On December 26, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.), the Fifth Circuit Court of Appeals reinstated the preliminary injunction prohibiting the federal government from enforcing the Corporate Transparency Act (CTA) on a nationwide basis.
In a highly unusual move, the Fifth Circuit’s merits panel, which now has the appeal on an expedited basis, of its own accord lifted the stay of the injunction previously ordered by the Fifth Circuit’s motions panel. In its order, the merits panel explained that “[i]n order to preserve the constitutional status quo while the merits panel considers the parties' weighty substantive arguments, that part of the motions-panel order granting the Government's motion to stay the district court's preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.” Briefs by the parties are due at various dates in February, and oral argument is scheduled for March 25.
As a result of this latest court ruling, reporting companies are not required to make any CTA filings pending further judicial action. This ruling is not a full and final ruling on the merits of the case, but temporarily halts enforcement of the CTA while the case proceeds.
We will continue to monitor this topsy-turvy situation and provide additional information as it becomes available. Please see our prior December 5 Alert and December 24 Alert.
