Amicus Curiae Brief — National Small Business United, dba National Small Business Association, et al., Petitioners v. Scott Bessent, Secretary of the Treasury, et al.
Supreme Court briefMay 21, 2026
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No. 25-1201
In the Supreme Court of the United States
NATIONAL SMALL BUSINESS UNITED, d/b/a National
Small Business Association, et al.,
Petitioners,
V.
SCOTT BESSENT, in his official capacity as the Secretary
of the United States Department of the Treasury, et al.,
Respondents.
——————
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
BRIEF OF AMICI CURIAE STATE OF
WEST VIRGINIA AND 24 OTHER STATES
IN SUPPORT OF PETITIONERS
JOHN B. MCCUSKEY
Attorney General
OFFICE OF THE
WEST VIRGINIA
ATTORNEY GENERAL
State Capitol Complex
Building 1, Room E-26
Charleston, WV 25306
mwilliams@wvago.gov
(304) 558-2021
MICHAEL R. WILLIAMS
Solicitor General
Counsel of Record
HOLLY J. WILSON
Principal Deputy Solicitor
General
MATTIE SHULER
Assistant Solicitor General
Counsel for Amicus Curiae State of West Virginia
II
TABLE OF CONTENTS
Introduction and Interests of Amici Curiae ..................... 1
Summary of Argument ........................................................ 2
Reasons for Granting the Petition...................................... 3
I.
The CTA upends the federal-state balance ............ 3
II. The Eleventh Circuit unleashed unlimited
federal commerce power ......................................... 10
III. The States will suffer ............................................... 15
Conclusion ........................................................................... 23
III
TABLE OF AUTHORITIES
Page(s)
Cases
Ams. for Prosperity Found. v. Bonta,
594 U.S. 595 (2021) ....................................................... 14
Bond v. United States,
572 U.S. 844 (2014) ..................................................... 7, 9
Burwell v. Hobby Lobby Stores, Inc.,
573 U.S. 682 (2014) ....................................................... 12
Chi. Title & Tr. Co. v. Forty-One ThirtySix Wilcox Bldg. Corp.,
302 U.S. 120 (1937) ......................................................... 5
Cort v. Ash,
422 U.S. 66 (1975) ........................................................... 5
CTS Corp. v. Dynamics Corp. of Am.,
481 U.S. 69 (1987) ............................................... 1, 2, 5, 8
Edgar v. MITE Corp.,
457 U.S. 624 (1982) ......................................................... 5
Garcia v. San Antonio Metro.
Transit Auth.,
469 U.S. 528 (1985) ......................................................... 7
Gonzales v. Raich,
545 U.S. 1 (2005) ........................................................... 11
Gregory v. Ashcroft,
501 U.S. 452 (1991) ..................................................... 6, 7
Haaland v. Brackeen,
599 U.S. 255 (2023) ......................................................... 9
IV
Heart of Atlanta Motel, Inc. v.
United States,
379 U.S. 241 (1964) ....................................................... 11
Helvering v. Nw. Steel Rolling Mills,
311 U.S. 46 (1940) ........................................................... 4
Murphy v. NCAA,
584 U.S. 453 (2018) ......................................................... 9
NFIB v. Sebelius,
567 U.S. 519 (2012) ....................................... 3, 11, 12, 14
NLRB v. Jones & Laughlin Steel Corp.,
301 U.S. 1 (1937) ........................................................... 13
Printz v. United States,
521 U.S. 898 (1997) ....................................................... 21
Sackett v. EPA,
598 U.S. 651 (2023) ......................................................... 7
U.S. Forest Serv. v. Cowpasture River
Pres. Ass’n,
590 U.S. 604 (2020) ..................................................... 2, 7
United States v. Bass,
404 U.S. 336 (1971) ......................................................... 7
United States v. Lopez,
514 U.S. 549 (1995) ....................................... 3, 11, 13, 15
United States v. Morrison,
529 U.S. 598 (2000) ................................................... 3, 15
West Virginia v. EPA,
597 U.S. 697 (2022) ......................................................... 7
Wickard v. Filburn,
317 U.S. 111 (1942) ................................................... 3, 11
Will v. Mich. Dep’t of State Police,
491 U.S. 58 (1989) ........................................................... 6
V
Constitutional Provisions & Statutes
U.S. CONST. amend. X .......................................................... 4
U.S. CONST. art. I, § 8, cl. 3................................................ 10
31 U.S.C. § 5336 ..................................... 1, 3, 9, 12, 18, 19, 21
Other Authorities
Allen D. Boyer,
Federalism and Corporation Law:
Drawing the Line in State Takeover
Regulation,
47 OHIO ST. L.J. 1037 (1986) ...................................... 4, 6
Beneficial Ownership Information
Reporting Requirement Revision and
Deadline Extension,
90 Fed. Reg. 13,688 (Mar. 26, 2025) ............................ 18
Beneficial Ownership Information
Reporting Requirements,
87 Fed. Reg. 59,498 (Sept. 30, 2022) ............ 1, 3, 15, 16,
17, 18, 19
Business and Charities Scams,
COMMONWEALTH OF PA.,
https://perma.cc/TU3E-DL7W (last
visited May 20, 2026) .................................................... 22
Carl W. Mills,
Breach of Fiduciary Duty as Securities
Fraud: Sec v. Chancellor Corp.,
10 FORDHAM J. CORP. & FIN. L. 439
(2005) ................................................................................ 6
VI
CLYDE WAYNE CREWS, JR.,
COMPETITIVE ENTER. INST., TEN
THOUSAND COMMANDMENTS: AN
ANNUAL SNAPSHOT OF THE FEDERAL
REGULATORY STATE (2022) ......................................... 20
David B. Simpson,
Does Federalism Provide A Means to
Circumvent Citizens United?,
20 U.C. DAVIS BUS. L.J. 253 (2020) ............................... 4
Dustin Chambers et al.,
How Do Federal Regulations Affect
Consumer Prices? An Analysis of the
Regressive Effects of Regulation, 180
PUB. CHOICE 57 (2019) ................................................. 20
Entrepreneurship,
W. VA. ECON. DEV.,
https://perma.cc/HHB5-SVLJ (last
visited May 20, 2026) .................................................... 19
Erin C. Blondel,
The Structure of Criminal Federalism,
98 NOTRE DAME L. REV. 1037 (2023) ........................... 8
Jeffrey J. Polich,
Judicial Review and the Small
Business Regulatory Enforcement
Fairness Act,
41 WM. & MARY L. REV. 1425 (2000) .......................... 20
Kevin L. Shepherd,
Compliance with the New Reporting
Regulations Under the Corporate
Transparency Act,
PRAC. REAL EST. LAW., Jan. 2024 ................................ 7
VII
Letter from Josh McLeod,
Fed. Gov’t Rels. Dir., NFIB, to French
Hill, Chairman, and Maxine Waters,
Ranking Member, House Fin. Servs.
