MEMORANDUM OF DECISION

HENRY J. BOROFF, Bankruptcy Judge.

Before the Court is a request by a creditor in the Chapter 7 bankruptcy case filed by Nigel Alan Blake and Madelyn Louise Blake (the "Debtors") to redact portions of the transcript of a hearing held over a year ago. The motive for the request is fairly transparent—having failed to obtain this Court's permission to keep secret the amount paid by the creditor to the Debtors and their attorney in settlement of alleged violations of the automatic stay, the creditor now wants the transcript redacted to remove that disclosure.

I. FACTS AND TRAVEL OF THE CASE

The Debtors filed this bankruptcy case under Chapter 7 of the United States Bankruptcy Code (the "Bankruptcy Code" or the "Code")1 on July 31, 2008. On Schedule F-Creditors Holding Unsecured Nonpriority Claims ("Schedule F"), filed with the petition, the Debtors listed "Verizon" as an unsecured creditor with a claim totaling $475.63 for "Utilities" and identified their Verizon account number by the last four digits. See Chapter 7 Voluntary Petition, All Schedules and Statements, Matrix and Disclosure of Attorney Compensation, July 31, 2008, ECF No. 1. The Debtors also included Verizon on their matrix list of creditors (the "Mailing Matrix"). See id. On August 6, 2008, all creditors listed on the Mailing Matrix, including Verizon, were sent notice of the Debtors' bankruptcy case filing (the "Notice of Filing"), which identified the Debtors' names, address, bankruptcy case number, and full social security numbers. See Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, & Deadlines, Aug. 4, 2008, ECF No. 10; BNC Certificate of Mailing, Aug. 6, 2008, ECF No. 11.2

According to the Debtors, approximately one month after their bankruptcy case was filed, they received a letter from Verizon which identified the Debtors' bankruptcy case number and filing date and also noted that Verizon had "received notification that [the Debtors had] filed for bankruptcy." See Debtor's Motion for Stay Violation Sanctions: Verizon (the "First Sanctions Motion"), Ex. B, Sept. 29, 2008, ECF No. 14. In that letter (the "Information Request"), Verizon asked the Debtors to provide their Verizon account number, the names listed on the Verizon account, the Debtors' social security numbers, the state in which service was provided, and a phone number where the Debtors could be reached for further information. On September 12, 2008, the Debtors' attorney, L. Jed Berliner ("Attorney Berliner"), responded to the Information Request, declining to provide the requested information.3

Shortly thereafter, Verizon sent a notice to the Debtors, dated September 24, 2008, advising that the Debtors' account was past due and threatening to cancel service if payment was not made by October 10, 2008 (the "First Cancellation Notice"). In response to the First Cancellation Notice, on September 29, 2008, the Debtors filed their First Sanctions Motion, asking this Court to sanction Verizon for its alleged violation of the automatic stay imposed by § 362(a) of the Bankruptcy Code.4 The certificate of service attached to the First Sanctions Motion indicates that the motion was served on Verizon at three separate addresses, including the addresses for Verizon that appeared in the Information Request and First Cancellation Notice. See First Sanctions Motion, 6.

Three days later, the Court scheduled the First Sanctions Motion for a hearing to be held on November 6, 2008. See Notice of Nonevidentiary Hearing, Oct. 2, 2008, ECF No. 15. On that same date, Attorney Berliner filed a certificate of service indicating that he had served Verizon (at the same three addresses) with a copy of the Notice of the November 6, 2008 hearing. See Certificate of Service of Notice of Hearing, Oct. 2, 2008, ECF No. 16.

The Debtors say that, also on October 2, 2008, a Verizon representative left a message on the Debtors' answering machine asking the Debtors to call Verizon to make payment arrangements. On October 13, 2008, the Debtors say, they received a second message on their answering machine in which a Verizon representative stated that it was critical for the Debtors to make payment arrangements in order to avoid termination of service. Verizon also sent an account statement to the Debtors, dated October 13, 2008, which the Debtors say included prepetition amounts due. Verizon sent yet another notice, dated October 8, 2008 (but which the Debtors say they received on October 14, 2008), threatening to cancel the Debtors' service unless all overdue amounts were paid by October 10, 2008 (the "Second Cancellation Notice").

