Posts By: Chris Wielinski

The U.S. Treasury Department has announced that it will not enforce any fines or penalties under the Corporate Transparency Act (“CTA”) against U.S. citizens, domestic reporting companies, or their beneficial owners. It will also issue a proposed rulemaking to formally narrow the CTA’s reporting requirements to foreign reporting companies only.

Where we were

On February 27, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) announced that it intended to issue a rule change to extend the CTA’s reporting deadlines — and that it would do so before the current deadline (applicable to most companies) of March 21. FinCEN also said it would not enforce the March 21 (or other current) deadlines, including by issuing fines or penalties. Finally, in its February 27 announcement, FinCEN stated that it would initiate a formal process later this year “to minimize burden on small businesses while ensuring that [CTA-reportable “beneficial ownership information” or “BOI”] is highly useful to important national security, intelligence, and law enforcement activities.”

Where we are now

On the evening of Sunday, March 2 — yesterday evening, if you’re reading this in real time — the Treasury Department issued an announcement that went much farther than FinCEN’s February 27 announcement.

• Because FinCEN is the office that administers the CTA, notices regarding the CTA normally come from FinCEN. But FinCEN is part of the Treasury Department, so Treasury itself has ultimate regulatory authority over the CTA.

Specifically, Treasury announced two new CTA policies.

Non-enforcement policy as to U.S. citizens, domestic reporting company and their beneficial owners

First, Treasury announced that it would not enforce any penalties or fines associated with the CTA’s reporting requirements against U.S. citizens or “domestic reporting companies” or their “beneficial owners,” either before or after the upcoming rule change extends the current reporting deadlines.

• Who is protected by this new blanket policy of non-enforcement?
  • U.S. citizens
  • “Domestic reporting companies”: A “domestic reporting company” is a company that (1) was created by a filing with a secretary of state (or similar office) under the law of a U.S state or Indian tribe, and (2) is not exempt under one of the CTA’s 23 exemptions. An example would be a corporation or LLC formed in Texas or Delaware, and which does not qualify for one of the CTA exemptions.
  • “Their beneficial owners” — i.e., “beneficial owners” (25%-or-more individual owners, or individuals with substantial control) of domestic reporting companies.
    • If a non-U.S. citizen is a beneficial owner of a domestic reporting company — such as a Mexican citizen who owns 25% of a California LLC — then presumably the blanket non-enforcement policy protects him or her as well, but only as to such “domestic reporting company.”

Formal process to limit CTA reporting to “foreign reporting companies“

Treasury’s new non-enforcement policy is obviously intended to protect U.S. citizens, domestic reporting companies and their beneficial owners from the CTA’s reporting requirements. But the non-enforcement policy is presumably a stop-gap measure, because formally removing such persons and companies from the scope of the CTA reporting rules will require amendments to those rules. Amending the rules, in turn, requires a formal “rulemaking” process, which can easily take months. Treasury referred to that process when it said, in the March 2 notice, that it “will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.”

• A “foreign reporting company” is a company that (1) was formed under the law of a foreign country, (2) that has registered to do business in any U.S. state or tribal jurisdiction by a filing with a secretary or state (or similar office), and (3) is not exempt under one of the CTA’s 23 exemptions. An example would be a German GmbH, a UK private limited company (Ltd), or a French SARL, that chooses to register to do business in the U.S. directly (rather than through a U.S. subsidiary) — and which does not qualify for any of the CTA exemptions.

How Cokinos | Young can help

The corporate attorneys at Cokinos | Young continue to closely monitor CTA developments and will keep you updated as important events occur, including FinCEN’s anticipated issuance of rules changes.

