ARTICLE
14 January 2025

Second Eastern District Of Texas Judge Issues Injunction Against BOI Reporting Enforcement

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Liskow & Lewis

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Another judge with the Eastern District of Texas enjoined enforcement of the Beneficial Ownership Information reporting requirements on Wednesday January 8, 2025. In Smith v. Dep't of the Treasury...
United States Texas Corporate/Commercial Law

Another judge with the Eastern District of Texas enjoined enforcement of the Beneficial Ownership Information reporting requirements on Wednesday January 8, 2025. In Smith v. Dep't of the Treasury, E.D. Tex., No. 6:24-cv-00336, 1/8/25, the court found that the "breadth" of the Corporate Transparency Act "expands federal power beyond constitutional limits." Because a company formed under state law "is not a channel or instrumentality of commerce," the court ruled that enforcement of the Act's reporting requirements would exceed the authority granted to Congress under the Commerce Clause of the Constitution of the United States. The injunction in Smith only applies to the plaintiffs and their related entities. This comes as the Fifth Circuit Court of Appeals has sustained a nationwide injunction against the enforcement requirements while appeals are pending in Texas Top Cop Shop, Inc. v. Garland. The United States Treasury Department has submitted an emergency appeal to the Supreme Court of the United States in that case. We will provide any additional updates that may become available.

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