On January 23, 2025, the U.S. Supreme Court issued a stay of the nationwide preliminary injunction issued by a federal district court in Texas in December 2024 in the Texas Top Cop Shop litigation.
However, a second nationwide injunction against the Corporate Transparency Act (CTA) was issued earlier this month in the Smith v. Treasury litigation. The Supreme Court's order in the Texas Top Cop Shop litigation does not specifically address the injunction in the Smith v. Treasury litigation. Because the injunction in the Smith v. Treasury litigation remains in effect, enforcement of the CTA remains paused.
FinCEN today stated that, because the nationwide injunction issued in the Smith v. Treasury litigation remains in place, reporting companies:
“are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court's action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
The Texas Top Cop Shop and Smith v. Treasury litigations both originated in the U.S. District Court for the Eastern District of Texas. While the Supreme Court's order in the Texas Top Cop Shop litigation does not specifically address the injunction in the Smith v. Treasury litigation, Foley's CTA team would not be surprised if the injunction in the Smith v. Treasury litigation was to be stayed or lifted soon. Therefore, companies may want to keep preparing their beneficial ownership information reports so that, if CTA enforcement resumes, they will be ready to submit their required reports by the applicable filing deadlines.
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