If you have any questions, please contact one of our following corporate attorneys:

About Cokinos | Young

Cokinos | Young has led Texas construction and real estate law for over three decades. And today, our 100+ dedicated professionals operate coast to coast and proudly handle all aspects of construction law for owner/developers, project managers, general contractors, design professionals, subcontractors, sureties, and lenders. We provide both dispute resolution and transactional services to clients through all phases of commercial, industrial, pipeline, offshore, civil, and residential construction. Our reputation was built on relentless commitment to client service and the industries we serve, and that remains our primary driver. Dedicated. Resilient. Expertise. That’s Cokinos | Young. Learn more at cokinoslaw.com.

Just when you thought it was safe to delete all of those emails about the Corporate Transparency Act (“CTA”), a recent court decision has brought the long-dormant law back to life. Most companies now have until March 21 to file their initial CTA reports. Although it is possible the deadline may be extended, the current prospects for an extension are very uncertain. We recommend that companies expeditiously begin the process of preparing their CTA filings.

How we got here

The CTA was on hold as the result of a nationwide order blocking its reporting regulations (the “Smith Order”), which was issued on January 7 by a federal district court in Tyler, Texas in the case of Smith v. U.S. Department of the Treasury. The Smith Order was based on the court’s conclusion that the CTA was likely unconstitutional, because (in the court’s view) it exceeded Congress’s constitutional powers.

Many observers, across the political spectrum, expected President Trump to oppose the CTA, because it seemed contrary to his anti-regulatory agenda. The easiest way to keep the CTA on hold would have been to let the Smith Order stay in place. It was reasonable to assume, therefore, that the government (i.e., the Trump administration) would probably not appeal the Smith Order.

It came as something a shock, then, when the government announced early this month, in multiple court filings, that it would defend the CTA against constitutional challenges, making many of the same legal arguments the Biden administration had made. Most notably, the Trump administration appealed the Smith Order, and asked the Smith court to put the Smith Order on hold by “staying” it. Because the Smith Order had put the CTA on hold, a “stay” of the Smith Order would revive the CTA and its reporting requirements.

What’s happened now

On February 17, the Smith court granted the government’s request for a stay of the Smith Order.  Because the Smith Order is now stayed, the CTA’s reporting requirement are officially back in effect.

The Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), which administers the CTA, issued a notice on February 19 acknowledging the stay and the revived effectiveness of the CTA reporting requirements. In addition, following up on commitments made by the government when it requested the stay, FinCEN took the following two actions:

• First, it extended the reporting deadline for 30 days, until Friday, March 21.
  • This new deadline applies to all initial, updated and corrected CTA filings that would otherwise have been due before March 21, had the CTA been in effect. (The technical term for such filings is “Beneficial Ownership Information Reports,” usually abbreviated to BOIR or just BOI. For simplicity, we will continue to refer to them as “CTA” filings or reports. Also, when we refer to “companies,” we mean companies that are required to make CTA filings, which are referred to in the CTA as “reporting companies.”)
  • If a company was previously given a reporting deadline that was later than March 21, then it still has the benefit of that later deadline. There are two situations in which this would be the case.
    • First, companies formed in 2024 had 90 days after formation in which to file. For companies formed between December 22 and December 31, 2024, this 90-day period will expire after March 21. Similarly, companies that are formed in 2025 have 30 days after formation in which to file. For companies formed on or after February 20, this 30-day period will expire after March 21. In each case, their deadline will be the end of the 90-day or 30-day period, rather than March 21. (The 30-day period also applies to required updates of changed information in, and corrections of, any previously-made filings.)
    • Second, some companies formed in 2024 have later deadlines because of 2024 hurricanes. These are companies that were formed during certain specified periods in 2024 and that have their principal place of business in an area designated for disaster relief as a result of Hurricanes Beryl, Debby, Francine, Helene or Milton. The additional extension would be very short in the case of Hurricane Beryl (and now only applies to companies formed between June 24 and July 4, 2024), but somewhat longer in the case of the hurricanes that occurred later in 2024.
  • FinCEN also teased the possibility of a further extension. It said: “FinCEN will provide an update before [March 21] of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.”
• Second, FinCEN announced that it “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.” This contemplated rule-revision process, therefore, would focus on reprioritizing the CTA toward higher-risk companies while providing some regulatory relief for lower-risk companies.
  • FinCEN described this statement as “in keeping with Treasury’s commitment to reducing regulatory burdens on businesses.” This rings somewhat hollow, however, when one considers the discrepancy in timing between the 30-day deadline extension and the likely timing of the proposed rule-revision process.
    • Over 20 million existing companies will be required to file their initial CTA reports by this March 21, unless FinCEN voluntarily extends that deadline.
    • The rule-revision process, by contrast, will inevitably take many months, if not longer. Indeed, because FinCEN only “intends to initiate” it sometime this year, the process may well not be completed until 2026.

