an action to challenge protective or 

confidentiality orders entered in that action. E.g., Beckman 

Indus., Inc. v. International Ins. Co., 966 F.2d 470, 473-74 (9th 

Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 197 (1992); United 

Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1427 (10th 

Cir. 1990), cert. denied, 498 U.S. 1073, 111 S. Ct. 799 (1991); 

Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 783-87 (1st 

Cir. 1988), cert. denied, 488 U.S. 1030, 109 S. Ct. 838 (1989); 

Meyer Goldberg, Inc., of Lorain v. Fisher Foods, Inc., 823 F.2d 

159, 161-64 (6th Cir. 1987); Martindell v. International Tel. & 

Tel. Corp., 594 F.2d 291, 294 (2d Cir. 1979); In re Beef Indus. 

Antitrust Litig., 589 F.2d 786, 788-89 (5th Cir. 1979); City of 

Hartford v. Chase, 733 F. Supp. 533, 534 (D. Conn. 1990), rev'd 

on other grounds, 942 F.2d 130 (2d Cir. 1991); In re Franklin 

Nat'l Bank Sec. Litig., 92 F.R.D. 468, 470-71 (E.D.N.Y. 1981), 

aff'd sub nom. Federal Deposit Ins. Corp. v. Ernst & Ernst, 677 

F.2d 230 (2d Cir. 1982) [hereinafter FDIC]. In Beckman, the 

Court of Appeals for the Ninth Circuit stated: 

[S]pecificity, e.g., that the [intervenors'] claim 

involve . . . the same legal theory [that was raised in 

the main action], is not required when intervenors are 

not becoming parties to the litigation. There is no 

reason to require such a strong nexus of fact or law 

when a party seeks to intervene only for the purpose of 

modifying a protective order. 
11 

966 F.2d at 474.0 The reasoning in Beckman is persuasive, and we 

adopt it. We therefore reject the district court's conclusion 

that the Newspapers have not shown their claim has anything in 

common with a question of law or fact in the case, and therefore 

cannot intervene. By virtue of the fact that the Newspapers 

challenge the validity of the Order of Confidentiality entered in 

the main action, they meet the requirement of Fed. R. Civ. P. 

24(b)(2) that their claim must have "a question of law or fact in 

common" with the main action.0

 The district court's second reason for denying the 

Newspapers' motion for intervention was that the motion to 

intervene was untimely, as it was made approximately six and onehalf months from the date of settlement. In support of its 

holding, the district court cited dicta from a footnote in an 

opinion by this court, Littlejohn v. Bic Corp., 851 F.2d 673, 677 

n.7 (3d Cir. 1988), which stated that "'intervention is ancillary 

 

0The Beckman court also noted that although permissive 

intervention ordinarily requires independent jurisdictional 

grounds, an independent jurisdictional basis is not required 

because intervenors do not seek to litigate a claim on the 

merits. 966 F.2d at 473. Thus, in cases where intervenors seek 

to modify an order of the court, the court has jurisdiction based 

on the fact that it already has the power to modify the 

protective order and no independent jurisdictional basis is 

needed. Id.

0We therefore do not follow dicta in our decision in Littlejohn 

v. Bic Corp., 851 F.2d 673 (3d Cir. 1988), which stated: "Third 

parties seeking access to the judicial record after the 

termination of an action may therefore be required to proceed by 

complaint or order to show cause." Id. at 677 n.7. That 

statement is dicta because, as the Littlejohn court pointed out, 

the intervention issue was not raised on appeal. Id. Of course, 

as an alternative to permissive intervention, parties may choose 

to proceed by complaint or order to show cause to challenge 

confidentiality orders. 
12 

and subordinate to a main cause and whenever an action is 

terminated, for whatever reason, there no longer remains an 

action in which there can be an intervention,'" id. (quoting 

Black v. Central Motors Lines, Inc., 500 F.2d 407, 408 (4th Cir. 

1974)). 

 We do not follow the dicta quoted above from Littlejohn

because it announces an inappropriate rule and is contrary to the 

majority of courts that have decided the issue. These courts 

have allowed intervention by parties for the limited purpose of 

modifying a confidentiality or protective order even after the 

underlying dispute between the parties has been settled. See, 

e.g., Beckman, 966 F.2d at 471, 473-75; Brown v. Advantage Eng'g, 

Inc., 960 F.2d 1013, 1014-16 (11th Cir. 1992); United Nuclear, 

905 F.2d at 1426-29; Public Citizen, 858 F.2d at 783-87; Meyer 

Goldberg, 823 F.2d at 161-64; Stallworth v. Monsanto Co., 558 

F.2d 257, 260-70 (5th Cir. 1977); In re Franklin Nat'l Bank Sec. 

Litig., 92 F.R.D. at 469-71; see Bank of Am. Nat'l Trust and Sav. 

Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 342 n.2 (3d 

Cir. 1986).0 Discussion in a recent decision by this court 

 

0One case has been found which contradicts the general rule that 

intervenors will be granted permissive intervention to challenge 

confidentiality orders. In United States v. Kentucky Utils. Co., 

927 F.2d 252 (6th Cir. 1991), the Court of Appeals for the Sixth 

Circuit expressed skepticism as to whether intervention to 

challenge a confidentiality order would be appropriate. The 

court stated: 

Because the papers [sought] are not in the court 

record, but are instead copies of private documents 

that came into the possession of the DOJ only for the 

limited purposes of discovery and were not safeguarded 

by a protective order during discovery, [the potential 

intervenor] faces a formidable burden in attempting to 
13 

reflects the growing consensus among the courts of appeals that 

intervention to challenge confidentiality orders may take place 

long after a case has been terminated. In Leucadia, Inc. v. 

Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 

1993), we stated that "a district court may properly consider a 

motion to intervene permissively for the limited purpose of 

modifying a protective order even after the underlying dispute 

between the parties has long been settled." Id. at 161 n.5. This 

recognition in Leucadia, in combination with the forming 

consensus in other courts of appeals, provides strong reasons to 

allow a district court to grant permissive intervention in order 

to allow litigation of ancillary issues even after a case has 

been concluded. 

 In Public Citizen, the Court of Appeals for the First 

Circuit reasoned that where an intervenor is litigating an 

 

demonstrate that her desire for access to materials of 

such a private nature rises to the status of an 

interest of so significant a magnitude as to entitle 

her to participate as a party to the action and 

challenge the . . . order. 

Id. at 255. It should be noted that the Kentucky Utilities court 

cited no authority for the above-quoted passage. It contains no 

analysis, nor does it articulate any workable standards, 

concerning whether a party may intervene in an action to 

challenge a protective or confidentiality order. It merely 

asserts the phrase "formidable burden". Moreover, as a matter of 

policy the holding in Kentucky Utilities is unacceptable since it 

makes it almost impossible for the public to intervene in actions 

even involving important public matters to challenge protective 

or confidentiality orders. We therefore cannot join the position 

taken by the Sixth Circuit in Kentucky Utilities. 
14 

ancillary issue, the potential for prejudice to the original 

parties due to the delay in intervention0 is minimized: 

[A] factor to be considered is the prejudice to 

existing parties due to [a litigant's] delay in 

intervening. This factor encompasses the basic 

fairness notion that intervention should not work a 

"last minute disruption of painstaking work by the 

parties and the court." For purposes of this factor, 

therefore, it is necessary to ask why a would-be 

intervenor seeks to participate, for if the desired 

intervention relates to an ancillary issue and will not 

disrupt the resolution of the underlying merits, 

untimely intervention is much less likely to prejudice 

the parties. Here, of course, [the intervenor's] 

motion pertains to a particularly discrete and 

ancillary issue, as demonstrated by the fact that the 

merits of the case have been already concluded and are 

no longer subject to review. Because [the intervenor] 

sought to litigate only the issue of the protective 

order, and not to reopen the merits, we find that its 

delayed intervention caused little prejudice to the 

existing parties in this case. 

