03/05/2024
An Alabama federal judge placed an injunction on the enforcement of the Corporate Transparency (against plaintiffs). It is not yet clear whether copycat suits will emerge in other districts or the Treasury Department may modify rules based on this decision.
The opening paragraph of the opinion sets the tone:
“The late Justice Antonin Scalia once remarked that federal judges should have a rubber stamp that says STUPID BUT CONSTITUTIONAL. See Jennifer Senior, In Conversation: Antonin Scalia, New York Magazine, Oct. 4, 2013. The Constitution, in other words, does not allow judges to strike down a law merely because it is foolish, burdensome or offensive. Yet the inverse is also true—the wisdom of a policy is no guarantee of its constitutionality. Indeed, even in the pursuit of sensible and praiseworthy ends, Congress sometimes enacts smart laws that violate the Constitution. This case, which concerns the constitutionality of the Corporate Transparency Act, illustrates that principle.” Nat’l Small Bus. Assoc. v. Janet Yellen, No. 05:22-cv-1448-LCB, N.D.Ala. March 2, 2024).
The government claims authority under the ability to oversee foreign affairs and national security, the Commerce Clause, and taxing power. With prior precedents heavily in favor of regulation of interstate commerce and banking, it is hard for me to believe that the Supreme Court will limit Congress’s ability to monitor the sources of financial transactions.
Very likely, the case will be appealed to the 11th Circuit U.S. Court of Appeals and/or Congress may amend the law to provide the jurisdictional hook that Judge Burke finds missing.
Yesterday’s full opinion can be accessed at:
