US Points to High Court in Corporate Transparency Act Defense

The Treasury Department asked a federal appeals court to lift the final injunction limiting its authority to enforce the Corporate Transparency Act, arguing the US Supreme Court’s choice to pause a separate injunction should affect its case against members of National Small Business United.

The US Court of Appeals for the Eleventh Circuit heard oral arguments between the US and NSBU, doing business as the National Small Business Association, over an Alabama federal judge’s order blocking CTA enforcement against NSBU members. The CTA cracks down on anonymous business ownership by requiring entities to disclose their beneficial ownership information — who owns or controls the company — to the Financial Crimes Enforcement Network.

The Supreme Court in January stayed a separate, nationwide preliminary injunction against the law, which had been issued late last year by a federal judge in Texas. The justices’ order suggests the Eleventh Circuit should also allow CTA enforcement against NSBU members, the Treasury Department said in a letter filed Feb. 21.

“Eight justices joined that order; the sole dissenter, Justice Jackson, addressed only the equities and did not suggest that the CTA’s challengers have a likelihood of success on the merits,” the letter said. “The only currently effective judicial order that constrains the enforcement of the reporting requirements is the one in this case.”

The last remaining nationwide injunction was lifted last week, but members of the NSBU are still covered by a narrower injunction.

The government extended the disclosure deadline for most businesses to March 21 following the Supreme Court’s order, except for entities that qualify for disaster relief. According to its announcement, FinCEN will use the period to consider further modifications to the deadline and the scope of small businesses’ reporting obligations.

Hughes, Hubbard & Reed LP represents NSBU.

The case is Nat’l Small Bus. United v. US Dep’t of the Treasury, 11th Cir., No. 24-10736, supplemental authority filed 2/21/25.