Petition for Writ of Certiorari — National Small Business United, dba National Small Business Association, et al., Petitioners v. Scott Bessent, Secretary of the Treasury, et al.

Supreme Court briefApr 15, 2026

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No. ______

In the

Supreme Court of the United States

________________

NATIONAL SMALL BUSINESS UNITED, d/b/a National

Small Business Association; ISAAC WINKLES,

Petitioners,

SCOTT BESSENT, in his official capacity as the

Secretary of the United States Department of

the Treasury; UNITED STATES DEPARTMENT OF THE

TREASURY; ANDREA GACKI, in her official capacity

as the Director of the Financial Crimes

Enforcement Network,

Respondents.

________________

On Petition for Writ of Certiorari to

the United States Court of Appeals

for the Eleventh Circuit

________________

PETITION FOR WRIT OF CERTIORARI

________________

JOHN NEIMAN, JR.

PAUL D. CLEMENT

MAYNARD NEXSEN P.C. Counsel of Record

1901 Sixth Avenue N.

ANDREW C. LAWRENCE

Suite 1700

NICCOLO A. BELTRAMO

Birmingham, AL 35203 CLEMENT & MURPHY, PLLC

706 Duke Street

Thomas H. Lee

Alexandria, VA 22314

HUGHES HUBBARD

(202) 742-8900

& REED LLP

paul.clement@clementmurphy.com

One Battery Park Plaza

New York, NY 10004

Counsel for Petitioners

April 15, 2026

QUESTIONS PRESENTED

In 2021, Congress intruded into an area that the

Framers reserved for the states when it enacted the

Corporate Transparency Act (CTA). On pain of severe

penalties, the CTA requires state-chartered

corporations to disclose sensitive data about their

“beneficial owners” to federal authorities. The CTA

does not require companies to engage in any economic

activity before they must comply; mere existence

under state law triggers the federal mandate. And

although the statute authorizes federal authorities to

use the collected information to further a generalized

interest in law enforcement, it does not require

individualized suspicion or a warrant.

The district court recognized that the CTA

exceeded Congress’ authority, but the Eleventh

Circuit reversed. Invoking Wickard v. Filburn, 317

U.S. 111 (1942), the court of appeals held that, under

the Commerce Clause, the mere potential to engage in

commerce empowered Congress to regulate companies

chartered under state law. It also found the CTA’s

suspicionless and warrantless searches reasonable

under the Fourth Amendment based on precedent

approving federal efforts to require banks engaged in

commerce to report transactional information.

The questions presented are:

1. Whether the CTA’s regulation of corporations

merely because they exist under state law exceeds

Congress’ Commerce Clause authority.

2. Whether the CTA’s suspicionless and

warrantless searches to further a generalized interest

in expedient law enforcement violate the Fourth

Amendment.

PARTIES TO THE PROCEEDING

Petitioners (plaintiffs-appellees below) are

National Small Business United, d/b/a National Small

Business Association, and Isaac Winkles.

Respondents (defendants-appellants below) are

Scott Bessent, the United States Department of the

Treasury, and Andrea Gacki.

iii

CORPORATE DISCLOSURE STATEMENT

National Small Business United, d/b/a National

Small Business Association, is a nonprofit corporation

organized under the laws of the State of Ohio. It is not

owned in whole or in part by any parent corporation

or publicly traded company, and it does not issue

stock.

STATEMENT OF RELATED PROCEEDINGS

National Small Business United v. United States

Dep’t of the Treasury, No. 24-10736 (11th Cir.)

(judgment entered Dec. 16, 2025);

National Small Business United v. Yellen,

No. 5:22-cv-1448-LCB (N.D. Ala.) (judgment entered

Mar. 1, 2024).

TABLE OF CONTENTS

QUESTIONS PRESENTED ....................................... i

PARTIES TO THE PROCEEDING ........................... ii

CORPORATE DISCLOSURE STATEMENT ........... iii

STATEMENT OF RELATED PROCEEDINGS ....... iv

TABLE OF AUTHORITIES ..................................... vii

PETITION FOR WRIT OF CERTIORARI ................ 1

OPINIONS BELOW ................................................... 4

JURISDICTION ......................................................... 4

CONSTITUTIONAL

AND

STATUTORY

PROVISIONS INVOLVED...................................... 4

STATEMENT OF THE CASE ................................... 4

A. Constitutional & Legal Background ............ 4

B. Factual & Procedural Background ............ 11

REASONS FOR GRANTING THE PETITION....... 15

The Eleventh Circuit’s Commerce Clause

Holding Is Profoundly Flawed .......................... 18

A. The CTA Impermissibly Regulates

Corporations as Such, Not Their

Preexisting Commercial Activities ............ 19

B. The Decision Below Is A Blueprint to

Vastly Expand Congressional Power......... 23

II. The Eleventh Circuit’s Fourth Amendment

Holding Is Equally Flawed ............................... 27

A. The CTA Impermissibly Authorizes

Suspicionless and Warrantless Searches

to Further a Generalized Interest in

Expedient Law Enforcement ..................... 28

B. The Decision Below Badly Misapplies

This Court’s Precedent ............................... 31

III. The Issues Here Are Important, Recurring,

And Ideally Presented In This Case ................. 33

CONCLUSION ......................................................... 37

APPENDIX

Appendix A

Opinion, United States Court of Appeals

for the Eleventh Circuit, Nat’l Small Bus.

United v. U.S. Dep’t of Treasury, No. 2410736 (Dec. 16, 2025) .................................. App-1

Appendix B

Memorandum Opinion, United States

District Court for the Northern District of

Alabama, Nat’l Small Bus. United v.

Yellen, No. 22-cv-1448 (Mar. 1, 2024) ....... App-21

Appendix C

Relevant Constitutional and Statutory

Provisions................................................... App-70

U.S. Const. art. I, §8, cl.3 .................... App-70

U.S. Const. amend. IV ........................ App-70

U.S. Const. amend. X .......................... App-70

Pub. L. No. 116-283, tit. LXIV,

134 Stat. 4604 (2021) .......................... App-70

vii

TABLE OF AUTHORITIES

Cases

All. for Fair Bd. Recruitment v. SEC,

125 F.4th 159 (5th Cir. 2024) ................................ 22

Bond v. United States,

572 U.S. 844 (2014) .......................................... 22, 35

Cal. Bankers Ass’n v. Shultz,

416 U.S. 21 (1974) ................................ 15, 31, 32, 33

Carpenter v. United States,

585 U.S. 296 (2018) ............................................ 6, 29

Clinton v. City of New York,

524 U.S. 417 (1998) ................................................ 36

Comm. Ass’ns Inst. v. Yellen,

2024 WL 4571412 (E.D. Va. Oct. 24, 2024) .......... 35

Coolidge v. New Hampshire,

403 U.S. 443 (1971) ................................................ 30

Cort v. Ash,

422 U.S. 66 (1975) .................................................... 5

CTS Corp. v. Dynamics Corp. of Am.,

481 U.S. 69 (1987) .............................................. 5, 22

Does 1-3 v. Mills,

142 S.Ct. 17 (2021)................................................. 36

Dole Food Co. v. Patrickson,

538 U.S. 468 (2003) ................................................ 27

Free Enter. Fund v. PCAOB,

561 U.S. 477 (2010) ................................................ 27

Garland v. Texas Top Cop Shop,

145 S.Ct. 1 (2025)............................................. 35, 36

Georgia v. Randolph,

547 U.S. 103 (2006) .................................................. 7

viii

Griffin v. Wisconsin,

483 U.S. 868 (1987) .................................................. 7

Kennedy v. Bremerton Sch. Dist.,

586 U.S. 1130 (2019) .............................................. 35

Kyllo v. United States,

533 U.S. 27 (2001) .................................................. 29

Maryland v. King,

569 U.S. 435 (2013) .................................................. 6

Maryland v. Wirtz,

392 U.S. 183 (1968) ................................................ 19

Mincey v. Arizona,

437 U.S. 385 (1978) .................................................. 6

NFIB v. Sebelius,

567 U.S. 519 (2012) ........ 1, 13, 19, 20, 21, 24, 25, 26

NLRB v. Noel Canning,

573 U.S. 513 (2014) ................................................ 22

Paul v. Virginia,

75 U.S. (8 Wall.) 168 (1868)................................... 22

Riley v. California,

573 U.S. 373 (2014) .......................................... 29, 30

Skinner v. Ry. Lab. Execs.’ Ass’n,

489 U.S. 602 (1989) ................................................ 31

Small Bus. Ass’n of Mich. v. Yellen,

769 F.Supp.3d 722 (W.D. Mich. 2025) ........... 10, 29,

30, 33, 35

Smith v. Maryland,

442 U.S. 735 (1979) ................................................ 30

Smith v. U.S. Dep’t of the Treasury,

761 F.Supp.3d 952 (E.D. Tex. 2025) ..................... 35

Texas Top Cop Shop, Inc. v. Garland,

758 F.Supp.3d 607 (E.D. Tex. 2024) ..................... 35

United States v. Chadwick,

433 U.S. 1 (1977) .................................................... 28

United States v. Comstock,

560 U.S. 126 (2010) ................................................ 22

United States v. Jones,

565 U.S. 400 (2012) ................................................ 29

United States v. Lopez,

514 U.S. 549 (1995) .................................... 19, 23, 25

United States v. Morrison,

529 U.S. 598 (2000) .......................................... 18, 20

United States v. Morton Salt Co.,

338 U.S. 632 (1950) ................................................ 15

United States v. White,

782 F.3d 1118 (10th Cir. 2015).............................. 20

Virginia Mil. Inst. v. United States,

508 U.S. 946 (1993) ................................................ 35

Wickard v. Filburn,

317 U.S. 111 (1942) ............................................ 2, 14

Constitutional Provisions

U.S. Const. art. I, §8, cl.3 ......................................... 18

U.S. Const. art. VI, cl.2 .............................................. 4

U.S. Const. amend. IV .......................................... 6, 28

U.S. Const. amend. X ................................................. 5

Statutes

31 U.S.C. §5336(a)(2) .................................................. 8

31 U.S.C. §5336(a)(3) ............................................ 8, 33

31 U.S.C. §5336(a)(11) .................. 8, 10, 13, 21, 26, 34

31 U.S.C. §5336(b)(1) ............................ 8, 9, 21, 26, 32

31 U.S.C. §5336(b)(2) .................................................. 8

31 U.S.C. §5336(c)(1) .................................................. 9

31 U.S.C. §5336(c)(2) ............................................ 9, 32

31 U.S.C. §5336(h) ................................................ 9, 34

An Act to incorporate the Protestant

Episcopal Cathedral Foundation

of the District of Columbia,

27 Stat. 414 (1893) ................................................. 23

An Act to incorporate the subscribers

to the Bank of the United States,

1 Stat. 191 (1791) ................................................... 22

Pub. L. No. 90-129, 81 Stat. 365 (1967) ................... 23

Pub. L. No. 91-518, 84 Stat. 1327 (1970) ................. 23

Pub. L. No. 116-283, 134 Stat. 3388 (2021) .... 7, 8, 13,

29, 30, 31, 34

Regulations

86 Fed. Reg. 69,920 (Dec. 8, 2021) ............... 10, 33, 34

87 Fed. Reg. 59,498 (Sept. 30, 2022) ...... 11, 30, 33, 34

90 Fed. Reg. 13,688 (Mar. 26, 2025) ............ 13, 14, 36

Other Authorities

Beneficial Ownership Information,

FinCEN, https://perma.cc/VN3Z-DZ9W

(last visited Apr. 13, 2026) .................................... 30

Allen D. Boyer, Federalism and Corporation

Law: Drawing the Line in State Takeover

Regulation, 47 Ohio St. L.J. 1037 (1986) ................ 5

Bureau of Econ. Analysis, U.S. Dep’t of Com.,

Gross Domestic Product, Third Quarter

2024 (Second Estimate) and Corporate

Profits (Preliminary) (Nov. 27, 2024),

https://perma.cc/BW5X-CPKN .............................. 34

M. Farrand, The Records of the Federal

Convention of 1787 (1911) ................................... 4, 5

FinCEN, Beneficial Ownership Reporting

Outreach and Education Toolkit,

https://perma.cc/7VFM-9YDN

(last visited Apr. 14, 2026) .................................... 10

Joseph J. Stengel, The Background of the

Fourth Amendment to the Constitution

of the United States, Part Two,

4 U. Rich. L. Rev. 60 (1969) ..................................... 6

Message to the House of Representatives

Returning Without Approval the

National Defense Authorization Act for

Fiscal Year 2021, 2020 Daily Comp. Pres.

Doc. 903 (Dec. 23, 2020)........................................... 7

U.S. Small Bus. Admin., Frequently

Asked Questions (Jul. 23, 2024),

https://perma.cc/85G4-86TQ.................................. 34

PETITION FOR WRIT OF CERTIORARI

This case involves a double blow to the

Constitution: an extraordinary effort to expand

Congress’ Commerce Clause power in a way not seen

since NFIB v. Sebelius, 567 U.S. 519 (2012), all while

ignoring core Fourth Amendment protections to boot.

The offending and unprecedented law is known as the

Corporate Transparency Act (CTA), which Congress

enacted in 2021 as part of a package of legislation that

President Trump vetoed at the tail end of his first

term. Under the CTA, companies must collect and

turn over to the federal government a vast array of

sensitive and private information that most state

authorities directly responsible for chartering

corporations pointedly do not require—i.e., the names,

birthdates, addresses, and other identifying

information of all “beneficial owners” who exercise

“substantial control” over the state-chartered

companies, whether “directly or indirectly.”

particular relevance here, that federal reporting

requirement is triggered not by the state-chartered

entity’s actual participation in commerce, but rather

by its mere existence under state law. And federal

authorities justify the forced disclosure and collection

of all this non-commercial information about

beneficial owners—which they deemed too difficult

and time-consuming to gather through the

constitutionally prescribed warrant process—to

further an undifferentiated interest in law

enforcement.

Petitioners are a nonprofit corporation that

represents small businesses nationwide and one

individual who formed two small businesses in

Alabama. In 2022, petitioners filed suit alleging that

the CTA is unconstitutional because, inter alia, it

exceeds Congress’ Commerce Clause authority and

violates the Fourth Amendment. The district court

agreed with petitioners on the former argument,

obviating the need to reach the latter. As that court

explained, the mere act of incorporation by state

authorities is not sufficient to trigger Congress’

commerce power. Incorporation is a quintessential

state-law area, and the mere possibility that

corporations may engage in commercial activity in the

future is not sufficient either, as NFIB makes crystal

clear that neither the mere potential for engaging in

commerce nor any economic effect of inactivity

justifies the exercise of the commerce power. To the

contrary, one of the few options for avoiding the

federal government’s reach is to refrain from

commercial activity.

The Eleventh Circuit reversed. The court of

appeals relegated NFIB to a one-paragraph

afterthought and invoked Wickard v. Filburn, 317

U.S. 111 (1942), instead, holding that Congress could

rationally conclude that potential future economic

activity would have a substantial effect on interstate

commerce. And while the court did not disagree that

the CTA effected en masse searches, it deemed those

searches reasonable after relying on cases upholding

record-keeping and disclosure obligations on

companies engaged in commerce, like banks.

The Eleventh Circuit’s decision is profoundly

wrong and represents a profound threat to federalism

and individual liberty. The Framers debated the

possibility of the new federal government displacing

states in chartering corporations and expressly

rejected the possibility. For over two centuries,

Congress respected that judgment and left the

requirements, including disclosure requirements

regarding ownership, for chartering corporations to

the states. The CTA broke from that long tradition

and flouted this Court’s teaching that Congress’ ample

Commerce Clause powers do not extend to regulating

economic potentialities or inactivity.

Equally

important, the entire point of the Fourth Amendment

is to prevent the government from engaging in

suspicionless and warrantless searches, and

precedents upholding record-keeping requirements on

those engaged in commerce provide no support for

requiring disclosures by those who have done no more

than comply with the state requirements for

chartering a corporation.

Unsurprisingly given these glaring constitutional

defects, the executive branch recently issued an

administrative regulation exempting all domestic

entities and U.S. persons from the CTA’s reporting

requirement. While that is certainly a welcome

development, there is substantial doubt about the

President’s authority to effectively repeal the CTA

domestically and no guarantee that future

administrations will show comparable restraint.

Moreover, the citizenry should not have to rely on

executive grace for rights that the Constitution

guarantees. Instead, this Court should use the respite

provided by that executive restraint to resolve the

constitutionality of the CTA on the merits docket

rather than the emergency docket. The Court should

embrace that opportunity, grant the petition, and

reverse.

OPINIONS BELOW

The Eleventh Circuit’s opinion is reported at 161

F.4th 1323 and reproduced at App.1-20. The district

court’s opinion is reported at 721 F.Supp.3d 1260 and

reproduced at App.21-69.

JURISDICTION

The Eleventh Circuit issued its opinion on

December 16, 2025. On March 4, 2026, Justice

Thomas extended the deadline to file a petition for

certiorari until April 15, 2026. This Court has

jurisdiction under 28 U.S.C. §1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Relevant constitutional and statutory provisions

are reproduced at App.70-117.

STATEMENT OF THE CASE

A. Constitutional & Legal Background

1. At the Constitutional Convention in 1787, a

minority of delegates proposed that the federal

government should possess a broad power to oversee

“charters of incorporation.” 2 M. Farrand, The

Records of the Federal Convention of 1787 at 325, 615

(1911) (“Records”). One delegate deemed such a power

“necessary to prevent a State from obstructing the

general welfare.” Id. at 615 (emphasis omitted). But

the majority view at the Convention was quite

different. As the prevailing voices explained, granting

the federal government a general power over

incorporation would “prejudice[]” and “divide[]” the

states. Id. at 616. And a federal power over

corporations, which would displace any conflicting

state laws, see U.S. Const. art. VI, cl.2, would permit

the creation of nationwide “monopolies of every sort,”

Records 616, which the Founders reviled.

The

Founders understood that their decision would have

costs: “[L]eaving business regulation primarily to the

individual states might cause friction within the

overall American economy.”