Comm. (Mar. 17, 2026),
https://perma.cc/CU6Y-9V7F ............................... 19, 22
Matthew B. Edwards & D. Parker Baker
III,
The Basic Ins and Outs of the
Corporate Transparency Act,
S.C. LAW., Sept. 2023 ................................................... 18
Michel Rosenfeld,
Law As Discourse: Bridging the Gap
Between Democracy and Rights
Between Facts and Norms,
108 HARV. L. REV. 1163 (1995) .................................... 12
MISS. SEC’Y OF STATE,
BOI FILING SCAMS ALERT (2024) .............................. 22
OFF. OF ADVOC.,
U.S. SMALL BUS. ADMIN.,
2025 SMALL BUSINESS PROFILE ̶ IOWA,
https://perma.cc/8RU3-8EBJ...................................... 19
Press Release,
FinCEN, FinCEN Warns of Fraud
Schemes That Abuse Its Name,
Insignia, and Authorities for
Financial Gain (Dec. 18, 2024),
https://perma.cc/GEE9-EAJQ .................................... 22
RECORDS OF THE FEDERAL CONVENTION
OF 1787 (M. Farrand ed., 1911) ..................................... 4
VIII
Richard J. Pierce, Jr.,
The Combination of Chevron and
Political Polarity Has Awful Effects,
70 DUKE L.J. ONLINE 91 (2021) .................................. 20
The Corporate Transparency Act Sounds
Harmless. It's Not.,
WASH. POST (Apr. 19, 2026),
https://perma.cc/U9HV-LG5B .................................... 18
U.S. Chamber of Com.,
Comment letter on Proposed Rule
regarding Beneficial Ownership
Reporting Requirements (Dkt. No.
FINCEN-2021-0005), at 3 (May 7,
2021), https://perma.cc/ER3H-5WY5 ......................... 16
U.S. SMALL BUS. ADMIN.,
FREQUENTLY ASKED QUESTIONS
ABOUT SMALL BUSINESS (2024),
https://perma.cc/YUN4-UCX2 .................................... 20
William E.H. Quick,
The Corporate Transparency Act: A
New Federal Reporting Obligation
That Impacts Almost Everyone,
79 J. MO. B. 270 (2023) ............................................... 8, 9
William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal
Year 2021, Pub. L. No. 116-283,
§ 6402(5)(A), 134 Stat. 3388, 4604 ................................. 8
INTRODUCTION AND INTERESTS
OF AMICI CURIAE1
States create corporations. Historically, Congress has
not. And this Court has agreed Congress should not.
Rightly so. The Framers debated giving Congress federal
chartering power at the Constitutional Convention. But
they voted it down. The Tenth Amendment then locked in
the choice to make States the primary charterers. And for
more than two centuries, through every expansion of
federal regulatory power, Congress seemingly respected
the line the Framers drew. Looking back on that long arc,
this Court put it plainly: “[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).
The Corporate Transparency Act takes a major swipe
at the States’ traditional authority. The moment a small
business files papers with a State’s Secretary of State, the
CTA conscripts its owners to turn over sensitive personal
information for a federal law enforcement database; it
threatens criminal penalties for anyone who hesitates. 31
U.S.C. § 5336(b), (h). None of these requirements turn on
whether the entity has, does, or ever will engage in
interstate commerce.
The trigger is the act of
incorporation alone. So millions of state-chartered
entities and tens of millions of state citizens are swept in
on that sole basis, at a first-year cost of more than 118
million work-hours and billions of dollars. Beneficial
Ownership Information Reporting Requirements, 87
Fed. Reg. 59,498, 59,549, 59,581-82 (Sept. 30, 2022). And
Under Supreme Court Rule 37.2, amici timely notified counsel of
record of their intent to file this brief.
1
2
the federal government becomes the new corporate
recordkeeper.
The States get hit hard. Their residents and small
businesses absorb the burden, and their agencies are
drafted into the federal reporting scheme. But most
fundamentally, the Act quietly redraws States’
constitutional authority over the entities they alone bring
into being.
It bakes new requirements into the
state-controlled corporate formation process. And the
Eleventh Circuit has, for the first time, placed every
state-chartered entity in America within Congress’s
reach. Its decision that corporate formation is commerce
has no limit: every company in America—active or
dormant, commercial or charitable, for-profit or not—is
now open to federal control from cradle to grave. That
sweeping conception of the commerce power invites
Congress to treat every other creature of state law the
same way.
The Court should grant the petition.
SUMMARY OF ARGUMENT
I. States form (and largely regulate) domestic
corporations. This Court has said so for over a century:
corporations are “entities whose very existence and
attributes are a product of state law.” CTS Corp., 481 U.S.
at 89. And out of respect for state sovereignty, this
Court’s precedents demand that Congress speak with
“exceedingly clear” language before intruding on
traditional state domains like corporate formation. U.S.
Forest Serv. v. Cowpasture River Pres. Ass’n, 590 U.S.
