Another Twist for the Ongoing Corporate Transparency Act Saga: The Supreme Court Provides a Lifeline

By Tracy A. Olson, Sarah Hibbard, Brett W. Johnson, and Garth D. Stevens

On Thursday, January 23, 2025, in an 8-1 decision, the U.S. Supreme Court stayed one of the two nationwide injunctions of the Corporate Transparency Act (CTA) pending the conclusion of the Fifth Circuit appeal and any subsequent petition for writ of certiorari in that case. The Fifth Circuit is set to hear oral argument on March 25, 2025.

Justice Ketanji Brown Jackson dissented, expressing concern over the need for Supreme Court interference while the expedited appeal is pending — regardless of the merits of the case. Justice Neil Gorsuch, on the other hand, would have gone further, signaling an appetite to resolve the question of whether a nationwide injunction is appropriate in the first place.

While this decision lifts one nationwide injunction, the second nationwide injunction — issued by a different Texas judge in Smith v. United States Department of the Treasury — remains intact. As a result, FinCEN has advised that companies are not presently required to make beneficial ownership information (BOI) report filings under the CTA. In addition, companies are not subject to liability for failure to file so long as one of the nationwide injunctions is in place. However, as previously reported in our prior Legal Alerts, reporting companies can still voluntarily submit BOI reports.

As outlined in our prior alert, the Fifth Circuit briefing is ongoing. Under the Rules of Appellate Procedure, amicus, or “friend of the court,” briefs are typically due seven days after the merits brief of the party being supported is filed (i.e., February 14, 2025, for briefs supporting Appellants or no party and February 28, 2025, for briefs supporting Appellees). However, the Court’s expedited timeline may impact this timeframe, so interested parties should consider making preparations as soon as possible.

In addition, it is still unclear what the Trump administration will do in response to the appeals and injunctions. It is possible that, regardless of the stay, the new administration will continue to extend the deadline to submit BOI reports and may revamp the CTA’s reporting requirements to be less onerous as to content or less expansive as to affected companies. On January 15, 2025, a bill was simultaneously resubmitted in both the House and Senate in an effort to repeal the CTA. The bill’s reintroduction comes with more sponsors supporting its passage, and the Republican controlled Congress is considered a more favorable audience. Snell & Wilmer will continue to monitor the bill’s progress.