Allen D. Boyer,

Federalism and Corporation Law: Drawing the Line in

State Takeover Regulation, 47 Ohio St. L.J. 1037, 1041

(1986) (“Boyer”). Nevertheless, they “were more

reluctant … to allow concentrations of economic

power, which they visualized as a governmentsponsored monopoly.” Id.

The view that prevailed at the Convention

continued to carry the day until Congress broke with

tradition in the CTA. In 1791, the Founders ratified

the Tenth Amendment, reinforcing the understanding

that corporation law is “reserved to the States” and to

“the people.” U.S. Const. amend. X. And although the

federal government “debated whether to enter the

corporate area itself” on multiple occasions in the

intervening centuries, including “during the

Progressive Era[] and at the height of the New Deal,”

it resisted the temptation “every time,” even in the

face of concerns that laboratories of state government

were creating a race to the bottom in matters of

corporate law. Boyer 1037-38. As a result, “[n]o

principle of corporation law and practice is more

firmly established than a State’s authority to regulate

domestic corporations.” CTS Corp. v. Dynamics Corp.

of Am., 481 U.S. 69, 89 (1987).

Simply put,

“[c]orporations are creatures of state law.” Cort v. Ash,

422 U.S. 66, 84 (1975).

2. While the Constitutional Convention included

a decisive debate over the federal-state balance of

power over corporations, other important issues

received scant attention.

“[S]o far as can be

ascertained from the reports thereof, there was no

discussion regarding searches and seizures.” Joseph

J. Stengel, The Background of the Fourth Amendment

to the Constitution of the United States, Part Two, 4 U.

Rich. L. Rev. 60, 61 (1969). That is not because the

topic lacked salience. To the contrary, opposition to

the “general warrants” and “writs of assistance” of the

colonial era, “which allowed British officers to

rummage through homes in an unrestrained search

for evidence of criminal activity,” helped “spark the

Revolution itself.” Carpenter v. United States, 585

U.S. 296, 303-04 (2018). To make abundantly clear

that the new federal government did not possess a

“general, suspicionless warrant” to violate personal

privacy to achieve its law-enforcement goals,

Maryland v. King, 569 U.S. 435, 467 (2013) (Scalia, J.,

dissenting), the Founders ratified the Fourth

Amendment.

That

guarantee

prohibited

“unreasonable searches and seizures” and established

judicial procedures for obtaining search warrants

supported by probable cause. U.S. Const. amend. IV.

Under this Court’s Fourth Amendment precedent,

“it is a cardinal principle that ‘searches conducted

outside the judicial process, without prior approval by

judge or magistrate, are per se unreasonable … subject

only to a few specifically established and welldelineated exceptions.’” Mincey v. Arizona, 437 U.S.

385, 390 (1978). And to ensure that the exceptions do

not swallow the rule, this Court has admonished that

“the normal need for law enforcement” is not a

sufficient justification for dispensing with the warrant

requirement. Griffin v. Wisconsin, 483 U.S. 868, 873

(1987). In other words, “[a] generalized interest in

expedient law enforcement cannot, without more,

justify a warrantless search.” Georgia v. Randolph,

547 U.S. 103, 115 n.5 (2006).

3. In 2021, Congress radically departed from

these bedrock constitutional principles when it

enacted the CTA as Title LXIV of the 2021 National

Defense Authorization Act—over President Trump’s

veto. See Pub. L. No. 116-283, §§6401-03, 134 Stat.

3388, 4604-625 (2021); Message to the House of

Representatives Returning Without Approval the

National Defense Authorization Act for Fiscal Year

2021, 2020 Daily Comp. Pres. Doc. 903 (Dec. 23, 2020).

The CTA begins by providing the “sense of Congress”

that “more than 2,000,000 corporations and limited

liability companies are being formed under the laws of

the States each year” and that “most or all States do

not require information about the beneficial owners of

the corporations, limited liability companies, or other

similar entities formed under the laws of the State.”

CTA §6402(1)-(2), 134 Stat. at 4604 (codified at 31

U.S.C. §5136 note). Perceiving that state of affairs as

a problem in need of a federal solution, Congress

declared that “the collection of beneficial ownership

information” (BOI) “is needed to … set a clear, Federal

standard for incorporation practices” and that the

establishment of a federal “database” aggregating BOI

is necessary to “facilitate important national security,

intelligence, and law enforcement activities.” Id.

§6402(5)(A), (6)(A), (7)(A), 8(C), 134 Stat. at 4604-05.

To that end, the CTA requires any “reporting

company” to “submit to FinCEN”—i.e., the Financial

Crimes Enforcement Network of the U.S. Department

of the Treasury—a “report” with information

regarding any “beneficial owner” and “applicant.” 31

U.S.C. §5336(b)(1)-(2). A “reporting company” is

defined in the statute as a “corporation, limited

liability company, or other similar entity” that is

“created by the filing of a document” with relevant

state authorities or that is “formed under the law of a

foreign country and registered to do business in the

United States by the filing of a document with” such

authorities. Id. §5336(a)(11). A “beneficial owner” is

defined as an “individual” who “exercises substantial

control over the entity,” whether “directly or

indirectly, through any contract, arrangement,

understanding, relationship, or otherwise,” or who

otherwise “owns or controls not less than 25 percent of

the ownership interests of the entity.”

Id.

§5336(a)(3)(A). And an “applicant” is an individual

who files an application to form an entity under state

law or who seeks to register a foreign entity with state

authorities. Id. §5336(a)(2).

The CTA explicitly acknowledges that the

required “report” includes “sensitive information.”

CTA §6402(6), 134 Stat. at 4605. In particular, the

report must include “the full legal name[,] date of

birth[,] current[] … residential or business street

address” of every beneficial owner or applicant, and

either a “unique identifying number from an

acceptable identification document” or what the

statute refers to as the “FinCEN identifier” of the

entity’s beneficial owners and applicants. 31 U.S.C.

§5336(b)(2)(A). Reporting companies also have a

continuing obligation to update FinCEN with changes

to BOI after filing the initial report.

See id.

§5336(b)(1)(D). FinCEN then retains all BOI for the

lifetime of the reporting company and “not fewer than

5 years” beyond. Id. §5336(c)(1).

Once FinCEN obtains a reporting company’s BOI

and deposits it into the federal database, the CTA

authorizes FinCEN to disseminate that information to

a variety of third parties. For instance, any “[f]ederal

agency engaged in national security, intelligence, or

law enforcement activity” that requests the

information through “appropriate protocols” can

receive it. Id. §5336(c)(2)(B)(i). FinCEN can also

share BOI with a “State, local, or Tribal law

enforcement agency” pursuant to a court order. Id.

§5336(c)(2)(B)(i)(II). On top of that, FinCEN may send

BOI overseas to a “law enforcement agency,

prosecutor, or judge of another country” subject to “an

international treaty, agreement, convention, or official

request made by law enforcement, judicial, or

prosecutorial authorities in trusted foreign countries”

for “authorized investigation or national security or

intelligence activity.” Id. §5336(c)(2)(B)(ii). And BOI

is also available to “appropriate regulatory agenc[ies]”

or federal tax officials. Id. §5336(c)(2)(B)(iv), (c)(5).

Severe penalties await those who do not comply

with the CTA’s reporting requirements. A person who

willfully fails to report complete or updated BOI (or

provides false information), faces the prospect of

$10,000 in criminal fines or two years of imprisonment

(or both). See id. §5336(h). The CTA also authorizes

civil penalties of up to $500 for each day of noncompliance. See id.

The CTA does not require commercial activity to

trigger its obligations. To the contrary, it actually

exempts some of the “biggest players in the economy,”

Small Bus. Ass’n of Mich. v. Yellen (SBAM), 769

F.Supp.3d 722, 735 (W.D. Mich. 2025), such as

financial institutions, insurance agencies, accounting

firms, and telecommunications providers via its

various exemptions from BOI reporting. See 31 U.S.C.

§5336(a)(11)(B). The CTA also contains a catchall

exemption provision, which authorizes the Treasury

Secretary to issue regulations exempting otherwisecovered entities if he determines that obtaining

“beneficial ownership information from the entity or

class of entities … would not serve the public interest”

and “would not be highly useful in national security,

intelligence, and law enforcement agency efforts.” Id.

§5336(a)(11)(B)(xxiv).

As FinCEN itself has

explained, “[t]he CTA reporting requirements target

generally smaller, more lightly regulated entities,” not

the corporations most actively engaged in interstate

commerce. 86 Fed. Reg. 69,920, 69,928 (Dec. 8, 2021).

Nor is the real target of this law just abstract entities.

FinCEN has emphasized that the purpose of the CTA

is to sniff out “the real people who ultimately own or

control” the smallest state-chartered entities.

FinCEN, Beneficial Ownership Reporting Outreach

and Education Toolkit, https://perma.cc/7VFM-9YDN

(last visited Apr. 14, 2026); see CA11.Dkt.67.at.4-5

(“Congress … requir[ed] entities with the capacity to

engage in commerce to identify the human beings

behind the corporate form.”).

4. In 2022, FinCEN promulgated a final rule

implementing the CTA. See 87 Fed. Reg. 59,498 (Sept.

30, 2022). Among other things, the rule emphasized

congressional testimony from a prior FinCEN director,

who lamented that FinCEN historically needed to

secure “search warrants” before obtaining BOI, which

supposedly “take[] an enormous amount of time” and

“waste[] resources.” Id. at 59,504. To make FinCEN’s

law-enforcement mission more efficient, the rule

explained that it would take effect in January 2024

and that reporting companies would have to begin

complying with the CTA’s suspicionless and

warrantless regime no later than January 2025. See

id. at 59,511. The rule also projected that the

reporting requirement would apply to 32.6 million

small businesses in the United States in the first year

alone and to five million new entities in each

succeeding year. See id. at 59,549. As a result of that

sweeping coverage, “FinCEN estimate[d] that the rule

will have total estimated [compliance] costs in the

billions of dollars on an annual basis.” Id.

B. Factual & Procedural Background

1. Petitioner

National

Small

Business

Association (NSBA) is an Ohio nonprofit corporation

that represents over 65,000 small businesses and

entrepreneurs nationwide. See App.5-6. NSBA’s

purpose is to advocate for its members’ interests, to

protect the interests of small businesses and

entrepreneurs in the United States, and to provide its

members with guidance regarding how to navigate

government regulations. See App.23. Petitioner Isaac

Wilkes is an NSBA member who has formed two small

businesses under Alabama law. See App.6.

In November 2022, only weeks after FinCEN

promulgated its rule implementing the CTA,

petitioners filed suit in the Northern District of

Alabama to challenge the statute. See App.24. Among

other things, petitioners alleged that Congress lacked

authority under the Commerce Clause or any other

constitutional provision to enact the CTA and that the

statute violated the Fourth Amendment. See App.6.

Petitioners sought a declaratory judgment that the

CTA is unconstitutional and an order enjoining its

enforcement against them. See App.6.

After reviewing hundreds of pages of dispositive

motions briefing and hearing oral argument, the

district court issued a 53-page decision granting

summary judgment to petitioners and permanently

enjoining the enforcement of the CTA against them.

See App.21-69. As relevant here, the court held that

the CTA exceeded Congress’ enumerated powers,

including its Commerce Clause authority. See App.3368. At the outset, the court rejected the government’s

arguments that the CTA regulates the channels or

instrumentalities of interstate commerce.1

See

App.44-50.

Nor did the court agree with the

government that the CTA regulates commercial

activity that, in the aggregate, has a substantial effect

on interstate commerce. See App.50-65. As to the

latter theory, the court explained that the government

had “concede[d]” that merely “‘submitt[ing] documents

to a Secretary of State” to create a corporate entity

“does not “implicate[] the Commerce Clause,” meaning

that the government’s Commerce Clause argument

hinged on the proposition that Congress may regulate

corporate entities formed under state law because

they are likely to engage in future “activities” that

1 The government abandoned these arguments on appeal. See

App.7-8.

have a substantial effect on commerce. App.52. The

court determined, however, that “the future activities

of state entities are not enough to invoke Congress’

‘substantial effects’ commerce powers,” as “‘[t]he

Commerce Clause is not a general license to regulate

an individual from cradle to grave, simply because he

will predictably engage in particular transactions.’”

App.51 (quoting NFIB, 567 U.S. at 557 (opinion of

Roberts, C.J.)). Because the conclusion that Congress

exceeded its enumerated powers proved dispositive,

the court found it unnecessary to address petitioners’

Fourth Amendment argument. See App.69.

2. In March 2025, after the district court issued

its decision—and after the beginning of President

Trump’s second term—FinCEN issued an interim

final rule that superseded its 2022 rule. See 90 Fed.

Reg. 13,688 (Mar. 26, 2025). Although the CTA

explicitly contemplates that FinCEN would collect

BOI from entities formed under state law, see CTA

§6402, (6), 134 Stat. at 4604, the interim final rule

declared that FinCEN had invoked the CTA’s catchall

exemption provision and opted to exempt “all domestic

reporting companies, and their beneficial owners,”

from the CTA’s reporting requirement, on the ground

that it “‘would not serve the public interest’” and

“‘would not be highly useful in national security,

intelligence, and law enforcement agency efforts’” to

require BOI from any domestic reporting company, 90

Fed. Reg. at 13,690-91 (quoting 31 U.S.C.

§5336(a)(11)(B)(xxiv)). The interim final rule also

“exempt[ed] foreign reporting companies, and their

U.S. person beneficial owners, from the requirement

to provide the BOI of any U.S. persons who are

beneficial owners of the foreign reporting company.”

Id. at 13,690. The interim final rule thus preserved

the CTA’s reporting requirement only as to foreign

reporting companies and foreign-person beneficial

owners. See id. at 13,692-93.

3. In December 2025, the Eleventh Circuit

reversed the district court’s decision. See App.1-20.

After agreeing with the parties that the interim final

rule did not moot petitioners’ challenge to the CTA,

App.5 n.1, the court of appeals concluded that the CTA

fit within Congress’ power to regulate interstate

commerce under the “substantial effects” test, see

App.7-18. Echoing the government’s arguments, the

court first reasoned that the CTA “regulates activity

that is economic in nature” simply because it regulates

corporations, which are often “[f]or-profit business

entities” that engage in activity to “maximize profits.”

App.8, 10; see CA11.Dkt.18.at.23 (government arguing

that “the CTA regulates a class of entities—primarily

active, for-profit businesses—whose defining feature

is their authority and propensity to conduct

commercial transactions”). According to the court,

that propensity to engage in activity “is comparable to

other regulated activities the Supreme Court … found

commercial in nature” in Wickard. App.11. The court

also explained that, “to the extent a corporate entity is

not involved in commerce, the CTA’s many carveouts

will likely exempt it.” App.11.

Having determined that the CTA regulated

economic activity, the Eleventh Circuit next concluded

that “Congress rationally conclude[d] that the

regulated conduct has a substantial aggregate effect

on interstate commerce.” App.14. According to the

court of appeals, “financial crime,” “money

laundering,” “drug trafficking,” and “terrorist

operations” have a substantial effect on interstate

commerce, and some entities formed under state law

proceed to “abuse[] … the corporate form” by engaging

in such conduct. App.15-16. By requiring state-law

entities to reveal BOI, the court summarized, the CTA

is a “routine federal law” just like other federal

reporting requirements—“[a]part from its scope,”

which the court did not consider routine. App.14.

The Eleventh Circuit also rejected petitioners’

argument that the CTA violates the Fourth

Amendment. See App.18-20. The court of appeals

likened the CTA’s reporting requirement to another

reporting requirement found in the Bank Secrecy Act,

which requires banks to report domestic currency

transactions above a certain amount, together with

identifying information about the persons involved in

those transactions. See App.19. Because this Court

found that reporting requirement consistent with the

Fourth Amendment in California Bankers Association

v. Shultz, 416 U.S. 21 (1974), the court saw “no Fourth

Amendment issue” with the CTA’s reporting

requirement either, reasoning that “‘[t]he inquiry is

within the authority of the agency, the demand is not

too indefinite and the information sought is

reasonably relevant.’” App.20 (quoting Shultz, 416

U.S. at 67, in turn quoting United States v. Morton

Salt Co., 338 U.S. 632, 652 (1950)).

REASONS FOR GRANTING THE PETITION

The Eleventh Circuit’s decision provides a

blueprint to vastly expand congressional power and to

severely restrict individual liberty. Indeed, the court

of appeals’ decision transforms the federal

government into the superintendent of statechartered entities by demanding more disclosure than

states without regard to whether those state-law

entities engage in any commerce. And it empowers

federal officers to engage in suspicionless and

warrantless searches and to assemble a massive

database of sensitive information for no reason other

than to facilitate law enforcement. That decision

would shock those who prevailed at the Constitutional

Convention in rejecting efforts to have the new federal

government take over the chartering of corporations

and enshrining the protection against warrantless

searches in our foundational document. This Court’s

review is imperative.

This Court granted certiorari in NFIB and

confirmed that Congress does not have authority to

regulate natural persons under the Commerce Clause

on the theory that their inactivity affects commerce.

Instead, the Court held that a valid exercise of the

commerce

power

requires

some

preexisting

commercial activity for Congress to regulate. Put

differently, after decades of expansive interpretations

of the Commerce Clause, NFIB made clear that the

one option retained by the citizenry for avoiding

federal regulation is refraining from commercial

activity. This case is NFIB all over again—except that

it also involves corporate persons. In the CTA,

Congress declared that state-chartered entities and

the natural persons who own or control them must

disclose BOI to the federal government merely

because the entities exist under state law, without

regard to whether the entities or such natural persons

are engaged in any activity. But inactivity is no more

commerce when it comes to artificial persons than

natural persons. Indeed, if anything, the fact that a

corporation exists only because of a state’s act of

incorporation (subject to whatever disclosure

requirements that the state deems appropriate) only

underscores the federalism problems with a federal

effort to deem corporate inactivity a sufficient basis for

federal regulation. And, if anything, the founding-era

debates more clearly condemned this kind of

overreach into an area of traditional state authority.