604, 622 (2020). Federalism should drive the analysis—
but the Eleventh Circuit didn’t seem to think so. The
court didn’t engage with federalism at all, even though the
CTA is an unprecedented federal power grab. And had it
3
earnestly searched for the clear statement required to
shift traditional state power, it would have come up empty.
That absence should have been enough to decide this case.
II. The Eleventh Circuit’s reasoning opens the door to
unlimited federal commerce power. By holding that every
state-chartered entity is, by virtue of incorporation,
engaged in federally regulable “economic activity,” the
Eleventh Circuit pushed Wickard v. Filburn, 317 U.S. 111
(1942), past its breaking point. It collapsed the line NFIB
v. Sebelius, 567 U.S. 519 (2012), drew between activity and
inactivity. And it rendered landmark decisions like
United States v. Lopez, 514 U.S. 549 (1995), and United
States v. Morrison, 529 U.S. 598 (2000), meaningless. Left
unchecked, the decision will justify federal regulation of
nearly any state-created entity or status that might
somehow, someday touch commerce.
III. For the States, the stakes are high. FinCEN
projects millions of compliance hours and billions of
dollars in first-year costs, falling heaviest on the small
businesses that are the engines of state economies. 87
Fed. Reg. at 59,573, 59,581-82. Congress expects State
agencies to work for free, too, under the CTA’s
cooperation mandates. 31 U.S.C. § 5336(d)(2), (e)(2)(A),
(j). More, CTA-related fraud schemes have already
surfaced targeting States’ residents. And every day that
the CTA remains on the books, these injuries compound.
REASONS FOR GRANTING THE PETITION
I.
The CTA upends the federal-state balance.
Without considering the federalism principles that
should have framed the analysis from the start, the
Eleventh Circuit endorsed the CTA’s sweeping
conception of congressional power over corporations.
4
That choice was a mistake. This Court should grant the
petition to put States back in the driver’s seat—where
they belong.
A. Corporations have been grounded in state law since
the Founding. At the Constitutional Convention, the
Framers proposed giving Congress the power to grant
federal charters of incorporation. 2 RECORDS OF THE
FEDERAL CONVENTION OF 1787, at 325 (M. Farrand ed.,
1911). The delegates rejected the proposals. The
prevailing voices warned that a federal chartering power
would “prejudice[]” and “divide[]” the States and permit
the creation of nationwide “monopolies of every sort.” Id.
at 615-16. The Framers made their choice deliberately,
even understanding “that leaving 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).
They were “more reluctant … to allow
concentrations of economic power, which they visualized
as a government-sponsored monopoly.” Id.
The Tenth Amendment later confirmed the point. It
reserves to the States the powers not delegated to the
United States. See U.S. CONST. amend. X. And because
federal chartering was not, in fact, delegated to the United
States, that power stayed with the States. See David B.
Simpson, Does Federalism Provide A Means to
Circumvent Citizens United?, 20 U.C. DAVIS BUS. L.J.
253, 257 (2020); see also, e.g., Helvering v. Nw. Steel
Rolling Mills, 311 U.S. 46, 53 (1940) (noting the argument
that a statute “violate[d] the Tenth Amendment because
it interfere[d] with the authority of the states to prescribe
the powers of corporations and the conditions under which
their powers may be exercised,” though finding the
5
statute ultimately
corporations).
did
not
limit
the
powers
of
Corporations were creatures of state law in 1789 and
remain creatures of state law today. Every modern
business entity in America—the public corporation, the
limited liability company, the professional association, the
closely held family business—has a state charter. After
all, “[a] private corporation in this country can exist only
under the express law of the state or sovereignty by which
it was created.” Chi. Title & Tr. Co. v. Forty-One ThirtySix Wilcox Bldg. Corp., 302 U.S. 120, 124-25 (1937). That
framework was chosen by the Framers, ratified by the
people, and preserved across every expansion of federal
regulatory authority since.
This Court reinforced this well-known rule in two
centuries-worth of decisions. “Corporations are creatures
of state law,” one decision stressed. Cort v. Ash, 422 U.S.
66, 84 (1975). Regulation of “internal [corporate] affairs”
has been “traditionally relegated to state law in an area of
primarily state concern.” Id. at 67, 84. “No principle of
corporation law and practice is more firmly established
than a State’s authority to regulate domestic
corporations.” CTS Corp., 481 U.S. at 89. And Justice
Scalia put it more plainly still: regulating the governance
of state-chartered companies “is a traditional state
function with which the Federal Congress has never, to
my knowledge, intentionally interfered.” Id. at 96 (Scalia,
J., concurring in part).
So States create corporations, define what they are,
and set the terms on which they exist. “[O]nly one
State”—and by extension, one sovereign authority—
“should have the authority to regulate a corporation’s
internal affairs.” Edgar v. MITE Corp., 457 U.S. 624, 645
6
(1982). That’s the State that brought the corporation into
being.
This understanding has remained over “heated
debate” that competition among States was creating a
“race to the bottom” or, maybe, a “race to the top.” Carl
W. Mills, Breach of Fiduciary Duty as Securities Fraud:
Sec v. Chancellor Corp., 10 FORDHAM J. CORP. & FIN. L.
439, 448 (2005); Boyer, supra, at 1037-38. No matter who’s
right, it’s a feature—not a glitch—that States get to
choose their own course. Our constitutional system
reflects the judgment that the States’ ability to adopt
“alternative solutions to the many difficult regulatory
problems that arise in corporate law” is valuable—and
“cannot be adequately replaced by a uniform federal
standard.” Mills, supra at 498 (quoting Stephen M.
Bainbridge, The Creeping Federalization of Corporate
Law, REGULATION (Spring 2003), at 26, 27-28).
Federalism, in this domain, is an uninterrupted,
two-hundred-year practice that must be honored.
