Supreme Court of the United States Stays Eastern District of Texas Order in Texas Top Cop Shop Case Pending Fifth Circuit Appeal

The decision

On January 23, 2025, the Supreme Court of the United States granted the federal government’s application to stay the December 5, 2024 amended order of the United States District Court for the Eastern District of Texas in case No. 4:24–cv–478. The Court issued only a short, unsigned order. It gave no reasons, did not identify which Justices joined, and did not report a vote.

The stay remains in place while the government’s appeal proceeds in the United States Court of Appeals for the Fifth Circuit and while any timely petition for a writ of certiorari is pending. Justice Gorsuch filed an opinion concurring in the grant of stay. Justice Jackson filed an opinion dissenting from the grant of stay. The order decides no question about the underlying statute or the correctness of the district court’s order.

Background

The order itself states little about the case. It recites that the application for stay was presented to Justice Alito and referred by him to the full Court, that the order under review is the district court’s December 5, 2024 amended order, and that an appeal is pending in the Fifth Circuit. The order does not name the statute at issue or describe the district court’s reasoning.

The separate writings supply a few additional details. Justice Gorsuch described the stayed order as “the district court’s universal injunction.” Justice Jackson wrote that the Fifth Circuit had expedited its consideration of the government’s appeal, and that the government had itself deferred implementation of “the law,” setting an enforcement date nearly four years after Congress enacted it. Neither writing names the statute beyond Justice Jackson’s reference to “the Act.”

News coverage identified the statute and the procedural setting. According to SCOTUSblog, the district court had issued a nationwide preliminary injunction barring enforcement of the Corporate Transparency Act, which requires many companies to report information about their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), and the government had asked the Supreme Court to lift that injunction after the Fifth Circuit declined to keep a stay in place. Reuters described the statute as an anti-money-laundering law. The caption at the Supreme Court names James R. McHenry, III, Acting Attorney General, as the lead applicant; SCOTUSblog and the Journal of Accountancy noted that the case had earlier been captioned with the name of the prior Attorney General. The Journal of Accountancy, citing FinCEN, reported that roughly 32 million small businesses were subject to the reporting requirement. These details come from the coverage, not from the Court’s order.

The court’s reasoning

The Court did not issue an opinion. The order contains no discussion of the standards for a stay, no assessment of the government’s likelihood of success, no finding on irreparable harm, and no balancing of the equities. All of the reasoning in the document appears in the separate writings of Justice Gorsuch and Justice Jackson, which are described below and which speak only for their authors.

The grant

The operative text of the order is a single sentence: “The application for stay presented to JUSTICE ALITO and by him referred to the Court is granted.” The order then identifies the stayed ruling, stating that “[t]he December 5, 2024 amended order of the United States District Court for the Eastern District of Texas, case No. 4:24–cv–478, is stayed” pending further proceedings. The order does not characterize that ruling as an injunction; that description appears only in Justice Gorsuch’s concurrence.

Duration and termination

The order sets out how long the stay lasts. The district court’s order “is stayed pending the disposition of the appeal in the United States Court of Appeals for the Fifth Circuit and disposition of a petition for a writ of certiorari, if such a writ is timely sought.” It then specifies two separate ways the stay ends. First: “Should certiorari be denied, this stay shall terminate automatically.” Second: “In the event certiorari is granted, the stay shall terminate upon the sending down of the judgment of this Court.”

What the order does not decide

The order grants emergency relief only. It does not resolve whether the statute is constitutional, whether the district court erred in granting relief, or whether the relief the district court granted was properly nationwide in scope. Justice Gorsuch alone wrote that he would have taken up the last of those questions now; the Court did not do so. The order also does not address any reporting obligation or deadline under the statute. Docket number 24A653 is an application for stay, not a grant of certiorari, and the order contemplates that a petition for certiorari may or may not be filed.

Separate opinions

Justice Gorsuch, concurring in the grant of stay

Justice Gorsuch wrote a one-paragraph concurrence. He stated: “I agree with the Court that the government is entitled to a stay of the district court’s universal injunction.” He added: “I would, however, go a step further and, as the government suggests, take this case now to resolve definitively the question” whether a district court may issue universal injunctive relief. In support, he cited his own earlier concurrences in the grant of stay in Labrador v. Poe (2024) and Department of Homeland Security v. New York (2020). The concurrence does not discuss the statute or the stay factors. No other Justice is listed as joining it.

Justice Jackson, dissenting from the grant of stay

Justice Jackson would have denied the application. She wrote: “However likely the Government’s success on the merits may be, in my view, emergency relief is not appropriate” because, in her view, the government had not shown sufficient exigency to justify the Court’s intervention. She cited her own dissent from the grant of stay in Labrador v. Poe.

She continued: “I see no need for this Court to step in now for at least two reasons.” The first: “First, the Fifth Circuit has expedited its consideration of the Government’s appeal.” The second: “Second, the Government deferred implementation on its own accord—setting an enforcement date of nearly four years after Congress enacted the law—despite the fact that the harms it now says warrant our involvement were likely to occur during that period.” She wrote that the government had given no indication that a more serious or significant injury would result if implementation of the Act were further delayed while the litigation proceeded in the lower courts, and that she would therefore deny the application and let the appellate process run its course. The dissent does not assess the merits. No other Justice is listed as joining it.

Status

Under the terms of the order, the district court’s December 5, 2024 amended order is stayed while the appeal proceeds in the Fifth Circuit and, if a petition for certiorari is timely filed, while that petition is pending. The stay ends automatically if certiorari is denied and, if certiorari is granted, when the Supreme Court’s judgment is sent down. Justice Jackson’s dissent states that the Fifth Circuit has expedited its consideration of the government’s appeal.

The Supreme Court’s order does not itself address whether companies must now file beneficial ownership reports. According to the Journal of Accountancy, FinCEN stated on January 24, 2025 that, because a separate nationwide order issued by the Eastern District of Texas in Smith v. U.S. Department of the Treasury remained in effect, reporting companies were not required to file beneficial ownership information and would face no liability for not filing, though they could file voluntarily. Forbes likewise reported that the Smith order left the reporting requirement on hold.

The Journal of Accountancy later reported that the Justice Department filed a notice of appeal in Smith and asked the district court to stay or narrow that injunction, citing the Supreme Court’s order in this case, and stated that FinCEN would extend filing deadlines by 30 days if the stay were granted.