Despite all that, the Eleventh Circuit all but ignored

the clear direction of NFIB in favor of the Commerce

Clause’s high-water mark in Wickard v. Filburn. But

even Wickard involved some economic activity—the

production of wheat on a farm—and no precedent

supports federal regulation of untilled but farmable

land. The decision below thus out-Wickards Wickard

while ignoring the clear import of NFIB.

The Fourth Amendment problems posed by the

CTA are equally frightening. The Eleventh Circuit did

not dispute that the government’s collection of BOI

under the CTA constitutes a search. It could hardly

be otherwise given that reporting companies and their

beneficial owners plainly have a reasonable

expectation of privacy in information that the state

deems unnecessary and has heretofore always

remained private. Nonetheless, the court of appeals

deemed the search reasonable by relying on cases

upholding

record-keeping

and

disclosure

requirements on highly regulated entities engaged in

commerce. Those precedents distinguish themselves

and underscore that the searches authorized here are

unprecedented, unreasonable, and unconstitutional.

These twin errors cry out for this Court’s review.

The CTA is a threat not only to our Constitution, but

also to the tens of millions of small businesses across

the country and the “real people” behind them who

face the prospect of debilitating penalties for failure to

comply with novel federal regulation that will

generate billions of dollars in compliance costs.

Underscoring the importance of the issues here,

multiple other plaintiffs across the country have filed

similar challenges. But there is no better vehicle for

resolving these issues than this case. The lower courts

squarely addressed and definitively resolved the

questions presented in the proceedings below, and this

case is far ahead of all other comparable cases.

Moreover, the executive’s admirable restraint in

suspending enforcement of this misguided statute

against state-chartered entities and their beneficial

owners both underscores its constitutional infirmities

and creates a window for thoughtful review on the

merits docket. The alternative of rushed litigation in

an emergency posture after a subsequent

administration unleashes the statute has nothing to

recommend it. The prudent course thus is to grant

certiorari here and now.

The Eleventh Circuit’s Commerce Clause

Holding Is Profoundly Flawed.

The Constitution gives Congress only limited and

enumerated powers. Among them is the power to

“regulate Commerce … among the several States.”

Art. I, §8, cl.3. Although broad interpretations of that

power render it “expansive,” United States v.

Morrison, 529 U.S. 598, 608 (2000), it is neither a

plenary nor a police power; the Clause still “has

limits,” Maryland v. Wirtz, 392 U.S. 183, 196 (1968).

Indeed, this Court has expressly warned that the

scope of the interstate commerce power must be

limited to preserve the Framers’ elaborate efforts to

maintain a “distinction between what is national and

what is local.” United States v. Lopez, 514 U.S. 549,

557 (1995).

The Eleventh Circuit erased that

distinction here, positing that the inherently local

formation of a company under state law is

simultaneously an inherently commercial act by both

the entity itself and its beneficial owners sufficient to

trigger federal regulation under the Commerce

Clause. That holding cannot stand.

A. The CTA Impermissibly Regulates

Corporations as Such, Not Their

Preexisting Commercial Activities.

“The path of [this Court’s] Commerce Clause

decisions has not always run smooth.” NFIB, 567 U.S.

at 549 (opinion of Roberts, C.J.). But this Court’s

precedent now establishes that Congress’ power to

regulate interstate commerce encompasses “three

broad categories”: (1) the “use of the channels of

interstate commerce,” (2) the “instrumentalities of

interstate commerce, or persons or things in interstate

commerce,” and (3) “those activities that substantially

affect interstate commerce.” Lopez, 514 U.S. at 55859. Although the government once took a different

view, it is now common ground that the CTA does not

regulate the channels or instrumentalities of

interstate commerce. See App.7-8. Thus, the CTA’s

validity under the Commerce Clause turns on whether

the statute regulates commercial activities that, in the

aggregate, have a substantial effect on interstate

commerce. Even setting aside whether the “rootless

and malleable” substantial-effects test is “[]consistent

with the original understanding of Congress’ powers

and with this Court’s early Commerce Clause cases,”

Morrison, 529 U.S. at 627 (Thomas, J., concurring),

the answer to that question is plainly no.

After all, under the Commerce Clause, Congress

is empowered only to “regulate Commerce”—a phrase

that “presupposes the existence of commercial activity

to be regulated.” NFIB, 567 U.S. at 550 (opinion of

Roberts, C.J.); see id. at 649-50 (joint dissent).2 Put

another way, “it must be activity affecting commerce

that is regulated.” Id. at 658 (joint dissent). Hence,

Congress may not target “inactivity” for regulation or

persons who are “doing nothing.” Id. at 555-56

(opinion of Roberts, C.J.). That is because the “police

power to regulate individuals as such, as opposed to

their activities, remains vested in the States” under

the Tenth Amendment. Id. at 557.

NFIB reflects these foundational principles. In

pertinent

part,

that

case

addressed

the

constitutionality of the “individual mandate” in the

Affordable Care Act under the Commerce Clause’s

substantial-effects test. See, e.g., United States v.

White, 782 F.3d 1118, 1124 (10th Cir. 2015) (“All of the

justices focused their discussion of the Commerce

Clause on the third Lopez prong and addressed

whether the individual mandate was a valid

regulation of intrastate activity that substantially

affects interstate commerce.”).

The individual

2 Justices Scalia, Kennedy, Thomas, and Alito joined the joint

dissent.

mandate required individuals who had opted not to

obtain health insurance “to purchase a health

insurance policy providing a minimum level of

coverage.” NFIB, 567 U.S. at 530-31. A majority of

the Court concluded that Congress’ commerce power

did not extend that far. See id. at 546-61 (opinion of

Roberts, C.J.); id. at 649-60 (joint dissent). As the

Chief Justice explained, the individual mandate

“targeted ... a class” of individuals “whose commercial

inactivity rather than activity is its defining feature.”

Id. at 556 (opinion of Roberts, C.J.). But this Court’s

cases recognized only “Congress’s power to regulate

classes of activities, not classes of individuals, apart

from any activity in which they are engaged.” Id.

(citation omitted). Or as the joint dissent put it,

Congress does not have commerce power to regulate

someone or something “simply because it exists.” Id.

at 658 (joint dissent).

Under NFIB, the CTA’s unconstitutionality is

self-evident. The CTA provides that “any reporting

company” that is “formed or registered” under state

law “shall … submit to FinCEN a report” containing

“sensitive” information about their legally distinct

beneficial owners. 31 U.S.C. §5336(b)(1)(A)-(D) &

note. And the statute defines a “reporting company”

to include an entity “created by the filing of a

document” with relevant state authorities.

Id.

§5336(a)(11)(A)(i). There is thus no disputing that the

CTA seeks to regulate state-chartered entities “simply

because [they] exist[]” under state law, NFIB, 567 U.S.

at 658 (joint dissent), not because they are actually

engaged in any “preexisting economic activity” that

implicates Congress’ commerce power, id. at 557

(opinion of Roberts, C.J.). That is precisely what this

Court precluded in NFIB.

The only distinction between NFIB and this case

is that the former involved natural persons alone

instead of both corporate and natural persons. But

that is a distinction without a constitutional

difference. If anything, the framing-era history more

emphatically precludes federal regulation of an

artificial entity merely because it has been brought

into existence by state law. Indeed, “‘[o]ur whole

experience’ as a Nation,” NLRB v. Noel Canning, 573

U.S. 513, 557 (2014)—from the Constitutional

Convention of 1787 to modern times, see pp.4-5,

supra—reveals that the “very existence” of a

corporation is entirely the “product of state law.” CTS

Corp., 481 U.S. at 89; see also Paul v. Virginia, 75 U.S.

(8 Wall.) 168, 181 (1868) (explaining that a corporation

is “the mere creation of local law”). Regulation of

corporations as such thus is a prototypical “purely

local” concern. Bond v. United States, 572 U.S. 844,

860 (2014). Allowing the federal government to

intrude into that space absent some regulable act of

commerce would “invade state sovereignty” and

“improperly limit the scope of powers that remain with

the States.” United States v. Comstock, 560 U.S. 126,

144 (2010); cf. All. for Fair Bd. Recruitment v. SEC,

125 F.4th 159, 182 (5th Cir. 2024) (en banc).

To be sure, the federal government has

historically chartered a limited number of

corporations addressing uniquely federal interests.

See, e.g., An Act to incorporate the subscribers to the

Bank of the United States, ch. X, 1 Stat. 191 (1791)

(First Bank of the United States); An Act to

incorporate the Protestant Episcopal Cathedral

Foundation of the District of Columbia, ch. XX, 27

Stat. 414 (1893) (National Cathedral); Pub. L. No. 91518, 84 Stat. 1327 (1970) (Amtrak); Pub. L. No. 90129, 81 Stat. 365 (1967) (Corporation for Public

Broadcasting). But those targeted actions to advance

enumerated powers are the exception that proves the

rule. The act of incorporation is not commerce, as the

government wisely conceded below. See App.52. And

regulation of entities or individuals based on their

mere existence is the essence of the police power that

the framing generation denied the new federal

Leviathan. The CTA cannot be reconciled with that

settled understanding.

B. The Decision Below Is A Blueprint to

Vastly Expand Congressional Power.

The Eleventh Circuit’s decision blessing the

CTA’s overreach is egregiously wrong. The court of

appeals began by acknowledging (as it must) that the

CTA does not a contain any “jurisdictional element”

that actually “link[s]” the statute to “interstate

commerce.” App.8; cf. Lopez, 514 U.S. at 561 (“§922(q)

contains no jurisdictional element which would

ensure, through case-by-case inquiry, that the firearm

possession in question affects interstate commerce”).

But the court nevertheless found the CTA

constitutionally valid under the Commerce Clause’s

substantial-effects test because (1) it purportedly

“regulates activity that is economic in nature,” and

(2) “Congress rationally concluded” that this

“regulated activity” has “a substantial aggregate effect

on interstate commerce.”

App.8-9.

The court

stumbled at both steps.

The Eleventh Circuit started off on the wrong foot

in concluding that the CTA regulates economic

activity. The court of appeals reasoned that, “after

they have incorporated,” many corporations “exist

primarily to ‘use [their] resources and engage in

activities designed to increase [their] profits.’” App.10,

12. But that is a near carbon copy of the theory that

this Court rejected in NFIB. The government found it

“sufficient” there that “almost all those who are

uninsured will, at some unknown point in the future,

engage in a health care transaction.” NFIB, 567 U.S.

at 557 (opinion of Roberts, C.J.). But a majority of the

Court deemed such inchoate or potential commercial

activity insufficient. As NFIB admonished, just

because a person may “predictably engage in

particular transactions” affecting interstate commerce

does not authorize Congress to regulate that person

under the Commerce Clause. Id.; see id. (“The

proposition that Congress may dictate the conduct of

an individual today because of prophesied future

activity finds no support in [this Court’s] precedent.”).

Indeed, “if every person comes within the Commerce

Clause power of Congress to regulate by the simple

reason that he will one day engage in commerce, the

idea of a limited Government power is at an end.” Id.

at 657 (joint dissent).3

Despite its obvious relevance, the Eleventh

Circuit had virtually nothing to say about NFIB,

which it dismissed in a paragraph, suggesting that,

3 Regardless, not all corporations formed under state law (e.g.,

religious

and

charitable

organizations,

homeowners’

associations, and so forth) inevitably proceed to engage in activity

to “maximize profits.” Contra App.10.

unlike the Affordable Care Act, “the CTA does not

‘compel [entities] not engaged in commerce’ to do so.”

App.14. That is immaterial and, if anything, makes

the CTA less defensible. At least the Affordable Care

Act recognized that the Commerce Clause requires

commercial activity and thus forced people to engage

in commercial transactions the better to regulate

them.

The CTA skips that step and imposes

obligations (backed by criminal penalties) on statechartered entities and their beneficial owners without

regard to whether they ever engage in commercial

activity. That plainly runs afoul of NFIB’s central

lesson that the Commerce Clause does not empower

Congress to regulate in the absence of “preexisting

economic activity.” 567 U.S. at 557 (opinion of

Roberts, C.J.). The Eleventh Circuit highlighted

NFIB’s language that “Congress can anticipate the

effects on commerce of an economic activity,” id.

(opinion of Roberts, C.J.), App.14, but that language

still requires economic activity. The CTA, by contrast,

requires none and regulates based on mere

existence—i.e., the CTA does precisely what NFIB

forbids.

In lieu of seriously grappling with NFIB, the

Eleventh Circuit resorted to “perhaps the most far

reaching example of Commerce Clause authority over

intrastate activity.” Lopez, 514 U.S. at 560. According

to the court of appeals, the CTA is constitutionally

permissible because it targets conduct that is

“comparable to [the] regulated activities the Supreme

Court … found commercial in nature” in Wickard.

App.11. Wrong again. If Wickard had held that

Roscoe Filburn could face Commerce Clause

regulation merely because he owned farmable land,

perhaps the CTA would pass muster. But Wickard

held no such thing. “[T]he farmer in Wickard was at

least actively engaged in the production of wheat, and

the Government could regulate that activity because

of its effect on commerce.” NFIB, 567 U.S. at 553

(opinion of Roberts, C.J.). Out-Wickarding Wickard—

“the ne plus ultra of expansive Commerce Clause

jurisprudence,” id. at 648 (joint dissent)—is no mean

feat. In fact, it is reversible error that should not

stand uncorrected.

The Eleventh Circuit attempted to deny that the

CTA regulates inactivity by suggesting that it

“exempts businesses that are not actively engaged in

commerce from the reporting requirement.” App.13.

But, unfortunately, Congress showed no such

restraint. The only statutory provision cited by the

court of appeals for that proposition, see App.5, is 31

U.S.C. §5336(a)(11)(B)(xxiii), which exempts entities

“not engaged in active business” only if (among other

things) they have “existe[d] for over 1 year.” Of course,

that exemption is meaningless for newly formed or

registered entities, as they must comply with the

CTA’s reporting requirement long before they hit the

one-year mark—viz., “at the time of formation or

registration.” 31 U.S.C. §5336(b)(1)(C). Furthermore,

the exemption is subject to numerous exceptions,

including for entities with “an ownership interest in

any corporation, limited liability company, or other

similar entity”—even if that entity is not engaged in

economic activity. Id. §5336(a)(11)(B)(xxiii).4

4 The CTA also contains no exemption for beneficial owners not

engaged in commerce. The Eleventh Circuit assumed that, if

Congress has Commerce Clause authority over state-chartered

As all of this demonstrates, the CTA simply does

not regulate any preexisting economic activity. As a

result, it follows that the Eleventh Circuit erred at the

second step of its analysis when it posited that

Congress rationally concluded that the “regulated

activity in the aggregate substantially affects

interstate commerce.” Contra App.8. While the court

of appeals suggested that, “[a]part from its scope, the

CTA is a routine federal law,” App.14, there is nothing

routine about congressional regulation of inactivity.

Such efforts were correctly determined to be

“unprecedented” in NFIB, and the second time is not

the charm. As this Court has frequently stated,

“[p]erhaps the most telling indication of [a] severe

constitutional problem with” federal action is a “lack

of historical precedent” for it. Free Enter. Fund v.

PCAOB, 561 U.S. 477, 505 (2010). Moreover, when it

comes to the Commerce Clause, the permissible

“scope” of federal law is the essential problem, not

some detail to be set to one side. “Apart from [their]

scope,” the laws in Lopez, Morrison, and NFIB were

defended as “routine federal law[s].” They were all

unconstitutional. The same is true of the CTA.

II. The Eleventh Circuit’s Fourth Amendment

Holding Is Equally Flawed.

The Eleventh Circuit’s misguided Commerce

Clause conclusion required it to address whether the

CTA is consistent with the Fourth Amendment. The

entities, it also has Commerce Clause authority over the human

beings that chartered them despite their legal separateness. “A

basic tenet of American corporate law is that the corporation and

its shareholders are distinct entities.”

Dole Food Co. v.

Patrickson, 538 U.S. 468, 474 (2003).

court of appeals correctly recognized that the CTA

authorizes searches on a massive scale, but

nonetheless deemed those en masse suspicionless and

warrantless searches of private and sensitive

information perfectly reasonable. See App.19-20.

That holding is equally flawed and equally deserving

of this Court’s review.

A. The CTA Impermissibly Authorizes

Suspicionless and Warrantless Searches

to Further a Generalized Interest in

Expedient Law Enforcement.

The Fourth Amendment provides that “[t]he right

of the people to be secure in their persons, houses,

papers, and effects, against unreasonable searches

and seizures, shall not be violated, and no Warrants

shall issue, but upon probable cause, supported by

Oath or affirmation, and particularly describing the

place to be searched, and the persons or things to be

seized.” U.S. Const. amend. IV. As this Court has

explained, the Fourth Amendment developed as a

response to the founding generation’s opposition to the

“general warrants” and “writs of assistance” of the

colonial era, which armed British officers with

unfettered discretion to engage in suspicionless

invasions of privacy. See, e.g., United States v.

Chadwick, 433 U.S. 1, 7-8 (1977) (“It cannot be

doubted that the Fourth Amendment’s commands

grew in large measure out of the colonists’ experience

with the writs of assistance and their memories of the

general warrants formerly in use in England.”). The

Fourth Amendment thus serves the dual purposes of

“secur[ing] the privacies of life against arbitrary

power” and “plac[ing] obstacles in the way of a too

permeating police surveillance.” Carpenter, 585 U.S.

at 305.

Whether government action violates the Fourth

Amendment involves two basic questions.

The

threshold question is whether the government has

engaged in a “search.” Under this Court’s cases, a

search occurs either when the government “obtains

information

physically

intruding

constitutionally protected area” or when it violates a

person’s “reasonable expectation of privacy.” United

States v. Jones, 565 U.S. 400, 406 & n.3 (2012); see

Kyllo v. United States, 533 U.S. 27, 33-34 (2001). If

such a search occurs, it is constitutional only if it is

“reasonable.” See Riley v. California, 573 U.S. 373,

381-82 (2014).

The Eleventh Circuit correctly

recognized that the CTA effects searches on a massive

scale, but erred in deeming those nearly

unprecedented en masse intrusions reasonable.