858 F.2d at 786 (citations omitted). 

 This reasoning is persuasive and we adopt it. We also 

note that in cases dealing with access to information, the public 

and third parties may often have no way of knowing at the time a 

confidentiality order is granted what relevance the settling case 

has to their interests. Therefore, to preclude third parties 

from challenging a confidentiality order once a case has been 

settled would often make it impossible for third parties to have 

their day in court to contest the scope or need for 

confidentiality. We therefore expressly hold today what we 

observed in our opinion in Leucadia: "a district court may 

 

0Fed. R. Civ. P. 24(b) provides, in part, that in exercising its 

discretion in determining whether to allow permissive 

intervention, "the court shall consider whether the intervention 

will unduly delay or prejudice the adjudication of the rights of 

the original parties." 
15 

properly consider a motion to intervene permissively for the 

limited purpose of modifying [or vacating] a [confidentiality] 

order even after the underlying dispute between the parties has 

long been settled." 998 F.2d at 161 n.5.0

 The facts of this case lead us to conclude that 

intervention should not be deemed untimely. In United Nuclear, 

intervention was permitted approximately three years after the 

underlying action was settled and dismissed, 905 F.2d at 1427, 

and in Beckman, intervention was allowed approximately two years 

after the underlying case was terminated, 966 F.2d at 471, 473. 

In the instant case, there was only a six and one-half month 

delay between the time of settlement and the motion for 

 

0In Commonwealth of Pa. v. Rizzo, 530 F.2d 501 (3d Cir.), cert. 

denied, 426 U.S. 921, 96 S. Ct. 2628 (1976), we listed three 

factors to consider in determining whether a motion to intervene 

is timely: (1) how far the proceedings have gone when the movant 

seeks to intervene; (2) prejudice which resultant delay might 

cause to other parties; and (3) the reason for the delay. Id. at 

506. In Delaware Valley Citizens' Council v. Commonwealth of 

Pa., 674 F.2d 970 (3d Cir. 1982), we also stated that "a motion 

to intervene after entry of a decree should be denied except in 

extraordinary circumstances," id. at 974. However, Rizzo and 

Delaware Valley involved parties seeking to intervene and 

litigate the merits of the underlying suit. The standards 

articulated in Rizzo and Delaware Valley are therefore not 

helpful in cases such as the instant one, where the intervenors 

do not wish to litigate the merits of the underlying suit, but 

rather only seek to litigate an ancillary issue, such as a 

protective or confidentiality order. For example, the first 

Rizzo factor will rarely be helpful in cases where the intervenor 

is challenging a confidentiality order over a settlement 

agreement, because the order usually takes effect upon the 

termination of an action. Thus, to ask how far the proceedings 

have gone is pointless. Therefore, although Rizzo, Delaware 

Valley and their progeny are good law, they do not control in 

cases such as the one which is the subject of this appeal, where 

the potential intervenors wish only to litigate a question 

ancillary to the underlying suit. 
16 

intervention.0 This relatively short delay, in itself, leads us 

to the conclusion that intervention should be permitted.0 

 

3. The Right of Access Doctrine

 Although the district court denied intervention by the 

Newspapers, it made an alternative holding. Assuming that 

intervention was proper, the district court considered the merits 

of the Newspapers' challenge to the Order of Confidentiality and 

their attempt to obtain access to the Settlement Agreement. The 

district court determined that the Settlement Agreement was not a 

"judicial record," and it therefore denied the Newspapers' motion 

to obtain access to the Settlement Agreement under the right of 

access doctrine. 

 We have previously recognized a right of access to 

judicial proceedings and judicial records, and this right of 

access is "beyond dispute." Littlejohn v. Bic Corp., 851 F.2d 

673, 677-78 (3d Cir. 1988) (quoting Publicker Indus., Inc. v. 

Cohen, 733 F.2d 1059, 1066 (3d Cir. 1984)). "The balancing of 

factors for and against access is a decision committed to the 

 

0We also note that the Record sent the Borough a request for 

information pursuant to the Pennsylvania Right to Know Act on 

October 22, 1992, just over four months from the date of 

settlement. Only after the Borough refused to provide the Record 

with the Settlement Agreement did the Record realize that court 

action would be necessary. These facts indicate that the Record 

was diligent in seeking the Settlement Agreement, and that its 

motion for intervention therefore cannot be deemed untimely. 

0We need not address whether in some circumstances a trial court, 

in the exercise of its discretion, may rightly conclude that 

untimeliness or other factors relating to the particular claimant 

justify refusal of intervention where the intervenors seek to 

contest an ancillary issue. 
17 

discretion of the district court, although it is not generally 

accorded the narrow review reserved for discretionary decisions 

based on first-hand observations." Bank of Am. Nat'l Trust and 

Sav. Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d 

Cir. 1986) (citations omitted). In this case, however, the 

district court reached its conclusion through a legal 

determination that the Settlement Agreement was not a "judicial 

record" accessible under the right of access doctrine. We will 

therefore exercise plenary review over the district court's legal 

determination. See 1st Westco Corp. v. School Dist. of Phila., 6 

F.3d 108, 112 (3d Cir. 1993). 

 The Newspapers argue that the Settlement Agreement 

which Pansy and the Borough entered into is a "judicial record," 

accessible under the right of access doctrine. If the Settlement 

Agreement is a judicial record, then Rittenhouse would be binding 

and the Agreement should be released by the district court. In 

Rittenhouse, this court held that a settlement agreement deemed a 

judicial record is accessible under the right of access doctrine. 

800 F.2d at 344-45. We specifically held that the strong 

presumption of access outweighed the interest in promoting 

settlements, which in the matter before us is the only interest 

which the Borough has argued in favor of maintaining the Order of 

Confidentiality. Id. Therefore, if the Settlement Agreement is 

a judicial record, it should be released by the district court 

itself under the right of access doctrine, and there would be no 

need for the Newspapers to demonstrate that the Settlement 
18 

Agreement is a public record under the Pennsylvania Right to Know 

Act. 

 However, our prior decisions preclude a finding that 

the Settlement Agreement is a judicial record accessible under 

the right of access doctrine. See Internal Operating Procedures 

of the United States Court of Appeals for the Third Circuit 9.1 

(July 1990) ("It is the tradition of this court that the holding 

of a panel in a reported opinion is binding on subsequent 

panels."). In Enprotech Corp. v. Renda, 983 F.2d 17 (3d Cir. 

1993), we indicated that when a settlement agreement is not filed 

with the court, it is not a "judicial record" for purposes of the 

right of access doctrine. Id. at 20-21. In Enprotech, we held 

that since the "Settlement Agreement ha[d] not been filed with, 

placed under seal, interpreted or enforced by the district 

court", it was not a judicial record. Id. at 20. The Enprotech

court went on to hold: "Moreover, the Agreement will not become a 

part of the public record unless and until the district court may 

order the parties to comply with its terms." Id. at 21. The 

Enprotech Court so held even though the district court in that 

case specifically retained jurisdiction over the settlement 

agreement until its expiration so that it could enforce its 

terms. Id.

 In the instant case, the Settlement Agreement which is 

subject to the Order of Confidentiality was never filed with, 

interpreted or enforced by the district court. The district 

court has not ordered any of the terms of the Settlement 

Agreement to be complied with. Accordingly, Enprotech controls 
19 

the instant case and leads us to conclude that the Settlement 

Agreement is not a judicial record, and the right of access 

doctrine cannot be a basis for the Newspapers to obtain access to 

the Agreement. In contrast, in Rittenhouse we found that the 

settlement agreement was a judicial record because it had been 

filed with and enforced by the district court. 800 F.2d at 344-

45. 

