Injunction is Back ON; CTA is OFF Again!!

In the “you can’t make this up” category, the Fifth Circuit Court of Appeals has just issued an order VACATING its stay of the injunction applicable to the enforcement of filing requirements under the Corporate Transparency Act.  You can read the order right here Texas Top Cop Shop v Garland 24-40792 (5th Circuit; Stay Vacated).

In other words, the original order enjoining the enforcement of FINCEN’s filing requirements is back on, pending a review of the merits!!

The appeal is now scheduled for oral argument in March (2025).

For reference see:  Injunction is ON; CTA is OFF

and then see:  Injunction is OFF; CTA is Back ON

Now read this post Injunction is Back ON; CTA is OFF Again!!

CTA Update

Following up on our recent posting concerning the CTA (see CTA On Hold in the US, But . . .   posted on December 9, 2024).

Earlier today (December 23, 2024), the United States Court of Appeals for the Fifth Circuit Order (24-40792) issued its order in response to the emergency appeal by the US government, concerning the nationwide injunction preventing the enforcement of filing requirements under the Corporate Transparency Act (CTA).

In short, the 5th Circuit Court held that since the government met its burden under Nken v. Holder, 556 U.S. 418 (2009), the government’s motion for a temporary stay of the district court’s order and injunction pending appeal was granted. In plain English, the order lifts the injunction imposed by the District Court.

Given the timing of this ruling, FINCEN issued an ALERT updating its Beneficial Ownership Information Reporting deadlines and providing some extensions:

  • The due date for pre-existing companies has been shifted from January 1st to January 13th;
  • For companies that had an initial filing due date while the injunction was in place, their initial filing deadline is now also January 13th;
  • For any company formed while the injunction was in place, FINCEN has allowed an additional 21 days to make their initial filing (i.e., the filing due day changes from 90 days to 111 days); and
  • For any company formed on or after January 1, 2025, the initial filing date will remain as 30 days from notice of formation.

While the 5th Circuit Court’s order lifts the injunction that was previously in effect, this doesn’t decide the matter on its merits and a full hearing and decision is still on the way.  Stay tuned.

 

 

CTA On Hold in the US, But . . .

Spoiler Alert: Federal Court Enjoined Implementation and Enforcement!

Additional Spoiler Alert: NY LLC Transparency Act Unaffected (so far)!

The US Federal Corporate Transparency Act (CTA) * was enacted into law in January of 2021, in an effort to bolster the ability of law enforcement and intelligence agencies, as well as financial institutions to be better able to identify and prevent the use of empty shell holding companies to disguise the movement of illicit funds (e.g., money laundering, financing terrorism, drug trafficking, etc.). The CTA requires certain business entities to report and file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN).

New York State has enacted a similar statute, which was amended on March 1, 2024. The New York LLC Transparency Act (NYLTA) was originally enacted on December 22, 2023, and amended by Chapter Amendment on March 1, 2024 [New York Limited Liability Company Law, Sections 1106-1108, effective January 1, 2026], requires limited liability companies (LLCs) that are or have been formed under New York law or are or wish to be qualified and authorized to do business in the State of New York to provide information to the New York Department of State disclosing the LLCs beneficial owners.  While there are certain exemptions and exclusions under both the Federal and New York State laws, there are some other key differences. The NYLTA:

Becomes effective January 1, 2026, not 2025 as the Federal law provides, and any LLC formed in or qualified to do business in New York after January 1, 2026, has 30 days from formation (or qualification) to file.  If your LLC was formed or qualified to do business in NYS before January 1, 2026, you will have until January 1, 2027, to make your initial filings.
Applies only to LLCs, not any other types of businesses, such as corporations, limited partnerships or statutory trusts.
On December 3, 2024, a federal district court in the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction: (1) enjoining enforcement of the CTA, as well as the implementation of the reporting requirements applicable to beneficial ownership information;  and (2) staying all deadlines required to comply with the statute’s reporting requirements.  You can read the amended order granting the injunction here: Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States (E.D. Tex., No. 4:24-cv-00478). The Department of Justice, on behalf of the Department of the Treasury, is appealing the ruling, but in the meantime FinCEN must comply with the order while it is still in effect.

