Alabama federal judge declares Corporate Transparency Act unconstitutional!

Issues permanent injunction against enforcing it!

ANNISTON, Alabama (PNN) - March 13, 2024 - On March 1, 2024, Judge Liles C. Burke of the (Fascist Police States of Amerika) District Court, Northern District of Alabama permanently enjoined enforcement of the Corporate Transparency Act (the “CTA”) against the plaintiffs in the case - the National Small Business Association and one of its members - in an action that challenged the constitutionality of the CTA.

The court ruled that the CTA's reporting requirements exceed “the Constitution's limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress' policy goals.”

We expect that the federal government will move to stay the court's injunction pending appeal. If upheld, the decision would not only complicate the government's administration and enforcement of the CTA but would also have far-reaching implications regarding the scope of the Commerce Clause.

In addition to finding that the CTA is not justified by Congress' foreign policy powers, its power to regulate non-commercial intrastate activity, or its taxing power, the opinion discusses “how easily Congress could have written the CTA to pass constitutional muster.” For example, the Court notes that Congress could have imposed similar, but constitutional, reporting requirements by requiring entities to report beneficial ownership information at the point where they engage in interstate commerce.

The court's permanent injunction prevents FinCEN from enforcing the CTA reporting requirements. We expect that additional lawsuits challenging the CTA will be filed in other districts, citing this case as persuasive authority, and that the constitutionality of the CTA will ultimately be decided by the Supreme Court.