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I managed to hold off for a few weeks–and then for the past 24-48 hours (or so)–in reporting back on the current state of the Corporate Transparency Act (CTA). But the U.S. Supreme Court has again spoken, and so it is time to do an update (since little more is likely to happen over the weekend). FinCEN, the U.S. Financial Crimes Enforcement Network, summarizes the current state of play, an update from my post earlier this month.

On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

And so it…

A U.S. District Court judge sitting in the Northeastern Division of the Northern District of Alabama found the Corporate Transparency Act (affectionately referred to in short form as the CTA) unconstitutional as detailed in a memorandum opinion issued on Friday.  The opinion granted the plaintiffs, the National Small Business United (NSBU) and Isaac Winkles, an NSBA member, their summary judgment motion on this basis.  The accompanying final judgment permanently enjoined the Secretary of the Treasury and other government defendants, as well as "any other agency or employee acting on behalf of the United States," from enforcing the Corporate Transparency Act against the plaintiffs in the litigation.

Many of us business law profs–and all of our business law practice brethren–have been following the CTA, endeavoring to gain a more comprehensive understanding of its provisions and fashioning advice on compliance.  The CTA, enacted in 2021 and effective as of January 1, 2024, requires nonexempt companies (domestic or foreign corporations, limited liability companies, and other entities formed or, in the case of foreign entities, registered to do business in any U.S. state or tribal jurisdiction) to disclose certain information, including about their beneficial owners, to the Financial Crimes Enforcement Network (FinCEN), part of…

As much as I love being a professor, it can be hard. I’m not talking about the grading, keeping the attention of the TikTok generation, or helping students with the rising mental health challenges.

I mean that it’s hard to know what to say in a classroom. On the one hand, you want to make sure that students learn and understand the importance of critical thinking and disagreeing without being disagreeable.

On the other hand, you worry about whether a factual statement taken out of context or your interpretation of an issue could land you in the cross hairs of cancel culture without the benefit of any debate or discussion.

I’m not an obvious person who should be worried about this. Although I learned from some of the original proponents of critical race theory in law school, that’s not my area of expertise. I teach about ESG, corporate law, and compliance issues.

But I think about this dilemma when I talk about corporate responsibility and corporate speech on hot button issues. I especially think about it when I teach business and human rights, where there are topics that may be too controversial to teach because some issues are too close…

I've finally gotten around to updating my SSRN page.  I would love to hear any comments you might have.

1.  Corporate Governance and the Omnipresent Specter of Political Bias: The Duty to Calculate ROI

2.  Totalitarian Nudges, Illusory Externalities, and Utopian Benefits: Reflections on the 34th Economics Institute for Law Professors

3.  Killing Corporations to Save Humans: How Corporate Personhood, Human Rights, and the Corporate Death Penalty Intersect

4.  The Helper Therapy Principle: Using the Power of Service to Save Addicts

In Tennessee Wine and Spirits Retailers Assn. v. Thomas, the SCOTUS affirmed decisions of the Sixth Circuit and Federal District Court of Middle Tennessee finding Tennessee’s 2-year residency requirement applicable for retail liquor store license applicants unconstitutional as a violation of the Commerce Clause that is not saved by the 21st Amendment.  Specifically, in an opinion dated June 26, 2019, Justice Alito concluded that "Tennessee’s 2-year durational-residency requirement plainly favors Tennesseans over nonresidents" and, addressing the claim that Tennessee's regulation nevertheless is valid under Section 2 of the 21st Amendment, found that "the record is devoid of any 'concrete evidence' showing that the 2-year residency requirement actually promotes public health or safety; nor is there evidence that nondiscriminatory alternatives would be insufficient to further those interests."  This is a huge win for the alcoholic beverage retail industry nationwide, even of it is a deemed loss for smaller local liquor retailers in Tennessee who were protected by the stringent residency requirements (although the Tennessee Alcoholic Beverage Commission had stopped enforcing the requirements against new applicants).

[Note: BLPB reader Tom N. predicted this result in his comment to this Josh Fershee post earlier in the year.]

A number of things about…

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"A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice."

