The Department of Justice has filed an emergency request for the US Supreme Court to remove the injunction against enforcement of the Corporate Transparency Act the Fifth Circuit had put back in place on December 26, 2024.[^1] The Department of Justice (DOJ) has made several arguments as to why the Supreme Court should stay the order barring enforcement of the Corporate Transparency Act (CTA), including the following:

Presumption of constitutionality: The DOJ argues that there is a strong presumption that acts of Congress should remain in effect pending final review by the Supreme Court. The DOJ asserts that this presumption should inform the analysis of all stay factors.
Likelihood of Supreme Court review: The DOJ argues that there is a reasonable probability that the Supreme Court would grant certiorari in this case, particularly because a lower court has invalidated a federal statute. The DOJ notes that the Supreme Court almost always grants review when a lower court has invalidated a federal statute.
Likelihood of success on the merits: The DOJ argues that the government is likely to succeed on the merits of its case, and that the district court’s decision is incorrect. The DOJ contends that the Commerce Clause and Necessary and Proper Clause empower Congress to adopt the CTA’s reporting requirements.
- The DOJ argues that the CTA regulates economic activity because it concerns the ownership and operation of corporations, and that this is within Congress’s power under the Commerce Clause.
- The DOJ further argues that the CTA’s reporting requirements are necessary and proper to deter individuals from using companies for illegal purposes.
- The DOJ claims that the respondents have not met the high standard to bring a facial challenge.
Equities favor a stay: The DOJ argues that the equities favor a stay because the district court’s injunction harms the federal government in multiple ways.
- The injunction prevents the government from executing a duly enacted Act of Congress.
- The injunction impedes efforts to prevent financial crime and protect national security.
- The injunction undermines the U.S.’s ability to press other countries to improve their anti-money laundering regimes.
- The injunction severely disrupts the ongoing implementation of the CTA.
- By contrast, the DOJ asserts the CTA imposes only minimal burdens on respondents. The government cites a FinCEN estimate that it would take about 90 minutes or $85 for a typical company to complete the required report.
The district court’s injunction is overbroad: The DOJ argues that the district court’s universal injunction is overbroad and should be narrowed to apply only to the respondents in the case.
- The DOJ cites the principle that a court of equity may grant relief only to the parties before it.
- The DOJ contends that the district court had no power to enjoin the CTA itself, but only to enjoin the named defendants from taking specified actions.
Status Quo: The DOJ argues that the district court’s injunction has disrupted rather than preserved the status quo, and a court has no warrant to block the enforcement of constitutional and democratically enacted laws simply in order to preserve the status quo before enactment of the new law. The DOJ points out that the CTA has been in place since 2021, and the reporting rule has been in place since 2022.
Universal Injunctions: The DOJ contends that the Supreme Court may wish to grant certiorari before judgment to consider the lawfulness of universal relief because it is a recurring issue. The DOJ also notes that this issue has escaped review in prior cases because of the Court’s antecedent procedural or merits rulings. The DOJ argues that this case would provide an ideal vehicle for addressing the lawfulness of universal relief. In summary, the DOJ’s arguments for a stay center on the importance of allowing duly enacted laws to remain in effect, the likelihood of success on the merits, and the serious harm to the government and public that would result from the injunction. They further contend that the district court’s injunction was inappropriately broad.

[^1]: Application for a Stay of the Injunction Issued by the United States District Court for the Eastern District of Texas, US Supreme Court Texas Top Cop Shop, Inc. v. Garland, December 31, 2024, https://www.supremecourt.gov/DocketPDF/24/24A653/336329/20241231163238372_24aGarland%20v%20Texas%20Top%20Cop%20Shop.pdf