Corporate Transparency Act Blocked Nationwide by Texas Federal Judge

On Dec. 3, the U.S. District Court for the Eastern District of Texas published a decision in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. issuing a preliminary nationwide injunction against the Corporate Transparency Act (Act).  

The court granted Plaintiff’s request for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the act’s beneficial ownership information (BOI) reporting requirements.  

In his opinion, Judge Amos L. Mazzant III grants the Plaintiff’s request to preliminary enjoin the Government from enforcing the Corporate Transparency Act and its Implementing Regulations, ruling that “Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.” 

This preliminary injunction applies nationwide, halting enforcement and compliance of the Act’s beneficial ownership reporting requirements across the entire United States. CAI’s legal team believes the injunction applies to all community associations incorporated within the U.S.  

CAI will continue its unwavering commitment to protecting the community association housing model and our members’ interests. We firmly believe the act’s requirements place an excessive burden on community associations, which operate differently from traditional corporations and small businesses. We will continue to pursue a full repeal of the act or exemption to protect the community association housing model as well as the privacy and personal information of its volunteer leaders. This is good news today, but it isn’t the end of the story. Please continue to watch for messaging about any further developments by visiting www.caionline.org/CTA.  

Plaintiffs in the Texas Top Cop Shop case made similar arguments to those made in CAI’s federal lawsuit against the U.S. Department of Treasury, Secretary Janet Yellen, and the director of the Financial Crimes Enforcement Network. The plaintiffs argued the act was an overreach of Congress’s authority over the states, improperly compelling speech and contradicting the right of association guaranteed by the First Amendment and violating the Fourth Amendment by forcing the disclosure of private information. Judge Mazzant’s opinion cites arguments and rulings from CAI’s pending federal case in the U.S. District Court for the Eastern District of Virginia to substantiate his ruling.  

For community association board members who have taken advice from industry professionals and already complied with the act’s reporting requirements, you have taken the responsible route. We recognize the situation is complex especially because we are so close to the reporting deadline. We continue to believe that exempting community associations from the act is in the best interests of CAI member communities.  

The full opinion can be found here. For more information on CAI’s pending lawsuit, advocacy efforts, and the act’s impact on community associations, visit www.caionline.org/CTA.