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Alabama Federal Judge Rules Corporate Transparency Act Unconstitutional


Decision Has Limited Scope

By David H. Freedman and Jordan M. Small

In a decision late last Friday, March 1st, Judge Liles Burke of the U.S. District Court for the N.D. of Alabama issued a Memorandum Opinion in the matter known as National Small Business United v. Yellen, et al., Case No. 5:22-cv-01488, declaring the Corporate Transparency Act (CTA) unconstitutional.

The decision, however, only enjoins enforcement of the CTA against Plaintiffs which is a small business association and potentially its various business members, and is not an immediate invalidation of the CTA. 

For the time being, all other businesses which are non-exempt reporting companies under the CTA are unaffected.

This decision only has precedential value in this case and the attorney’s representing Plaintiffs have indicated that this decision will almost certainly be appealed by the U.S. government to the Eleventh Circuit Court of Appeals.

We anticipate that additional similar lawsuits will be filed in other jurisdictions.

This is a developing story, and Maddin Hauser will provide further updates as they are available on our CTA blog and other social media.