By: Tarig Anani
We recently published an article “U.S. District Court Judge Grants Nationwide Preliminary Injunction on Corporate Transparency Act” advising clients that on December 3, 2024, the Honorable Judge Amos L. Mazzzant of the U.S. District Court for the Eastern District of Texas, granted a nationwide preliminary injunction that enjoins the federal government from enforcing the Corporate Transparency Act (the “CTA”). This Client Note is an update to that article.
On December 5, 2024 the federal government filed a Notice of Appeal with the 5th Circuit Court of Appeals. This past weekend, the government filed a motion with the 5th Circuit to immediately either stay the preliminary injunction at the district court level or narrow the injunction to apply only to the plaintiffs in that case pending the case’s full outcome.
The federal government seems to be pushing the 5th Circuit to rule on this motion quickly and stated “the government respectfully requests a ruling on this motion as soon as possible, but in any event no later than December 27, 2024 to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.
The 5th Circuit appears to be on board with an aggressive timeline for a ruling on the government’s motion and has ordered the plaintiffs to respond by December 17th and the government to respond to plaintiff’s reply by December 18th. We would therefore expect that the 5th Circuit will rule on the government’s motion to either stay the ruling of the Eastern District of Texas’ ruling or narrow it only to the plaintiff’s in that case before the end of 2024.
We would encourage all clients who may be subject to the CTA to be prepared to file BOI reports prior to January 1, 2025 in the event that the 5th Circuit rules in favor of the government’s motion. Please reach out to Tarig Anani or Brett Chisum if we can assist you with these filings.