Douglas has pleaded guilty to charges of dealing methamphetamine and faces more than 10 years behind bars when he is handed his punishment on April 27.
His attorneys lodged a request earlier this week to have the hearing kept private.
But the 31-year-old's legal team has failed in its legal challenge - on Friday, Manhattan Federal Judge Richard Berman ruled the courtroom will be kept open.
He also decided that Michael Douglas' letter pleading for leniency in his son's case should be made public, according to the New York Daily News.
Notes from Cameron's stepmother, Catherine Zeta-Jones, and his grandfather, Kirk Douglas, have already been published.