B. When a federal statute strikes at the heart of state
authority—like the CTA does—this Court’s precedents
require more than a post-hoc rationale. Even if one
assumes that Congress does have the power to act,
Congress still must speak with “unmistakably clear”
language before it upsets the federal-state balance. Will
v. Mich. Dep’t of State Police, 491 U.S. 58, 65 (1989)
(cleaned up). And reviewing courts must begin the
analysis by asking whether Congress has done so. See
Gregory v. Ashcroft, 501 U.S. 452, 460 (1991). “Congress’s
ability to legislate in areas traditionally regulated by the
States is an extraordinary power in a federalist system, so
courts must assume Congress does not exercise that
power lightly.” Id. (cleaned up). To “place [its] intent
beyond dispute,” Congress must use “exceedingly clear”
7
language. U.S. Forest Serv., 590 U.S. at 621-22. Congress
must announce its understanding that it is striking at
other sovereigns. Short of that, statutes “will not be
deemed to have significantly changed” the constitutional
“balance” favoring the States’ traditional zones of
authority. United States v. Bass, 404 U.S. 336, 349 (1971);
see, e.g., Sackett v. EPA, 598 U.S. 651, 679-80 (2023)
(holding that “overly broad” reading of Clean Water Act
would “impinge on” “traditional state authority” without
clear statement).
The clear-statement principle does not stand alone. It
exists because “the sovereignty of the States is limited by
the Constitution itself,” Garcia v. San Antonio Metro.
Transit Auth., 469 U.S. 528, 548 (1985), and because “the
background principle[s]” of federalism are “grounded in
the very structure of the Constitution” and “protect[] the
liberty of the individual from arbitrary power,” Bond v.
United States, 572 U.S. 844, 862-63 (2014) (cleaned up).
“In the tension between federal and state power lies the
promise of liberty.” Gregory, 501 U.S. at 459. So, the
clear-statement rule isn’t a judicial hallucination; it is a
structural guarantee.
This Court understands why it matters that federal
power not crowd out the States. Time and again, this
Court has reminded that “more local” governance is
“more accountable” governance—an accountability that
federal uniformity displaces. West Virginia v. EPA, 597
U.S. 697, 739 (2022) (Gorsuch, J., concurring) (cleaned up).
C. The CTA overtakes too much state-law ground with
too little authority.
Congress chose to “embrace a reporting regime where
the federal government, not the states, would collect, hold,
and share beneficial ownership information.” Kevin L.
8
Shepherd, Compliance with the New Reporting
Regulations Under the Corporate Transparency Act,
PRAC. REAL EST. LAW., Jan. 2024, at 3, 6. And it shifts to
the federal level “oversight to the regulation of business
entities and their operations” that “traditionally has
resided with U.S. states.” William E.H. Quick, The
Corporate Transparency Act: A New Federal Reporting
Obligation That Impacts Almost Everyone, 79 J. MO. B.
270, 273 (2023).
Consider the CTA’s purpose. Congress announced its
“sense” that it was imposing “a clear, Federal standard for
incorporation practices.” William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021,
Pub. L. No. 116-283, § 6402(5)(A), 134 Stat. 3388, 4604
(statutory note to 31 U.S.C. § 5336). But given that the
first rule of corporate law is that States, not Congress,
“regulate domestic corporations,” CTS Corp., 481 U.S. at
89, the CTA starts on shaky ground.
Congress’s other justifications—money-laundering
enforcement and compliance with international
anti-money-laundering standards, Pub. L. No. 116-283,
§ 6402(5)(D)–(E), 134 Stat. 3388, 4604—don’t help. The
statute applies to corporate entities the moment they
come into existence—before they begin handling money
or engaging in commerce. And anyway, when it comes to
law enforcement, the States are not Congress’s junior
partner in addressing such activities. Quite the opposite.
It’s the States who have “near-complete autonomy,
historical primacy, and enormous
institutional
advantages.” Erin C. Blondel, The Structure of Criminal
Federalism, 98 NOTRE DAME L. REV. 1037, 1099 (2023).
This Court has recognized as much: Congress cannot
lightly “convert[] an astonishing amount of traditionally
local criminal conduct into a matter for federal
9
enforcement.” Bond, 572 U.S. at 863 (cleaned up). Yet,
the CTA does exactly that. And it does so on a staggering
scale. “Despite the limited number of bad actors who form
the target of the CTA, the law casts a very wide net”—so
wide that “[m]uch of the business community swept into”
it “will be unwitting and innocent bycatch.” Quick, supra,
at 271. And the consequences for these many entities are
huge. The law’s “reporting obligations” “touch on the
sensitive issue of personal anonymity historically enjoyed
by U.S. beneficial owners.” Quick, supra, at 273. Too, the
Act creates new risks of serious civil and criminal
penalties, including thousands in fines and penalties and
up to two years in prison, for the thousands of reporting
companies doing legal business in the States.
The CTA also treads into dangerous Tenth
Amendment territory. The Act orders all state agencies
to “cooperate with and provide information requested by
FinCEN” for purposes of administering the federal
beneficial ownership database. 31 U.S.C. § 5336(d)(2).
That mandate is not optional. So the CTA—at a
minimum—rubs up against the anticommandeering
doctrine. See Murphy v. NCAA, 584 U.S. 453, 473 (2018);
Haaland v. Brackeen, 599 U.S. 255, 281 (2023). It
certainly doesn’t respect the traditional state authority
over corporate formation preserved in the amendment.
The Eleventh Circuit ignored all these federalism red
flags, though. Faced with a statute that reaches every
state-chartered entity in America, the Eleventh Circuit
focused entirely on the Commerce Clause. The court
asked whether the CTA regulated “economic activity,”
App.10, answered yes, and held the statute constitutional
on that basis. Whether Congress must respect the
structural line between what the States create and what
Congress regulates did not figure into the analysis. The
10
court’s opinion does not mention the Tenth Amendment.