The Debtors immediately sent a copy of the Second Cancellation Notice to Attorney Berliner, who claims to have contacted Verizon on October 15, 2008. According to Attorney Berliner, he spoke with a Verizon representative who assured him that the account would be put in "permanent nonprocess status" and a new bill reflecting only postpetition charges would be issued. See Debtor's Amended Motion for Stay Violation Sanctions: Verizon, 4 ¶ 15, Nov. 6, 2008, ECF No. 19.

Despite the representations to the contrary claimed to have been made by the Verizon employee during the October 15, 2008 telephone conversation, the Debtors' internet service was terminated on October 24, 2008. Attorney Berliner says that he immediately contacted Verizon, and was told that the service would be reinstated within a few hours. Attorney Berliner also says that he was told by the Verizon representative that Verizon's records reflected receipt of the pending sanctions motion and notice of the hearing scheduled for November 6.

At the November 6, 2008 hearing on the First Sanctions Motion (the "First Sanctions Hearing"), no one appeared on Verizon's behalf. Attorney Berliner informed the Court at that time of, and proffered an affidavit attesting to, the events that had occurred after the filing of the First Sanctions Motion. Because Verizon had not received advance notice that the matters included in that affidavit would be considered at the First Sanctions Hearing, Attorney Berliner, at the Court's urging, withdrew the First Sanctions Motion and filed an amended motion for sanctions the same day (the "Amended Sanctions Motion").

The Amended Sanctions Motion included the events that followed the filing of the First Sanctions Motion and was initially set for a hearing to be held on December 11, 2008. After two continuances at the request of the parties, the hearing was ultimately held on February 5, 2009. On February 3, 2009—approximately 3 months after the filing of the Amended Sanctions Motion and only 2 days before the hearing—Verizon filed a response (the "Response"). In the Response, Verizon did not admit or deny the allegations of the motion (as required by Massachusetts Local Bankruptcy Rule ("MLBR") 9013-1(i)), but alleged that it did not receive the Debtors' full account number in enough time to prevent the disconnection of the Debtors' service, concluding that: "the Debtors' failure to comply with the noticing requirements of 11 U.S.C. § 342(c)(2)(A) and the Debtors' counsel [sic] refusal to timely assist [Verizon] in the location of the Debtors' accounts resulted in the temporary disconnection of the Debtor's [sic] service." See Response, Feb. 3, 2009, ECF No. 35.

At the February 5, 2009 hearing on the Amended Sanctions Motion (the "Second Sanctions Hearing"), counsel for Verizon appeared. At the conclusion of that hearing, the Court scheduled the matter for an evidentiary hearing to be conducted in June 2009.

Prior to the scheduled trial date, however, Verizon filed a motion, assented to by the Debtors, to continue the trial. In that motion, Verizon indicated that a settlement had been reached and that the parties expected to be filing a motion to approve the settlement within a few days. See Motion by Verizon New England, Inc., to Suspend Response Date and to Continue Trial (Assented), ¶ 3, June 12, 2009, ECF No. 51. In light of that representation, the Court continued the matter generally.

No motion to approve a settlement was filed. However, on September 21, 2009, the parties filed a "Stipulation of Dismissal" with regard to the Amended Sanctions Motion. The Stipulation of Dismissal stated that "[p]ursuant to Fed.R.Civ.P. 41(a)(1)(A)(ii), made applicable by Fed. R. Bankr.P. 9014(c), the debtor and respondent stipulate to dismiss Debtor's Amended Motion for Stay Violation Sanctions." See Stipulation of Dismissal, Sept. 21, 2009, ECF No. 71.