The CTA effects a search because reporting

companies and beneficial owners subject to the statute

plainly have a reasonable expectation of privacy in

their BOI. State law sets the baseline for reasonable

expectations, and the raison d’être of the CTA is to

demand information that states do not require.

Indeed, the CTA’s text itself pronounces that “most or

all States do not require information about the

beneficial owners of the corporations, limited liability

companies, or other similar entities formed under the

laws of the State.” CTA §6402(2), 134 Stat. at 4604.

“Nor is there any other local, state, or federal law

mandating beneficial owner disclosure directly to the

government.”

SBAM, 769 F.Supp.3d at 731.

Reporting companies thus unquestionably have an

“actual (subjective) expectation of privacy.” Smith v.

Maryland, 442 U.S. 735, 740 (1979). And that

expectation is “objectively … justifiable,” id., as the

text of the CTA again underscores by describing BOI

as “sensitive information,” CTA §6402(6), 134 Stat. at

4604.

FinCEN has also instructed reporting

companies to “not send BOI” to unauthorized third

parties due to the sensitivities. Beneficial Ownership

Information, FinCEN, https://perma.cc/VN3Z-DZ9W

(last visited Apr. 13, 2026). As another court has

explained, the CTA “places in the hands of

government officials and special government

employees large volumes of personally identifiable

information and commercially sensitive data” that

reveals a company’s “internal power dynamics.”

SBAM, 769 F.Supp.3d at 731-32. That is a search, as

the decision below did not dispute.

Nothing about the en masse searches launched by

the CTA are reasonable. “In the absence of a warrant,

a search is reasonable only if it falls within a specific

exception to the warrant requirement.” Riley, 573

U.S. at 382. The CTA does not require a warrant; in

fact, FinCEN has applauded the CTA precisely

because it eliminates the need for a warrant, which

supposedly “takes an enormous amount of time—time

that could be used to further other important and

necessary aspects of an investigation—and wastes

resources, or prevents investigators from getting to

other equally important investigations.” 87 Fed. Reg.

at 59,504. But see Coolidge v. New Hampshire, 403

U.S. 443, 481 (1971) (“The warrant requirement … is

not an inconvenience to be somehow ‘weighed’ against

the claims of police efficiency.”). Nor do any exceptions

to the warrant requirement apply here. This Court

has stated that the government may conduct a search

without a warrant when “special needs, beyond the

normal need for law enforcement, make the warrant

and probable-cause requirement impracticable.”

Skinner v. Ry. Lab. Execs.’ Ass’n, 489 U.S. 602, 619

(1989). That exception is obviously inapplicable here,

as the CTA itself states that BOI is necessary to

“facilitate” normal “law enforcement activities.” CTA

§6402(6)(A), 134 Stat. at 4604.

Ordinary law

enforcement objectives do not come close to justifying

the extraordinary en masse searches authorized by the

CTA.

B. The Decision Below Badly Misapplies

This Court’s Precedent.

The Eleventh Circuit recognized that the

government engages in searches for Fourth

Amendment purposes when requiring the disclosure

of BOI under the CTA. However, the court of appeals

deemed those searches “reasonable” based on this

Court’s decision in California Bankers Association v.

Shultz. App.19-20. But Shultz distinguishes itself.

Shultz addressed a constitutional challenge to the

Bank Secrecy Act’s requirement that banks disclose to

the government the “name, address, business or

profession and social security number” of persons

participating in “domestic financial transactions”

involving at least $10,000. 416 U.S. at 39 n.15, 65, 67.

In finding those searches reasonable, Shultz applied

this Court’s decision in United States v. Morton Salt

Co., which “held that organizations engaged in

commerce could be required by the Government to file

reports dealing with particular phases of their

activities” so long as “the inquiry is within the

authority of the agency, the demand is not too

indefinite and the information sought is reasonably

relevant.” Id. at 65, 67 (emphasis added).

Shultz is obviously distinguishable on grounds

that should have been obvious to a court that just

found the CTA within Congress’ Commerce Clause

authority despite reaching countless state-chartered

entities not engaged in commerce. It is one thing to

impose reporting requirements on companies actively

engaged in interstate commerce, and quite another to

demand disclosure from those being regulated based

on their very existence and without regard to whether

they engage in any commerce whatsoever. Shultz

thus provides no shelter for the unprecedented federal

searches at issue here.

Moreover, the CTA goes well beyond the

disclosures at issue in Shultz in other significant

respects. Although the CTA provides that reporting

companies should direct their BOI report to FinCEN,

see 31 U.S.C. §5336(b)(1)(A), that report is hardly

restricted to that agency. To the contrary, the CTA

permits FinCEN to disclose BOI to any federal agency

for use in “national security, intelligence, or law

enforcement” purposes. 31 U.S.C. §5336(c)(2)(B)(i)(I).

FinCEN can also distribute BOI to state lawenforcement agencies. See id. §5336(c)(2)(B)(i)(II), (ii).

In fact, FinCEN even has authority to distribute BOI

to foreign law-enforcement agencies.

See id.

§5336(c)(2)(B)(ii). In other words, the CTA authorizes

an agency (FinCEN) to receive information that it has

no authority to receive in the first place and then

empowers that agency to distribute that information

around the world. The “gist” of the Morton Salt test is

that the “disclosure sought shall not be unreasonable.”

Shultz, 416 U.S. at 67. A statute that allows the

government to send concededly sensitive information

worldwide is the very opposite of reasonable.

That conclusion is only reinforced by the reality

that the CTA’s “demand” is “indefinite” in the

extreme. Id. The CTA demands reporting companies

to disclose any “beneficial owner,” which includes

anyone who “exercises substantial control over the

entity,” whether “directly or indirectly, through any

contract, arrangement, understanding, relationship,

or otherwise.” 31 U.S.C. §5336(a)(3)(A). As the

district court aptly observed, the term “substantial

control”—which is left undefined in the statute—is “as

vague as it sounds.” App.25. And far from affecting a

finite number of entities, the CTA instead sweeps in

tens of millions of “smaller” entities (and counting), 86

Fed. Reg. at 69,928, generating tens of billions of

dollars in compliance costs, 87 Fed. Reg. at 59,549.

In the end, the CTA “amounts to … a broad, grabeverything collection of suspicionless data because

some day, some way, somehow, someone in law

enforcement might find it useful.”

SBAM, 769

F.Supp.3d at 735. That is as unreasonable and

unconstitutional as it gets.

III. The Issues Here Are Important, Recurring,

And Ideally Presented In This Case.

The importance of this case is indisputable. Even

the Eleventh Circuit conceded that the CTA is

“controversial.” App.5. That is an understatement.

As long as the CTA remains on the books, tens of

millions of state-law entities and countless more

beneficial owners throughout the Nation, see 87 Fed.

Reg. at 59,549, will face the threat of substantial

criminal and civil penalties, see 31 U.S.C. §5336(h), if

they fail to disclose information so “sensitive” that

“States do not require” disclosure themselves, CTA

§6402(1)-(2), (6) 134 Stat. at 4604-05. By statutory

design, moreover, the vast majority of those regulated

entities are “smaller” entities. 86 Fed. Reg. at 69,928.

While small businesses are the lifeblood of the

Nation’s economy collectively, see, e.g., Bureau of

Econ. Analysis, U.S. Dep’t of Com., Gross Domestic

Product, Third Quarter 2024 (Second Estimate) and

Corporate Profits (Preliminary) (Nov. 27, 2024),

https://perma.cc/BW5X-CPKN; U.S. Small Bus.

Admin., Frequently Asked Questions (Jul. 23, 2024),

https://perma.cc/85G4-86TQ,

they

are

poorly

positioned individually to shoulder the “billions of

dollars” in compliance costs that the statute imposes,

87 Fed. Reg. at 59,549.

But CTA-regulated reporting companies and their

beneficial owners are hardly the only ones with a stake

in this case. Simply put, the Eleventh Circuit’s

reasoning is a green light for Congress to use its

commerce power to nationalize American corporate

law and to usurp authority that has traditionally

belonged to the states. Indeed, under the court of

appeals’ reasoning, as soon as a company is “created

by the filing of a document with a secretary of state,”

31 U.S.C. §5336(a)(11)(A)(i), Congress has plenary

power to regulate it. That cannot be correct unless the

entire process of enumerating specific and limited

federal powers was pointless as to corporations and

the Framers’ confidence that they had preserved the

states’ primary authority over state-chartered entities

was entirely misplaced. The stakes for the federal-

state balance are thus sky-high. As the district court

summarized, the CTA “converts an astonishing

amount of traditionally local … conduct into a matter

for federal enforcement, and involves a substantial

extension of federal police resources.”

App.40

(brackets omitted) (quoting Bond, 572 U.S. at 863).

It thus is little wonder that an informed citizenry

did not take the CTA lying down. Challenges to the

CTA’s constitutionality have repeatedly arisen—

including on this Court’s emergency docket. See

Garland v. Texas Top Cop Shop, 145 S.Ct. 1 (2025); see

also SBAM, 769 F.Supp.3d 722; Smith v. U.S. Dep’t of

the Treasury, 761 F.Supp.3d 952 (E.D. Tex. 2025);

Comm. Ass’ns Inst. v. Yellen, 2024 WL 4571412 (E.D.

Va. Oct. 24, 2024); Texas Top Cop Shop, Inc. v.

Garland, 758 F.Supp.3d 607 (E.D. Tex. 2024). This

case is an ideal vehicle in which to resolve the

questions presented once and for all. The lower courts

have already provided their final word on those

constitutional questions. Cf. Virginia Mil. Inst. v.

United States, 508 U.S. 946, 946 (1993) (Scalia, J.,

respecting the denial of the petition for writ of

certiorari) (“We generally await final judgment in the

lower courts before exercising our certiorari

jurisdiction.”). Nor are there are any “unresolved

factual questions” or other disputes that make this

Court’s resolution of those questions premature.

Kennedy v. Bremerton Sch. Dist., 586 U.S. 1130, 1130

(2019) (Alito, J., respecting the denial of certiorari).

Furthermore, unlike the Texas Top Cop Shop case

that previously came to this Court on an emergency

basis, this case does not involve extraneous questions

that detract from the core constitutional ones, such as

“the question whether a district court may issue

universal injunctive relief.” 145 S.Ct. at 1 (Gorsuch,

J., concurring in the grant of stay).

Nor does FinCEN’s 2025 interim final rule

exempting domestic reporting companies and U.S.

persons from the CTA’s reporting requirement pose an

obstacle to this Court’s review. See 90 Fed. Reg.

13,688. As the Eleventh Circuit observed, everyone

agrees that the interim final rule “does not render this

case moot.” App.5 n.1. That position is correct: This

case concerns the constitutionality of the CTA, not any

administrative regulation, and “[t]here is no provision

in the Constitution that authorizes the President to

enact, to amend, or to repeal statutes.” Clinton v. City

of New York, 524 U.S. 417, 438 (1998). If anything,

FinCEN’s interim final rule makes this case an even

more attractive vehicle. The CTA remains lying

around like the proverbial loaded revolver waiting to

be wielded by the next administration, no doubt

precipitating challenges on the emergency docket.

And precisely because FinCEN is not currently

enforcing the CTA against domestic reporting

companies or U.S. persons, this Court has the ability

to address the CTA’s constitutionality on the merits

docket after the benefit of receiving full briefing and

argument, instead of on the emergency docket on a

“short fuse without benefit of full briefing and oral

argument.” Does 1-3 v. Mills, 142 S.Ct. 17, 18 (2021)

(Barrett, J., concurring in the denial of application for

injunctive relief). In sum, this is both the right time

and the right case in which to resolve whether this

unprecedented statute is constitutional.

CONCLUSION

For the foregoing reasons, this Court should grant

the petition for certiorari.

Respectfully submitted,

JOHN NEIMAN, JR.

PAUL D. CLEMENT

MAYNARD

Counsel of Record

NEXSEN P.C.

ANDREW C. LAWRENCE

1901 Sixth Avenue N. NICCOLO A. BELTRAMO

CLEMENT & MURPHY, PLLC

Suite 1700

Birmingham, AL 35203 706 Duke Street

Alexandria, VA 22314

Thomas H. Lee

(202) 742-8900

HUGHES HUBBARD paul.clement@clementmurphy.com

& REED LLP

One Battery Park Plaza

New York, NY 10004

Counsel for Petitioners

April 15, 2026

APPENDIX

TABLE OF APPENDICES

Appendix A

Opinion, United States Court of Appeals

for the Eleventh Circuit, Nat’l Small Bus.

United v. U.S. Dep’t of Treasury, No. 2410736 (Dec. 16, 2025) .................................. App-1

Appendix B

Memorandum Opinion, United States

District Court for the Northern District of

Alabama, Nat’l Small Bus. United v.

Yellen, No. 22-cv-1448 (Mar. 1, 2024) ....... App-21

Appendix C

Relevant Constitutional and Statutory

Provisions................................................... App-70

U.S. Const. art. I, §8, cl.3 ................... App-70

U.S. Const. amend. IV ........................ App-70

U.S. Const. amend. X ......................... App-70

Pub. L. No. 116-283, tit. LXIV, 134

Stat. 4604 (2021) ................................ App-70

App-1

Appendix A

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________

No. 24-10736

________________

NATIONAL SMALL BUSINESS UNITED, d.b.a. National

Small Business Association, ISAAC WINKLES,

Plaintiffs-Appellees,

U.S. DEPARTMENT OF THE TREASURY, ACTING

DIRECTOR OF THE FINANCIAL CRIMES ENFORCEMENT

NETWORK, SECRETARY, U.S. DEPARTMENT OF THE

TREASURY,

Defendants-Appellants.

________________

Filed: Dec. 16, 2025

________________

Before: Jordan, Newsom, and Brasher,

Circuit Judges.

________________

OPINION

________________

Brasher, Circuit Judge:

The question in this appeal is whether a federal

law requiring corporations to report information about

their owners is constitutional. Congress found that

bad actors have been using the anonymity of the

corporate form to commit financial crimes, such as

App-2

money laundering and financing terrorism. To prevent

these anonymous business dealings, Congress passed

the Corporate Transparency Act as part of the AntiMoney Laundering Act of 2020. Pub. L. No. 116-283,

134 Stat. 4604 (codified at 31 U.S.C. § 5336). The CTA

requires certain corporate entities to report their

“beneficial owners”—i.e., the actual people who

exercise control over the entity— to the Department of

the Treasury.

To be constitutional, every federal law must, first,

be consistent with one of Congress’s enumerated

powers and, second, not violate any of the

Constitution’s individual rights guarantees. National

Small Business United, a business association, and

Isaac Winkles, a real-estate manager, argue that the

CTA fails on both counts. As relevant here, they say

that the CTA is not an appropriate exercise of

Congress’s power to regulate interstate commerce and

is therefore facially unconstitutional. See U.S. Const.

art. I, § 8, cl. 3. In the alternative, they say that the

CTA violates the Fourth Amendment’s prohibition on

unreasonable searches and is facially unconstitutional

for that reason. See U.S. Const. amend IV.

The district court concluded that the CTA did not

regulate economic activity and, on that basis, granted

the plaintiffs summary judgment. We disagree. We

believe that, by effectively prohibiting anonymous

business dealings, the CTA facially regulates

economic activities having a substantial aggregate

impact on interstate commerce. Moreover, as a

uniform and limited reporting requirement, the CTA

does not facially violate the Fourth Amendment.

Accordingly, we reverse.

App-3

Financial crime is a serious problem. According to

one recent estimate, money laundering costs the

government billions of dollars every year. Dep’t of the

Treasury, National Money Laundering Risk

Assessment 3 & n.1 (2024). Financial criminals often

use shell companies to conceal their fraud and their

identities. Id. at 53. Because most states do not

require businesses to report information about their

owners, law enforcement has long suffered from an

information gap when fighting financial crime. H.R.

Rep. No. 116-227, at 2 (2019).

To combat this problem, Congress passed the

CTA. In doing so, it made a series of findings. It found

that more than 2,000,000 corporations and limited

liability companies are formed each year, mostly in

states that do not require beneficial ownership

information. Id. These anonymous companies

sometimes abuse the corporate form to commit crimes

“affecting interstate and international commerce.” Id.

Congress therefore concluded that the CTA was

necessary to combat securities and financial fraud. Id.

Congress also found that uniform reporting laws

would support “national security, intelligence, and law

enforcement efforts to counter money laundering, the

financing of terrorism, and other illicit activity.” Pub.

L. No. 116-283, § 6402(5)(D), 134 Stat. 4604.

The CTA provides for the “collection of beneficial

ownership information” of designated reporting

companies. Id. § 6402(5), 134 Stat. 4604. Under the

law, those companies must disclose information about

“each beneficial owner” and “each applicant” to the

Department of the Treasury’s Financial Crimes

App-4

Enforcement Network. 31 U.S.C. § 5336(b)(1)(A),

(b)(2)(A). A “reporting company” is a corporation, LLC,

or other similar entity incorporated under the laws of

a state, or formed under the law of a foreign country

and registered to do business in the United States. Id.

§ 5336(a)(11). “Beneficial owner” is defined as an

individual who exercises substantial control over an

entity or otherwise controls at least twenty-five

percent of its ownership interests. Id. § 5336(a)(3)(A).

“Applicant” refers to an individual who files an

application to form an entity. Id. § 5336(a)(2).

Reporting companies must provide FinCEN with their

beneficial owners’ and applicants’ full legal name, date

of birth, home or business address, and government

ID. Id. § 5336(b)(2)(A).

The CTA applies differently depending on when

the reporting company incorporates. Under the CTA

and subsequent Treasury regulations, businesses

created before March 26, 2025, were required to

comply with the CTA by April 25, 2025. 31 C.F.R.

§ 1010.380(a)(1)(ii); U.S.C. § 5336(b)(1)(B). Companies

formed after that date must file a report within thirty

days of registration. 31 C.F.R. § 1010.380(a)(1)(i); 31

U.S.C. § 5336(b)(1)(C). The reporting requirement is

an ongoing obligation. If there is any change with

respect to required information previously submitted

to FinCEN, the company must file an updated report

within thirty days. 31 C.F.R. § 1010.380(a)(2)(i); 31

U.S.C. § 5336(b)(1)(D).

