In this appeal, two Tennessee newspapers, intervening parties in the lawsuit between United American Bank and the Federal Deposit Insurance Corporation, are seeking a writ of mandamus. The newspapers request that we vacate an order of the district court which permitted the bank to remove from the court’s record, prior to public inspection, two exhibits the bank had filed in its lawsuit against the FDIC.
On January 25, 1983, bank examiners of the FDIC, pursuant to their statutory authority to regulatе federally-insured state banks, presented the bank officials with a list of 423 questionable loans in United American’s portfolio. The list contained the names of borrowers and the amount of each loan. The bank responded by submitting to the FDIC a loan-by-loan defense of each of the 423 loans listed by the FDIC as questionable. This response contained extensive discussion of the borrower’s financial condition, prospects and personal life.
During this time, stories were appearing in thе Tennessee news media discussing the FDIC’s concern over the bank’s financial condition. Apparently in response to this media attention, the bank issued a press release on January 28, 1983 disclosing its fourth-quarter and year-end financial results for 1982. The figures relied upon in this press release came from an audit report prepared by the bank’s own independent accountants. The press release did not mention the FDIC’s list of questionable loans.
*472 On February 4, 1983, the FDIC served on the bank a Temрorary Order to Cease and Desist which required that:
Immediately upon service of this TEMPORARY ORDER TO CEASE AND DESIST, the Bank shall correct the false or misleading public statements disseminated by the Bank, or officers, directors, or employees of the Bank, on or about January 29, 1983.
The Bank shall file an amended consolidated Report of Condition and an amended consolidated Report of Income as provided under section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. § 1817(a)) which shall accurаtely reflect the financial condition of the Bank as of December 31, 1982.
On February 8, the bank filed suit in the district court pursuant to 12 U.S.C. § 1818(c)(2), seeking an injunction to prohibit the FDIC from enforcing its Temporary Cease and Desist Order.
Upon filing, counsel for the bank was granted, ex parte, a protective order from the district court sealing the entire court record. At that time, the record contained the bank’s complaint, ten exhibits, and responsive pleadings. Included among the ten exhibits were the FDIC’s list of questionable loans, Exhibit 3, and the bank’s loan-by-loan response, Exhibit 4. The protective order, dated February 8, barred all public access to the court file and ordered the parties to keep confidential any information derived from the court file. On February 11, the Knoxville News-Sentinel Co., whose reporters had been assigned to monitor the litigation between the bank and the FDIC, filed in this court a Petition for a Writ of Mandamus to vacate the protective order. On February 14, the Knoxville Journal Corporation and Tennessean Newspapers, Inc., also filed a Petition for a Writ of Mandamus. The newspapers argued that the lawsuit between the bank and the FDIC dealt with events and personalities of “immense public interest.” They contended public access to the file was needed to facilitate further discussion and debate among the citizens of Tennessee about these important matters.
In a memorandum opinion dated February 11, 1983, the district court set forth its reasons for sealing the court record. First, the court noted the sensitive nature of the exhibits relating to the bank’s customers and the bank’s loan policy. The district court acknowledged the bank’s contention that public disclosure “would result in the FDIC prevailing in the action before the issues are joined or any necessary hearing is held.” In light of these circumstances, the court concluded there was authority to deny public access to the court file in order to “protect the interest of the Bank in this case.”
On February 14, the Tennesseе Commissioner of Banking ordered United American closed because of extensive loan losses, and appointed the FDIC as receiver of the bank. On February 15, the FDIC negotiated an agreement with the First Tennessee Bank of Knoxville to assume all the assets and liabilities of United American Bank. On the same day, the district court issued an order dismissing the lawsuit between United American and the FDIC. This order also lifted the February 8 protective order, but directed that Exhibits 3 and 4 be withdrawn from the court file and rеturned to counsel for the bank, “with the understanding that the exhibits will be preserved and submitted to the Sixth Circuit if requested by that Court.” On February 18, the newspapers filed amended Petitions for a Writ of Mandamus in this court seeking an order vacating the February 15 order to the extent that it permits the removal of Exhibits 3.and 4 from the district court’s records.
In- our view, this appeal presents two separate issues:
(1) Did the district court’s February 15 order, which dismissed the underlying lawsuit between the bank and the FDIC and provided for public access to the remaining documents in the court file, moot the newsрapers’ claims against the district court?
(2) Did the district court abuse its discretion by permitting counsel for the *473 bank to remove Exhibits 3 and 4 from the court’s file?