 Another decision by this court indicates that the 

Settlement Agreement is not a judicial record accessible under 

the right of access doctrine. In Littlejohn v. Bic Corp., 851 

F.2d 673 (3d Cir. 1988), we addressed the question of whether 

documents which were admitted into evidence and had become 

judicial records were accessible under the right of access 

doctrine after the underlying litigation had been settled and the 

documents had been returned to the party resisting disclosure. We 

stated: 

We . . . hold that, absent allegations of fraud or 

other extraordinary circumstances, trial exhibits that 

were restored to their owner after a case has been 

completely terminated and which were properly subject 

to destruction by the clerk of court are no longer 

judicial records within the "supervisory power" of the 

district court. 

Id. at 683. Under Littlejohn, even where there is no dispute 

that documents were at one time judicial records, once such 

documents are no longer part of the court file they lose their 

status as judicial records.0 Thus, in Littlejohn, as in 

 

0But see Littlejohn, 851 F.2d at 688 (Scirica, J., dissenting). 

In his dissent, Judge Scirica stated: 
20 

Enprotech, we focused on the technical question of whether a 

document is physically on file with the court. If it is not, it 

is not a "judicial record." We pointed out in Leucadia that 

"[n]umerous other courts have also recognized the principle that 

the filing of a document gives rise to a presumptive right of 

public access." 998 F.2d at 161-62 (emphasis added). See also

Rittenhouse, 800 F.2d at 345 ("Once a settlement is filed in the 

district court, it becomes a judicial record, and subject to the 

access accorded such records." (emphasis added)). In the matter 

presently before the court, the parties agree that the Settlement 

Agreement has never been filed with the court. 

 The Newspapers nevertheless argue that since the 

district court has entered an Order of Confidentiality over the 

Settlement Agreement, this in effect has converted the unfiled 

Settlement Agreement into a judicial record. This argument 

fails. Simply because a court has entered a confidentiality 

order over documents does not automatically convert those 

documents into "judicial records" accessible under the right of 

access doctrine. For example, when a court enters an order of 

 

Any member of the public, whether a student of the law, 

an interested observer, or a historian, will be 

required to assert his rights within two months or lose 

them forever. . . . I do not view a local rule 

permitting return or destruction of exhibits as 

controlling the determination of right of access. 

Rather, the district judge should be permitted to 

inquire whether the contested items are still available 

from any source. If the items exist, their character 

as judicial records renders them presumptively open to 

public examination, absent "improper purposes." 

Id. (citation omitted). 
21 

protection over documents exchanged during discovery, and these 

documents have not been filed with the court, such documents are 

not, by reason of the protective order alone, deemed judicial 

records to which the right of access attaches. See Seattle Times 

Co. v. Rhinehart, 467 U.S. 20, 30-37, 104 S. Ct. 2199, 2206-10 

(1984); Leucadia, 998 F.2d at 163 & n.9; Cipollone v. Liggett 

Group, Inc., 785 F.2d 1108, 1119-20 (3d Cir. 1986), cert. denied, 

484 U.S. 976, 108 S. Ct. 487 (1987). 

 The district court in this case stated that "it is 

further ordered that the terms of the settlement are confidential 

and the parties hereby are ordered and directed to abide by the 

order of confidentiality." App. at 54-55. Therefore, the 

district court granted an order of confidentiality over the terms 

of the Settlement Agreement. It did not order the terms of the 

Settlement Agreement to be abided by the parties--nor could it, 

since the Settlement Agreement itself was never filed with the 

court. 

 The Order of Confidentiality is independent of any of 

the terms included within the Settlement Agreement, just as 

protective orders over discovery materials are independent of the 

items actually exchanged subject to such protective orders. 

Indeed, we have no way of knowing whether the Settlement 

Agreement itself includes a provision for confidentiality because 

the Settlement Agreement was never filed with the court and is 

not a part of the court record. It is therefore not possible for 

us to find, as Enprotech requires in order to deem a settlement 

agreement a judicial record, that the district court ordered the 
22 

parties to comply with the terms of the Settlement Agreement. 983 

F.2d at 21 ("[T]he [Settlement] Agreement will not become a part 

of the public record unless and until the district court may 

order the parties to comply with its terms."). 

 The Newspapers further argue that the Settlement 

Agreement is a judicial record because the district court 

actually reviewed the Settlement Agreement before granting the 

Order of Confidentiality. In its June 5, 1992 order, the 

district court stated: "[T]he parties having informed the Court 

that the . . . matter is settled and the Court having reviewed 

the terms of settlement, this action is hereby discontinued . . . 

." App. at 54 (emphasis added). By virtue of the fact that the 

district court reviewed the Settlement Agreement before granting 

its order, the Newspapers argue this converts the Settlement 

Agreement into a judicial record. In support of this position, 

the Newspapers cite the decision by the Court of Appeals for the 

First Circuit in FTC v. Standard Fin. Management Corp., 830 F.2d 

404 (1st Cir. 1987). 

 In Standard Financial, the court held that "relevant 

documents which are submitted to, and accepted by, a court of 

competent jurisdiction in the course of adjudicatory proceedings, 

become documents to which the presumption of public access 

applies." Id. at 409. Even though the disputed documents were 

not part of the court file, id. at 405-407, 413, the Standard 

Financial court held that they were nevertheless accessible under 

the right of access doctrine because "[t]hey were duly submitted 

to the court", id. at 410, and "were relevant and material to the 
23 

matters sub judice", id. The Newspapers argue that since the 

Settlement Agreement was duly submitted to the district court, 

and the district court based its June 5, 1992 Order partly in 

reliance on this submission, Standard Financial controls and the 

Settlement Agreement is accessible under the right of access 

doctrine. 

 The Court of Appeals for the First Circuit in Standard 

Financial has articulated a persuasive and perhaps desirable 

rule. Moreover, it may well be that during the life of a case, 

the issue of whether a document is a judicial record should turn 

on the use the court has made of it rather than on whether it has 

found its way into the clerk's file. However, when the "judicial 

record" issue arose in this case, final judgment had been entered 

and no possibility of an appeal remained. As a result, we find 

this case to be indistinguishable from Littlejohn and we are 

bound by the Internal Operating Procedures of this court to 

follow that decision. Internal Operating Procedures of the 

United States Court of Appeals for the Third Circuit 9.1 (July 

1990). In Littlejohn, this court held that exhibits that have 

been admitted into evidence and relied upon by the court do not 

remain judicial records after the case is closed and they are 

returned to the parties. 851 F.2d at 683. We are therefore 

clearly not at liberty here to bestow judicial record status on 

the Settlement Agreement, which the court briefly perused and 

returned to the parties in a now closed case. But see

Littlejohn, 851 F.2d at 688 (Scirica, J., dissenting) (A 

"district judge should be permitted to inquire whether the 
24 

contested items are still available from any source."). The 

Settlement Agreement is not a "judicial record," and the district 

court correctly concluded that the Newspapers cannot obtain 

access to that document under the right of access doctrine.0

4. Challenging the Order of Confidentiality

 The Newspapers also made a motion in the district court 

to reconsider, vacate or modify the Confidentiality Order, as a 

matter independent of the right of access doctrine. The district 

court denied the Newspapers' motion. We review the grant or 

modification of a confidentiality order for abuse of discretion. 

See Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d 

653, 664 (3d Cir. 1991); Smith v. Bic Corp., 869 F.2d 194, 199 

(3d Cir. 1989). However, we exercise plenary review over the 

district court's interpretation and application of the legal 

standard for granting or modifying a confidentiality order. Cf.

Savarese v. Agriss, 883 F.2d 1194 (3d Cir. 1989). 

