Following the FinCEN announcement that it was going to ignore the Corporate Transparency Act requirement, the law suffered another loss in a Michigan case. This time the loss was due to a different part of the consitution.
Judge Jonker in the Western District Court of Michigan in the Small Business Association of Michigan v. Janet Yellen case found the Beneficial Ownership Reporting provisions violated the Fourth Amendment as an unlawful search.
“In Orwell’s 1984, “Big Brother” had omnipresent telescreens everywhere—including every citizen’s living room—that made sure nothing beyond a smuggled, hand-written diary was truly private. The CTA doesn’t go that far, to be sure, but it’s a step in that direction. It compels citizens to disclose private information they are not required to disclose anywhere else just so the government can sit on a massive database to satisfy future law enforcement requests. It does so at a cost of billions of dollars to the citizens least likely to afford it. It amounts to an unreasonable search prohibited by the Fourth Amendment.
This case does not address the other Constitutional challenges to the Corporate Transparency Act seen in other cases.
The question for me is whether the Trump administration will keep defending the law or let these adverse cases stand.
Sources:
- Opinion and Order in Small Business Association of Michigan v. Janet Yellen March 3, 2025
- The Death of the Corporate Transparency Act
- Trump Administration Proposes Eliminating CTA Requirements for All U.S. Companies