Title: Supreme Court Greenlights Reporting of Beneficial Ownership Interests
In the case of Texas Top Cop Shop, decided on January 23, 2025, the U.S. Supreme Court granted the U.S. Secretary of the Treasury's application to lift the nationwide preliminary injunction that had temporarily halted the enforcement of the Beneficial Ownership Interest (BOI) reporting requirements under the Corporate Transparency Act (CTA), passed by Congress in 2021. This ruling focused on the authority of a U.S. District Court to issue a last-minute order preventing the execution of an Act of Congress.
The ruling itself does not address the merits of the CTA's constitutionality, merely allowing the Act to move forward as if the preliminary injunction had never existed, meaning that the FINCEN BOI reporting requirements are once again in effect. The Court's decision comes without justifying reasoning, as the order itself is brief and formulaic.
Several justices provide additional insights on the case. Justice Gorsuch agreed with the Court, but suggests further examination of the issue of universal injunctive relief, while Justice Jackson argued against the stay, stating that there is no justifiable reason for the Court to intervene in the contest's proceedings.
There are two main points of controversy before the Supreme Court. The first is the CTA's constitutionality, a question the Court decides to postpone until lower counters have deliberated extensively. The second issue pertains to a U.S. District Court's capacity to issue an 11th-hour nationwide preliminary injunction that halts an Act of Congress.
The Supreme Court's opinion on the latter concern signals disfavor towards such injunctions, implying that they should not be issued by lower courts, by virtue of temporarily staying the preliminary injunction blocking the enforcement of the CTA. This stance may also influence other courts issuing similar injunctions against the CTA's enforcement.
Overall, the Supreme Court's ruling alleviates one legal issue preventing the execution of the CTA's reporting requirements. However, another challenge in the case Smith v. United States Department of the Treasury persists, necessitating further attention from the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN).
The U.S. Secretary of the Treasury requested to lift the injunction on the BOI reporting requirements under the CTA, which was granted by the Supreme Court in the case of Texas Top Cop Shop. With the injunction lifted, the FINCEN BOI reporting requirements are now in effect. Justice Gorsuch suggested further examination of universal injunctive relief, while Justice Jackson argued against the stay, believing there was no justifiable reason for court intervention. The Supreme Court's decision indicates disfavor towards nationwide preliminary injunctions, potentially influencing other courts issuing similar injunctions against the CTA. Despite this ruling, the case Smith v. United States Department of the Treasury still requires attention from FinCEN.