 

0The Newspapers make a technical argument as to why the 

Settlement Agreement is a judicial record accessible under the 

right of access doctrine. Citing Bank of Am. Nat'l Trust and 

Savings Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d 

Cir. 1986), the Newspapers argue that since in settling the case 

the appellees did not meet the specific requirements of Fed. R. 

Civ. P. 41(a), governing voluntary dismissal, the Settlement 

Agreement must be considered a judicial record. Although in 

Rittenhouse we did state in dicta that documents relating to a 

voluntary stipulation of dismissal under Fed. R. Civ. P. 41(a)(1) 

would likely not be accessible under the right of access 

doctrine, 800 F.2d at 344, we did not at all suggest that any 

documents not relating to a Rule 41(a)(1) dismissal would 

automatically be accessible under the right of access doctrine. 

The Newspapers' argument overlooks the fact that the settlement 

agreement in Rittenhouse, unlike the one in the case presently 

before the court, was filed with the court. 800 F.2d at 344-45. 

As the above discussion indicates, whether the relevant document 

is in the court file is the critical inquiry. 
25 

 Even if the Settlement Agreement is not a judicial 

record, the Newspapers seek to modify or vacate the Order of 

Confidentiality controlling the Settlement Agreement. Their 

reason for doing so is that if the Newspapers are successful in 

vacating the Order of Confidentiality, they will then be able to 

seek access to the Settlement Agreement under the Pennsylvania 

Right to Know Act, Pa. Stat. Ann. tit. 65, §§ 66.1-.4. (1959 & 

Supp. 1993), without interference by the federal court Order of 

Confidentiality. 

 It is important to note the practical difference 

between the Newspapers' failed attempt to obtain the Settlement 

Agreement under the right of access doctrine on the one hand, and 

on the other hand the Newspapers' attempt only to modify or 

vacate the Order of Confidentiality. If the Newspapers had been 

successful in demonstrating that the Settlement Agreement was a 

judicial record for purposes of the right of access doctrine, the 

Settlement Agreement would have been made available by the 

district court itself, as a judicial record. In contrast, if the 

Newspapers are successful in vacating the Order of 

Confidentiality, as a matter independent of the right of access 

doctrine, the district court will not then automatically grant 

access to the Settlement Agreement. Rather, the Order of 

Confidentiality would merely be vacated, and the Newspapers would 

then be free to seek access to the Settlement Agreement through 

other legal channels, without interference by the Order of 

Confidentiality. In fact, the Newspapers have already commenced 

a suit in Pennsylvania state court, seeking the Settlement 
26 

Agreement as a "public record" under the Pennsylvania Right to 

Know Act. The state court stayed that action pending the outcome 

of this federal action. 

 If the Order of Confidentiality is vacated, then it 

appears that the Settlement Agreement will be made available by 

order of the state court pursuant to the Pennsylvania Right to 

Know Act.0 If the Order of Confidentiality is not vacated, then 

the state court would be unable to order the document accessible. 

This is because even though the Settlement Agreement would likely 

be available under the Pennsylvania Right to Know Act, the state 

court would be obligated to respect the already-existing federal 

court Order of Confidentiality.0 From these observations, it is 

 

0In Morning Call, Inc. v. Lower Saucon Township, 627 A.2d 297 

(Pa. Commw. Ct. 1993), the Commonwealth Court of Pennsylvania 

held that a settlement agreement entered into between a township 

and a private party was a "public record" subject to disclosure 

under the Pennsylvania Right to Know Act. Id. at 299-301. The 

court so held even though the parties to the settlement agreement 

had included a non-disclosure clause within the settlement 

agreement. Id. at 298. 

0The Pennsylvania Right to Know Act provides that information 

restricted by order of a court is not a "public record" for the 

purposes of the Act. Pa. Stat. Ann. tit. 65, § 66.1(2) (Supp. 

1993). 

 Although neither the Full Faith and Credit Statute, 28 

U.S.C. § 1738, nor the Full Faith and Credit Clause of the United 

States Constitution, U.S. Const. art. IV, § 1, mentions what 

obligations exist for state courts confronting federal court 

judgments, it is well recognized that state courts must give full 

faith and credit to federal court judgments. E.g., Stoll v. 

Gottlieb, 305 U.S. 165, 170-71, 59 S. Ct. 134, 136-37 (1938); 

Crescent City Live-Stock Landing & Slaughter-House Co. v. 

Butchers' Union Slaughter-House & Live-Stock Landing Co., 120 

U.S. 141, 146-47, 156-59, 7 S. Ct. 472, 474-75, 480-81 (1887). 

The state court's obligation to respect a prior federal court 

order which conflicts with state law also follows from the 

principle that states cannot curtail the jurisdiction of the 

federal courts. Janice Toran, Secrecy Orders and Government 
27 

clear that the Newspapers have an interest in vacating the Order 

of Confidentiality even though we have rejected their attempt to 

obtain the Settlement Agreement under the right of access 

doctrine. 

 It is well-established that a district court retains 

the power to modify or lift confidentiality orders that it has 

entered. See, e.g., United Nuclear Corp. v. Cranford Ins. Co., 

905 F.2d 1424, 1427 (10th Cir. 1990), cert. denied, 498 U.S. 

1073, 111 S. Ct. 799 (1991); In re "Agent Orange" Prod. Liab. 

Litig., 821 F.2d 139, 145 (2d Cir.), cert. denied , 484 U.S. 953, 

108 S. Ct. 344 (1987); Palmieri v. New York, 779 F.2d 861, 864-65 

(2d Cir. 1985); In re Franklin Nat'l Bank Sec. Litig., 92 F.R.D. 

468, 471 (E.D.N.Y 1981), aff'd sub nom. FDIC, 677 F.2d 230 (2d 

Cir. 1982). The issue of whether an order of confidentiality 

should be modified is separable from the question concerning 

whether a settlement agreement subject to that order is a 

judicial record for purposes of the right of access doctrine. 

Cf., e.g., Beckman Indus., Inc. v. International Ins. Co., 966 

F.2d 470, 471-76 (9th Cir. 1992); City of Hartford v. Chase, 942 

F.2d 130, 134-37 (2d Cir. 1991) (allowing intervening third 

parties to challenge confidentiality order over documents not 

part of court file); Cipollone v. Liggett Group, Inc., 785 F.2d 

1108, 1110-23 (3d Cir. 1986), cert. denied, 484 U.S. 976, 108 S. 

Ct. 487 (1987). Therefore, although we have already determined 

that the Settlement Agreement is not available under the right of 

 

Litigants: "A Northwest Passage Around the Freedom of Information 

Act"?, 27 Ga. L. Rev. 121, 170-71 (1992). 
28 

access doctrine, we will consider whether the district court 

should have nevertheless modified or vacated the Order the 

Confidentiality which it ordered over the Settlement Agreement. 

 In favor of its position that the Order of 

Confidentiality should be vacated, the Newspapers argue that the 

district court lacked the power to enter an order of 

confidentiality over a document which is not in the court file 

nor incorporated into an order of the court. We reject this 

argument. Courts have inherent power to grant orders of 

confidentiality over materials not in the court file. In Seattle 

Times Co. v. Rhinehart, 467 U.S. 20, 104 S. Ct. 2199 (1984), the 

Supreme Court confirmed that courts have the power to grant 

confidentiality orders over material not on file with the court, 

id. at 33 n.19, 104 S. Ct. at 2207 n.19, holding that "we have no 

question as to the court's jurisdiction to [enter protective 

orders] under the inherent 'equitable powers of courts of law 

over their own process, to prevent abuses, oppression, and 

injustices,'" id. at 35, 104 S. Ct. at 2209 (quoting 

International Prods. Corp. v. Koons, 325 F.2d 403, 407-08 (2d 

Cir. 1963)). See also, e.g., FDIC, 677 F.2d at 232 ("It is 

beyond question that a court may issue orders prohibiting 

disclosure of documents or information."). 

