US Department of Justice Appeals to Supreme Court to Reinstate Corporate Transparency Act

The Department of Justice filed an emergency appeal to the Supreme Court and asked it to reinstate the federal AML law, including the Corporate Transparency Act (CTA).

The Corporate Transparency Act (CTA) was passed in 2021 to combat financial crimes that require millions of business entities to reveal their actual owners, their addresses, and date of birth to the Financial Crimes Enforcement Network (FinCEN), by January 2025.

In May 2024, 4 business entities including a firearms dealer, an information technology company, a dairy farm and the Libertarian Party of Mississippi, and owners of a Tech company and the National Federation of Independent Business (NFIB) sued the law and challenged the constitutionality of the CTA.

The enforcement of CTA was halted after several court proceedings that found that Congress had exceeded its authority with the legislation.

Following many consecutive rulings, the 5th U.S. Circuit Court of Appeals denied the federal government’s attempt to restore the statute while it appealed.

In an emergency motion filed Tuesday, the Justice Department requested that the Supreme Court reinstate the legislation, asserting that the law is constitutional and that the lower court overreached.

The administration of Biden argued that lower courts overreached by blocking the law universally and also kept insisting that CTA is constitutional.

National Federation of Independent Business (NFIB), a nonprofit & nonpartisan advocacy group for small business issues in Washington, filed the lawsuit on behalf of the MustardSeed Livestock, Texas Top Cop Shop, Data Comm for Business, Russell Straayer & Libertarian Party of Mississippi.

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The Justice Department also argues that this injunction stops efforts that are required to combat financial crimes such as terrorism financing, human trafficking & money laundering.

“Contrary to the district court’s decision, the Commerce Clause, Necessary and Proper Clause empower Congress to adopt the CTA’s reporting requirements.”

Justice Department

In an emergency appeal application, the Department of Justice argued that lower courts misunderstood their rulings & the law is considered an essential step in addressing gun violence.