Am. Bar Assoc., Model Rules of Prof. Conduct Preamble ¶ 1 (emphasis added)

Although we business lawyers do not talk about this much–at least not in forums like this–as licensed attorneys, we have an obligation to speak out publicly on matters of justice.  Paragraph 6 of the Preamble to the Model Rules of Professional Conduct offers details on this role.  Among my favorite parts of this paragraph from the Preamble are the following duties that most commonly impact my work:

  • "As a public citizen, a lawyer should seek improvement of the law, access to the legal system, the administration of justice and the quality of service rendered by the legal profession."
  • "As a member of a learned profession, a lawyer should cultivate knowledge of the law beyond its use for clients, employ that knowledge in reform of the law and work to strengthen legal education."
  • "In addition, a lawyer should further the public's understanding of

…

Jeremy Kessler and David Pozen have posted a draft of their paper The Search for an Egalitarian First Amendment on SSRN (available here).  In skimming the paper, I came across a number of quotes, including a couple of citations, I thought readers of this blog might find of interest. So, here they are, in no particular order:

— One does not need to read Piketty … to guess that equating corporations’ rights to spend money, sell data, and trim benefits with citizens’ First Amendment rights might prove controversial in a world of bank bailouts and mortgage foreclosures.

— the question whether the Free Speech Clause permits a legislature to limit the election-related spending of corporations, unions, or wealthy individuals in the service of antiplutocratic goals. To help answer this question in the face of mixed precedent and negligible Founding-era evidence, the Justices have adverted to each of the three major normative theories of the First Amendment [pursuit of truth, the promotion of individual autonomy, and the facilitation of democratic self-government].

— Both the majority and the dissent in Citizens United thus plausibly invoked each and every one of the three major First Amendment theories, as well as the value of equality…

The Southeastern Association of Law Schools (SEALS) Annual Meeting is upon us. If you are free from 9-11 AM this coming Saturday, Aug. 11, please stop by our discussion group on The Role of Corporate Personhood in Masterpiece Cakeshop. Don't worry about the fact that SCOTUS ignored the personhood issue — we'll have plenty to talk about.

Here is a summary of the program:

In the United States Supreme Court case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, the issue presented is: “Whether applying Colorado's public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.” A group of corporate law professors has filed an amicus brief in support of the CCRC. One of the arguments in that brief is: “Because Of The Separate Legal Personality Of Corporations And Shareholders, The Constitutional Interests Of Shareholders Should Not Be Projected Onto The Corporation.” This discussion group features a dialogue on the pros and cons of this argument, together with related analysis and observations.

I'll be moderating, and here is a list of dicussants:

Professor Eric Chaffee, University…

I am putting together a panel or discussion group (depending on how many folks respond positively) for the SEALS conference for next summer, which is scheduled to be held August 5-11, 2018, at the Marriott Harbor Beach Resort & Spa in Fort Lauderdale, Florida (details here).

Here is the proposed title and a brief draft description (which may have to be shortened for the submission):

The Role of Corporate Personhood in Masterpiece Cakeshop

The United States Supreme Court is scheduled to hear arguments in the case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission on Dec. 5, 2017 (SCOTUSblog summary here). The issue presented in that case is: “Whether applying Colorado's public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.” A group of corporate law professors have filed an amicus brief in support to the CCRC (available here). One of the two arguments in that brief is: “Because Of The Separate Legal Personality Of Corporations And Shareholders, The Constitutional Interests Of Shareholders Should Not Be Projected Onto The Corporation.” This [panel] [discussion group] features…

These days it is easy to get discouraged on how divided our nation seems to be on a number of issues. John Inazu, Distinguished Professor of Law, Religion, and Political Science at Washington University, maps a way forward in his book Confident Pluralism (2016).

The book is divided into two parts: (1) Constitutional Commitments, and (2) Civic Practices.

The first part “contend[s] that recent constitutional doctrine has departed from our longstanding embrace of pluralism and the political arrangements that make pluralism possible.” (8) Further, the first part offers guideposts for future decisions and political solutions. The first part argues for both inclusion and dissent, for the free formation of voluntary groups, for meaningful access to public forums, and for access to publicly available funding for diverse organizations. Provocatively, Inazu claims that Bob Jones case – which stripped tax-exempt status from Bob Jones University due to its prohibition of interracial dating/marriage – is “normatively attractive to almost everyone, [but] is conceptually wrong.” (75) Inazu claims that “[t]he IRS should not limit tax-exempt status based on viewpoint of ideology.” (79) He extends the argument to “generally available resources.” While the Trinity Lutheran case was decided by the Supreme Court after publication…