The U.S. Court of Appeals for the Fifth Circuit has reinstated the nationwide preliminary injunction preventing the federal government from enforcing the Corporate Transparency Act (“the CTA”) and the related reporting obligations.

As we previously reported, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued that nationwide preliminary injunction preventing the federal government from enforcing the CTA, but a motions panel of the Fifth Circuit granted a stay of the district court's injunction on December 23, 2024. The motions panel simultaneously expedited the case and sent the case to the next available merits panel of the Fifth Circuit.

Upon receiving the case, on December 26, 2024, the Fifth Circuit merits panel issued an order vacating the stay, thereby reinstating the nationwide preliminary injunction.  “In 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" is vacated, the merits panel wrote.

The merits panel has also set the briefing to be completed in February 2025 and will hear oral argument on March 25, 2025.

With the CTA and its implementing regulations again enjoined, the government may still seek emergency relief in the U.S. Supreme Court.

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