It does not discuss state sovereignty. It does not pause on
the Framers’ decision to withhold federal chartering
power. See App.1-20. And even assuming congressional
authority, it does not identify a clear statement reflecting
Congress’s knowing and intentional choice to upend
traditional state control in this field. (If anything, the
context—in which the provision was tucked into the
otherwise non-germane National Defense Authorization
Act—suggests the bill’s seismic effects were not so
knowing, really.)
The result is a constitutional holding that rests on half
an analysis. A federal court of appeals cannot nationalize
a traditional state domain by reasoning backward from
the Commerce Clause. The federalism question is the
first question, not the last. And the Eleventh Circuit’s
failure to ask it at all is reason enough to grant review.
II.
The Eleventh Circuit unleashed unlimited
federal commerce power.
The Eleventh Circuit’s focus on corporate existence
did more than just disadvantage state power. In
concluding that state incorporation equates to “economic
activity,” the Eleventh Circuit also handed Congress
plenary authority over every entity States create. No
decision of this Court compels that result. Many foreclose
it.
A. Article I, Section 8, Clause 3 of the Constitution
grants Congress power “[t]o regulate Commerce with
foreign Nations, and among the several States, and with
the Indian Tribes.” Broken down, Congress’s commerce
power thus includes “three broad categories”: (1) the “use
of the channels of interstate commerce,” (2) the
“instrumentalities of interstate commerce, or persons or
11
things in interstate commerce,” and (3) “those activities
that substantially affect interstate commerce.” Lopez, 514
U.S. at 558-59. Because the CTA reaches even purely
intrastate corporations (a point the Government
apparently concedes), this case could only implicate the
third category.
The substantial-effects test has always measured
Congress’ power against the ongoing conduct Congress
seeks to regulate. The “economic activity” in Wickard was
a farmer’s decision to grow wheat. 317 U.S. at 114. In
Raich, it was the cultivation and possession of marijuana.
Gonzales v. Raich, 545 U.S. 1, 18-19 (2005). In Heart of
Atlanta Motel, an inn was operating and refusing to serve
customers. Heart of Atlanta Motel, Inc. v. United States,
379 U.S. 241, 258 (1964). Each case asked: what is the
regulated party doing today, and is it economic? But the
Eleventh Circuit asked: what is the “nature” of the
regulated party, and can it be deemed commercial?
App.10.
By focusing heavily on the “nature” of the entity (and
not the activity), the Eleventh Circuit erased the line
drawn in NFIB v. Sebelius, 567 U.S. 519, 551-58 (2012)
(opinion of Roberts, C.J.). Sebelius saw that Congress’s
commerce power reaches “activity” only. It does not
reach inactivity. Id. at 551. The Commerce Clause
“presupposes the existence of commercial activity to be
regulated,” id. at 550, and Congress may not target
persons or entities “doing nothing,” id. at 555-56. The
“police power to regulate individuals as such, as opposed
to their activities, remains vested in the States.” Id. at
557. And it was not enough that individuals would be
forced to engage with the health system—and thus face
the consequences of their choice not to buy insurance—in
the future. Id. at 547 (“Everyone will eventually need
12
health care at a time.”). The joint dissent was even more
pointed: Congress has no commerce power to regulate
something “simply because it exists.” Id. at 658 (joint
dissent).
Yet the CTA regulates even entirely dormant
corporations. It compels “any reporting company” that is
“formed or registered” under state law to submit
beneficial ownership information to FinCEN—without
regard to whether that entity is engaged in any
preexisting economic activity. 31 U.S.C. § 5336(b)(1)(A)–
(D). The statute defines a “reporting company” as an
entity “created by the filing of a document” with state
authorities, id. § 5336(a)(11)(A)(i). So, it regulates statechartered entities “simply because [they] exist[],” NFIB,
567 U.S. at 658 (joint dissent)—and for no other reason.
Just as people can’t be subject to congressional power
merely because they exist as potential market
participants, corporations can’t, either. Cf. Burwell v.
Hobby Lobby Stores, Inc., 573 U.S. 682, 706 (2014) (“A
corporation is simply a form of organization used by
human beings to achieve desired ends.”).
The Eleventh Circuit found some regulable activity
only by employing a transitive chain of reasoning that the
Court has never adopted: a corporate entity can be
important to business, and business activity comprises
economic activity, so the entity is economic. App.9-11. But
even the “run-of-the-mill criminal” activity that the
Eleventh Circuit conceded does not fall within Congress’s
reach would become “economic” activity, App.9, as safety
and rules are an essential part of economic markets, too.
After all, “without … criminal laws penalizing interference
with property and contract rights, there could be no largescale functioning market economy.” Michel Rosenfeld,
Law As Discourse: Bridging the Gap Between Democracy
13
and Rights Between Facts and Norms, 108 HARV. L. REV.
1163, 1173 (1995). But that was the Lopez dissent’s view—
not the reading that won out. See Lopez, 514 U.S. at 63031 (Breyer, J., dissenting) (discussing economic
consequences of crime).
In the end, under the Eleventh Circuit’s view, a
corporation is thought to be engaged in regulable
economic activity not because it is doing anything—but
because it simply is. A dormant LLC with no revenue, no
employees, and no business is just as “economic” as a
Fortune 500 company. The commercial “nature” of the
corporate form, on the Eleventh Circuit’s account,
attaches at incorporation and never lets go. App.10.
Considering Sebelius, that conclusion is wrong.
B. The error is not merely academic. Congress’s
commerce power is not limitless, and courts evaluate
purported exercises “in the light of our dual system of
government.” NLRB v. Jones & Laughlin Steel Corp.,
301 U.S. 1, 37 (1937). Congress may not extend its power
“so as to embrace effects upon interstate commerce so
indirect” as to “effectually obliterate the distinction
between what is national and what is local.” Id. The
Eleventh Circuit’s test ignores this principle, and the
consequences of leaving it standing could be devastating
for the States.