The CTA contains numerous exceptions. Excluded

from the definition of “reporting company” are banks,

credit unions, brokers, investment companies,

insurance companies, accounting firms, and 501(c)

App-5

nonprofits. 31 U.S.C. § 5336(a)(11)(B). Also excluded

are entities that employ more than twenty employees

and make more than $5,000,000 in annual gross sales.

Id. § 5336(a)(11)(B)(xxi). Entities in existence on or

before January 1, 2020, that are not engaged in active

business, are not owned by a foreign person, have not

experienced a recent change in ownership, do not hold

assets, and have not sent or received funds in an

amount greater than $1,000 in the past year are

likewise exempt. 31 C.F.R. § 1010.380(c)(2)(xxiii); 31

U.S.C. § 5336(a)(11)(B)(xxiii).

The CTA also permits the Secretary of the

Treasury to pass regulations exempting other groups

from the reporting requirement. 31 U.S.C.

§ 5336(a)(11)(B)(xxiv). After passage, FinCEN issued

an interim final rule exempting domestic companies

from the CTA’s requirements. The interim final rule

still requires foreign companies to report ownership

information except as to American owners.1 See

Beneficial

Ownership

Information

Reporting

Requirement Revision and Deadline Extension, 90

Fed. Reg. 13688, 13690 (Mar. 26, 2025) (to be codified

at 31 C.F.R. pt. 1010).

The CTA was controversial from the start. See

Kate Kelly, On Eve of Money Laundering Law’s

Activation, a Lobby Cries Foul, N.Y. Times, Dec. 18,

2023, at B4. After it was enacted, NSBU and Winkles

sued the Secretary of the Treasury, the Department of

the Treasury, and FinCEN’s Acting Director, seeking

declaratory and injunctive relief. NSBU represents

1 The parties agree that this rulemaking does not render this

case moot. We believe they are correct. See Naturist Soc’y v.

Fillyaw, 958 F.2d 1515, 1520 (11th Cir. 1992).

App-6

“over 65,000 businesses and entrepreneurs located in

all 50 states. [Its] members come from every sector of

the U.S. economy, including manufacturing, retail,

food service, and professional services.” McCracken

Decl. at 2. Winkles owns a small business with three

full-time employees and “annual turnover of under

$20 million.” Winkles Decl. at 1-2.

NSBU and Winkles claimed that the CTA is

facially unconstitutional and that it violates the First,

Fourth, Fifth, Ninth, and Tenth Amendments. The

parties agreed that the case could be resolved on

dispositive motions without discovery. They then

cross-moved for summary judgment.

The district court granted the plaintiffs’ motion

for summary judgment and denied the defendants’

cross-motion for summary judgment. The court held

that neither the Commerce, Taxing, and Necessary

and Proper Clauses, nor Congress’s foreign affairs and

national security powers, justified the CTA. Regarding

the Commerce Clause, the court ruled that the CTA

primarily regulates the non-commercial act of

incorporation and that the connection between the act

of incorporation and the activities Congress sought to

curb was too attenuated. The court also emphasized

the CTA’s lack of any jurisdictional hook limiting its

reach to interstate commerce. Because it held that the

CTA exceeded Congress’s enumerated powers, the

court did not address whether it violated the First,

Fourth, or Fifth Amendments.

The government timely appealed.

II.

This Court reviews de novo the district court’s

disposition of a motion for summary judgment. See

App-7

Lowery v. AmGuard Ins. Co., 90 F.4th 1098, 1103

(11th Cir. 2024). We also review de novo the

constitutionality of a challenged statute. United States

v. Paige, 604 F.3d 1268, 1270 (11th Cir. 2010).

III.

NSBU and Winkles advance two main arguments

against the facial constitutionality of the CTA. First,

they argue that Congress did not have the power,

under the Commerce Clause or otherwise, to enact the

CTA. Second, in the alternative, they argue that the

CTA violates the Fourth Amendment’s prohibition on

unreasonable searches. We address each argument in

turn.

Turning to the Commerce Clause, we start with

first principles. Every law enacted by Congress must

be based on one or more of its constitutionally

enumerated powers. See Marbury v. Madison, 5 U.S.

(1 Cranch) 137, 176 (1803) (Marshall, C.J.). One of

those enumerated powers is the power “[t]o regulate

Commerce with foreign Nations, and among the

several States, and with the Indian Tribes.” U.S.

Const. art. I, § 8, cl. 3.

To preserve a “distinction between what is truly

national and what is truly local,” United States v.

Lopez, 514 U.S. 549, 567-68 (1995), the Supreme Court

has identified three categories of activity that

Congress may regulate under its Commerce Clause

power: (1) channels of interstate commerce;

(2) instrumentalities of interstate commerce, or

persons or things in interstate commerce; and

(3) activities that substantially affect interstate

commerce. Id. at 558-59. The district court held, and

App-8

the parties do not dispute, that the CTA does not

regulate the channels or instrumentalities of

commerce. Therefore, the question is whether the CTA

passes muster under the third category: the

“substantial effects” test.

Under the substantial effects test, the Court has

distinguished between laws having “nothing to do

with ‘commerce’ or any sort of economic enterprise,”

id. at 561, and those laws regulating “quintessentially

economic” activities, Gonzales v. Raich, 545 U.S. 1, 25

(2005). The substantial effects test is ordinarily met

only when the underlying activity is economic in

nature or where the statute contains a jurisdictional

element linked to interstate commerce. See Lopez, 514

U.S. at 560-61; United States v. Morrison, 529 U.S.

598, 613 (2000) (“[O]ur cases have upheld Commerce

Clause regulation of intrastate activity only where

that activity is economic in nature.”); United States v.

Olin Corp., 107 F.3d 1506, 1511 (11th Cir. 1997)

(“have an economic character”). In short, for a law to

be facially constitutional under the substantial effects

test in the absence of a jurisdictional element, the law

ordinarily must be directed at some kind of

commercial or economic activity and Congress must

have rationally concluded that the regulated activity

in the aggregate substantially affects interstate

commerce.

Applying the substantial effects test, we hold that

the CTA is a constitutional exercise of Congress’s

power under the Commerce Clause. First, on its face,

the CTA regulates activity that is economic in nature.

It effectively prohibits anonymous corporate dealings,

regulates commercial entities that are active in the

App-9

stream of commerce, and requires them to report

information related to their ownership. Second,

Congress rationally concluded that anonymous

corporate dealings have a substantial aggregate effect

on interstate commerce. We address each point below.

We will start with whether the CTA regulates

economic activity. The Supreme Court has held that

run-of-the-mill criminal laws flunk this test. For

example, criminal statutes prohibiting firearms in

school zones and gender-motivated violence are not

directed at economic activity. Lopez, 514 U.S. at 561;

Morrison, 529 U.S. at 613, 617. But a law can regulate

economic activity even if the connection between the

challenged law and commerce isn’t airtight. It is

enough that the regulated activity involves “some sort

of economic endeavor” with “an apparent commercial

character.” Morrison, 529 U.S. at 611 & n.4.

We think the CTA is sufficiently connected to

economic activity to meet the first part of the

substantial effects test. The law applies to

“corporation[s], limited liability compan[ies], or other

similar

entit[ies].”

U.S.C.

§ 5336(a)(11).

Corporations

are

formed

when

prospective

shareholders exchange money, property, or both, in

return for stock. A corporation conducts business,

realizes losses or gains, pays taxes, and distributes

dividends to its shareholders. Holger Spamann, Scott

Hirst & Gabriel Rauterberg, Corporations in 100

Pages 1-12 (2020); Richard D. Freer & Douglas K.

Moll, Principles of Business Organizations 194-96 (2d

ed. 2018). Like corporations, LLCs offer owners

protection from personal liability, although profits are

App-10

passed through to a member’s personal income

without facing corporate taxes. Franklin A. Gevurtz,

Corporation Law 4-6 (3d ed. 2021); Stephen M.

Bainbridge, Agency, Partnership & LLCS 269 (4th ed.

2024).

These entities are commercial by their very

nature. As the Supreme Court has long recognized, a

corporation is never created “for its own sake,” but

instead exists “for the purpose of effecting something

else.” McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316,

411 (1819). For-profit business entities are a means to

an economic end. They exist primarily to “use [their]

resources and engage in activities designed to increase

[their] profits.” Milton Friedman, Capitalism and

Freedom 133 (1962); Stephen M. Bainbridge,

Corporation Law and Economics 419-29 (2002)

(traditional fiduciary duties require corporations to

maximize profits). Aside from being profit

maximizers, business entities also exist to efficiently

pool capital and allow creditors and shareholders to

invest without disclosing their identities. William J.

Moon, Anonymous Companies, 71 Duke L.J. 1425,

1429-32 (2022). For all these reasons, the corporate

form is understood to be “the foundation of the modern

market economy.” Giuseppe Dari-Mattiacci, Oscar

Gelderblom, Joost Jonker & Enrico C. Perotti, The

Emergence of the Corporate Form, 33 J.L. Econ. & Org.

193, 225 (2017).

Considering the nature of the corporate form and

modern business, we can safely say that the CTA

facially regulates economic activity. The statute is

specifically directed at domestic companies created

under the laws of a state and foreign companies

App-11

registered to do business in the United States. 31

U.S.C. § 5336(a)(11)(A). By requiring these corporate

entities to provide beneficial ownership information,

the CTA regulates how they operate and the level of

secrecy with which they do business. The maintenance

and operation of a separate corporate entity is

comparable to other regulated activities the Supreme

Court has found commercial in nature. See Wickard v.

Filburn, 317 U.S. 111 (1942) (consumption of homegrown wheat); Perez v. United States, 402 U.S. 146

(1971) (extortionate intrastate credit transactions).

NSBU’s and Winkles’s own declarations

emphasize the point. NSBU represents tens of

thousands of businesses in every sector of the

economy. According to NSBU, eighty percent of its

members fall under the CTA’s definition of “reporting

company.” Winkles co-owns two corporations that

“manage and lease real property” and generate

“annual turnover of under $20 million.” Winkles Decl.

at 1-2. Winkles’s two companies earn approximately

$8 million and $5 million in annual gross sales.

Neither NSBU nor Winkles has identified any

reporting companies that do not engage in commercial

activity. That both plaintiffs are clearly economically

active and failed to provide evidence of a noncommercial entity regulated by the CTA is strong

evidence that the statute regulates commerce.

Moreover, to the extent a corporate entity is not

involved in commerce, the CTA’s many carveouts will

likely exempt it. The statute excludes trusts, banks,

government agencies, public utilities, political

organizations,

and

nonprofits.

U.S.C.

§ 5336(a)(11)(B). The CTA also exempts inactive

App-12

businesses that are created on or before January 1,

2020, hold no assets, and have not sent or received

funds exceeding $1,000 in a year. 31 C.F.R.

§ 1010.380(c)(2)(xxiii); 31 U.S.C. § 5336(a)(11)(B)(xxiii).

Congress’s decision to tailor the CTA to active

businesses is further evidence the statute regulates

commerce on its face.

NSBU and Winkles make three arguments to

resist this conclusion. None works.

First, they argue, like the district court, that the

CTA regulates the noneconomic “isolated, discrete act”

of incorporation. We’ll assume without deciding that

this “isolated, discrete act” is not itself commercial in

character. Even indulging that assumption, we believe

the CTA’s text establishes that it does not regulate the

act of incorporation. Instead, the CTA regulates

entities after they have been incorporated. Even

though the statute defines “reporting company” as one

“created by the filing of a document,” this provision

serves only to identify those entities that must comply

with the statute’s reporting requirements. 31 U.S.C.

§ 5336(a)(11)(A)(i). The statute in no way affects how

businesses incorporate. It does not alter any relevant

state law. It addresses only what entities must do after

they are registered to do business—provide beneficial

owner information to the Treasury Secretary.

Other parts of the text confirm that the CTA is not

regulating the act of incorporation. The statute

requires existing businesses that have already

incorporated to continue reporting changes in

ownership. Id. § 5336(b)(1)(D). Foreign entities

registered to do business in the United States, but that

were incorporated abroad, are also subject to the CTA.

App-13

Id. § 5336(a)(11)(A)(ii). And, as we’ve already

explained above, the CTA exempts businesses that are

not actively engaged in commerce from the reporting

requirement.

Second, NSBU and Winkles argue that the CTA is

constitutionally infirm because it lacks a jurisdictional

element. Again, we disagree. A jurisdictional element

“ensure[s], through case-by-case inquiry, that the

[activity] in question affects interstate commerce.”

Lopez, 514 U.S. at 561. We have held that a

jurisdictional element—because it allows a case-bycase assessment—immunizes criminal statutes from

facial challenges. United States v. Pugh, 90 F.4th

1318, 1326 (11th Cir.), cert. denied, 145 S. Ct. 236

(2024). See also United States v. Dupree, 258 F.3d

1258, 1259 (11th Cir. 2001) (jurisdictional hook

defeated facial challenge to statute prohibiting a felon

from possessing a firearm). But neither we nor the

Supreme Court has ever suggested that a

jurisdictional element is necessary for an economic

regulation. See United States v. Moghadam, 175 F.3d

1269, 1275-76 (11th Cir. 1999) (holding that a

jurisdictional element was unnecessary where the

statute regulated economic activities having a

substantial effect on interstate commerce). In Lopez

and Morrison, for example, a case-by-case

jurisdictional assessment was necessary because the

statutes facially regulated non-economic activity. “The

absence of such a jurisdictional element simply means

that courts must determine independently whether

the statute regulates activities that arise out of or are

connected with a commercial transaction, which

viewed in the aggregate, substantially affect

interstate commerce.” Id. (citation modified).

App-14

Finally,

citing

National

Federation

Independent Business v. Sebelius, 567 U.S. 519 (2012),

NSBU and Winkles say that the CTA regulates

inactivity. But the CTA does not “compel [entities] not

engaged in commerce” to do so. Id. at 549. Because of

the tailored scope of the act, it regulates entities that

are

active

commerce.

See

U.S.C.

§ 5336(a)(11)(B), (b)(1)(B). The CTA does not regulate

based on an entity’s anticipated future conduct.

Instead, the CTA anticipates the effects on commerce

of active businesses not reporting ownership

information. See NFIB, 567 U.S. at 557.

In sum, the CTA regulates economic activity on its

face. Accordingly, the only question for its facial

constitutionality under the Commerce Clause is

whether the intrastate economic activity it regulates

substantially affects interstate commerce.

We turn now to that second question: did

Congress rationally conclude that the regulated

conduct has a substantial aggregate effect on

interstate commerce? We believe that it did.

Apart from its scope, the CTA is a routine federal

law. Federal reporting requirements are very

common. See Cal. Bankers Ass’n v. Shultz, 416 U.S.

21, 47 (1974) (“[P]rovisions requiring reporting or

recordkeeping . . . are by no means unique.”). The

United States Code is replete with them. See, e.g., 31

U.S.C. § 5313 (requiring banks to file reports with the

Secretary of the Treasury whenever they are involved

in cash transactions exceeding a certain amount); 52

U.S.C § 30104 (requiring political committees to file

reports of receipts and disbursements); 2 U.S.C.

App-15

§ 1604 (requiring registered lobbyists to file reports

with Congress that include their name, a list of

lobbying activities, and a list of employees). So the

CTA is hardly based on a “new conception[] of federal

power.” NFIB, 567 U.S. at 550.

This particular reporting requirement is an effort

to curtail abuses of the corporate form. In its report

accompanying the CTA, the House Committee on

Financial Services found that anonymous ownership

and the corporate form were contributing to fraud. The

Committee concluded that anonymous shell

companies “afford a high level of secrecy” to money

launderers. H.R. REP. NO. 116-227, at 10 (2019). The

report also found that the United States was not

meeting international standards regarding disclosure

requirements, making it a target for money

laundering. Id. at 2, 11.

In reaching these conclusions, Congress relied on

input from numerous national security and law

enforcement experts about how anonymous shell

companies affect interstate and international

commerce. Congress held a hearing on the CTA,

during which the former Director of the FBI’s

Terrorist Financing Operation Section testified that

the CTA was “necessary and long overdue.” Promoting

Corporate Transparency: Examining Legislative

Proposals to Detect and Deter Financial Crimes:

Hearing on H.R. 2513 Before the Subcomm. on Nat’l

Sec., Int’l Dev., & Monetary Pol’y of the H. Comm. on

Fin. Servs., 116th Cong. 49 (2019) (statement of

Dennis M. Lormel). Lormel also stated that he

believed reporting requirements would help reduce

drug trafficking. Id. at 28. Congress heard additional

App-16

testimony in support of the CTA from law enforcement

associations such as the Fraternal Order of Police. The

Fraternal Order said that collecting beneficial

ownership information would help combat the threat

posed by “[t]ransnational criminal organizations and

terrorist operations.” Id. at 69. Finally, an array of

industry representatives concluded the CTA would

protect financial institutions of all stripes from

financial crime. Id. at 75-76.

Congress could rationally conclude that the

freedom of beneficial owners to operate anonymously

through shell companies had a substantial aggregate

impact on interstate commerce. Congress found that

2,000,000 corporations and LLCs are formed annually.

Congress reasonably concluded that failing to require

businesses to report beneficial ownership information

would undercut its goal of regulating interstate

financial crime. Indeed, it explicitly found that the

CTA was necessary to prevent the use of the corporate

form to commit fraud. Anti-Money Laundering Act of

2020, Pub. L. No. 116-283, § 6402(5), 134 Stat. 4547,

4604 (2021).

Although congressional findings are not

necessary, Katzenbach v. McClung, 379 U.S. 294, 299,

304 (1964), and alone cannot sustain Commerce

Clause legislation, see Morrison, 529 U.S. at 614, such

findings may better “enable us to evaluate the

legislative judgment that the activity in question

substantially affect[s] interstate commerce.” Lopez,

514 U.S. at 563. Congress’s findings here are entitled

to deference. See United States v. Viscome, 144 F.3d

1365, 1371 (11th Cir. 1998) (holding that “explicit

findings that the proscribed activity in issue

App-17

substantially affected interstate commerce” are

accorded “substantial deference”). Here the connection

between the thing being regulated—the anonymous

ownership and operation of businesses—and its effect

on interstate commerce is direct and straightforward.