 The Newspapers also challenge the validity of the Order 

of Confidentiality because the Order was not entered pursuant to 

a rule of civil procedure or any other court rule. The Order was 

entered over the Settlement Agreement, while the Federal Rules of 

Civil Procedure only address protective orders over materials 
29 

exchanged during discovery, Fed. R. Civ. P. 26(c). However, in 

Seattle Times, the Supreme Court made clear that courts have 

inherent equitable power to grant confidentiality orders, whether 

or not such orders are specifically authorized by procedural 

rules. 467 U.S. at 35, 104 S. Ct. at 2209. 

 Nevertheless, simply because courts have the power to 

grant orders of confidentiality does not mean that such orders 

may be granted arbitrarily. Disturbingly, some courts routinely 

sign orders which contain confidentiality clauses without 

considering the propriety of such orders, or the countervailing 

public interests which are sacrificed by the orders.0 Because 

 

0In City of Hartford v. Chase, 942 F.2d 130 (2d Cir. 1991), Judge 

Pratt, in a concurring opinion, made the following insightful 

observations: 

A . . . troubling tendency accompanies the increasing 

frequency and scope of confidentiality agreements that 

are ordered by the court. These agreements are reached 

by private parties and often involve materials and 

information that is never even presented to the court. 

With the signature of a federal judge, however, they 

are converted into a powerful means of maintaining and 

enforcing secrecy. Once signed, a confidentiality 

order, which has converted a private agreement into an 

order of the court, requires the court to use its 

contempt power to enforce the private agreement. . . . 

[B]ecause they often involve information not in the 

control of the court, and may . . . implicate public 

concerns, confidentiality orders, when not subject to 

proper supervision, have a great potential for abuse. 

For this reason, judges should review such agreements 

carefully and skeptically before signing them. 

Id. at 137-38 (Pratt, J., concurring). See also Toran, supra

note 13, at 124-26; Brian T. FitzGerald, Note, Sealed v. Sealed: 

A Public Court System Going Secretly Private, 6 J.L. & Pol. 381, 

382 (1990) ("Unfortunately, the incidence of secrecy in the 

judicial process appears to be on the rise, particularly in the 

complex litigation area. Equally disturbing is the trend for 
30 

defendants request orders of confidentiality as a condition of 

settlement, courts are willing to grant these requests in an 

effort to facilitate settlement without sufficiently inquiring 

into the potential public interest in obtaining information 

concerning the settlement agreement. The public's interest is 

particularly legitimate and important where, as in this case, at 

least one of the parties to the action is a public entity or 

official. 

 In this case, the district court made no findings for 

the record when it initially granted the Order of 

Confidentiality, and apparently did not balance the competing 

public and privacy interests before entering the Order. In 

denying the Newspapers' Motion to Reconsider, Vacate or Modify 

the Order, the district court did not explain why the need for 

confidentiality outweighed the Newspapers' interest in obtaining 

access to the Settlement Agreement pursuant to the Pennsylvania 

Right to Know Act.0 We must determine whether the district court 

appropriately exercised its discretion in granting and 

maintaining the Order of Confidentiality. 

 In the context of discovery, it is well-established 

that a party wishing to obtain an order of protection over 

discovery material must demonstrate that "good cause" exists for 

the order of protection. Fed. R. Civ. P. 26(c); Smith v. Bic 

Corp., 869 F.2d 194, 199 (3d Cir. 1989). In this case, the Order 

 

parties to condition any pre-trial settlement on the court's 

granting a total sealing order covering all materials in the 

court's possession." (footnotes omitted)). 

0See supra note 12. 
31 

of Confidentiality was not entered over discovery materials, but 

rather over a settlement agreement. Protective orders over 

discovery materials and orders of confidentiality over matters 

relating to other stages of litigation have comparable features 

and raise similar public policy concerns. All such orders are 

intended to offer litigants a measure of privacy, while balancing 

against this privacy interest the public's right to obtain 

information concerning judicial proceedings. Also, protective 

orders over discovery and confidentiality orders over matters 

concerning other stages of litigation are often used by courts as 

a means to aid the progression of litigation and facilitate 

settlements. Protective orders and orders of confidentiality are 

functionally similar, and require similar balancing between 

public and private concerns. We therefore exercise our inherent 

supervisory power0 to conclude that whether an order of 

confidentiality is granted at the discovery stage or any other 

 

0"While we adhere firmly to the view that our supervisory power 

should not be invoked lightly, we believe that circumstances 

warrant its application here." Sowell v. Butcher & Singer, Inc., 

926 F.2d 289, 295 (3d Cir. 1991) (requiring district courts 

entering a directed verdict to set forth an explanation for the 

court's order). The Federal Rules of Civil Procedure do not 

discuss confidentiality orders outside the context of discovery. 

See Fed. R. Civ. P. 26(c) (protective orders). "In the absence 

of procedural rules specifically covering a situation, the court 

may, pursuant to its inherent power . . . fashion a rule not 

inconsistent with the Federal Rules." Franquez v. United States, 

604 F.2d 1239, 1244-45 (9th Cir. 1979) (footnote omitted). If, 

as we have recognized above, a district court has inherent power 

to enter orders of confidentiality outside the context of 

discovery despite the fact that such orders are not made pursuant 

to any federal rule, it is appropriate for an appellate court to 

exercise its supervisory power to ensure that such orders are not 

granted arbitrarily. 
32 

stage of litigation, including settlement, good cause must be 

demonstrated to justify such orders. Cf. City of Hartford v. 

Chase, 942 F.2d 130, 136 (2d Cir. 1991) ("We do not . . . give 

parties carte blanche either to seal documents related to a 

settlement agreement or to withhold documents they deem so 

'related.' Rather, the trial court--not the parties themselves--

should scrutinize every such agreement involving the sealing of 

court papers and [determine] what, if any, of them are to be 

sealed, and it is only after very careful, particularized review 

by the court that a Confidentiality Order may be executed."). 

 "Good cause is established on a showing that disclosure 

will work a clearly defined and serious injury to the party 

seeking closure. The injury must be shown with specificity." 

Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 

1984). "Broad allegations of harm, unsubstantiated by specific 

examples or articulated reasoning," do not support a good cause 

showing. Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 

(3d Cir. 1986), cert. denied, 484 U.S. 976, 108 S. Ct. 487 

(1987). The burden of justifying the confidentiality of each and 

every document sought to be covered by a protective order remains 

on the party seeking the order. Id. at 1122.0

 

0However, because of the benefits of umbrella protective orders 

in cases involving large-scale discovery, the court may construct 

a broad umbrella protective order upon a threshold showing by the 

movant of good cause. Cipollone v. Liggett Group, Inc., 785 F.2d 

1108, 1122 (3d Cir. 1986), cert. denied, 484 U.S. 976, 108 S. Ct. 

487 (1987). After delivery of the documents, the opposing party 

would have the opportunity to indicate precisely which documents 

it believed not to be confidential, and the party seeking to 

maintain the seal would have the burden of proof with respect to 

those documents. Id.
33 

 In considering whether good cause exists for a 

protective order, the federal courts have generally adopted a 

balancing process. Arthur R. Miller, Confidentiality, Protective 

Orders, and Public Access to the Courts, 105 Harv. L. Rev. 427, 

432-33 (1991). The balancing conducted in the discovery context 

should be applied by courts when considering whether to grant 

confidentiality orders at any stage of litigation, including 

settlement: 

[T]he court . . . must balance the requesting party's 

need for information against the injury that might 

result if uncontrolled disclosure is compelled. When 

the risk of harm to the owner of [a] trade secret or 

confidential information outweighs the need for 

discovery, disclosure [through discovery] cannot be 

compelled, but this is an infrequent result. 

