On Thursday, the U.S. Supreme Court ruled in favor of the Treasury Department, overturning an injunction put in place last month by a federal court in Texas in the Texas Top Cop Shop case. However, the Jan. 7 order issued by another federal district court in the Smith/Means case remains in place.

By Mary Hightower
U of Arkansas System Division of Agriculture

Jan. 24, 2025

Fast facts

  • SCOTUS overturns lower court ruling
  • Separate federal injunction remains in place

FAYETTEVILLE, Ark. — If the Corporate Transparency Act had a theme song, it would probably be “The Long and Winding Road.”

The legal switchbacks for CTA, a law intended to dampen financial fraud, are happening across two primary court cases, Texas Top Cop Shop v. Garland, and Samantha Smith and Robert Means v. U.S. Department of Treasury.

On Thursday, the U.S. Supreme Court ruled in favor of the Treasury Department, overturning an injunction put in place last month by a federal court in Texas in the Texas Top Cop Shop case. However, the Jan. 7 order issued by another federal district court in the Smith/Means case remains in place.

“Yesterday the Supreme Court stayed the injunction that prohibited enforcement of the CTA as challenged in the Texas Top Cop Shop case, reinstating reporting requirements until the litigation has finished,” said Elizabeth Rumley, senior staff attorney for the National Agricultural Law Center, part of the University of Arkansas System Division of Agriculture. “If this were the only case at issue, that would have been the end of the story.  However, early this month another federal district court judge had considered the issue and issued a second injunction, which was not affected by yesterday’s ruling.”

The bottom line is this: “as of Jan. 24, the Corporate Transparency Act is not enforceable,” Rumley said. Business owners should note, however, that this injunction could be lifted or other circumstances could change at any time.”

If you’ve following along at home, here’s the timeline:

  • March 1, 2024 — a U.S. District Court in Alabama, suspended the law’s requirements for plaintiffs in the Business United v. Yellen case.
  • 3, 2024 — U.S. District Judge Amos Mazzant issues a nationwide injunction in the case of Texas Top Cop Shop, Inc. v. Garland.
  • 23, 2024 — In Texas Top Cop Shop, Inc. v. Garland, a three-judge panel of the U.S. Fifth Circuit Court of Appeals reinstated the law’s reporting requirements.
  • 26, 2024 — In Texas Top Cop Shop, Inc. v. Garland, another three-judge panel of the U.S. Fifth Circuit Court of Appeals vacated their colleagues’ decision three days earlier, reinstating the stay until after the appeals on the merits of the case had been heard.
  • Jan 7, 2025 – U.S. District Judge Jeremy Kernodle issues a nationwide injunction in the case of Samantha Smith and Robert Means v. U.S. Department of the Treasury.
  • 23, 2025 — SCOTUS lifts the injunction from the CTA case of Texas Top Cop Shop, Inc. v. Garland
  • March 25, 2025 — Texas Top Cop Shop appeal scheduled to be heard by the full U.S. Fifth Circuit Court of Appeals in New Orleans.

To read the full article, click here.

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