The U.S. Supreme Court has stayed the nationwide injunction that had been blocking the enforcement of the Corporate Transparency Act (CTA) while the merits of the CTA are pending a decision in the U.S. Court of Appeals for the Fifth Circuit, which will hear oral argument on March 25 in McHenry v. Texas Top Cop Shop, Inc.

The CTA requires more than 32 million existing businesses to disclose their beneficial owners. That number is expected to grow by five million new businesses per year. Texas Top Cop Shop, a firearms retailer, has challenged the CTA’s constitutionality.

During this interim period, it is unclear what, if any, action the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) will take. Today’s decision does not reinstate the previous January 13 filing deadline. Throughout the tortured history of this case, FinCEN has updated earlier compliance deadlines, but with a new administration, it is possible for the agency to await the action of the Fifth Circuit, which many believe is a commodious environment for firearms purveyors. Others stress the importance of a law designed in part to disclose foreign and domestic criminals who use anonymous U.S. companies to launder profits from drugs such as fentanyl or mask cybercrime-related transactions.

The purpose of this post is not to give legal advice but to describe important developments in the law. We do recommend that affected businesses consult with their own counsel as they survey the road ahead. We also caution, with respect to this current chapter in the life of the CTA, that there is a ticking time bomb that not only might undermine the enforcement of this act but also might augur fundamental change to the remedies available across administrative law writ large.

The Supreme Court’s order is a simple one, occupying eleven lines of text. What follows that text, also concise, is potentially more important. Justice Jackson dissented from the grant of the stay, believing that imminent injury is unlikely given the expedition being offered in the Fifth Circuit. However, the more impactful statement is that of Justice Gorsuch, who concurred in the granting of the stay. In doing so, he stated that he not only agreed “that the government is entitled to a stay of the district court’s universal injunction” [emphasis added], but that he would “go a step further and . . . resolve definitively the question whether a district court may issue universal injunctive relief.”

The issue of the geographic scope of injunctive relief has been discussed before in this blog and elsewhere, but Justice Gorsuch is attempting to give it new energy.

With what many observers think will be the retirement of at least one justice during the new Trump term and President Trump’s likely appointment of a significantly right-of-center successor adding to that leaning in the Court, it is not improbable for Justice Gorsuch’s preference to gain sufficient traction to provide at least the necessary four votes to grant cert. in a given case, and maybe a fifth vote to set off the decisional explosion. This is an issue upon which I’d place the “to be confirmed” warning label.