The Eleventh Circuit’s reasoning has no principled
stopping point. If being a state-chartered entity amounts
to regulable economic activity, Congress’s commerce
power reaches every creature of state law—partnerships,
professional associations, cooperatives, charitable
nonprofits, religious organizations, and family trusts alike.
Each is state-chartered. Each has an ongoing existence it
maintains. Each fits the logic the Eleventh Circuit
endorsed. Under the decision below, Congress could
14
require federal reporting from state-chartered nonprofits,
governance restrictions on professional associations, or
operational disclosures from family trusts—each justified
on the same rationale that sustains the CTA. The limit
would not come from the Commerce Clause. It would
come from the political will of a particular Congress—and
even that check is temporary.
Never mind the
constitutional spillover effects that could result even
outside the question of Congress’s commerce power. See,
e.g., Ams. for Prosperity Found. v. Bonta, 594 U.S. 595,
619 (2021) (holding that compelled disclosure of nonprofit’s donors violated the First Amendment right to free
association).
The logic doesn’t stop there, though. The Eleventh
Circuit’s rationale would reach natural persons through
their state-granted statuses just as readily. Marriage
licenses, professional credentials, driver’s licenses, and
voter registrations are all state-issued.
Each is
maintained by its holder. Each could be characterized, on
the Eleventh Circuit’s reasoning, as enabling commerce in
the aggregate—marriages generate spending, credentials
permit work, licenses enable travel. This Court rejected
that kind of reasoning when it declined to treat the
healthcare individual mandate as regulation of the
commerce people would inevitably engage in “over the
course of their lives.” NFIB, 567 U.S. at 557 (Ginsburg,
J., concurring in part). The Eleventh Circuit’s logic, taken
seriously, would leave natural persons no more protected
from status-based federal regulation than the
corporations whose “nature” it deemed sufficient to
trigger Commerce Clause authority.
Justice Thomas warned of this slippery slope in Lopez.
Without a meaningful limit on the substantial-effects test,
he wrote, Congress would wield “a general police power”
15
extending to all aspects of American life. Lopez, 514 U.S.
at 584 (Thomas, J., concurring). The Eleventh Circuit’s
decision points to that destination. It accepts a theory of
commercial-status regulation with no discernible limit,
applies it to one of the oldest domains of state sovereignty
in our system, and clears the ground for the same logic to
apply to every other. Allowing that result would eliminate
“the distinction between what is national and what is local
and create a completely centralized government.” United
States v. Morrison, 529 U.S. 598, 608 (2000) (cleaned up).
The Eleventh Circuit’s Commerce Clause holding
cannot be reconciled with this Court’s precedent or the
enumerated-powers structure those decisions protect. It
makes status the trigger, existence the activity, and every
state-chartered entity permanently subject to federal
regulation. The Court should grant the petition to turn
that logic back.
III.
The States will suffer.
The constitutional questions before the Court arise
against concrete, daily harm to the States’ economies and
citizens. Those costs justify immediate intervention.
Even more so considering that the full scope of the CTA
could spring back to life with a change in the
administration or a single bad court decision against the
Interim Final Rule. Better to relieve these burdens for
good—now.
A. The CTA is a time-suck like no other. FinCEN
estimated the burden to file initial reports would range
between 90 minutes for reporting companies with a
“simple structure,” to 370 minutes for those with an
“intermediate structure,” to 650 minutes for those whose
structure is “complex.” 87 Fed. Reg. at 59,573. Those
estimates translated to 118,572,335 hours nationwide in
16
the CTA’s first year—followed by another 18,204,421
hours in its second. Id. at 59,581.
Bad enough as those admitted numbers are on their
own, they’re likely underestimates. For example, the time
FinCEN allotted for a reporting company with a “simple
structure” presumed that a single employee would handle
the task and would spend a mere 90 minutes to read and
“understand” the statutory and regulatory requirements
and definitions; “[i]dentify, collect, and review information
about beneficial owners and company applicants”; and “fill
out and file [the] report.” 87 Fed. Reg. at 59,573.
Expecting all that to happen well before lunch on a single
day is unrealistic—especially when a rush job could have
severe consequences.
Indeed, when it came to its rule implementing the
CTA, FinCEN had many public comments explaining how
its “estimated time burden … for filing initial reports was
unrealistically low given the complexity of the
requirements.” 87 Fed. Reg. at 59,553. As the U.S.
Chamber of Commerce explained, for instance,
“Disclosure of beneficial ownership is an entirely new
federal requirement, from an agency that most businesses
are unfamiliar with.” U.S. Chamber of Com., Comment
letter on Proposed Rule regarding Beneficial Ownership
Reporting Requirements (Dkt. No. FINCEN-2021-0005),
at 3 (May 7, 2021), https://perma.cc/ER3H-5WY5.
Another commenter explained, reasonably enough, “that
the 20[-]minute allotment to read the form and understand
the requirement from the initial report time estimate
should be increased to no fewer than 4.5 hours per report.”
87 Fed. Reg. at 59,553. Still another explained how
FinCEN’s estimates “are off by at least 400 percent and
quite likely several times that.” Id. at 59,554.
17
FinCEN’s already-faulty initial numbers didn’t even
include the time needed to apply for and update FinCEN
identifiers—the “unique identifying number[s] that
FinCEN will issue to individuals or reporting companies
upon request, subject to certain conditions.” 87 Fed. Reg.
at 59,507. Here, FinCEN estimated an additional time
burden of 110,553 hours in year one and 21,091 hours in
year two. Id. at 59,581. Then add to that the time to
update initial filings after circumstances like name and
address changes, identification number expirations,
beneficial owners who pass away, or “management
decision[s] resulting in a change in beneficial owner.” Id.
at 59,574. Companies must file updates within 30 calendar
days of each of these triggering circumstances, id. at
59,592, requiring (again, under FinCEN’s own and
questionably low estimates) yet another 7,657,096 hours in
year one, id. at 59,581. And unlike the other burdens, this
one goes up in future years: FinCEN estimated 16,826,105
hours will be needed the second year. Id.