Congress had a rational basis for believing that, in the

aggregate, the anonymous operation of businesses

substantially affected interstate commerce.

NSBU and Winkles resist this conclusion by citing

examples of hypothetical entities that engage in

purely intrastate activity but may still be regulated by

the CTA. The existence of some edge cases doesn’t help

in this facial challenge. “[W]here a general regulatory

statute bears a substantial relation to commerce, the

de minimis character of individual instances arising

under that statute is of no consequence.” Lopez, 514

U.S. at 558 (citing Maryland v. Wirtz, 392 U.S. 183,

196 n.27 (1968) (citation modified), overruled on other

grounds by, Nat’l League of Cities v. Usery, 426 U.S.

833 (1976)). This argument about corporations that

are uniquely focused on intrastate activity is the stuff

of an as-applied challenge. See, e.g., Gonzales v. Raich,

545 U.S. 1 (2005). Because Congress reasonably

determined that this cumulative activity would

substantially affect commerce, the existence of some

purely intrastate entities does not invalidate the CTA

as a facial matter.

***

In short, the CTA is a constitutional exercise of

Congress’s enumerated power to regulate interstate

commerce. Because it is directed at the ownership and

maintenance of corporations, it is a regulation of

economic activity. And Congress rationally concluded

App-18

that this activity has a substantial aggregate impact

on interstate commerce.

Having determined that Congress had the power

to enact the CTA, we now ask whether the CTA

facially violates any individual rights amendment. A

facial challenge under an individual rights

amendment is “hard to win.” Moody v. NetChoice,

LLC, 603 U.S. 707, 723 (2024). A plaintiff cannot

succeed on such a facial challenge unless he

“‘establish[es] that no set of circumstances exists

under which the [law] would be valid,’ or he shows that

the law lacks a ‘plainly legitimate sweep.’” Id. (quoting

United States v. Salerno, 481 U.S. 739, 745 (1987) and

Washington State Grange v. Washington State

Republican Party, 552 U.S. 442, 450-451 (2008)).

NSBU and Winkles urge us to affirm on the

ground that the CTA facially violates the Fourth

Amendment. The Fourth Amendment protects “[t]he

right of the people to be secure in their persons,

houses, papers, and effects, against unreasonable

searches and seizures.” U.S. Const. amend. IV. NSBU

and Winkles argue that the reporting requirement is

unconstitutional because it permits suspicionless

searches for general law enforcement purposes.2 We

disagree.

2 NSBU and Winkles vaguely reference First, Fifth, Ninth, and

Tenth Amendment claims but make no argument in support of

them. These arguments are abandoned for purposes of appeal.

See Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681

(11th Cir. 2014) (a party fails to adequately brief a claim when it

fails to clearly present it or refers to it only in passing).

App-19

The Supreme Court has previously considered

Fourth Amendment challenges to uniform reporting

requirements. In Shultz, the Court addressed a

statute requiring banks to report domestic currency

transactions above a certain amount. 416 U.S. 21

(1974). The reports contained the “name, address,

business or profession and social security number of

the person conducting the transaction,” as well as a

description of the transaction itself. Id. at 39 n.15. The

Court upheld the statute against a Fourth

Amendment

challenge,

concluding

that

the

regulations “do not impose unreasonable reporting

requirements on the banks.” Id. at 67. Even though

the law required banks to obtain information “simply

because the Government want[ed] it,” the information

was limited in nature and “sufficiently related to a

tenable congressional determination as to improper

use of transactions of that type in interstate

commerce.” Id.

Under this precedent, the CTA does not violate

the Fourth Amendment. It is a uniform reporting

requirement applied to all businesses that meet the

CTA’s definition of “reporting company.” There is

nothing arbitrary or discretionary about its

application. See Brock v. Emerson Elec. Co., Elec. &

Space Div., 834 F.2d 994, 996 n.2 (11th Cir. 1987)

(concluding that a “uniform statutory or regulatory

reporting

requirement

satisfies

the

Fourth

Amendment concern regarding the potential for

arbitrary invasions of privacy”). The information it

requires is “sufficiently described and limited in

nature” and is no more detailed than the reports in

Shultz. 416 U.S. at 67.

App-20

The CTA also has several privacy guarantees. It

permits disclosure of beneficial ownership information

only upon request by discrete categories of agencies

under certain circumstances. 31 U.S.C. § 5336(c)(2).

The statute requires the Secretary of the Treasury to

protect ownership information and prevent breaches

of confidentiality. Id. § 5336(c)(8). And the

Comptroller General must conduct periodic audits to

ensure the Department of the Treasury is using

beneficial ownership information appropriately. Id.

§ 5336(c)(10).

In support of their argument, NSBU and Winkles

cite a series of decisions involving substantial

arbitrary privacy intrusions in which the government

collected an array of detailed and sensitive

information. But these decisions bear no resemblance

to the facts of this case. Here, “[t]he inquiry is within

the authority of the agency, the demand is not too

indefinite and the information sought is reasonably

relevant.” Shultz, 416 U.S. at 67 (quoting United

States v. Morton Salt Co., 338 U.S. 632, 652 (1950)).

Because the CTA’s disclosure requirement is

reasonable, there is no Fourth Amendment issue. See

id.

IV.

We REVERSE and REMAND for further

proceedings consistent with this opinion.

App-21

Appendix B

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF ALABAMA

________________

No. 22-cv-1448

________________

NATIONAL SMALL BUSINESS UNITED, d.b.a. National

Small Business Association, et al.,

Plaintiffs,

JANET YELLEN, in her official capacity as Secretary of

the Treasury, et al.,

Defendants.

________________

Filed: Mar. 1, 2024

________________

MEMORANDUM OPINION

________________

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 burdensome, foolish, 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

App-22

Corporate

principle.

Transparency

Act,

illustrates

that

When Congress passed the 2021 National Defense

Authorization Act, it included a bill called the

Corporate Transparency Act (“CTA”). Although the

CTA made up just over 21 pages of the NDAA’s nearly

1,500-page total, the law packs a significant

regulatory

punch,

requiring

most

entities

incorporated under State law to disclose personal

stakeholder

information

the

Treasury

Department’s criminal enforcement arm.

By requiring these disclosures, Congress aimed to

prevent financial crimes like money laundering and

tax evasion, which are often committed through shell

corporations. Broadly defined, a shell corporation is a

legal entity with no (or minimal) employees,

customers, business, or assets. Although shell

corporations serve many legitimate purposes, it’s also

possible to disguise the identity of interested

individuals and the flow of money by layering shell

companies on top of each other, “such that each time

an investigator obtains ownership records for a

domestic or foreign entity, the newly identified entity

is yet another corporate entity, necessitating a repeat

of the same process[.]” Pub. L. 116-283 § 6402(4).

Yet corporate formation includes far more than

for-profit enterprise. Each year, the States grant

formal status to millions of entities that can and do

serve “any lawful purpose,” including benefit

corporations, non-profits, holding companies, political

organizations, and everything in between.

With that in mind, this case presents a

deceptively simple question: Does the Constitution

App-23

give Congress the power to regulate those millions of

entities and their stakeholders the moment they

obtain a formal corporate status from a State? The

Government thinks so. While it acknowledges that

Congress “can exercise only the powers granted to it,”

the Government says that the CTA is within Congress’

broad powers to regulate commerce, oversee foreign

affairs and national security, and impose taxes and

related regulations.

The Government’s arguments are not supported

by precedent. Because the CTA exceeds the

Constitution’s limits on the legislative branch and

lacks a sufficient nexus to any enumerated power to

be a necessary or proper means of achieving Congress’

policy goals, the Plaintiffs are entitled to judgment as

a matter of law. As a result, the Court GRANTS the

Plaintiffs’ motion for summary judgment and

DENIES the Government’s motion to dismiss and

alternative cross-motion for summary judgment.

Background

Plaintiffs. Plaintiff National Small Business

Association is “an Ohio non-profit corporation that

represents and protects the rights of small businesses

across the United States,” including “over 65,000

businesses and entrepreneurs located in all 50 states.”

(Doc. 39-2 at 1-2). The NSBA’s stated purpose is “to

advocate for its members” and their employees, and

“to provide its members guidance and data on how to

navigate government regulations.” Id. at 2.

Plaintiff Isaac Winkles is an NSBA member and

owner of two small businesses, one of which “is a small

family business with 3 full-time employees and annual

turnover of under $20 million.” (Doc. 39-3 at 1-2).

App-24

Procedural Background. The Treasury

Department’s criminal-enforcement bureau, the

Financial Crimes Enforcement Network (“FinCEN”),

issued a final rule implementing the CTA on

September 29, 2022, slated to go into effect on January

1, 2024. 87 Fed. Reg. 59498 (Sept. 30, 2022) (codified

at 31 C.F.R. § 1010.380). Six weeks later, Plaintiffs

sued the Treasury Department, along with Treasury

Secretary Janet Yellen and Acting Director of FinCEN

Himamauli Das in their official capacities, alleging

that the CTA’s mandatory disclosure requirements

exceed Congress’ authority under Article I of the

Constitution and violate the First, Fourth, Fifth,

Ninth, and Tenth Amendments. (Doc. 1). The parties

agreed that the case could be resolved on dispositive

motions without discovery, so the parties cross-moved

for summary judgment in early 2023, with the

Government simultaneously moving to dismiss. (Docs.

23 & 24). In the following months, the parties and

amici exchanged hundreds of pages of briefing, and

oral argument on the parties’ motions was held in

November 2023.

The

Operation

the

Corporate

Transparency Act. As always, “[o]ur analysis begins

and ends with the text,” Octane Fitness, LLC v. ICON

Health & Fitness, Inc., 572 U.S. 545, 553 (2014), and

the text of the CTA is wide-ranging in scope. The CTA

regulates “reporting company[ies],” defined as

“corporation[s], limited liability company[ies], or other

similar entit[ies]” that are either “(i) created by the

filing of a document with a secretary of state or a

similar office under the law of a State or Indian Tribe,

or (ii) formed under the law of a foreign country and

registered to do business in the United States.” 31

App-25

U.S.C. § 5336(a)(11)(A). The CTA exempts twentyfour kinds of entities from its reporting requirements,

including banks, insurance companies, and entities

with more than twenty employees, five million dollars

in gross revenue, and a physical office in the United

States. § 5336(a)(11)(B).

In total, FinCEN estimates that the CTA applies

to 32.6 million currently existing entities and 5 million

new entities formed each year from 2025 to 2034.

Beneficial

Ownership

Information

Reporting

Requirements, 87 Fed. Reg. at, 59,549. The CTA

requires these millions of entities to disclose the

identity and information of any “beneficial owner.”

§ 5336(b)(1)(A). A beneficial owner is defined as “an

individual who . . . (i) exercises substantial control

over the entity; or (ii) owns or controls not less than 25

percent of the ownership interests of the entity,” with

some exceptions for children, creditors, and a few

others. § 5336(a)(3). The definition of “substantial

control” is as vague as it sounds—although it includes

some clear categories like “senior officer[s],” FinCEN’s

regulations “clarify” that a person with substantial

control also includes someone who “[h]as any other

form of substantial control over the reporting

company”

besides

those

listed.

C.F.R.

§ 1010.380(d)(1)(i)(D).

For new entities incorporated from January 1,

2024, onward, the CTA requires them to disclose the

identity and information of both Beneficial Owners

and “Applicants,” defined as “any individual who files

an application to form a corporation, LLC, or other

similar entity under the laws of a State or Indian

App-26

Tribe; or registers [a foreign entity] to do business in

the United States.” 31 U.S.C. § 5336(a)(2).

Reporting entities must give FinCEN a Beneficial

Owner or Applicant’s full legal name, date of birth,

current address, and identification number from a

driver’s license, ID card, or passport. § 5336(a)(1),

(b)(2)(A). Under the final rule, reporting entities are

also required to submit an image of the identifying

document. 31 C.F.R. § 1010.380(b)(1)(ii)(E). If any of

that information changes, the reporting company

must update FinCEN, 31 U.S.C. § 5336(b)(1)(D), and

FinCEN retains Applicant and Beneficial Owner

information on an ongoing basis for at least five years

after the reporting company terminates. § 5336(c)(1).

The CTA’s disclosure requirements aren’t

toothless, either: knowing or willful violations carry

serious civil and criminal penalties. A willful provision

of false or fraudulent beneficial ownership information

or failure to report “complete or updated beneficial

ownership information to FinCEN” by “any person” is

punishable by a $500 per day civil penalty and up to

$10,000 in fines and 2 years in federal prison,

§ 5336(h)(1), (3)(A); a knowing and unauthorized

disclosure or use of beneficial ownership information

by “any person” is punishable by a $500 per day civil

penalty, along with a $250,000 fine and 5 years in

federal prison, § 5336(h)(2), (3)(B); and a knowing and

unauthorized use or disclosure while violating another

federal law “or as part of a pattern of any illegal

activity involving more than $100,000 in a 12-month

period” by “any person” is punishable with a $500,000

fine

and

years

federal

prison,

§ 5336(h)(3)(B)(ii)(II).

App-27

Crucially (at least for standing purposes), these

severe penalties apply to individuals, not reporting

entities. For starters, a disembodied corporate entity

cannot be sentenced to federal prison. Beyond that,

although the CTA does not define “person,” it does

define both “United States person” (§5336(a)(14)) and

“Foreign person” (§5336(a)(7)) to include corporations,

partnerships, and trusts, and uses those terms in

other provisions. See § 5336(a)(11)(B)(xx). Yet the

statute does not use those terms in its penalty

provisions, so the statute can be read only to penalize

individual beneficial owners and applicants, not

reporting entities.

The ultimate result of this statutory scheme is

that tens of millions of Americans must either disclose

their personal information to FinCEN through Stateregistered entities, or risk years of prison time and

thousands of dollars in civil and criminal fines.

II. Legal Standards

Although the Government requested summary

judgment as an alternative to its motion to dismiss,

summary judgment is the most appropriate means for

resolving this case. The parties have waived discovery

and agreed that this case can be “resolved through

dispositive motions.” (Doc. 16 at 3). Furthermore,

when there are no genuine issues of material fact and

“the only issues before the Court are pure questions of

law,” disposition of the case by summary judgment is

particularly appropriate. Maxim Crane Works, L.P. v.

Zurich Am. Ins., 11 F.4th 345, 350 (5th Cir. 2021)

(cleaned up); Saregama India Ltd. v. Mosley, 635 F.3d

1284, 1290 (11th Cir. 2011) (“When the only question

App-28

a court must decide is a question of law, summary

judgment may be granted.”).

Under Federal Rule of Civil Procedure 56(a),

summary judgment is warranted if “there is no

genuine dispute as to any material fact and . . . the

moving party is entitled to judgment as a matter of

law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

247 (1986). Because there are no disputed issues of

fact here, the Court need only decide which parties are

entitled to judgment as a matter of law.

III. Discussion

The Court’s opinion is in two parts. First, the

Court considers its own jurisdiction, looking mainly to

the Plaintiffs’ standing. Having found that Winkles is

a regulated party and a member of the NSBA, and that

the NSBA has associational standing as a result, the

Court concludes that both Plaintiffs have standing to

bring their constitutional claims.

With standing out of the way, the Court then

addresses the Government’s proffered justifications

for the CTA’s constitutionality—that the CTA falls

within the ambit of the Commerce, Taxing, and

Necessary and Proper Clauses, along with Congress’

foreign affairs and national security powers. After a

close look at each of these putative justifications, the

Court concludes that the CTA is not authorized by the

Constitution.

A. Standing

The first order of business is to make sure the

Court has jurisdiction to decide the merits of this case.

Article III, § 2 of the U.S. Constitution confines the

federal judicial power to “cases” and “controversies,”

App-29

and an “essential and unchanging part of the case-orcontroversy requirement of Article III” is the

requirement that a plaintiff have standing. Lujan v.

Defs. of Wildlife, 504 U.S. 555, 560 (1992). To satisfy

the “irreducible constitutional minimum of standing,”

id., “a claimant must present an injury that is

concrete, particularized, and actual or imminent;

fairly traceable to the defendant’s challenged

behavior; and likely to be redressed by a favorable

ruling.” Davis v. Fed. Election Comm’n, 554 U.S. 724,

733 (2008).

According to the Government, neither Plaintiff

has standing to bring this suit: Winkles, it suggests,

has failed to show a concrete and particularized

injury, while NSBA has failed to support its claim to

organizational, third-party, or associational standing.

Neither argument is persuasive.

Plaintiff Isaac Winkles

Winkles has standing to challenge the CTA’s

beneficial owner provisions because the compelled

disclosure of Winkles’ sensitive personal information

to FinCEN is a concrete, imminent injury that is

traceable to the government, and redressable by a

favorable decision. The Government does not dispute

that the CTA will require Winkles, as the beneficial

owner of at least one reporting entity, to submit his

beneficial owner status and information to FinCEN.

As a result, because Winkles has “challeng[ed] the

legality of government action” and is undisputedly the

“object of the action,” there is “little question that the

action or inaction has caused him injury, and that a

judgment preventing or requiring the action will

redress it.” Lujan, 504 U.S. at 561-62.

App-30

The Government disagrees. In its view, Winkles’

injuries aren’t traceable to the CTA or redressable by

a favorable decision because he has already disclosed

at least some of the required information while

complying with other regulatory requirements, like

“tax returns, passport forms, and bank account

applications.” (Doc. 24-1 at 19-20). The Government

also argues that Winkles isn’t injured by disclosing

government-provided information like a passport

number to the government. Id. at 20.

Yet federal subdivisions like FinCEN must still

follow standard judicial procedures to obtain even

federally provided information without an express

authorization like the CTA’s. And although the

Government says that disclosure to FinCEN is no big

deal because it’s “no secret” that Winkles is the

beneficial owner of at least one company, id., the

Government never explains why it needs to compel

Winkles to disclose beneficial owner information at all

if that information is so easily discovered by other

means. After all, FinCEN already compels banks and

other financial institutions to obtain nearly identical

information from State entity customers and provide

it to FinCEN. See 31 C.F.R. § 1010.230(a) (requiring

“covered financial institutions” to “identify and verify

beneficial owners of legal entity customers.”).