This substantial discrepancy in timing means that, at least with respect to their initial CTA filings, existing companies (all 20+ million of them) will not enjoy any of the benefits of “Treasury’s commitment to reducing regulatory burdens on businesses.” This is because they must report by March 21 under the existing rules, rather than under the contemplated revised rules — even though such revised rules will presumably offer some degree of CTA relief for “lower-risk” companies. Indeed, it is conceivable that some types of information which are currently required to be reported under the existing rules may subsequently, as a result of the rule-revision process, be made no longer reportable. But such information will already have been reported by 20+ million existing companies complying with the existing rules, in the huge tranche of CTA filings required by March 21. Once so disclosed, such information can never realistically be “un-disclosed.”

FinCEN could have avoided this problem by doing two things:

• Substantially extending the March 21 reporting deadline, perhaps even until the end of this year. (Extending the deadline any farther would likely require a statutory change to the CTA itself, and is therefore outside of FinCEN’s power.)
• Initiating its rule-revision process as soon as possible, so that it can be completed this year.

But, unfortunately, that is not what FinCEN did. For now, the deadline for the vast majority of companies is March 21. 

There will be another twist, right?

Anyone who has followed the long CTA saga knows by now that it has been chock-full of twists. And, while otherwise unpredictable, all of the twists have affected only one issue:  is the CTA on or off?

Because the most recent developments have turned the CTA back on again, it’s only human to assume that surely there will be another twist, and that its effect will be to turn the CTA back off. So it’s tempting to leave your half-finished (or barely-started) CTA filing in the bottom drawer, kick back with a plate of nachos and a frosty margarita, and figuratively tune in to see what clever twist will put that darn CTA back on ice again.

There are a couple of possible twists:

• First, as mentioned above, FinCEN teased the possibility of extending the March 21 deadline: “FinCEN will provide an update before [March 21] of any further modification of this deadline.”
• Second, on Capitol Hill, there is proposed legislation under consideration to extend the reporting deadline until January 1, 2026, for companies in existence before 2024.The House bill, H.R. 736, passed on February 10 by a unanimous vote. (Yes, you read that right, “unanimous.”) In the Senate, a companion bill, S. 505, was introduced on February 11 and referred to the Senate’s Committee on Banking, Housing, and Urban Affairs.

But, for now, we strongly recommend you pass on that second margarita, and instead pull your incomplete or blank CTA filing out of the bottom drawer (literally or figuratively). We absolutely understand you don’t want to do it, but we’re here to tell you there may not be another twist. Let’s consider the two possible twists again, this time a bit more critically:

• FinCEN said it will provide an update of “any further modification” of the March 21 deadline. The crucial word, of course, is “any.” FinCEN is saying there may be an extension past March 21, but also there may not be one. We have absolutely no idea which it will be.
• On the legislative front, it’s very significant that the one-year deadline extension (for pre-2024 companies) passed the House unanimously. But it’s equally significant, in a bad way, that no action has occurred yet on the Senate bill in the 13 days since its introduction, other than being referred to committee. There will also be intense Congressional attention to more big-picture legislation regarding the budget and the debt limit, and there is no assurance that there will be adequate time or attention to move the CTA extension bill. (Its best possibility for passage may be to catch a ride on a must-pass bill, but there is no way to know if that will occur.)
  • Even if the proposed legislature is enacted (which is a very big “if”), bear in mind that it will only extend the reporting deadline for companies formed before 2024. Companies formed in 2024 would remain subject to the 90-day deadline, and those formed in 2025 would remain subject to the 30-day deadline (as would the requirement for updates and corrections of previously-made filings).