Although this means that until the litigation is resolved or the injunction is lifted, companies otherwise required to file will not be subject to any liability if they fail to do so. That said, any company that wants to voluntarily file their beneficial ownership information reports may do so.

IMPORTANT NOTE: Although the NYLTA doesn’t come into effect until January of 2026, the Federal injunction does not appear to affect the NY Statute.

With thanks to James (“Jamie”) Ballard for keeping me up to date.

Stay tuned!

* (Public Law 116-283, Title LXIV of the National Defense Authorization Act for Fiscal Year 2021 (Division F) and is part of the Anti-Money Laundering Act of 2020 (AML Act). The substantive provisions of the CTA can be found in Sections 6401, 6402 and 6403 (this latter section adds § 5336 to Title 31 of the United States Code establishing the Beneficial Ownership Information Reporting Requirements).

Marketing Sweats: Covering the Legal Bases

Recently, I had the honor and privilege of being interviewed by Misty Klobucher and Tim Leesman, both Principals of Simantel, a full service advertising, marketing and integrated communications agency based in Peoria, Illinois.  Misty regularly hosts a podcast called “Marketing Sweats” and I was more than happy to spend some time with them answering questions and providing insights on the subject of, as the title suggests,  “Marketing Law: How We Cover Our Legal Bases”

Feel free to enjoy all or as much as you can bear!

Thank you Misty, Tim and Simantel, “The Agency of  And.”

 

SXSW South by Southwest Conference

As some of you already know, South by Southwest ®(SXSW) is one of the world’s premier events showcasing music, film and interactive media. This internationally-recognized event has live panels, special events, cinema and combines entertainment and educational activities in a conference and festival atmosphere.  The event takes place annually in Austin, Texas in the United States – this year between March 8th and 16th, 2024.

I have made a proposal to participate by making a presentation entitled “Legal Implications of AI: The Good, the Bad and the Ugly” and voting by the online community is now live!  That allows the public to help the organizers decide on ideas that are the most creative, innovative, and relevant for 2024.  Starting today and until August 20th (11:59 PM PT), you can see my proposal and vote using this link: Legal Implications of AI: The Good, the Bad and the Ugly.  I hope you will vote to include my presentation in the event.

My objective is to make the presentation interactive and entertaining, including some potentially innovative uses of AI to make the point. What do I want to talk about? First, how does current law deal with the film, television, music, art, literary industries – what are the challenges and the opportunities. Second, how can celebrities, sports figures, creative artists and talented professionals protect themselves while also exploiting the evolving technology. Of course, last but not least, is it too soon to start regulating AI? If so, what are we waiting for? If not, how do we even suggest regulation when we can’t predict where we are going?

I won’t pretend to have all the answers, but I will try to provide an enlightening, stimulating and thought provoking presentation – and yes, entertaining!  Again, I would appreciate your vote:  Legal Implications of AI: The Good, the Bad and the Ugly.

Season’s Greetings

This is the time of year when season’s greetings, holiday and new year’s wishes, regardless of religion, culture, ethnic background or heritage, usually fills the air.  In past years, we have spent lots of time and attention on shopping for gifts, sending cards, attending or hosting parties, dinners and gaining the 10 pounds we resolve to lose every new year.  Some join a swelling tide of well-wishers, holiday revelers, frosty noses, red cheeks and smiling faces. We traditionally gather together with family, friends, loved ones and colleagues –  often planning travel and vacations and taking a break from work and school.

This year, much like last year, but unlike any others, we continue to face challenges unthinkable and unimaginable less than two years ago. We have and continue to suffer tragic losses, we continue to confront anxiety and fear, we continue to pray for our most vulnerable. Many were often helpless to be near loved ones, unable to hold their hands or be there during moments when it mattered most. This has also been a year in which natural disasters and catastrophic events have contributed to the despair, forcing us to confront tragic loss of life and devastation to homes and property.

