Client Alerts & Insights
On Again, Off Again – CTA Preliminary Injunction Stayed by Supreme Court
January 24, 2025
On January 23, 2025, the Supreme Court stayed an injunction blocking enforcement of the Corporate Transparency Act’s (“CTA”) beneficial ownership information (“BOI”) requirement. McHenry v. Texas Top Cop Shop, Inc., 604 U.S.__(2025). This ruling paves the way for the federal government to potentially enforce the BOI reporting requirements that had been set to go into effect at the beginning of this month.
The Supreme Court’s ruling comes as the latest in a line of an on-again-off-again injunctions, which we previously reported on. In early December, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction blocking the U.S. Department of Treasury from enforcing the CTA’s BOI reporting requirements. Texas Top Cop Shop v Garland et al., 4:24-cv-00478 (Dec. 3, 2024). Then on December 23, 2024, a motions panel of the Fifth Circuit Court of Appeals stayed the preliminary injunction, restoring the reporting requirements. Then, the Fifth Circuit reinstated the injunction, and now the Supreme Court has nixed it again.
However, per an alert from FinCen, companies are not currently required to report their BOI as a separate federal injunction from a different federal judge in Texas remains in effect. Smith v. U.S. Dept. of the Treasury, No. 6:24-cv-336-JDK (E.D. Texas, Jan. 7, 2025). Reporting companies will not be subject to liability for not filing while the Smith injunction stands.
The future of the CTA is uncertain, and reporting entities should work with experienced counsel to navigate this ever-shifting landscape. If you have questions regarding the CTA or the impact of the Texas Top Cop Shop decision, the White Collar and Corporate & Securities Practice Groups at Benesch are here to help.
Marisa T. Darden at mdarden@beneschlaw.com or 216.363.4440.
Robert J. Kolansky at rkolansky@beneschlaw.com or 216.363.4575.
Jennifer L. Stapleton at jstapleton@beneschlaw.com or 216.363.4428.
Connie A. Porter at cporter@beneschlaw.com or 216.363.4433.
Latest News
Customs Duty Assists: Regulatory Compliance Overview and FAQ
Customs compliance and enforcement defense are high-profile exercises within U.S.-based importers due to the higher-risk regulatory enforcement environment. One of the more complex hot topics facing compliance and legal professionals within importers of record (IORs) is the degree to which “assists” impact dutiable value, and therefore duty burden, in the eyes of U.S. Customs and Border Protection (CBP).
TSA Authorized Representatives—Emerging Practice of Engaging Freight Brokers and Its Practical Implications
Air transportation safety has long been of critical supply chain importance and geopolitical significance, and that role is growing. Supply chain constraints over this decade have driven a need for adaptation, modal diversification and cost containment. To do so, authorized air cargo providers have increasingly explored new ways to add capacity for regulated surface transportation.
Chameleon Carriers—FMCSA’s “Reincarnated” Rule and Enforcement
As the U.S. DOT and its FMCSA ramp up certain elements of domestic enforcement, regulators are utilizing existing laws and regulations that previously were not often invoked. Enforcement of the English language proficiency requirement is one great example.
What’s Old Is New Again: Broker Liability Insulation from the Case Law in the Post-Montgomery Era
The Supreme Court has spoken in its Montgomery v. Caribe Transport decision, and the brokerage sector, and even shipper and motor carriers, are working toward adapting to this “new liability regime.”