Our conclusion after a review of the record indicates no abuse of discretion in ordering Exhibits 3 and 4 expunged from the record. We also find that the remainder of the newspapers’ claims against the district court have been rendered moot.
Regarding the first issue, it is well established that we do not decide moot questions.
Hall v. Beals,
It is undisputed that the newspapers now have access to the court’s entire file, except for Exhibits 3 and 4. Putting aside their right of access to these latter two exhibits, the newspapеrs are now in the same position they would have been had no protective order issued. There is no indication the district court intends to place future restrictions on the public’s access to the file in this case. The record before us does not reveal a set of facts “of sufficient immediacy and reality” warranting a writ of mandamus.
Maryland Casualty Co. v. Pacific Coal and Oil Co.,
As the facts stand now, further relief is unnecessary. The newspapers cannot point to any continuing harm or future threat that the district court will issue similar protective orders denying their right of access to the file in question. As stated in
United States v. SCRAP,
The other issue in this case concerns whether the district court abused its discretion in ordering Exhibits 3 and 4 removed from its file prior to public inspection. In
Nixon v.
Warner
Communications,
Yet, the power to exercise “discretion” does not imply that discretionary powers can be exercised without restraint. A district court’s determination on the sealing of its own record is “not insulated from review merely becаuse the judge has discretion in this domain. The [district [c]ourt’s
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discretion is circumscribed by a long-established legal tradition.”
Brown & Williamson,
There are, however, important exceptions which limit the public’s right of access to judicial records.
[T]he right to inspect and copy judicial records is not absolute. Every court has supervisory power over its own records and files, and access has been denied where court files might have become a vehicle for improper purposes. For example, the common law right of inspection has bowed before the power of a court to insure that its records are not “used to gratify private spite or promote public scandal” through the publication of “the painful and sometimes disgusting details of a divorce case.” Similarly, courts have refused to permit their files to serve as reservoirs of libelous statements for press consumption, or as sources of business information that might harm a litigant’s competitive standing.
Nixon v. Warner Communications,
In reviewing the district court’s determination on this matter, we feel compelled to make two points. First, we note the failure of the district court to afford the press a reasonable opportunity to state their objectiоns to its protective order. As noted by the Supreme Court in
Gannett Co., Inc. v. De Pasquale,
I would conclude that any person removed from a court should be given a *475 reasonable opportunity to state his objections prior to the effectiveness of the order. This opportunity need not take the form of an evidentiary hearing; it need not encompass extended legal argument that results in delay; and the public need not be given prior notice that a closure order will be considered at a given time and place. But where a member of the public contemporaneously objects, the court should provide a reasonable opportunity to that person to state his objection.
Gannett,
Representatives of these groups must be given an opportunity to be heard on the question of their exclusion. But this opportunity extends no farther than the persons actually present at the time the motion for closure is made, for the alternative would require substantial delays in trial and pretrial proceedings while notice was given to the public. Upon timely objection to the granting of the motion, it is incumbent upon the trial court to afford those present a reasonable opportunity to be heard on the question whether the defendant is likely to be deprived of a fair trial if the press and public are permitted to remain in attendance.
The Third and Ninth Circuits have extended this right to be heard to cases where requests for closure are made to the trial judge in writing or during in-chambers conference when members of the public are not present.
Brooklier, supra; Criden II, supra.
Both of these courts have required that reasonable steps be taken to afford the public and press an opportunity to submit their views on the question of their exclusion before a closure motion is acted upon.
Brooklier,
Like the district courts in
Brooklier
and
Criden I,
the district court below was well aware of the public’s interest in the litigation between United American and the FDIC. After receiving the bank’s request to seal the record, the district court had an obligation to consider the rights of the public and the press. In its memorandum opinion the district court acknowledged the interest of the public in disclosure, but found that interest subordinate to the interests of the bank. In our view, the district court should not be placed “in the position of sole guardian of first amendment interests even against the express wishes of both parties.” Younger,
The Sheppard Mandate Today: A Trial Judge’s Perspective,
56 Neb.L.Rev. 1, 6-7 (1977),
quoted in Criden II,
In order to protect this right to be heard, the most reasonable approach would be to require that motions to seal be docketed with the clerk of the district court. The records maintained by the clerk are public records. If a party moves to seal a
*476
document, or the entire court record, such a motion should be made “sufficiently in advance of any hearing on or disposition of the [motion to seal] to afford interested members of the public an opportunity to intеrvene and present their views to the court.”