 Once the court determines that the discovery 

policies require that the materials be disclosed, the 

issue becomes whether they should "be disclosed only in 

a designated way," as authorized by the last clause of 

Rule 26(c)(7) . . . . Whether this disclosure will be 

limited depends on a judicial balancing of the harm to 

the party seeking protection (or third persons) and the 

importance of disclosure to the public. Courts also 

have a great deal of flexibility in crafting the 

contents of protective orders to minimize the negative 

consequences of disclosure and serve the public 

interest simultaneously. 

Id. at 433-35 (footnotes omitted). "The most common kind of 

order allowing discovery on conditions is an order limiting the 

persons who are to have access to the information disclosed and 

the use to which these persons may put the information." 8 

Charles Alan Wright & Arthur R. Miller, Federal Practice and 

Procedure § 2043, at 305 (1970). 

 One interest which should be recognized in the 

balancing process is an interest in privacy. See Seattle Times 
34 

Co. v. Rhinehart, 467 U.S. 20, 34-36, 104 S. Ct. 2199, 2208-09 

(1984). It is appropriate for courts to order confidentiality to 

prevent the infliction of unnecessary or serious pain on parties 

who the court reasonably finds are entitled to such protection. 

In this vein, a factor to consider is whether the information is 

being sought for a legitimate purpose or for an improper purpose. 

However, privacy interests are diminished when the party seeking 

protection is a public person subject to legitimate public 

scrutiny. Cf. United States v. Smith, 776 F.2d 1104, 1114 (3d 

Cir. 1985) ("[T]he public has a substantial interest in the 

integrity or lack of integrity of those who serve them in public 

office.").0

 While preventing embarrassment may be a factor 

satisfying the "good cause" standard, 

an applicant for a protective order whose chief concern 

is embarrassment must demonstrate that the 

embarrassment will be particularly serious. As 

embarrassment is usually thought of as a nonmonetizable 

harm to individuals, it may be especially difficult for 

a business enterprise, whose primary measure of wellbeing is presumably monetizable, to argue for a 

protective order on this ground. 

Cipollone, 785 F.2d at 1121. Circumstances weighing against 

confidentiality exist when confidentiality is being sought over 

information important to public health and safety, e.g., Miller, 

105 Harv. L. Rev. at 478, and when the sharing of information 

 

0See also Vassiliades v. Israely, 714 F. Supp. 604, 606 (D. Conn. 

1989) ("Every lawsuit has the potential for creating some adverse 

or otherwise unwanted publicity for the parties involved. It is 

simply one of the costs attendant to the filing of an action."). 
35 

among litigants would promote fairness and efficiency, e.g., id.

at 490. 

 A factor which a court should consider in conducting 

the good cause balancing test is whether a party benefitting from 

the order of confidentiality is a public entity or official. 

Similarly, the district court should consider whether the case 

involves issues important to the public. If a settlement 

agreement involves issues or parties of a public nature, and 

involves matters of legitimate public concern, that should be a 

factor weighing against entering or maintaining an order of 

confidentiality. See, e.g., FTC. v. Standard Fin. Management 

Corp., 830 F.2d 404, 412 (1st Cir. 1987) (threshold for sealing 

is elevated because the case involves a government agency and 

matters of public concern).0 On the other hand, if a case 

 

0See also Johnson v. Greater Southeast Community Hosp. Corp., 951 

F.2d 1268, 1277-78 (D.C. Cir. 1991); Arkwright Mutual Ins. Co. v. 

Garrett & West, Inc., 782 F. Supp. 376, 381 (N.D. Ill. 1991) 

("The courts are public institutions and their proceedings should 

be public unless a compelling argument for secrecy can be made. 

The matters with which this case is concerned are of significant 

and legitimate public concern. . . . The public has a right to 

know of this resolution."); City of Hartford v. Chase, 733 F. 

Supp. 533, 536 n.5 (D. Conn. 1990) ("Where the parties are 

private, the right to rely on confidentiality in their dealings 

is more compelling than where a government agency is involved, as 

the public has a countering interest in, and thus the claim of 

access to the conduct of public business by a governmental 

agency."), rev'd, 942 F.2d 130 (2d Cir. 1991); United States v. 

Kentucky Utils. Co., 124 F.R.D. 146, 150 (E.D. Ky. 1989) ("[The 

parties] attempt to assume the posture of private parties who 

have settled a case and have a right of privacy in documents 

maintained outside the court record. . . . Here, however, the 

parties are not private parties. One of the parties is the 

federal government."), rev'd, 927 F.2d 252 (6th Cir. 1991); In re 

"Agent Orange" Prod. Liab. Litig., 99 F.R.D. 645, 648-50 

(E.D.N.Y. 1983). 
36 

involves private litigants, and concerns matters of little 

legitimate public interest, that should be a factor weighing in 

favor of granting or maintaining an order of confidentiality. 

 In this balancing process, the issue arises of how much 

weight should be assigned the interest in encouraging 

settlements. District courts should not rely on the general 

interest in encouraging settlement, and should require a 

particularized showing of the need for confidentiality in 

reaching a settlement. Cf. Bank of Am. Nat'l Trust and Sav. 

Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 346 (3d Cir. 

1986) (requiring particularized showing of need for secrecy to 

further settlement in a right of access doctrine case). Even 

when a particularized need for confidentiality is put forth by 

the parties, the interest in furthering settlement should only be 

one factor in the district court's determination. This is 

because, as one court put it, 

settlements will be entered into in most cases whether 

or not confidentiality can be maintained. The parties 

might prefer to have confidentiality, but this does not 

mean that they would not settle otherwise. For one 

thing, if the case goes to trial, even more is likely 

to be disclosed than if the public has access to 

pretrial matters. 

United States v. Kentucky Utils. Co., 124 F.R.D. 146, 153 (E.D. 

Ky. 1989), rev'd, 927 F.2d 252 (6th Cir. 1991).0 

 

0Accord Anne-Therese Bechamps, Note, Sealed Out-of-Court 

Settlements: When Does the Public Have a Right to Know?, 66 Notre 

Dame L. Rev. 117, 130 (1990) ("The incentives for settling, such 

as saving time and expense and avoiding the publicity of a trial, 

are still valid whether or not the parties are allowed to seal 

the case files."). Cf. Wilson v. American Motors Corp., 759 F.2d 

1568 (11th Cir. 1985). In Wilson, the court acknowledged that 
37 

 Moreover, if parties cannot demonstrate good cause for 

a court order of confidentiality over the terms of settlement, 

they have the option of agreeing privately to keep information 

concerning settlement confidential, and may enforce such an 

agreement in a separate contract action.0 See, e.g., Marine 

Midland Realty Credit Corp. v. LLMD of Michigan, Inc., 821 F. 

Supp. 370, 371-74 (E.D. Pa. 1993). Although it is more arduous 

to commence a new action to enforce a settlement agreement than 

to rely on the court's contempt power to enforce a court order of 

confidentiality, it must be remembered that balanced against the 

interest of settlement is the interest of the public to have 

access to information concerning judicial proceedings. Thus, to 

the extent that fewer orders of confidentiality are granted, and 

to the extent that parties may have to more often enforce orders 

of confidentiality in private contract suits, we believe that 

this may in fact be preferable to the current trend of increasing 

judicial secrecy. 

 The factors discussed above are unavoidably vague and 

are of course not exhaustive. Although the balancing test 

discussed above may be criticized as being ambiguous and likely 

to lead to unpredictable results, we believe that such a 

 

courts should encourage settlements. Id. at 1571 n.4. 