In other words, you should not count on another twist to put the CTA back on hold and thereby save you from the March 21 deadline. But remember: when you’re expecting a twist, sometimes the most surprising twist is that there’s no twist. (OK, we realize that’s not much consolation.)

Assuming that you have not already made your CTA filing, we strongly encourage you to begin preparing your filing now so that can meet the March 21 deadline. Some filings will require more time and analysis than others (possibly including, for example, examination by an attorney of your organizational documents). That’s particularly true in light of the complexity, and occasional lack of clarity on important issues, of the existing reporting rules. You will also need to allocate time to collect information from your 25%-or-more owners and other controlling persons.

How Cokinos | Young can help

The corporate attorneys at Cokinos | Young continue to closely monitor CTA developments and will keep you updated as important events occur, including any extension of the reporting deadline or passage of the pending extension legislation. We are also available to help you comply with the CTA, such as helping you determine:

• If you are subject to the reporting requirements — or, alternatively, if you fall within one of the 23 CTA exemptions.
• Who your beneficial owners are — which involves complicated and sometimes counter-intuitive rules regarding determination of 25%-or-more ownership, as well as imprecise rules regarding “substantial control.”
• What information you need to obtain from your beneficial owners, and, in the case of companies formed in 2024 or 2025, the “company applicants” who were involved in their formation.

If you have any questions, please contact one of our following corporate attorneys:

About Cokinos | Young

Cokinos | Young has led Texas construction and real estate law for over three decades. And today, our 100+ dedicated professionals operate coast to coast and proudly handle all aspects of construction law for owner/developers, project managers, general contractors, design professionals, subcontractors, sureties, and lenders. We provide both dispute resolution and transactional services to clients through all phases of commercial, industrial, pipeline, offshore, civil, and residential construction. Our reputation was built on relentless commitment to client service and the industries we serve, and that remains our primary driver. Dedicated. Resilient. Expertise. That’s Cokinos | Young. Learn more at cokinoslaw.com.

The new Trump administration has taken its first public position on the Corporate Transparency Act (“CTA”). In what may come as a surprise to many critics of the CTA, the administration intends to defend the CTA against court challenges to its constitutionality. At the same time, however, the administration proposes to “assess its options” to reprioritize CTA reporting by focusing on higher-risk companies while providing relief to lower-risk companies.

Background

The CTA currently remains on hold because of a nationwide order blocking its reporting regulations (the “Smith Order”), which was issued on January 7 by a federal district court in Tyler, Texas in the case of Smith v. U.S. Department of the Treasury.

Until February 5, the federal government had not appealed the Smith Order. Some observers believed this indicated opposition by the new Trump administration to the CTA. After all, the new conservative administration has a strongly anti-regulatory agenda, and many conservatives regard the CTA as an example of regulatory overreach. (Project 2025, for example, calls for the CTA’s repeal.) If, in fact, the new administration opposed the CTA, then not appealing the Smith Order would seem a simple and logical way to keep the CTA on hold. Regardless of one’s own political views and opinion of the CTA, therefore, it was reasonable to assume the government (i.e., the Trump administration) would probably not appeal the Smith Order.

The Latest Twist

As we all know by now, however, the CTA saga is twisty and unpredictable. It out-Shyamalans Shyamalan. The CTA script apparently called for another big twist right about now.

So the government appealed the Smith Order.