On the same date, Debtors' counsel filed a "Corrected Supplement to Disclosure of Compensation to Attorney for the Debtor" (the "Supplemental Fee Disclosure") in which he indicated that 1) he had received additional compensation from Verizon in settlement of the Amended Sanctions Motion, 2) the "parties finally achieved a settlement agreement," and 3) "disclosure of the settlement amount is available for oral presentation to the Court at its request." See Supplemental Fee Disclosure 2 ¶ 7, 3 ¶ 9, Sept. 21, 2009, ECF No. 73.

The Court marked the Stipulation of Dismissal for hearing, which was held on October 15, 2009 (the "Settlement Hearing"). When the Court inquired into the resolution of the matter, Attorney Berliner responded that the matter had settled "with a payment of a sum certain." Hr'g Transcript 2:12-13, Oct. 15, 2009. When the Court asked what the amount of the settlement was, Verizon's counsel indicated that the settlement contained a confidentiality agreement and that he preferred not to disclose the monetary terms in open court. Unwilling to accept the parties' agreement to keep the amount confidential, the Court stated that, absent full disclosure, it would strike the Stipulation of Dismissal and the matter would proceed to trial. At that point, the parties indicated their willingness to disclose the amount of the settlement and did so, informing the Court as to the gross amount of the settlement and the portion thereof that would be allocated to the Debtors' attorney's fees. The Court then indicated that no further action would be required.

Thereafter, the Chapter 7 trustee was discharged and the case was closed on April 5, 2010. In early 2011, an official transcript of the Settlement Hearing was requested (the "Hearing Transcript").5 The Hearing Transcript was filed on the docket on February 9, 2011, see ECF No. 78, but was not immediately made publicly viewable. Instead, in keeping with the District Court of Massachusetts Bankruptcy Court policy regarding the electronic availability of transcripts and requests for redaction (the "Transcript Policy"),6 the Court issued a "Notice of Filing of Official Transcript and of Deadlines Related to Restriction, Redaction and Release" (the "Transcript Notice") on February 10, 2011. See ECF No. 79.

The Transcript Notice set forth deadlines and procedures by which parties could request redaction of the transcript, specifically indicating that social security numbers, financial account numbers, and minors' names and birthdates should be redacted. In the absence of a request for redaction, the transcript would be made publicly available through the electronic docket after the expiration of 90 days.

On March 2, 2011, Verizon filed a "Request. . . for Redaction of Transcript" (the "Redaction Request") asking the Court to redact from the transcript the references made to the dollar amount of the settlement. See ECF No. 81. Upon receipt of the Redaction Request, the matter was taken under advisement. Although opportunity to respond has been given, the Debtors have not responded to the Redaction Request, nor has Verizon filed a brief or any further pleadings to expand upon the basis for its request. Nonetheless, the Court now elucidates its reasons why the Redaction Request must be denied.

II. DISCUSSION

A. Section 107: Public Access to Bankruptcy Records and Exceptions

Outside of the bankruptcy context, the right of public access to judicial records is entrenched in this country's judicial system, see, e.g., Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978) ("the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents"), and the sealing or redaction of documents on the record is considered with a keen eye toward the presumption that papers filed in the course of judicial proceedings should be open to the public. See, e.g., FTC v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 410 (1st Cir.1987).

In Gitto v. Worcester Telegram & Gazette Corp. (In re Gitto Global Corp.), the First Circuit Court of Appeals recognized that this right of public access vis-à-vis bankruptcy proceedings is specifically codified in the Bankruptcy Code at § 107(a)7:

422 F.3d 1, 6-7 (1st Cir.2005). And because this "broad right of public access" in bankruptcy cases is a creature of federal statutory law, the exceptions to it are also limited by specific statutory terms. As the Gitto court explained:

Gitto, 422 F.3d at 7-8, 10.

Sections 107(b) and (c)8 thus define a universe of information that is exempt from the right of public access established by subsection (a). But none of those exceptions applies here. Verizon has neither argued nor demonstrated that the information sought to be redacted is "a trade secret or confidential research, development, or commercial information," see 11 U.S.C. § 107(b)(1), "scandalous or defamatory," see 11 U.S.C. § 107(b)(2), or "would create undue risk of identity theft or other unlawful injury," see 11 U.S.C. § 107(c). See also Fed. R. Bankr.P. 9018.9 Therefore, there are no grounds under § 107(b) or (c) to grant Verizon's Redaction Request.

