Corporate Transparency Act Enforcement Still Paused Despite SCOTUS Grant of Stay

On January 23, 2025, the Supreme Court of the United States (SCOTUS) granted the Application for Stay filed by the government, led by Justice Alito—Justice Gorsuch concurring and Justice Jackson dissenting.
This Grant of Stay marks an end to the December 5, 2024 injunction preventing the Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA) issued by the United States District Court for the Eastern District of Texas, in Texas Top Cop Shop, Inc. v. McHenry, case No. 4:24–cv–478 (formerly Texas Top Cop Shop v. Garland) pending the appeal in the United States Court of Appeals for the Fifth Circuit. If the Fifth Circuit denies certiorari, the stay issued by SCOTUS shall terminate automatically—if certiorari is granted, the stay shall terminate upon the sending down of the judgement of SCOTUS.
In his concurrence, Justice Gorsuch notes that this Application for Stay by the Government should have been taken as an opportunity to resolve the question of whether a district court may issue universal injunctive relief—a point that has been argued by both sides.
In her dissent, Justice Jackson argues that the emergency relief granted by SCOTUS is not appropriate because the Government “failed to demonstrate sufficient exigency.” She defends her position by highlighting the expedited appeal schedule implemented by the Fifth Circuit and the self-imposed enforcement delay of nearly four years.
Under the Fifth Circuit Court of Appeals expedited schedule, briefing by the parties is due by February 28th, 2025, and oral arguments are set for March 3rd, 2025.
Despite this Grant of Stay, reporting obligations are still paused as noted in a January 24, 2025, update by FinCEN due to a separate nationwide injunction issued on January 7, 2025, in Smith v. U.S. Dept. of the Treasury, Case No. 6:24-cv-336-JDK, also by the United States District Court for the Eastern District of Texas.
The fate of the CTA is still unclear as these cases continue to work through the courts, but the Fifth Circuit Court of Appeals decision will likely shed more light on the future of enforcement for millions of reporting companies.
The Grant of Stay by SCOTUS can be found on their website: www.supremecourt.gov/opinions.
For more information regarding CTA reporting obligations and to stay up to date with changes to reporting obligations visit FinCEN’s website at www.fincen.gov/boi.
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