The Government’s standing arguments miss the

mark for an additional reason: the injury to Winkles

is not disclosure itself, but disclosure to FinCEN, the

Treasury

Department’s

criminal

enforcement

division. The mandatory disclosure of personal

information to FinCEN for law-enforcement purposes

satisfies the injury requirement for Winkles’ First,

App-31

Fourth, and Fifth Amendment claims, since courts

“accept as valid the merits of [the non-movant’s] legal

claims” for standing purposes when deciding a motion

for summary judgment, Fed. Election Comm’n v. Cruz,

596 U.S. 289, 298 (2022), and Winkles has alleged that

the CTA requires disclosure of “sensitive personal

information to FinCEN for law enforcement

purposes.” (Doc. 1 at 4); see also id. at 11 (“Winkles will

be subject to the Act’s reporting requirements to give

his sensitive personal information to FinCEN.”); and

id. at 12-14, 21 (describing the injury as disclosure to

FinCEN). Thus, the Court “must assume” that the

CTA violates constitutional “right[s] we must assume

[Winkles] has.” Cruz, 596 U.S. at 298.

Winkles also has standing to challenge the CTA’s

applicant disclosure requirement. Because “standing

is not dispensed in gross,” Lewis v. Casey, 518 U.S.

343, 358, n.6 (1996), Winkles is obligated “to

demonstrate standing for each claim he seeks to

press.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332,

352 (2006). In a pre-enforcement challenge like this

one, the injury-in-fact requirement is met when the

plaintiff “alleges an intention to engage in a course of

conduct arguably affected with a constitutional

interest, but proscribed by a statute, and there exists

a credible threat of prosecution” under that statute.

Susan B. Anthony List v. Driehaus, 573 U.S. 149, 159

(2014) (internal quotation marks omitted).

Here, Winkles has submitted sworn testimony

that he has “formed [other Alabama entities] in the

past,” and he “anticipate[s] forming other Alabama

entities over the next few years.” (Doc. 39-3 at 2).

Because the CTA would impose serious criminal

App-32

penalties on Winkles for non-compliance with the

CTA’s applicant disclosure requirements, “it is not

necessary that [Winkles] first expose himself to actual

arrest or prosecution to be entitled to challenge [the]

statute.” Steffel v. Thompson, 415 U.S. 452, 459

(1974). And because there is no doubt the CTA will be

applied with its full force, “the plaintiffs’ fear of

prosecution [is] not imaginary or wholly speculative.”

Susan B. Anthony List, 573 U.S. at 160 (internal

quotation marks omitted). As a result, Winkles has

standing to challenge the CTA’s applicant provisions

because they present Winkles with a choice between

compliance and felony prosecution. (Doc. 35-3 at 3)

(Winkles’ Affidavit: “[i]f I do not comply with these

rules, I understand that I may face fines and even

imprisonment.”).

Finally, Winkles’ standing to challenge the CTA’s

applicant and beneficial owner provisions on First,

Fourth, and Fifth Amendment grounds gives him

standing to challenge the CTA as a congressional

overreach. Although “[i]ndividuals have no standing

to complain simply that their Government is violating

the law,” Winkles “is a party to an otherwise

justiciable case or controversy,” and is therefore

allowed “to object that [his] injury results from

disregard of the federal structure of our Government.”

Bond v. United States, 564 U.S. 211, 225-26 (2011).

National Small Business Association

The Government attacks NSBA’s standing on

three fronts, asserting that the NSBA lacks

organizational, third party, and associational

standing. When it comes to federal jurisdiction,

however, standing on one leg is as good as standing on

App-33

three. Because Winkles is a member of the NSBA and

has standing as an individual, the NSBA has

associational standing.

“An association has standing to bring suit on

behalf of its members when its members would

otherwise have standing to sue in their own right.”

Georgia Republican Party v. Sec. & Exch. Comm’n, 888

F.3d 1198, 1203 (11th Cir. 2018). “[O]rganizations can

assert the standing of their members.” Summers v.

Earth Island Inst., 555 U.S. 488, 494 (2009). That said,

organizations can’t merely allege that a member has

standing—instead, “an organization must make

specific allegations establishing that at least one

identified member has suffered or will suffer harm.”

Georgia Republican Party v. Sec. & Exch. Comm’n, 888

F.3d 1198, 1203 (11th Cir. 2018) (cleaned up).

NSBA has done so here. Winkles has standing on

his own and has been a dues-paying member of the

NSBA since 2021. (Doc. 39-2 at 4; Doc. 39-3 at 2).

Furthermore, “the interests at stake are germane to

the [NSBA]’s purpose, and neither the claim asserted

nor the relief requested requires the participation of

individual members in the lawsuit.” Friends of the

Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528

U.S. 167, 181 (2000). As a result, the NSBA has

satisfied the requirements of associational standing.

Having determined that both Winkles and the

NSBA have standing to challenge the CTA, the Court

next considers whether Congress had the authority to

enact it.

B. Constitutionality of the CTA

The powers of the federal government are

expressly enumerated in the Constitution. McCulloch

App-34

v. Maryland, 4 Wheat. 316, 405 (1819). To protect

individual liberty, the Founders also drafted the

Constitution to ensure “separation and independence

of the coordinate branches of the Federal

Government,” which “prevent[s] the accumulation of

excessive power in any one branch.” Gregory v.

Ashcroft, 501 U.S. 452, 458 (1991). Within the green

pastures of its enumerated powers, however, Congress

may frolic with “great latitude.” Nat’l Fed’n of Indep.

Bus. v. Sebelius, 567 U.S. 519, 537 (2012).

Still, because enumeration itself “presupposes

something not enumerated,” Congress cannot range

wherever it pleases. Gibbons v. Ogden, 9 Wheat. 1, 195

(1824). It’s as simple as expressio unius est exclusio

alterius: “The Constitution’s express conferral of some

powers makes clear that it does not grant others. And

the federal government ‘can exercise only the powers

granted to it.’” NFIB, 567 U.S. at 534-35 (quoting

McCulloch, 4 Wheat. at 405).

To be sure, a “[p]roper respect for a coordinate

branch of the government requires that [a court] strike

down an Act of Congress only if the lack of

constitutional authority to pass the act in question is

clearly demonstrated.” Id. at 538 (cleaned up). But

appropriate judicial deference to Congressional action

ends at the borders of the Constitution, because “there

can be no question that it is the responsibility of [the

courts] to enforce the limits on federal power by

striking down acts of Congress that transgress those

limits.” Id. After all, a law “beyond the power of

Congress” is “no law at all.” Nigro v. United States, 276

U.S. 332, 341 (1928).

App-35

The Government offers three sources of

constitutional authority for Congress’ enactment of

the CTA. First, the Government argues that Congress

has the power to enact the CTA under its foreign

affairs powers. That is so, the Government says,

because the political branches have plenary power to

conduct foreign affairs, and Congress’ motivating

interest in curbing foreign money laundering and

other malign foreign influences places the CTA under

the aegis of those powers. Second, the Government

argues that Congress has the power to enact the CTA

via its Commerce Clause authority. Because many

State entities engage in activities that qualify as or

affect “commerce,” the argument goes, the act of

corporate formation itself is enough to invoke

Congress’ Commerce powers. Finally, the Government

asserts that the CTA is a necessary and proper

exercise of Congress’ taxing power, since one purpose

of the FinCEN database created by the CTA is to

assist in efficient tax administration.

Foreign Affairs & National Security

The Government first turns to Congress’

extensive powers over foreign affairs and national

security and the Necessary and Proper Clause. The

Government’s theory is this: In enacting the CTA,

“Congress concluded that collecting beneficial

ownership information ‘is needed to . . . protect vital

Unite[d] States national security interests’; ‘better

enable critical national security, intelligence, and law

enforcement efforts to counter money laundering, the

financing of terrorism, and other illicit activity’; and

‘bring the United States into compliance with

international anti-money laundering and countering

App-36

the financing of terrorism standards.’” (Doc. 24-1 at

27) (quoting Pub. L. 116-283 § 6402(5)).

And because the Executive Branch agrees with

Congress about the “necessity” of the CTA, says the

Government, “there is a rational relationship between

FinCEN’s collecting limited beneficial ownership and

applicant information and advancing the national

security and foreign policy interests of the United

States.” Id. The Government also contends that the

Court should defer to the political branches’ policy

determination that compliance with international

financial standards is best achieved through the CTA,

and that the CTA is within Congress’ foreign affairs

and national security powers because foreign parties

use domestic shell companies to harm the United

States’ interests. (Doc. 40 at 8). Not only that, but “the

Court must defer to the political branches on these

matters, not to advocacy groups or private citizens.”

Id. at 28 (emphasis added).

The Government is absolutely right to say that

courts should defer to the political branches on

matters of policy. As a matter of first principles, “[t]he

conduct of the foreign relations of our government is

committed by the Constitution to the executive and

legislative—‘the political’—departments of the

government.” Oetjen v. Cent. Leather Co., 246 U.S.

297, 302 (1918). This is so not only because foreign

policy “should be undertaken only by those directly

responsible to the people whose welfare they advance

or imperil,” but because “the Judiciary has neither

aptitude, facilities nor responsibility” for those

policies. Chicago & S. Air Lines v. Waterman S. S.

Corp., 333 U.S. 103, 111 (1948). Thus, judicial

App-37

deference to the political branches is most stringently

required in the arena of foreign affairs.

All the same, the Court’s “deference in matters of

policy cannot . . . become abdication in matters of law,”

and its “respect for Congress’s policy judgments thus

can never extend so far as to disavow restraints on

federal power that the Constitution carefully

constructed.” NFIB, 567 U.S. at 538. As already

explained, “[o]ur constitution limits the government to

those powers specifically granted or those that are

necessary and proper to carry out the specifically

granted ones.” Afroyim v. Rusk, 387 U.S. 253, 257

(1967). Of course, Congress’ foreign affairs powers are

different from its domestic powers in at least one

important way: the enumerated powers limitation “is

categorically true only in respect of our internal

affairs.” United States v. Curtiss-Wright Exp. Corp.,

299 U.S. 304, 315-16 (1936).

In any event, Congress is bound by the

Constitution’s enumerated powers limitation here,

because incorporation is an internal affair. It is

blackletter law that “[c]orporations are creatures of

state law.” Cort v. Ash, 422 U.S. 66, 84 (1975),

abrogated on other grounds by Touche Ross & Co. v.

Redington, 442 U.S. 560, 99 (1979). In fact, “[n]o

principle of corporation law and practice is more

firmly established than a State’s authority to regulate

domestic corporations.” CTS Corp. v. Dynamics Corp.

of Am., 481 U.S. 69, 89 (1987) (holding that federal

securities law did not preempt state law regulating

corporate takeovers).

At the Constitutional Convention of 1787, both

James Madison and Thomas Pinkney proposed

App-38

granting powers of incorporation to the federal

government. 2 M. Farrand, Records of the Federal

Convention of 1787, at 325 (1911). The defenders of

these proposals made similar arguments to those the

Government makes in defense of the CTA. James

Wilson, for instance, claimed that federal

incorporation was “necessary to prevent a State from

obstructing the general welfare.” Id. at 615. Even so,

these proposals were rejected outright. Id. at 616.

Although the Founders “were aware that leaving

business regulation primarily to the individual states

might cause friction within the overall American

economy[, t]hey were more reluctant . . . to allow

concentrations of economic power, which they

visualized as a government-sponsored monopoly, and

therefore chose” to leave incorporation to the States.

Allen D. Boyer, Federalism and Corporation Law:

Drawing the Line in State Takeover Regulation, 47

Ohio St. L.J. 1037, 1041 (1986).

Apart from quasi-public corporations like the

Tennessee Valley Authority and Amtrak (which were

formed by acts of Congress), the Founders’ deliberate

choice to leave general incorporation to the States has

gone unchanged, even at times when calls for federal

incorporation were at a fever pitch and Congress was

perhaps most willing to upset the balance of state and

federal power. For instance, Congress rejected twenty

bills to establish federal incorporation between 1903

and 1914 alone. Id. at 1049.

To be sure, the CTA is not a direct regulation of

corporate formation. There are no preemption or

commandeering concerns here, contra (Doc. 23-1 at 21

n.9), because the CTA does not establish general

App-39

federal incorporation or force States to demand

beneficial owner and applicant information as a filing

requirement for incorporation; rather, the CTA is a

federal reporting requirement imposed on entities

that voluntarily incorporate. Thus, the operative

question in light of “[t]he underlying assumptions of

our dual form of government,” Kelly v. Robinson, 479

U.S. 36, 49 n.11 (1986) (citation omitted), is whether

Congress’ Foreign Affairs powers justify the CTA’s

regulation of “creatures of state law,” which are

ordinarily within the sovereign purview of the States.

Cort, 422 U.S. at 84. In this case, the answer is no.

The Supreme Court’s unanimous decision in Bond

v. United States is instructive. 572 U.S. 844 (2014). In

Bond, a woman inflicted “irritating” but ultimately

harmless chemical burns on her husband’s mistress.

Id. at 861. For that, Bond was prosecuted and

convicted for violating the Chemical Weapons

Convention Implementation Act of 1998, which

“ma[d]e it a federal crime for a person to use or possess

any chemical weapon, and . . . punishe[d] violators

with severe penalties.” Id. at 848. The Chemical

Weapons Act implemented the international

Convention on Chemical Weapons “pursuant to the

Federal Government’s constitutionally enumerated

power to make treaties.” Id.

On appeal, the Supreme Court overturned Bond’s

conviction, ruling that the Chemical Weapons Act did

not “reach purely local crimes.” Id. at 860. Instead, the

Court held that because “our constitutional structure

leaves local criminal activity primarily to the States,”

courts “have generally declined to read federal law as

intruding on that responsibility, unless Congress has

App-40

clearly indicated that the law should have such reach.”

Id. at 848. Thus, absent a clear indication from

Congress, the Court concluded that Congress’ treaty

powers did not extend to Bond’s “unremarkable” and

“purely local” offense. Id.

Although Bond’s central question was one of

statutory (rather than Constitutional) interpretation,

the logical parallels between Bond and this case are

obvious. For starters, Congress’ treaty and foreign

affairs powers are closely related. And like local

criminal law, corporate formation has always been the

province of the States. So although the CTA does not

directly interfere with or commandeer State

incorporation practices, the CTA still “convert[s] an

astonishing amount of traditionally local . . . conduct

into a matter for federal enforcement, and involve[s] a

substantial extension of federal police resources.” Id.

at 863 (internal quotation marks omitted).

The CTA also cannot be justified as necessary and

proper to carry out Congress’ foreign affairs powers.

When Congress invokes the Necessary and Proper

Clause, it must “involve[] exercises of authority

derivative of, and in service to, a granted power.”

NFIB, 567 U.S. at 560. This is a showing the

Government has failed to make. Instead, the

Government seems to argue that regulation of purely

internal affairs may be necessary and proper to

effectuate Congress’ foreign affairs powers if foreign

actors (or enough foreign actors) participate in those

internal affairs to illicit ends.

The Court can find little support in history or

precedent for that position. The only support, in fact,

seems to be the CTA’s congressional findings,

App-41

including the finding that “malign actors seek to

conceal their ownership of [corporate] entities in the

United States to facilitate illicit activity, . . . harming

the national security interests of the United States

and allies of the United States.” (Doc. 24-1 at 26-28)

(quoting Pub. L. 116-283 § 6402(3)). The Government

offers these findings as proof that the CTA is

“rationally related to the implementation of a

constitutionally enumerated power” and thus is a

necessary and proper exercise of Congress’ foreign

affairs powers. Id. at 26 (citing United States v.

Comstock, 560 U.S. 126, 134 (2010)). But the CTA’s

congressional findings are not enough to conclude that

a regulation in the purely domestic arena of

incorporation is an “exercise[] of authority derivative

of, and in service to” Congress’ foreign affairs powers,

especially in light of the States’ historically exclusive

governance of incorporation. NFIB, 567 U.S. at 560.

The Government also asserts that the Necessary

and Proper Clause “extends not only to Article I, § 8

powers, but to ‘all other Powers vested by th[e]

Constitution in the Government of the United States,

or in any Department or Officer thereof,’” (Doc. 40 at

11) (citing U.S. Const. art. I, § 8, cl. 18), but never

explains what “other Powers” it could invoke in the

arena of foreign affairs to justify the CTA. Instead, the

Government cites Congress’ finding that the CTA is

needed to “bring the United States into compliance

with international anti-money laundering and

countering the financing of terrorism standards.”

(Doc. 24-1 at 27) (citing Pub. L. 116-283 § 6402(5)(E)).

Compliance with international standards may be

good policy, but it is not enough to make the CTA

App-42

“necessary” or “proper.” As admirable as Congress’

goals may be, this Court’s only job is to consider

whether the CTA follows the Constitution, not

whether it is good policy. See Lester v. United States,

921 F.3d 1306, 1318 (11th Cir. 2019) (quoting Marbury

v. Madison, 5 U.S. 137, 177 (1803)) (courts must “‘say

what the law is,’ not what it should be.”). The law is

clear on this much: the Necessary and Proper Clause,

“gives Congress authority to ‘legislate on that vast

mass of incidental powers which must be involved in

the constitution,’” but “it does not license the exercise

of any ‘great substantive and independent power[s]’

beyond those specifically enumerated.” NFIB, 567

U.S. at 559 (quoting McCulloch, 4 Wheat. at 411, 421).

The Government’s reading of the Necessary and

Proper Clause is far afield from that principle. It

would sanction almost any exercise of Congressional

power given the existence of a relevant international

standard. Read that way, the Necessary and Proper

Clause would give Congress carte blanche to do as it

pleases, allowing it to “reach beyond the natural limit

of its authority and draw within its regulatory scope

those who otherwise would be outside of it.” NFIB, 567

U.S. at 560; see also Bond, 572 U.S. at 877-78 (Scalia,

J., concurring) (reasoning that Congress’ general

foreign affairs powers cannot “come[] with no implied

subject

matter

limitations,”

otherwise

“the

possibilities of what the Federal Government may

accomplish, with the right [international standard] in

hand, are endless and hardly farfetched.”).