In addition to filing its notice of appeal, on February 5, the government asked the Smith court to “stay” (put on hold) the Smith Order until the U.S. Court of Appeals for the Fifth Circuit  (the “Fifth Circuit”) can decide the government’s appeal. Because the Smith Order put the CTA on hold, a stay of the Smith Order would bring the CTA, and its reporting requirements, back into effect.

In its court filing requesting the stay, the government makes many of the same arguments as those made by the Biden administration in its own CTA court filings. In particular, the government’s motion strongly argues that the CTA is constitutional, and therefore that the Smith Order is unjustified.

The government’s court filing, however, departs from the Biden administration’s approach in one important respect: it announces the government’s intent to consider reprioritizing the CTA’s reporting requirements to focus on higher-risk companies. The government wrote:

As a matter of policy, [the U.S. Treasury Department] continues to assess the potential burden of the Final Rule [i.e., the CTA reporting regulation]. If this Court grants the stay, FinCEN [the Treasury Department office that administers the CTA] intends to announce that it will extend the compliance deadline for thirty days. During that period, FinCEN intends to assess its potential options to prioritize reporting for those entities that pose the most significant national security risks while providing relief to lower-risk entities and, if warranted, amending the Final Rule.

FinCEN also updated its CTA website to announce the new position. In doing so, it offered a few additional comments:

• The proposed 30-day extension of the reporting deadline (if the stay is granted) will apply to “all” reporting companies. This would include not only companies formed before 2024, which originally had until January 1, 2025 to make their CTA filings, but also companies formed in 2024 (which had 90 days after formation to make their initial CTA filings) as well as companies formed in 2025 (for which the period is 30 days after formation).
• While the government’s court filing in Smith simply referred to “providing relief” to lower-risk entities, FinCEN’s website was slightly more specific. It referred to options “to modify further deadlines or reporting requirements” for lower-risk entities.

What we know, and what we don’t know

• The government’s appeal of the Smith Order (and request that it be stayed) is the incoming Trump administration’s first public statement about the CTA. Contrary to many predictions, it shows that the new administration supports the CTA and plans to defend its constitutionality against court challenges.
• At the same time, if a stay of the Smith Order is granted, the government says it will assess its options to reprioritize the CTA reporting requirements.
  • There are several things about this proposed reprioritization, however, that we do not know:
    • We do not know what form the reprioritization would take.
      • The government referred to reprioritizing the reporting requirements toward companies that “pose the most significant national security risks” and away from “lower-risk” companies. But we do not know how those two categories of companies would be determined.
      • We also do not know if “lower-risk” companies would be relieved of all CTA obligations, or if they would remain subject to some reduced level of obligations (for example, delayed reporting deadlines).
    • More importantly, we do not know for certain if any reprioritization will be adopted, because the government has only committed to “assess its options.” The government has also committed to do so only if the Smith Order is stayed.
• For now, the CTA remains on hold, because the Smith Order remains in effect.
  • We don’t know, however, how long the Smith Order will remain in effect, now that the government has requested that it be stayed. In the Texas Top Cop Shop (“TTCS”) case, the U.S. Supreme Court on January 23 granted a request, which had been made by the outgoing Biden administration, for a stay of a similar nationwide preliminary injunction against the CTA (the “TTCS Injunction”). Although there are legal differences between the Smith Order and the TTCS Injunction, it’s possible the Supreme Court’s stay of the TTCS Injunction could influence the Smith trial court or the Fifth Circuit to grant a similar stay of the Smith Order. In any event, the Supreme Court itself may ultimately be willing to stay the Smith Order.
• If the Smith Order is stayed, then the government has committed to a 30-day extension of the CTA reporting deadlines. Companies should therefore be prepared to make their CTA filings on 30 days’ notice.
  • Some of the possible CTA reprioritizations that FinCEN might adopt, however, would take longer than 30 days to implement. Amendments to the CTA reporting regulations, for example, would likely require compliance with the lengthy process for federal rulemaking. And any CTA changes, whether or not requiring formal rulemaking, would require some time to develop and draft, and additional time to “roll out” through a public-information campaign to reporting companies, trade associations, law firms, filing services and other relevant parties. It seems very unlikely that all of those actions could be accomplished within 30 days (and any requiring formal rulemaking would need much longer).
    
