CTA Still On Hold: US Supreme Court Lifts One Injunction, But Another Remains

The US Supreme Court has granted FinCEN’s request for a stay of the recent nationwide injunction of enforcement of the Corporate Transparency Act (CTA). A separate nationwide injunction, however, remains in place, meaning enforcement of the CTA is still blocked for now.

On January 23, 2025, the US Supreme Court granted the US Department of Justice’s request to stay a lower court’s nationwide injunction (Texas Top Cop Shop, Inc. v. McHenry, formerly Texas Top Cop Shop v. Garland), which was previously confirmed by the Fifth Circuit in December 2024.

However, a separate nationwide injunction issued by Judge Jeremy Kernodle of the US District Court for the Eastern District of Texas on January 7 (Smith v. US Department of the Treasury) was not addressed by the Court and, as such, continues to prevent the CTA’s implementation. The DOJ has not yet filed an appeal or sought a stay of the injunction in the Smith case, but still has time to do so and may have been waiting for the decision of the Supreme Court in the Texas Top Cop Shop case.

While it is unclear what views the Trump-Vance administration has on the CTA, the DOJ may take issue with the universal injunction granted because of the precedent it sets for other legal challenges to federal government legislation or other action in the future. On January 24, FinCEN confirmed that CTA filings are still voluntary while the Smith injunction is in effect.

Given the volatile legal landscape surrounding the CTA, including potential intervention by the White House or the US Congress, Morgan Lewis will continue to closely monitor developments and provide updates as the situation evolves.