Given the limits on Congress’ authority under the

Necessary and Proper Clause, Bond yields an

unavoidable conclusion: the CTA is not authorized by

App-43

Congress’ foreign affairs powers, because those powers

do not extend to purely internal affairs, especially in

an arena traditionally left to the States. Nor can

Congress look to international standards or

agreements to extend those powers, no matter how

praiseworthy the policy goal, because “no agreement

with a foreign nation,” formal or informal, “can confer

power on the Congress, or on any other branch of

Government, which is free from the restraints of the

Constitution.” Reid v. Covert, 354 U.S. 1, 16 (1957). As

a result, this Court must look somewhere other than

Congress’ foreign policy powers to justify the CTA.

Commerce Clause

The Government also says that the CTA is within

Congress’ power under the Commerce Clause and the

Necessary and Proper Clause. In relevant part, the

Constitution gives Congress the “Power . . . To

regulate Commerce with foreign Nations, and among

the several States.” U.S. Const. art. I, § 8, cl. 3. As for

the

power

regulate

foreign

commerce,

“jurisprudence addressing Congress’s positive Foreign

Commerce Clause power is sparse,” and “the Supreme

Court has never clearly articulated the bounds of the

positive foreign commerce power.” United States v.

Davila-Mendoza, 972 F.3d 1264, 1270 (11th Cir. 2020).

That said, the Court “assume[s], without deciding,

that the Foreign Commerce Clause has the same scope

as the Interstate Commerce Clause,” id. at 1271, so

the analysis is identical.

Although “the path of” Commerce Clause

jurisprudence “has not always run smooth . . . it is now

well established that Congress has broad authority

under the Clause.” NFIB, 567 U.S. at 549. The

App-44

Supreme Court has identified “three broad categories

of activity that Congress may regulate under its

commerce power.” United States v. Morrison, 529 U.S.

598, 608 (2000).

In the Government’s view, the CTA’s regulations

fit squarely within all three categories: (1) the

channels of interstate and foreign commerce, (2) the

instrumentalities of, and things and persons in,

interstate and foreign commerce, and (3) activities

that have a substantial effect on interstate and foreign

commerce. (Doc. 24-1 at 28); see Morrison, 529 U.S. at

609. For brevity’s sake, and in line with the

Government’s arguments, the Court addresses the

channels and instrumentalities of commerce as a

single category.

a) Channels and Instrumentalities

of Commerce

First, the Government says the CTA is a valid

regulation of the channels and instrumentalities of

commerce because “[b]oth the record and common

sense indicate that entities constituting CTA

reporting companies frequently utilize the channels of

interstate commerce.” (Doc. 24-1 at 33). Yet this

argument can’t be reconciled with the plain text of the

CTA.

It is “well-settled” that Congress has the power to

regulate “those who use the channels of interstate

commerce in order that those channels will not become

the means of promoting or spreading evil, whether of

a physical, moral or economic nature.” United States

v. Orito, 413 U.S. 139, 144 (1973). The channels of

commerce are “interstate transportation routes

through which persons and goods move.” United

App-45

States v. Ballinger, 395 F.3d 1218, 1225 (11th Cir.

2005) (quoting Morrison, 529 U.S. at 613 n.5). These

transportation routes “include highways, railroads,

navigable waters, and airspace, as well as

telecommunications networks, and national securities

markets.” Id. at 1225-26 (cleaned up and collecting

cases).

Congress can also “regulate and protect the

instrumentalities of interstate commerce, or persons

or things in interstate commerce.” United States v.

Lopez, 514 U.S. 549, 558 (1995). Unlike channels of

commerce, instrumentalities of commerce make the

conduct of interstate commerce possible—typically

“the people and things themselves moving in

commerce, including automobiles, airplanes, boats,

and shipments of goods,” along with “pagers,

telephones, and mobile phones.” Ballinger, 395 F.3d at

1226 (cleaned up and collecting cases).

The plain text of the CTA does not regulate the

channels and instrumentalities of commerce, let alone

commercial or economic activity. The CTA applies to

“reporting companies,” defined (with a list of

exceptions) as entities “created by the filing of a

document with a secretary of state or a similar office

under the law of a State or Indian Tribe; or formed

under the law of a foreign country and registered to do

business in the United States by the filing of a

document with a secretary of state or a similar office

under the laws of a State or Indian Tribe.” 31 U.S.C.

§ 5336(a)(11). The CTA then mandates that those

entities report information about their beneficial

owners and applicants to FinCEN. Id. § 5336(b)(1)(2)(A). The word “commerce,” or references to any

App-46

channel or instrumentality of commerce, are nowhere

to be found in the CTA. See 31 U.S.C. § 5336.

The Government points to the Supreme Court’s

decisions in California Bankers Ass’n v. Shultz and

American Power & Light Co. v. Sec. & Exch. Comm’n

to prove that reporting entities “frequently use the

channels of commerce[, so] Congress can impose

conditions on that use.” (Doc. 40 at 13). The

Government reads those cases too broadly.

In Shultz, banks and bank customers sought to

enjoin the enforcement of reporting and record

keeping requirements authorized by the Bank Secrecy

Act and promulgated by the Treasury Department.

Cal. Bankers Ass’n v. Shultz, 416 U.S. 21, 25-26

(1974). First, the Shultz plaintiffs challenged the

Treasury Department’s requirement that banks

maintain copies of each check for more than $100, as

well as “extension[s] of credit in an amount exceeding

$5,000 except those secured by interest in real

property,” as well as any “advice, request, or

instruction . . . regarding the transfer of funds,

currency, or other money or credit in amounts

exceeding $10,000 to a person, account, or place

outside the United States.” Id. at 34.

Second, the Shultz plaintiffs challenged the BSA’s

requirement that “anyone connected with the

transportation into or out of the country of monetary

instruments exceeding $5,000 on any one occasion”

must report the transaction. In tandem, they also

challenged the BSA’s grant of authority to the

Treasury Secretary “to prescribe regulations requiring

residents and citizens of the United States, as well as

nonresidents in the United States and doing business

App-47

therein, to maintain records and file reports with

respect to their transactions and relationships with

foreign financial agencies.” Id. at 36-37.

Third, the Shultz plaintiffs challenged the

Treasury Secretary’s requirement “that financial

institutions file” a report “for each deposit,

withdrawal, exchange of currency, or other payment

or transfer ‘which involves a transaction in currency

of more than $10,000.’” Id. at 39.

Shultz is not on point for two reasons. First,

Shultz did not address Congress’ constitutional

authority to enact the Bank Secrecy Act, only “the

Act’s asserted violation of specific constitutional

prohibitions,” the First, Fourth, and Fifth

Amendments. Id. at 30, 44. Second, Shultz also

illustrates the CTA’s over-inclusiveness problem:

unlike the challenged disclosure requirements in

Shultz, the CTA regulates most State entities, not just

entities that move in commerce.

The reporting and record-keeping requirements

at issue in Shultz were upheld largely because they

governed negotiable instruments and money actually

moving in foreign and interstate commerce. As the

Shultz Court concluded, Congress “was not limited to

any one particular approach to effectuate its concern

that negotiable instruments moving in the channels of

[interstate] commerce were significantly aiding

criminal enterprise.” Id. at 46. Further, the BSA’s

requirements were imposed on banks, not bank

customers, because “Congress recognized that the use

of financial institutions, both domestic and foreign, in

furtherance of activities designed to evade the

App-48

regulatory mechanisms of the United States, had

markedly increased.” Id. at 38.

In sum, Shultz doesn’t stand for the principle that

Congress may regulate an entire class whenever some

sub-class engages in commerce; Shultz affirms that

Congress may regulate a class’s use of the channels

and instrumentalities of commerce based on the

activities of a sub-class. That is why Congress “could

have made the transmission of the proceeds of any

criminal activity by negotiable instruments in

interstate or foreign commerce a separate criminal

offense . . . [or] required that each individual engaging

in the sending of negotiable instruments through the

channels of commerce maintain a record of such

action.” Id. at 47 (emphasis added). But that is as far

as Shultz goes.

American Power & Light Co. v. Sec. & Exch.

Comm’n further proves the point. 329 U.S. 90 (1946).

There, two public utility holding companies

challenged congressional authority to enact the Public

Utility Holding Act, which authorized the Securities

and Exchange Commission to require holding

companies and their subsidiaries to ensure that their

structure “d[id] not unduly or unnecessarily

complicate the structure, or unfairly or inequitably

distribute voting power among security holders.” Id.

at 97. Both plaintiffs in American Power & Light were

part of the same corporate structure, composed of an

umbrella corporation, five sub-holding companies

(including the plaintiffs), and 237 “direct and indirect

subsidiaries.” Id. at 95-96. This “vast system

embrace[d] utility properties in no fewer than 32

App-49

states from New Jersey to Oregon and from Minnesota

to Florida, as well as in 12 foreign countries.” Id. at 98.

The Supreme Court affirmed the constitutionality

of the act, noting first that the challenged statute was

“directed solely to public utility holding company

systems that use[d] the channels of interstate

commerce.” 329 U.S. at 100. The Court held that:

Congress, of course, has undoubted power

under the commerce clause to impose

relevant conditions and requirements on

those who use the channels of interstate

commerce so that those channels will not be

conduits for promoting or perpetuating

economic evils. Thus to the extent that

corporate business is transacted through such

channels, affecting commerce in more states

than one, Congress may act directly with

respect to that business to protect what it

conceives to be the national welfare. It may

prescribe appropriate regulations and

determine the conditions under which that

business may be pursued.

Id. at 99-100 (emphasis added) (citations omitted).

Thus, the Government misses the mark when it

argues that the Commerce Clause allows Congress to

regulate an entire class just because some members of

the class use the channels and instrumentalities of

commerce. The shared principle between Shultz and

American Power & Light Co. is that Congress may

“regulate the channels and instrumentalities of

commerce . . . to prohibit their use for harmful

purposes, even if the targeted harm itself occurs

outside the flow of commerce and is purely local in

App-50

nature.” United States v. Ballinger, 395 F.3d 1218,

1226 (11th Cir. 2005) (affirming Congressional power

to prohibit destruction of religious property “in or

affect[ing] interstate or foreign commerce.”). The

Commerce Clause thus allows Congress to regulate

“commerce to the extent of forbidding and punishing

the use of such commerce,” but no further. Brooks v.

United States, 267 U.S. 432, 436 (1925) (emphasis

added).

These cases also illustrate how easily Congress

could have written the CTA to pass constitutional

muster. For instance, nothing in Shultz or American

Power & Light Co. would bar Congress from imposing

the CTA’s disclosure requirements on State entities as

soon as they engaged in commerce, or from prohibiting

the use of interstate commerce to launder money,

“evade taxes, hide . . . illicit wealth, and defraud

employees and customers.” Beneficial Ownership

Information Reporting Requirements, 87 Fed. Reg. at

59,501. Indeed, Congress has already done so in

countless other statutes. See, e.g., 18 U.S.C. § 1343

(criminalizing the communication of information “in

interstate or foreign commerce” for the purpose of wire

fraud).

But that is not what the CTA does. Because the

CTA

doesn’t

regulate

the

channels

and

instrumentalities of commerce or prevent their use for

a specific purpose, it cannot be justified as a valid

regulation of those channels and instrumentalities.

b) Substantial effect on Interstate

and Foreign Commerce

The Government also says that the CTA is within

Congress’ commerce power because “Congress

App-51

rationally concluded that the ability of certain legal

entities to withhold beneficial ownership and

applicant information, taken in the aggregate,

substantially affects interstate commerce.” (Doc. 24-1

at 29) (cleaned up). Indeed, Congress has broad

Commerce Clause power “extend[ing] to activities that

have a substantial effect on interstate commerce,”

including “activities that do so only when aggregated

with similar activities of others.” NFIB, 567 U.S. at

549 (internal quotation marks omitted).

In brief, this “substantial effects” doctrine allows

Congress to regulate purely intrastate, non-economic

activity that (1) has a substantial effect on interstate

commerce in the aggregate, when (2) the regulation is

in the service of a comprehensive statute that

regulates commercial activity on its face, and

(3) regulation of the non-economic, non-commercial

activity is necessary to make the broader regulation

effective. Yet even under this expansive doctrine, the

Commerce Clause does not extend far enough to

sanction the CTA.

First, the future activities of state entities are not

enough to invoke Congress’ “substantial effects”

commerce powers. Even a near certainty of future

conduct is insufficient—“[t]he Commerce Clause is not

a general license to regulate an individual from cradle

to grave, simply because he will predictably engage in

particular transactions.” NFIB, 567 U.S. at 557.

Congress may “anticipate the effects on commerce of

an economic activity,” but it has never been

“permitted . . . to anticipate that activity itself in order

to regulate individuals not currently engaged in

commerce.” NFIB, 567 U.S. at 549. The Supreme

App-52

Court’s commerce-clause jurisprudence has always

“involved preexisting economic activity.” Id.

If future activities are off the table, a substantial

effects justification for the CTA is limited to two

possibilities: either (1) entity formation itself is a

commercial activity that substantially affects

interstate commerce, or (2) the fact that “many

entities subject to the CTA do engage in interstate

commercial activity” is enough to extend the

Commerce power to a regulation of incorporated

entities. (Doc. 24-1 at 30) (emphasis added). The

Government wisely hangs its hat on the latter option

and concedes that “[i]t is the activities of these

entities, not the mere fact that they submitted

documents to a Secretary of State, that implicates the

Commerce Clause and permits Congress to exercise its

authority.” (Doc. 40 at 12).

That brings us to the central question: Does

Congress have authority under the Commerce Clause

to regulate non-commercial, intrastate activity when

“certain entities, which have availed themselves of

States’ incorporation laws, use the channels of

commerce, and their anonymous operations

substantially affect interstate and foreign commerce?”

(Doc. 40 at 11). The Supreme Court’s Commerce

Clause decisions all point to the same conclusion: No.

For starters, “the most telling indication of [a]

severe constitutional problem . . . is the lack of

historical precedent’ for Congress’s action.” NFIB, 567

U.S. at 549. The Court cannot find, and the parties

have not identified, any other State or federal law like

the CTA. The Government correctly points out that

Congress routinely requires entities to submit

App-53

information to the government without a suspicion of

wrongdoing, but the cases it cites in support are not

on point. (Doc. 40 at 11) (citing Helvering v. Mitchell,

303 U.S. 393, 399 (1938) (upholding statute

criminalizing tax evasion as an exercise of Congress’

enumerated taxing power); and Elec. Bond & Share

Co. v. SEC, 303 U.S. 419, 432-33, 437 (upholding

public utility holding company regulation where

petitioners conceded that their corporate structure

and operations “involve[d] continuous and extensive

use of the mails and instrumentalities of interstate

commerce.”)).

Furthermore, “[i]n addition to being a historical

anomaly,” Seila L. LLC v. Consumer Fin. Prot.

Bureau, 140 S. Ct. 2183, 2202 (2020), the CTA runs

into trouble because it is not a facial regulation of

commercial activity, a hallmark of valid substantial

effects legislation. United States v. Morrison, 529 U.S.

598, 613 (2000). As already noted, the Government

concedes that “submitt[ing] documents to a Secretary

of State” does not “implicate[] the Commerce Clause.”

(Doc. 40 at 12). Thus, the Government’s real argument

is that the connection between the act of incorporation

and the activities Congress sought to curb through the

CTA is strong enough to “permit[] Congress to exercise

its authority.” Id. But the connection between

incorporation and criminal activity is far too

attenuated to justify the CTA. Indeed, if such an

attenuated connection were enough, Congress’

commerce powers would be functionally limitless.

The Supreme Court’s decision in United States v.

Morrison is helpful on this point: Congress, it said, can

validly regulate intrastate activity where the

App-54

regulated activity is “economic in nature.” Morrison,

529 U.S. at 613. The Morrison Court considered a

challenge to a provision of the Violence Against

Women Act that “provide[d] a federal civil remedy for

the victims of gender-motivated violence” without

requiring “a prior criminal complaint, prosecution, or

conviction to establish the elements of a cause of

action.” Morrison, 529 U.S. at 601-02, 606 (2000).

In defense of the law, the government asserted

that it fell within Congress’ substantial effects

commerce power, arguing that “gender-motivated

violence affect[ed] interstate commerce by deterring

potential victims from traveling interstate, from

engaging in employment in interstate business, and

from transacting with business, and in places involved

in interstate commerce; [and] by diminishing national

productivity, increasing medical and other costs, and

decreasing the supply of and the demand for interstate

products.” Morrison, 529 U.S. at 615 (cleaned up).

The Morrison Court rejected the government’s

substantial effects justification, in large part because

“the but-for causal chain from the initial occurrence of

violent crime . . . to every attenuated effect upon

interstate commerce” would expand Congress’ power

far beyond constitutional boundaries. Id. The chief

indicator of this excessive attenuation was that “[i]f

accepted, [the government’s] reasoning would allow

Congress to regulate any crime as long as the

nationwide, aggregated impact of that crime has

substantial effects on employment, production,

transit, or consumption.” Id.

The Morrison Court also observed that although

there is no “categorical rule against aggregating the

App-55

effects of any noneconomic activity in order to decide

these cases,” the Supreme Court has “upheld

Commerce Clause regulation of intrastate activity

only where that activity is economic in nature.” Id. at

613. And because “[g]ender-motivated crimes of

violence are not, in any sense of the phrase, economic

activity,” the Court concluded that aggregation of

effects was not permissible. Id.

Finally, as the Supreme Court later explained, the

cause of action created by the Violence Against

Women Act at issue in Morrison was “unconstitutional

because . . . it did not regulate economic activity.”

Raich, 545 U.S. 1, 25 (distinguishing Morrison).

Morrison thus established a “clear pattern of analysis”

for Commerce Clause cases: “Where economic activity

substantially affects interstate commerce, legislation

regulating that activity will be sustained

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