The toll isn’t just time, though; it’s money, too.
FinCEN estimated each reporting company would
incur between $85.14 and $2,614.87 to file an initial report.
87 Fed. Reg. at 59,559. “If all 32,556,929 existing
reporting companies have to incur [that expense] in the
same single year, the aggregate cost … is approximately
$21.7 billion for Year 1” and $3.3 billion after. Id. at 59,559,
59,581. FinCEN thought updating reports would cost
another $3.3 billion the first two years. Id. at 59,581. Put
another way, complying with the CTA would impose
“undoubtedly significant costs of approximately $22.8
billion in the first year and $5.6 billion each year
thereafter.” Id. at 59,582 (emphasis added). And though
the 2025 Interim Rule took pressure off domestic
corporations for the time being, “approximately 40
18
percent of expected year 1 costs have already accrued.”
Beneficial
Ownership
Information
Reporting
Requirement Revision and Deadline Extension, 90 Fed.
Reg. 13,688, 13,694 (Mar. 26, 2025).
Again, FinCEN’s figures were incomplete. They
included employee wages (based on the too-low hour
estimates) and costs to engage professionals like
attorneys and CPAs—but only for “intermediate
structure” and “complex structure” reporting companies.
87 Fed. Reg. at 59,573. The idea that no “simple
structure” companies would need help navigating the
CTA and completing their filings is irresponsible. After
all, “any person”—not just the company itself—who fails
to report “complete or updated beneficial ownership
information” faces civil penalties of $500 per day, up to
$10,000 in fines, and 2 years in federal prison. 31 U.S.C.
§ 5336(h)(1), (h)(3)(A). As the district court put it, “tens of
millions of Americans must either disclose their personal
information to FinCEN” “or risk years of prison time and
thousands of dollars in civil and criminal fines.” App.27.
To mitigate that risk, most reporting companies would
likely need legal counsel or other expert help to
“navigat[e] their FinCEN reporting responsibilities while
safeguarding against potential risks and fraudulent
practices.” Matthew B. Edwards & D. Parker Baker III,
The Basic Ins and Outs of the Corporate Transparency
Act, S.C. LAW., Sept. 2023, at 24, 29. Anyone who has
wrestled with corporate tax filings of a similar sort knows
the headaches this structure will bring, too. See The
Corporate Transparency Act Sounds Harmless. It’s Not.,
WASH. POST (Apr. 19, 2026), https://perma.cc/U9HVLG5B (“The Corporate Transparency Act, in addition to
being unconstitutional, is so confusing that the federal
government’s ‘Frequently Asked Questions’ webpage
about it has 122 questions.”).
19
And the financial costs don’t end even there. The time
to apply for and update FinCEN identifiers carry
associated wage costs—FinCEN was willing to admit at
least another $6.2 million for that in the first year and
around $950,000 afterward. 87 Fed. Reg. at 59,577.
Commenters also pointed out that FinCEN missed the
“cost of securing data” for reports, “including images of
identification documents, as well as the harms should such
information not be kept secure.”
Id.
FinCEN
acknowledged these “potentially significant costs to
businesses for securing the data and in increased identity
theft risk to individuals in the event of a data breach.” Id.
But curiously, it neglected any “estimates for these costs.”
Id.
B. No doubt, every reporting company is bound to
suffer, but the financial and resource burden falls heaviest
on small businesses. The largest public corporations
already disclose beneficial ownership under the securities
laws, and most are exempt from the CTA outright. 31
U.S.C. § 5336(a)(11)(B). Companies employing twenty or
fewer people are among the CTA’s principal targets. See
31 U.S.C. § 5336(a)(11)(A), (B)(xxi).
“According to
FinCEN, 32.6 million law-abiding small business owners
were required to file their BOI with the federal
government.” Letter from Josh McLeod, Fed. Gov’t Rels.
Dir., NFIB, to French Hill, Chairman, and Maxine
Waters, Ranking Member, House Fin. Servs. Comm.
(Mar. 17, 2026), https://perma.cc/CU6Y-9V7F.
And small businesses are the backbone of state
economies. In West Virginia, small businesses make up
98% of all businesses and employ almost half of all
employees. Entrepreneurship, W. VA. ECON. DEV.,
https://perma.cc/HHB5-SVLJ (last visited May 20, 2026).
Other States’ numbers look similar. E.g. OFF. OF ADVOC.,
20
U.S. SMALL BUS. ADMIN., 2025 SMALL BUSINESS PROFILE
̶ IOWA, https://perma.cc/8RU3-8EBJ (reporting that small
businesses make up 99.3% of all businesses and employ
46% of all employees). Nationally, small businesses
employ nearly half the private workforce and generate
most new jobs.
See U.S. SMALL BUS. ADMIN.,
FREQUENTLY ASKED QUESTIONS ABOUT SMALL
BUSINESS (2024), https://perma.cc/YUN4-UCX2.
Unfortunately, small businesses already bear a
disproportionate share of the federal regulatory burden—
roughly 63% of total regulatory costs by one estimate,
against a national regulatory tab that runs over $1.9
trillion a year. See Jeffrey J. Polich, Judicial Review and
the Small Business Regulatory Enforcement Fairness
Act, 41 WM. & MARY L. REV. 1425, 1432 (2000); CLYDE
WAYNE CREWS, JR., COMPETITIVE ENTER. INST., TEN
THOUSAND COMMANDMENTS: AN ANNUAL SNAPSHOT OF
THE FEDERAL REGULATORY STATE 6, 33 (2022). And the
CTA adds to that load. For businesses that employ twenty
or fewer workers, compliance is not an administrative
footnote—each employee diverted to a federal reporting
obligation is an employee pulled from productive work.
And those costs flow directly to consumers, who face
nearly 1% price increases for every 10% rise in overall
federal regulation. Dustin Chambers et al., How Do
Federal Regulations Affect Consumer Prices? An
Analysis of the Regressive Effects of Regulation, 180 PUB.
