The Supreme Court has granted the federal government’s request to enforce the Corporate Transparency Act, a federal anti-money-laundering law, while an appeal is pending in the U.S. Court of Appeals for the 5th Circuit. This order, issued on Thursday afternoon, counteracts a prior ruling from a federal trial judge in Texas that would have prevented the law’s enforcement nationwide. The justices’ decision, noted in an article by Amy Howe, notably leaves open questions on the constitutionality of universal injunctions without directly addressing them.
The Corporate Transparency Act, enacted in 2021, is designed to curb financial crimes such as money laundering and terrorism financing by mandating that businesses report their ownership details. U.S. District Judge Amos Mazzant ruled the law likely unconstitutional, siding with businesses that challenged its validity. Despite this, the 5th Circuit left Mazzant’s hold in place but fast-tracked the government’s case for a hearing on March 25.
Former U.S. Solicitor General Elizabeth Prelogar, in a submission to the Supreme Court, expressed that an enforcement delay hinders the U.S.’s efforts to combat financial crime and hampers its ability to advocate internationally for enhanced anti-money laundering measures. Conversely, the businesses challenging the law argue that the enforcement results in substantial compliance costs and infringes on constitutional rights under the First and Fourth Amendments.
Within the Supreme Court’s decision, Justice Ketanji Brown Jackson dissented, highlighting concerns over the urgency of intervention from the Supreme Court given the case’s expedited status in the appellate court. Justice Neil Gorsuch concurred with the enforcement hold but indicated a need to definitively address the broader issue of universal injunctions in future deliberations.