On December 26, the U.S. Court of Appeals for the Fifth Circuit vacated the previous grant of a stay of the injunction enjoining enforcement of the Corporate Transparency Act (CTA) and beneficial ownership reporting rule.  As a result, the nationwide preliminary injunction originally granted by the district court is once again in effect pending consideration of the DOJ’s appeal by the Fifth Circuit’s merits panel.Continue Reading Fifth Circuit Reinstates CTA Injunction Pending Oral Arguments in March; FinCEN January 13 Deadline on Hold

In our prior notes of December 4, 9, and 13, 2024, we reported that (1) a district court in Texas issued a nationwide injunction halting implementation of the Corporate Transparency Act (CTA), (2) the Financial Crimes Enforcement Network (FinCEN) acknowledged that companies need not file CTA mandated disclosures while that injunction remained in effect. Subsequently, the U.S. Department of Justice (DOJ) moved to stay the injunction pending appeal. The district court rejected that motion, but on December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted the government’s motion, staying the district court’s injunction and expediting briefing of the appeal. In so doing, the Court concluded that the government had “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.” In addition, the Court rejected the plaintiffs’ warnings that “lifting the . . . injunction days before the compliance deadline would place an undue burden on them,” reasoning that the plaintiffs filed suit only months ago and the injunction had been in place mere weeks, whereas businesses have had “nearly four years . . . to prepare since Congress enacted the CTA, as well as the year since FinCEN announced the reporting deadline.”Continue Reading Fifth Circuit Pauses District Court CTA Injunction; FinCEN Extends Filing Deadline to January 13, 2025