CHOICE 57, 80-81 (2019). Regulatory burdens of this
magnitude also deter investment, as unpredictable legal
demands reduce or eliminate the returns investors
require. See Richard J. Pierce, Jr., The Combination of
Chevron and Political Polarity Has Awful Effects, 70
DUKE L.J. ONLINE 91, 92, 99 (2021).
21
So, depressing small businesses means depressing
state economies.
C. The CTA draws the States directly in, too—at
considerable cost.
The States will incur direct costs on top of what their
residents and businesses will suffer.
The statute
authorizes FinCEN to request information from state
agencies and contemplates state participation in
implementation. 31 U.S.C. § 5336(d), (e)(2)(A). In
practice, the offices of state Secretaries of State—the
offices that register the entities the CTA targets—become
conduits for a federal reporting regime they neither built
nor asked for. These information requests all take time
and money—resources state governments will be
required to divert from other enforcement and regulatory
priorities.
None of the administrative work involved comes with
guaranteed federal reimbursement, either.
Section
5336(j) authorizes FinCEN to reimburse States for
“reasonable costs,” but only for three fiscal years, only to
the extent Congress appropriates funds, and only subject
to FinCEN’s discretionary approval. See 31 U.S.C.
§ 5336(j). “By forcing state governments to absorb the
financial burden of implementing [the] federal regulatory
program, Members of Congress can take credit for
‘solving’ problems without having to ask their constituents
to pay for the solutions with higher federal taxes.” Printz
v. United States, 521 U.S. 898, 930 (1997). But state
taxpayers are ultimately forced to fund the state-level
pieces of the Act’s machinery all the same, whether they
support the federal policy or not.
The States also absorb the informational burden.
Since enforcement began, small business owners have
22
flooded state agencies with questions: Must I report? To
whom? By when? Under what standard? The confusion
is fair. Regulators have shifted the CTA’s definitions,
exemptions, and enforcement timelines multiple times
over the last two years. State offices now spend their
resources explaining a federal law that the law’s own
administrators cannot consistently interpret.
Fraudsters are capitalizing on the chaos. FinCEN
recently warned the public about schemes where
criminals impersonate the agency and demand payment to
“file” or “process” beneficial ownership reports. See
Press Release, FinCEN, FinCEN Warns of Fraud
Schemes That Abuse Its Name, Insignia, and Authorities
for
Financial
Gain
(Dec.
18,
2024),
https://perma.cc/GEE9-EAJQ.
State
consumer
protection offices have issued similar advisories in
response to scams targeting older business owners,
immigrant entrepreneurs, and small landlords—the
residents least likely to know that FinCEN does not
charge filing fees or solicit payment. See, e.g., MISS. SEC’Y
OF STATE, BOI FILING SCAMS ALERT (2024); Business
and Charities Scams, COMMONWEALTH OF PA.,
https://perma.cc/TU3E-DL7W (last visited May 20, 2026)
(October 16, 2024 ̶ Additional Beneficial Ownership
Information (BIO) Scams). These schemes feed on the
Act’s confusion. Real people lose real money, and the
States are left to clean it up. See, e.g., Letter from Josh
McLeod, Fed. Gov’t Rels. Dir., NFIB, supra (detailing
how small businesses in Oregon, Texas, Michigan and
Florida were scammed).
Every day the Act remains on the books, these injuries
continue. Small businesses face uncertainty. State
agencies field inquiries. Scammers work the ambiguity.
And the next change in federal policy could require
23
millions of reports, restore the CTA’s full compliance
regime, and trigger a new wave of enforcement with no
warning. The practical stakes are ongoing, and they will
continue to mount. That’s reason enough to act now.
CONCLUSION
The Court should grant the petition for certiorari.
Respectfully submitted,
JOHN B. MCCUSKEY
Attorney General
OFFICE OF THE
WEST VIRGINIA
ATTORNEY GENERAL
State Capitol Complex
Building 1, Room E-26
Charleston, WV 25306
mwilliams@wvago.gov
(304) 558-2021
MICHAEL R. WILLIAMS
Solicitor General
Counsel of Record
Holly J. Wilson
Principal Deputy
Solicitor General
Mattie F. Shuler
Assistant Solicitor General
Counsel for Amicus Curiae State of West Virginia
24
ADDITIONAL LEGAL
REPRESENTATIVES OF THE STATES
STEVE MARSHALL
Attorney General
State of Alabama
KRIS KOBACH
Attorney General
State of Kansas
CORI MILLS
Acting Attorney General
State of Alaska
RUSSELL COLEMAN
Attorney General
State of Kentucky
TIM GRIFFIN
Attorney General
State of Arkansas
LIZ MURRILL
Attorney General
State of Louisiana
JAMES UTHMEIER
Attorney General
State of Florida
LYNN FITCH
Attorney General
State of Mississippi
CHRIS CARR
Attorney General
State of Georgia
CATHERINE HANAWAY
Attorney General
State of Missouri
RAÚL LABRADOR
Attorney General
State of Idaho
AUSTIN KNUDSEN
Attorney General
State of Montana
THEODORE E. ROKITA
Attorney General
State of Indiana
MICHAEL T. HILGERS
Attorney General
State of Nebraska
BRENNA BIRD
Attorney General
State of Iowa
DREW WRIGLEY
Attorney General
State of North Dakota
25
DAVE YOST
Attorney General
State of Ohio
JONATHAN SKRMETTI
Attorney General
State of Tennessee
GENTNER DRUMMOND
Attorney General
State of Oklahoma
KEN PAXTON
Attorney General
State of Texas
ALAN WILSON
Attorney General
State of South Carolina
DEREK BROWN
Attorney General
State of Utah
MARTY JACKLEY
Attorney General
State of South Dakota
KEITH G. KAUTZ
Attorney General
State of Wyoming
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.