Nevertheless, the court said that encouraging monetary settlement 

between the parties was not even entitled to consideration in 

deciding whether to seal the record. Id.

0In some circumstances, a private agreement to keep terms of a 

settlement confidential may be unenforceable because it violates 

public policy. E.g., Anchorage Sch. Dist. v. Anchorage Daily 

News, 779 P.2d 1191, 1193 (Alaska 1989) (confidentiality 

provision unenforceable because it violated public records 

disclosure statutes). 
38 

balancing test is necessary to provide the district courts the 

flexibility needed to justly and properly consider the factors of 

each case. 

 Discretion should be left with the court to 

evaluate the competing considerations in light of the 

facts of individual cases. By focusing on the 

particular circumstances in the cases before them, 

courts are in the best position to prevent both the 

overly broad use of [confidentiality] orders and the 

unnecessary denial of confidentiality for information 

that deserves it . . . . 

Miller, 105 Harv. L. Rev. at 492. 

 To facilitate effective appellate review of a district 

court decision of whether to grant or modify an order of 

protection or confidentiality, a district court should articulate 

on the record findings supporting its judgment.0 In appropriate 

cases, the district court may seal that portion of the record 

which contains its findings, for in some circumstances the 

court's articulation of its findings might destroy the very 

confidentiality being sought. 

 In determining whether to modify an already-existing 

confidentiality order, the parties' reliance on the order is a 

relevant factor. E.g., Anne-Therese Bechamps, Note, Sealed Out 

of Court Settlements: When Does the Public Have a Right to Know?, 

66 Notre Dame L. Rev. 117, 130 (1990); see also, e.g., City of 

 

0We have, when appropriate, exercised our inherent supervisory 

power to require the district courts to provide an explanation 

for certain types of orders to assist our statutory function of 

appellate review. E.g., Sowell v. Butcher & Singer, Inc., 926 

F.2d 289, 295 (3d Cir. 1991) (orders granting directed verdicts); 

Vadino v. A. Valey Eng'rs, 903 F.2d 253, 258-59 (3d Cir. 1990) 

(orders granting summary judgment). 
39 

Hartford v. Chase, 942 F.2d 130, 136 (2d Cir. 1991).0 However, 

there is a split in authority on the weight to be accorded the 

reliance interest. 

 The Court of Appeals for the Second Circuit has 

announced a stringent standard for modification, holding that a 

confidentiality order can only be modified if an extraordinary 

circumstance or compelling need warrants the requested 

modification. City of Hartford, 942 F.2d at 135-36; Palmieri v. 

New York, 779 F.2d 861, 864-66 (2d Cir. 1985); Federal Deposit 

Ins. Corp. v. Ernst & Ernst, 677 F.2d 230, 232 (2d Cir. 1982).0

 Other courts of appeals have rejected this stringent 

standard, have held that a more lenient test for modification 

applies, but have failed to articulate precisely what that 

standard is. E.g., Beckman Indus., Inc. v. International Ins. 

Co., 966 F.2d 470, 475-76 (9th Cir.), cert. denied, ___ U.S. 

___, 113 S. Ct 197 (1992); United Nuclear Corp. v. Cranford Ins. 

Co., 905 F.2d 1424, 1428 (10th Cir. 1990), cert. denied, 498 U.S. 

1073, 111 S. Ct. 799 (1991); Public Citizen v. Liggett Group, 

Inc., 858 F.2d 775, 791 (1st Cir. 1988), cert. denied, 488 U.S. 

1030, 109 S. Ct. 838 (1989); see Meyer Goldberg, Inc. of Lorain 

v. Fisher Foods, Inc., 823 F.2d 159, 163-64 (6th Cir. 1987). 

 

0The fact that the parties' reliance becomes relevant later on 

illustrates how important it is for courts to initially conduct a 

proper balancing analysis to determine whether a confidentiality 

order should be granted. 

0The Court of Appeals for the Sixth Circuit has apparently 

adopted the Second Circuit's standard. See United States v. 

Kentucky Utils. Co., 927 F.2d 252, 255 (6th Cir. 1991). But see

Meyer Goldberg, Inc. of Lorain v. Fisher Foods, Inc., 823 F.2d 

159, 163-64 (6th Cir. 1987). 
40 

 We agree with these courts that the standard of the 

Court of Appeals for the Second Circuit for modification is too 

stringent. The appropriate approach in considering motions to 

modify confidentiality orders is to use the same balancing test 

that is used in determining whether to grant such orders in the 

first instance,0 with one difference: one of the factors the 

court should consider in determining whether to modify the order 

is the reliance by the original parties on the confidentiality 

order. The parties' reliance on an order, however, should not be 

outcome determinative, and should only be one factor that a court 

considers when determining whether to modify an order of 

confidentiality. "[E]ven though the parties to [a] settlement 

agreement have acted in reliance upon that order, they [do] so 

with knowledge that under some circumstances such orders may be 

modified by the court." City of Hartford, 942 F.2d at 138 

(Pratt, J., concurring). 

The extent to which a party can rely on a protective 

order should depend on the extent to which the order 

induced the party to allow discovery or to settle the 

case. For instance, reliance would be greater where a 

trade secret was involved, or where witnesses had 

testified pursuant to a protective order without 

invoking their Fifth Amendment privilege. . . . 

 . . . Reliance will be less with a blanket order, 

because it is by nature overinclusive. 

 

0Cf. Leucadia, Inc. v. Applied Extrusion Technologies, Inc., 998 

F.2d 157, 166 (3d Cir. 1993) ("Although our decision [in a 

previous case] concerned the challenge by a party to the 

confidentiality designation made by its opponent, our reasoning 

applies with equal force when a non-party moves to intervene in a 

pending or settled lawsuit for the limited purpose of modifying a 

protective order and inspecting documents filed under seal."). 
41 

Beckman, 966 F.2d at 475-76 (citation omitted).0

 "[R]eliance on [confidentiality] orders [will] not 

insulate those orders from subsequent modification or vacating if 

the orders were improvidently granted ab initio. . . . [N]o 

amount of official encouragement and reliance thereon could 

substantiate an unquestioning adherence to an order improvidently 

granted." Palmieri, 779 F.2d at 865. "Improvidence in the 

granting of a protective order is [a] justification for lifting 

or modifying the order." In re "Agent Orange" Prod. Liab. 

Litig., 821 F.2d 139, 148 (2d Cir.), cert. denied, 484 U.S. 953, 

108 S. Ct. 344 (1987). It would be improper and unfair to afford 

an order presumptive correctness if it is apparent that the court 

did not engage in the proper balancing to initially determine 

whether the order should have been granted.0

 The party seeking to modify the order of 

confidentiality must come forward with a reason to modify the 

order. Once that is done, the court should then balance the 

interests, including the reliance by the original parties to the 

order, to determine whether good cause still exists for the 

order. 

If access to protected [material] can be granted 

without harm to legitimate secrecy interests, or if no 

such interests exist, continued judicial protection 

 

0Accord Public Citizen, 858 F.2d at 790 ("Although . . . blanket 

protective orders may be useful in expediting the flow of 

pretrial discovery materials, they are by nature overinclusive 

and are, therefore, peculiarly subject to later modification."). 

0But see Mokhiber v. Davis, 537 A.2d 1100, 1116 n.15 (D.C. 1988) 

("[I]t is quite proper for the trial court to place upon the 

attacking party the burden of showing that no such 'good cause' 

in fact existed; that is, the presumption in favor of the 

correctness of trial court actions is operative."). 
42 

cannot be justified. In that case, access should be 

granted even if the need for the protected materials is 

minimal. When that is not the case, the court should 

require the party seeking modification to show why the 

secrecy interests deserve less protection than they did 

when the order was granted. Even then, however, the 

movant should not be saddled with a burden more onerous 

than explaining why his need for the materials 

outweighs existing privacy concerns. 

