The court’s emergency stay lifts an injunction issued by a federal judge that had blocked the Corporate Transparency Act (CTA), which requires many business entities to disclose ownership details. Justice Ketanji Brown Jackson was the lone dissenter in the decision.
The U.S. Department of Justice had recently requested the Supreme Court’s intervention, and the ruling came shortly after a new administration took office. The CTA, enacted in early 2021 as part of an annual defense bill, mandates that small business owners submit personal information, such as birth dates and addresses, to the Financial Crimes Enforcement Network to aid in combating financial crimes.
The legal dispute has drawn attention from business groups and regulatory reform advocates, some of whom seek to delay the law’s implementation. The case will now return to the 5th U.S. Circuit Court of Appeals, where the Justice Department will defend the law as a valid exercise of congressional authority over interstate commerce. Meanwhile, the Supreme Court’s decision allows officials to move forward with enforcing the disclosure requirements.
Justice Jackson, in her dissent, argued that the government had not shown sufficient urgency to justify intervention. She noted that the law’s enforcement had already been delayed for nearly four years and questioned whether further postponement would cause significant harm.
The Justice Department contends that delaying the law’s implementation would impede efforts to combat financial crimes and affect national security. Former Solicitor General Elizabeth Prelogar emphasized in the government’s application that postponement would disrupt ongoing enforcement efforts and international cooperation on anti-money laundering measures.
The Supreme Court also declined an alternative proposal to take up a broader issue regarding the authority of federal judges to block laws nationwide. Justice Neil Gorsuch expressed interest in addressing this topic in the future, noting that such injunctions have become a common legal tool.
