Texas Top Cop Shop v. Garland

On December 18, the Liberty Justice Center filed an amicus brief urging the U.S. Court of Appeals for the Fifth Circuit to uphold a lower court ruling finding the Corporate Transparency Act (CTA) unconstitutional.

Created in 2021 as part of the Anti-Money Laundering Act, the CTA requires new corporations to disclose private stakeholder information, including the identities of a company’s beneficial owners, to the Financial Crimes Enforcement Network prior to January 1, 2025. Congress justified the creation of the CTA as an exercise of its authority to regulate commerce.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas found that the CTA is likely unconstitutional and issued a nationwide preliminary injunction to halt enforcement of the Act while litigation continues. The government appealed this decision to the Fifth Circuit Court.

The Liberty Justice Center’s amicus brief argues that the government’s attempt to overturn the injunction must fail because Congress does not have the authority to enforce the CTA or its reporting requirements. Although the Commerce Clause allows Congress to regulate economic activity, a company’s mere existence is not economic activity and therefore exceeds the scope of Congress’s authority.