Note, Nonparty Access to Discovery Materials in the Federal 

Courts, 94 Harv. L. Rev. 1085, 1092 (1981), cited with approval 

in Meyer Goldberg, Inc. of Lorain v. Fisher Foods, Inc., 823 F.2d 

159, 163 (6th Cir. 1987). 

 This case presents another factor which must be 

considered in the good cause balancing test. The Settlement 

Agreement to which the Newspapers are seeking access would, but 

for the Confidentiality Order, likely be accessible under the 

Pennsylvania Right to Know Act, Pa. Stat. Ann. tit. 65, §§ 66.1-

.4 (1959 & Supp. 1993).0 This case thus illustrates how 

confidentiality orders can frustrate, if not render useless, 

federal and state freedom of information laws.0 When a court 

orders confidentiality in a suit involving a governmental entity, 

 

0See supra notes 12-13. 

0The federal Freedom of Information Act ("FOIA") is codified at 5 

U.S.C. § 552. All fifty states have some form of freedom of 

information legislation. Toran, supra note 13, at 129 n.38 

(1992). 

 Federal courts are explicitly exempt from the Freedom of 

Information Act's coverage. 5 U.S.C. § 551(1)(B). In GTE 

Sylvania, Inc. v. Consumers Union of the United States, Inc., 445 

U.S. 375, 100 S. Ct. 1194 (1980), the Supreme Court held that a 

federal agency which had been previously ordered by a court not 

to disclose information was not required to release such 

information under the FOIA. Id. at 386-87, 100 S. Ct. at 1201-

02. It is precisely because courts have the power to trump 

freedom of information laws that they should exercise this power 

judiciously and sparingly. 
43 

as the district court in this case did, there arises a 

troublesome conflict between the governmental entity's interest 

as a litigant and its public disclosure obligations. The 

difficult problems created by such a conflict have finally 

received scholarly attention. See generally Janice Toran, 

Secrecy Orders and Government Litigants: "A Northwest Passage 

Around the Freedom of Information Act"?, 27 Ga. L. Rev. 121 

(1992). In this case, the Newspapers have had to endure 

considerable time and expense to obtain access to information 

which, but for the Order of Confidentiality, is likely available 

under the applicable freedom of information law.0 Because the 

Newspapers have been forced to challenge the Order of 

Confidentiality, many months have passed since they made their 

initial request for the desired documents. This case thus 

illustrates the need for increased judicial awareness of the 

public interest in access to information under relevant freedom 

of information laws. Accordingly, 

where [a governmental entity] is a party to litigation, 

no protective, sealing or other confidentiality order 

shall be entered without consideration of its effect on 

disclosure of [government] records to the public under 

[state and federal freedom of information laws]. An 

order binding [governmental entities] shall be narrowly 

drawn to avoid interference with the rights of the 

public to obtain disclosure of [government] records and 

shall provide an explanation of the extent to which the 

order is intended to alter those rights. 

Id. at 182. 

 To provide some measure of uniformity and 

predictability of outcome in this important area, we hold that 

 

0See supra note 12. 
44 

where it is likely that information is accessible under a 

relevant freedom of information law, a strong presumption exists 

against granting or maintaining an order of confidentiality whose 

scope would prevent disclosure of that information pursuant to 

the relevant freedom of information law. In the good cause 

balancing test, this strong presumption tilts the scales heavily 

against entering or maintaining an order of confidentiality. To 

avoid complicated inquiries as to whether certain information 

would in fact be available under a freedom of information law, 

courts may choose to grant conditional orders. For example, a 

court could order that the order of confidentiality will become 

inoperative if the information it orders confidential is later 

determined to be available under a freedom of information law. Or 

a court could grant an order of confidentiality while specifying 

that the scope of the confidentiality order does not extend so as 

to prevent disclosure pursuant to any freedom of information law. 

Courts have discretion to fashion such orders according to the 

needs and circumstances of each case. 

 We acknowledge the important role that court-aided 

settlement plays in our overburdened court system, and we realize 

that a strong presumption against confidentiality orders when 

freedom of information laws are implicated may interfere with the 

ability of courts to successfully encourage the settlement of 

cases. However, we believe that a strong presumption against 

entering or maintaining confidentiality orders strikes the 

appropriate balance by recognizing the enduring beliefs 

underlying freedom of information laws: that an informed public 
45 

is desirable, that access to information prevents governmental 

abuse and helps secure freedom, and that, ultimately, government 

must answer to its citizens. Neither the interests of parties in 

settling cases, nor the interests of the federal courts in 

cleaning their dockets, can be said to outweigh the important 

values manifested by freedom of information laws. 

 In the case before us, the district court made no 

findings for the record supporting its initial grant of the Order 

of Confidentiality. The district court apparently did not 

conduct any balancing test at all before signing the Order. The 

Order of Confidentiality was thus improvidently granted, and the 

reliance interest of the parties in the confidentiality of the 

Settlement Agreement must be considered weak in this case. 

Moreover, in denying the Newspapers' Motion to Reconsider, Vacate 

or Modify the Order of Confidentiality, the district court again 

did not articulate any findings demonstrating good cause for the 

Order. The district court noted in passing that some information 

concerning the cost of the settlement to the Borough has been 

made public. But it never explained why the Newspapers' interest 

in obtaining access to the Settlement Agreement itself under the 

Pennsylvania Right to Know Act was outweighed by the need for 

confidentiality. The entry of the Order of Confidentiality 

therefore did not reflect the proper exercise of discretion by 

the district court.0

 

0Because the Order of Confidentiality was ordered over a 

settlement agreement that was never filed with the court, and the 

order of confidentiality did not close a judicial proceeding to 

the public or seal judicial records, we do not apply the 
46 

 Because we have provided guidance in a previously 

unchartered area, we will remand the case to the district court 

and provide it an opportunity to determine whether there are 

circumstances justifying an order of confidentiality over the 

Settlement Agreement. This case involves a governmental body, a 

public official, and a Settlement Agreement which is likely 

available under the Pennsylvania Right to Know Act. Given these 

facts, it would be unusual if on remand the district court were 

to find that circumstances exist which justify the Order of 

Confidentiality being maintained over the Settlement Agreement, 

but we do not foreclose that determination.0

 We will reverse the district court's order denying 

intervention, dated May 13, 1993. We will remand the case to the 

district court with a direction that the Newspapers be permitted 

 

standards we have articulated in our line of cases dealing with 

access to judicial proceedings and documents. E.g., Miller v. 

Indiana Hosp., 16 F.3d 549, 551 (3d Cir. 1994); Publicker Indus., 

Inc. v. Cohen, 733 F.2d 1059, 1071-75 (3d Cir. 1984); United 

States v. Criden, 675 F.2d 550, 554-62 (3d Cir. 1982). 

 Also, the Newspapers have not challenged the Order of 

Confidentiality as a prior restraint or "gag order", and we 

therefore do not conduct any prior restraint analysis under the 

First Amendment. We note that in this case, a prior restraint 

claim by the Newspapers would lack merit because none of the 

parties subject to the Order of Confidentiality has indicated 

that it would willingly provide the Settlement Agreement to the 

Newspapers if the Order of Confidentiality were vacated. Cf.

Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer 

Council, Inc., 425 U.S. 748, 756-57, 96 S. Ct. 1817, 1822-23 

(1976). 

0However, any interest in confidentiality either must arise under 

federal law or must be an interest which the Pennsylvania state 

courts would determine is sufficient to prevent disclosure under 

the Right to Know Act. 
47 

to intervene, and for further proceedings consistent with this 

opinion.