    This suggests that the 30-day reporting extension (if the Smith Order is stayed) is unrealistically short. Assuming the government is serious about CTA reform, it’s reasonable to assume a longer period will be needed. But the government has only committed to a 30-day extension, and there is no assurance that period would be further extended. Companies should be prepared, therefore, to comply with a 30 day filing deadline, if the Smith Order is stayed.

How Cokinos | Young can help

The corporate attorneys at Cokinos | Young continue to closely monitor CTA developments and will keep you updated as important events occur. If you have any questions, please contact one of our following corporate attorneys:

About Cokinos | Young

Cokinos | Young has led Texas construction and real estate law for over three decades. And today, our 100+ dedicated professionals operate coast to coast and proudly handle all aspects of construction law for owner/developers, project managers, general contractors, design professionals, subcontractors, sureties, and lenders. We provide both dispute resolution and transactional services to clients through all phases of commercial, industrial, pipeline, offshore, civil, and residential construction. Our reputation was built on relentless commitment to client service and the industries we serve, and that remains our primary driver. Dedicated. Resilient. Expertise. That’s Cokinos | Young. Learn more at cokinoslaw.com.

Predicting the fate of the Corporate Transparency Act (“CTA”) is becoming more difficult than predicting snowfall in New Orleans. A surprise action by the U.S. Supreme Court in one Texas case makes it more likely the CTA will come back into effect. For now, however, the CTA remains blocked by a federal court order in a second Texas case. The CTA’s ultimate future may depend on the new Trump Administration, but the Administration’s position remains unknown.

Background

The CTA requires most private companies to confidentially report to the U.S. Treasury Department their 25%-or-more owners and other persons with “substantial control” over the company. Companies formed before 2024 were scheduled to become subject to the reporting requirements on January 1, 2025.

The CTA’s reporting requirements are unprecedented in U.S. law and have understandably encountered significant opposition. A number of lawsuits have been filed in federal district courts across the country challenging the CTA’s constitutionality. Two of the courts have ruled in favor of the CTA, while three others have ruled against it. In two of the latter cases, both from the Eastern District of Texas, the courts blocked CTA enforcement on a nationwide basis. Those two cases are now at the center of attention.

Texas Top Cop Shop v. Garland

In Texas Top Cop Shop, Inc. v. Garland (“TTCS”), a federal district court in Sherman, Texas ruled on December 3 that the CTA was likely unconstitutional, and issued a nationwide preliminary injunction against its enforcement (the “TTCS Injunction”). The federal government appealed the TTCS Injunction to the U.S. Court of Appeals for the Fifth Circuit (the “Fifth Circuit”), which is scheduled to hear oral arguments in that appeal on March 25. In addition, the government filed an emergency motion with the Fifth Circuit requesting a “stay” of the TTCS Injunction — which, if granted, would temporarily block the TTCS Injunction and therefore reinstate CTA enforcement. A “motions panel” of the Fifth Circuit initially granted the stay, but on December 26 a “merits panel” of the same court overruled that decision and denied the stay. The government quickly escalated its request for a stay to the U.S. Supreme Court. The government’s request initially went to Justice Alito, but he referred it to the entire Court.

On January 23, surprising most CTA observers, the Supreme Court granted the government its requested stay of the TTCS Injunction. This put the TTCS Injunction on hold until the Fifth Circuit, and possibly then the Supreme Court, can consider the TTCS Injunction “on the merits.” Only one Justice (Jackson) formally dissented, so it is likely that eight of the nine Justices were in favor of granting the stay.

