Will the losing bidders drop out, or not? In a sealed bid you have to guess what others will bid - you want to bid $1 more than your competitors (or if you will lose the bid make your competitor pay as much as possible). The judge is saying because the bids were seals losing bidders had no clue what their correct bid is and some are likely to have bid less than they would have in open bidding.
Who is right I don't know.