B. Personal Information and Privacy Protections

In addition to the limited exceptions to public access set forth in § 107(b) and (c), Federal Rule of Bankruptcy Procedure 9037(a) also requires the redaction of certain sensitive, private information from documents filed with the bankruptcy court. The information required to be redacted pursuant to Bankruptcy Rule 9037(a) includes social security numbers, taxpayer-identification numbers, financial account numbers, and the birthdates and names of minors. See Fed. R. Bankr.P. 9037(a).10

Any tension between (1) the policy of making documents, including transcripts of court proceedings,11 publicly and electronically available and (2) the need to protect the information encompassed by Bankruptcy Rule 9037(a) has been resolved by the Judicial Conference of the United States' "Policy on Privacy and Public Access to Electronic Case Files (March 2008)" (the "Judicial Conference Privacy Policy").12 Under that policy,

The Transcript Policy for the Bankruptcy Courts in the District of Massachusetts, in turn, was promulgated to effectuate the Judicial Conference's Privacy Policy and to implement the procedures outlined in that policy for the redaction of information from filed transcripts.13

But neither the Judicial Conference Privacy Policy nor the Transcript Policy are intended to open the door to automatic transcript redactions that extend beyond the scope of information protected under Bankruptcy Rule 9037(a). Instead, as the Judicial Conference Privacy Policy notes, "[t]hese procedures are limited to the redaction of the specific personal data identifiers listed in the rules."14 Thus, because the Redaction Request does not concern any personally identifying information, redaction of the settlement amount from the Hearing Transcript is not warranted under Bankruptcy Rule 9037(a), the Judicial Conference Privacy Policy, or this District's Transcript Policy.

C. Other Grounds for Redaction

While the presumption of public access to documents filed in a bankruptcy case is paramount, bankruptcy courts may also order the sealing or protection of additional information where justified. Under Bankruptcy Rule 9037(d), courts may "[f]or cause, . . . by order in a case under the Code: (1) require redaction of additional information; or (2) limit or prohibit a nonparty's remote electronic access to a document filed with the court." Fed. R. Bankr.P. 9037(d) (emphasis supplied). See also MLBR 9018-1(a), (f). Before prohibiting the public disclosure of information not delineated in the Bankruptcy Code or Rules, however, the bankruptcy court must first determine that cause has been established. See Fed. R. Bankr.P. 9037(d). Given that the Debtors and Verizon initially requested that the settlement amount remain confidential, the Court feels bound to consider whether its decision to require disclosure at the Settlement Hearing was in error. And since Verizon has not presented any additional arguments in favor of the need for confidentiality since the time of the hearing, the question is whether there was cause for keeping the information out of the public record at the time of the Settlement Hearing. If not, the Court must conclude that no cause exists for redacting the information from the Hearing Transcript now.

The Debtors and Verizon filed their Stipulation of Dismissal pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii) ("Rule 41")15 in an attempt to end the public record of their contest and deal with the matter privately. Indeed, in many civil matters, parties use Rule 41 stipulated dismissals to ensure the confidentiality of out-of-court settlements.16 But while such stipulated dismissals may be routine in other civil matters, their use in bankruptcy cases is circumscribed by the Bankruptcy Code, Rules, and policy considerations.

For example, where, as here, settlement of a disputed matter provides for compensation to debtor's counsel, that compensation must be disclosed. See 11 U.S.C. § 329(a)17; Fed. R. Bankr.P. 2016(b).18 And settlements generally are subject to disclosure and bankruptcy court approval procedures under both the federal and local bankruptcy rules. See Fed. R. Bankr.P. 9019(a)19; MLBR 9019-1(a), (b).20 Furthermore, the applicability of Rule 41 to contested matters may be waived by the bankruptcy court. See Fed. R. Bankr.P. 9014(c) (enumerated rules, including Bankruptcy Rule 7041, apply in contested matters "unless the court directs otherwise" (emphasis supplied)). In sum, as the Bankruptcy Court for the District of North Dakota has explained:

In re Trout, 108 B.R. 235, 238 (Bankr. D.N.D.1989).