Criden II,
The second point we wish to make concerns the scope of our review. In light of the important rights involved, the district court’s decision is not accorded the traditional scope of “narrow review reserved for discretionary decisions based on first-hand observations.”
United States
v.
Criden I,
To say that discretion exists, however, is not to say, as appеllee contends, that what is involved here “is simply a policy determination.” Appellants seek to vindicate a precious common law right, one that predates the Constitution itself. While the courts have sanctioned incursions on this right, they have done so only when they have concluded that “justice so requires.” To demand any less would demean the common law right.
United States v. Mitchell,
The district court’s order allowing removal of Exhibits 3 and 4 from its file properly protected the identity and privacy of customers of the bank whose names were included in the two exhibits. Congressional support for this action is reflected in statutory provisions and regulatory rules. The Right to Financial Privacy Act, 12 U.S.C. § 3401-3421, outlines numerous restrictions on the disclosure of financial records held by bank employees and federal regulatory authorities. The Act imposes an affirmative duty on thе government and banking officials to safeguard the financial records of individuals utilizing the services of banks. Section 3417(a) enforces the Act’s commands by allowing bank customers to recover civil penalties from “[a]ny agency or department of the United States or financial institution obtaining or disclosing financial records” in violation of the Act. In addition to the civil penalties permitted by 12 U.S.C. § 3417, Congress has also made it a federal crime for bank examiners, federal or private, to disclose information obtained in the course of examining a federally insured bank. 18 U.S.C. § 1906 expressly prohibits any bank examiner with access to the financial records bank customers from disclosing personal information discovered from those records.
Further Congressional recognition of the confidentiality of financial records is illustrated in 5 U.S.C. § 552(b)(8). This provision exempts from disclosure under the Freedom of Information Act information complied by government officials responsible for thе regulation or supervision of financial institutions. As noted in
Consumers Union of United States, Inc. v. Heimann,
Finally, the confidentiality оf financial records is recognized in regulations governing the disclosure of financial documents held by the FDIC. 12 C.F.R. § 309.5(f)(8) (1982) provides that “[r]ecords contained in or related to examination, operating, or condition reports by or on behalf of, or for the use of, the [FDIC] or any agency responsible for the regulation or supervision of financial institutions,” are exempt from public disclosure. Similar provisions are applicable to the Comptroller of the Currency, 12 C.F.R. § 4.16(b)(8) (1982); Board of Govеrnors of the Federal Reserve System, 12 C.F.R. § 261.6(a)(2) (1982); and the Federal Home Loan Bank Board, 12 C.F.R. § 505.-5(a)(2) (1982). The legality of these regulations has survived judicial scrutiny.
Denny v. Carey,
The strongest argument against the action of the district court is our decision in
Brown & Williamson Tobacco v. FTC,
Brown & Williamson
is distinguishable in another way. There, the court noted the public’s strong interest in disclosure because the subject being litigated “potentially involves the health of citizens who have an interest in knowing the accurate ‘tar’ and nicotine content of the various brands of cigarettes on the market.”
Id.
at 1180.
See also United States v. General Motors,
No. 83-2220, (D.D.C. Filed October 19,1983) (public interest in disclosure of documents regarding auto safety outweighs defendant’s interest in avoiding adverse publicity). Here, the newspapers can point to no analogous need of the public to know about the names and financial recоrds of the bank’s customers. While it is true the litigation between the bank and the FDIC involved matters of
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“immense public interest,” the “presumptively paramount” right of the public to know must be weighed against competing interests of privacy.
Nixon v. Warner Communications,
Finally, we must take account of the bank’s initial reliance on the district court’s protective order. The bank asserts it was forced to file suit against the FDIC to protect its business interests. They contend, however, that their cause of action under 12 U.S.C. § 1818(c)(2) was initiated “only after” they obtained the protective order needed to safeguard the stability of the bank and privacy interests of its customers. Regardless of whether we accept the bank’s version of the facts, or the newspapers’ version (the protective order was issued simultaneously to the bank’s filing), we do note that the bank placed significant reliance upon the protective order. Once placed in this position, only “extraordinary circumstances” or “compelling need” warrant the reversal of a protective order.
FDIC v. Ernst & Ernst,
As stated in
In Re Traffic Executive Ass’n-Eastern Railroads v. Long Island R.R. Co.,
