On March 1, 2024 the United States District Court for the Northern District of Alabama Northeastern Division granted National Small Business United d/b/a the National Small Business Association its motion for summary judgment against Janet Yellen as Secretary of the United States Treasury.  While numerous outlets have been pointing to this decision as the basis for not complying with the Corporate Transparency Act (CTA) based on the finding that the CTA is unconstitutional, Pullman & Comley advises that all entities should continue to comply with the CTA. 

A closer look at the Alabama District Court’s decision makes it clear that the basis for granting the motion was based solely on the conclusion that an entity is only subject to the CTA if such entity is involved in interstate commerce.           

In response to the Alabama District Court’s ruling, the United States Treasury Financial Crimes Enforcement Network (FinCen) issued its own advisory which states that it will comply with the court’s order and injunction as it relates to that plaintiff, but that it will continue to implement and enforce the CTA with respect to those other reporting companies.           

Given the narrowness of this court’s decision with respect to the unconstitutional application of the CTA against these particular plaintiffs and their members only, and the clear, unambiguous release from FinCen that it would continue to enforce CTA compliance, reporting companies should continue to adhere to the FinCen guideline requirements and time tables that can be found here in our November 30, 2023 alert.

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