While the Court can envision circumstances where confidentiality of a settlement agreement in whole or in part may be in the best interests of the parties, the estate, or both, strong policy reasons persuaded the Court that neither the Debtors' nor Verizon's interests in keeping the settlement confidential in this case outweighed the mandate of disclosure and public access embodied in the Bankruptcy Code and Rules.

The automatic stay imposed by § 362(a) that arises upon the filing of a bankruptcy case is one of the "cornerstones of bankruptcy law." Curtis v. LaSalle National Bank (In re Curtis), 322 B.R. 470, 483 (Bankr.D.Mass.2005); see also Soares v. Brockton Credit Union (In re Soares), 107 F.3d 969, 975 (1st Cir. 1997). The factual recitations in the First and Amended Sanctions Motions contained serious allegations of Verizon's repeated violations of the automatic stay—violations which, if widespread, affected not only the Debtors, but threatened to undermine the significance and centrality of the automatic stay within the bankruptcy system. In some cases, violations of the automatic stay are truly idiosyncratic and unlikely to be repeated. But where, as here, (1) the alleged violations were repeated, continued, and increasingly severe; (2) the alleged violations escalated even after communication with the Debtors' attorney and notice of a hearing on a pending motion for stay violation sanctions; and (3) the respondent has denied none of the facts and has raised a rather flimsy excuse for its actions,21 the controversy transcends a merely private dispute between parties and becomes a general affront to one of "the most basic of debtor protections under bankruptcy law." Soares, 107 F.3d at 975. Indeed, it is this very type of behavior that an award of punitive damages authorized by the Code is designed to deter. See 11 U.S.C. § 362(k).

Given that this Court, in similar circumstances, has awarded substantial punitive damages "in an amount sufficient to serve their purpose of deterrence," Curtis, 322 B.R. at 487,22 it was incumbent upon the Court to assess the adequacy of the parties' private settlement in light of the gravity of Verizon's alleged violations of the Bankruptcy Code. To do otherwise would be to ignore the First Circuit's admonition that "courts must display a certain rigor in reacting to violations of the automatic stay." Soares, 107 F.3d at 975-76.23

For these reasons, the Court refused to allow the parties to simply dismiss the matter and maintain the confidentiality of their agreement. In light of the impact of such behavior, if true, on the "fresh start" which the bankruptcy system promotes for all honest debtors, it was incumbent on the Court to require disclosure of the settlement amount in order to assess whether it appropriately reflected the severity of the alleged offenses.

This Court determined at the time of the Settlement Hearing that confidentiality of the settlement amount was inconsistent with the Court's responsibility to maintain the integrity of the bankruptcy system. Accordingly, the Court cannot now permit Verizon's "backdoor attempt to `seal the courtroom.'" Pfizer, 2010 WL 2710566, at *4, 2010 U.S. Dist. LEXIS 67631, at *10-11. The reasons for requiring disclosure at the Settlement Hearing apply with equal force to disclosure of the Hearing Transcript with respect to which § 107(a) presumes public access. To redact the transcript now would circumvent that access and is not justified in this case. As the Third Circuit Court of Appeals artfully explained:

Antar, 38 F.3d at 1359-60 (3d Cir.1994) (emphasis in original) (citations and footnote omitted).

III. CONCLUSION

This Court has taken a second look at its insistence at the Settlement Hearing that the terms of the settlement reached between the Debtors and Verizon be publicly available for disclosure, and discerns no error in that determination. The Redaction Request does not fall within the protections of either § 107(b) and (c) or Bankruptcy Rule 9037(a), and if allowed, would offend strong policy considerations attendant to enforcement of the automatic stay under § 362(a) of the Bankruptcy Code and to public access to court proceedings. Therefore, the Redaction Request must be DENIED. An order in conformity with this memorandum shall issue forthwith.