The TTCS Injunction had put the CTA on hold, but the Supreme Court’s January 23 stay put the TTCS Injunction itself on hold. Some CTA observers, focusing solely on the TTCS case, rushed to announce that the CTA was back and filings would soon be due. Those observers were wrong, however, because they overlooked a separate district court decision that had also put the CTA on hold.

Smith v. U.S. Department of Treasury

The second decision had been issued by another federal district court in the Eastern District of Texas, this one in Tyler, in the case of Smith v. U.S. Department of Treasury (“Smith”). On January 7, the Smith judge had come to the same basic conclusion as his colleague in Sherman in the TTCS case: that the CTA was likely unconstitutional. The Smith court issued a nationwide preliminary order blocking the CTA’s reporting requirements (the “Smith Order”). The Smith Order is not technically an injunction, but it has the same practical effect.

It’s understandable that some observers overlooked the Smith Order, given that the TTCS Injunction had been elevated to the lofty, and high-profile, level of the Supreme Court. But the Supreme Court’s January 23 stay of the TTCS Injunction did not affect the Smith Order. The Smith Order was not at issue before the Supreme Court. In fact, the federal government has still not filed an appeal in the Smith case, much less requested that the Smith Order be stayed. The federal office that enforces the CTA — the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN — has posted an alert on its website acknowledging that the Smith Order continues to block CTA enforcement, notwithstanding the Supreme Court’s stay of the TTCS Injunction. The bottom line is that the CTA remains on hold for now as a result of the Smith Order.

The fate of the Smith Order

If the federal government appeals the Smith Order, could it obtain a stay blocking the Smith Order like it obtained a stay blocking the TTCS Injunction? After all, the Smith Order has the same practical effect as the TTCS Injunction — it blocks CTA enforcement on a nationwide basis. Because the Supreme Court was willing to stay the TTCS Injunction (possibly by a lopsided 8-to-1 vote), wouldn’t the Court also be willing to stay the Smith Order?

The issue is not that simple, for a couple of reasons:

• The government’s request for a TTCS stay came to the Supreme Court on its “shadow docket.” Like the vast majority of decisions made by the Court on that docket, the Court order granting the stay was extremely short and contained no explanation for the decision. In other words, we don’t know why the Court decided to stay the TTCS Injunction. It’s therefore impossible to know if the Supreme Court would stay the Smith Order simply because it had stayed the TTCS Injunction.

• There are also timing considerations. Depending on certain procedural questions, it could possibly take the government some time to request a stay from the Supreme Court.

The political front

We still do not know the Trump Administration’s position on the CTA. Project 2025 called for the CTA’s repeal, and the CTA may be inconsistent with the new Administration’s general anti-regulatory philosophy. In that event, the new Administration could block the CTA in several different ways: for example, by declining to defend the CTA against lawsuits challenging its constitutionality (such as TTCS and Smith); by supporting proposed legislation to repeal or modify the CTA; or by voluntarily continuing to suspend enforcement efforts. Some methods would be easier than others, and some would potentially raise legal issues. But, ultimately, the fate of the CTA likely depends at least as much on what the Trump Administration does as what the federal courts do.

How Cokinos | Young can help

The corporate attorneys at Cokinos | Young continue to closely monitor CTA developments and will keep you updated as important events occur. If you have any questions, please contact one of our following corporate attorneys:

About Cokinos | Young

Cokinos | Young has led Texas construction and real estate law for over three decades. And today, our 100+ dedicated professionals operate coast to coast and proudly handle all aspects of construction law for owner/developers, project managers, general contractors, design professionals, subcontractors, sureties, and lenders. We provide both dispute resolution and transactional services to clients through all phases of commercial, industrial, pipeline, offshore, civil, and residential construction. Our reputation was built on relentless commitment to client service and the industries we serve, and that remains our primary driver. Dedicated. Resilient. Expertise. That’s Cokinos | Young. Learn more at cokinoslaw.com.