"[A]n Unopposed Grant" of Sealing "Carries Little Weight in a Contested Posture"

From Townsend v. The Gardens at Aldersgate LLC, decided Monday by Magistrate Judge Rachel Schwartz (D. Kan.):

This is a skilled-nursing-home negligence case proceeding in federal court based on diversity jurisdiction …. In diversity cases proceeding under § 1332(a), Federal Rule of Civil Procedure 7.1(a)(2) requires every “party or intervenor [to]…file a disclosure statement[ ] [that] must name—and identify the citizenship of—every individual or entity whose citizenship is attributed to that party or intervenor[.]” On August 3, 2026, Defendants filed their unredacted Rule 7.1 disclosure statements provisionally under seal. In the present Motion, Defendants seek to maintain under seal the unredacted Rule 7.1 disclosure statements, which reveal various layers of the respective limited liability companies’ (“LLC”) memberships and the identities of those layers of members. Defendants request permission to file publicly only redacted versions of these documents, redacting “the names of non-party individuals, trusts, and limited liability companies whose disclosure would reveal the private ownership and financial associations of non-parties.” Plaintiffs oppose the Motion on multiple grounds, including that granting the Motion “would convert a transparency rule into a sealing regime for any LLC that prefers anonymity.”

The court noted the general right of access to court records, and concludes that there’s no exception to it for the LLC disclosures; here’s part of the analysis:

[F]ederal district courts have overwhelmingly rejected these types of generic confidentiality and privacy concerns as insufficient to justify sealing or otherwise restricting Rule 7.1 disclosure statements. [Long string citation omitted. -EV] Simply put, “[c]orporations and limited partnerships may offer individuals protection from liability, but they do not entitle individuals to anonymity in court proceedings.” Here, all the individuals and entities listed in Defendants’ Rule 7.1 disclosure statements elected to have an ownership interest in a skilled nursing facility and the company that manages the skilled nursing facility. It is not unusual or unforeseeable that these types of parties would be sued in diversity cases in federal court, triggering the requirement that these Defendants file Rule 7.1 disclosure statements. While there may be specific cases in which sealing would be appropriate, they would involve a far more specific set of facts pertaining to specific entities or individuals than what this Court has before it….

[R]ather than address these cases, which represent the overwhelming majority view, Defendants’ Motion relies on a different case from this District that also involved Defendant MRC. In that case, the judge granted defendants’ unopposed motion seeking leave to file redacted copies of Rule 7.1 disclosures. This is the only case Defendants cite in which a court allowed Rule 7.1 disclosures to be sealed in whole or in part. But as Plaintiffs persuasively argue, “[a]n unopposed grant carries little weight in a contested posture,” such as here. The undersigned agrees with the majority view that Rule 7.1 disclosures should not be sealed in whole or in part based on generic privacy arguments that could apply to nearly any business that wishes to keep private those with an ownership interest….

The court also noted that

Rule 7.1 disclosure statements serve an important purpose. Rule 7.1 disclosures allow the judge to ascertain whether the judge has a financial interest in the party or associated parties that would require recusal. And in diversity cases like this one, “Rule 7.1 statements enable a federal court to assess its jurisdiction—jurisdiction that has been carefully delimited by Article III of the Constitution and by Congress.” These are matters of public interest.

The analysis seems quite sound to me; the most valuable part for the future, though, may be the sentence that I used as the title of the post: “[A]n unopposed grant carries little weight in a contested posture.” It’s a corollary of the broader point that (see, e.g., Webster v. Fall (1925); Cooper Industries, Inc. v. Aviall Services, Inc.(2004)):

Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents.

But it’s useful to have a case to quote on the more specific point as well.

Jonathan T. Steele (The Steele Law Firm) represents plaintiff.

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