This past year, adding to the raging pandemic is our growing frustration and often a sense of helplessness – it seems each time we think we are turning the corner, we feel outwitted by a tiny organism – a virus known as COVID-19. We argue over mask mandates and social distancing, whether to vaccinate or not to vaccinate and it sometimes feels like we are on different sides. The differences aren’t trivial and yes, they are most often very real. But they aren’t what really matters.

Once again, I prefer to focus on what is best in all of us, rather than what we argue about. Another year in which we witnessed heroic self-sacrifices from our health care workers, first responders, emergency search and rescue personnel, as well as our finest and our bravest – not just in our nation, but around the world.  So many dedicated, selfless people across the diverse fabric of our communities –  communities that have transcended borders. People from across nations, from around the globe, coming to the aid of those in need –  in places they have never been, helping people they don’t know.

Ordinary people performing extraordinary feats of kindness, tirelessly giving of themselves for long, sometimes thankless hours to save lives, feed the hungry, shelter the homeless, provide clothing and rebuild damaged houses and give comfort to so many in need.  Let’s also not forget those medical researchers, clinicians and volunteers who are still engineering medical miracles and who continued to work tirelessly to prevent this virus from outwitting us.  While we never know what the future holds, nor what “normal” might look like in the months and years ahead, we can change the way we handle and deal with it – together.

I know the news media spends more time reporting how these difficult times have brought out the worst in some of us. But quietly and usually without fanfare, you can see more examples of how these adversities are bringing out the best in us – just stop and look around you. They are my inspiration to try harder to live up to that ideal, rather than any headlines.

So not surprisingly, this time of year my thoughts turn gratefully to those people and relationships who have helped to enrich my life, personally and professionally and to those who have helped make this world better. There really aren’t words to adequately express my appreciation, so I’ll just say “thank you” and trust you will understand all that is behind those two simple words.

Wishing all of you, your families, friends and loved ones a meaningful holiday season and a wonderful new year filled with health, happiness, prosperity and peace!

US 5th Circuit Court of Appeals Issues Emergency Stay Blocking New COVID-19 Rules

Last Thursday (4 November 2021) we reported on the U.S. DOL’s announcement of new employer COVID-19 vaccine mandates (see US Department of Labor Announces Emergency COVID-19 Employer Requirements .

Yesterday (6 November 2021), a three judge panel of the United States Court of Appeals for the Fifth Circuit, granted an emergency stay prohibiting enforcement of the rules for now, saying they raise “grave statutory and constitutional issues.”   The order, temporarily blocks implementation of the new rules and the Court ordered the U.S. Government to file papers by Monday afternoon in an effort to ensure swift consideration of the request to issue an injunction against the vaccine mandate and corresponding testing requirements under the new rules.

Click here to read the 5th Circuit Court of Appeals Emergency Stay Order (November 6, 2021).

Stay tuned!

 

US Department of Labor Announces Emergency COVID-19 Employer Requirements

NEWS RELEASE

Today, the United States Department of Labor issued a press release announcing an emergency temporary standard to protect workers from coronavirus.

These requirements are intended to implement the COVID-19 vaccine directive announced by President Biden and will apply to employers with 100 or more employees.

The standards will require companies subject to the rules to ensure that:

  • Each vaccinated employee provides proof (type and date) of vaccination status (e.g., immunization record from a health care provider or pharmacy; CDC Covid-19 vaccination card; immunization records from a governmental authority; or other official documentation);
  • Employees who are not vaccinated must produce a negative COVID-19 test at least weekly and wear a mask (face covering) in the workplace;
  • An employee who is vaccinated but unable to provide documentary proof, must provide the employer with a written, signed and dated statement attesting to the fact they were successfully and properly vaccinated; and
  • Employees are given paid time off in order to obtain a Covid-19 vaccination and, if necessary, sick leave to recover from any side effects.

There are also separate rules requiring every staff member in health facilities that receive Medicare and Medicaid reimbursements to be vaccinated and health workers and federal contractors  have until January 4, 2022 to obtain either their second dose of the Pfizer/BioNTech or Modernavaccine or a single dose of the Johnson & Johnson vaccine.

The new rules do not require employers to provide or pay for tests, unless a collective bargaining agreement that applies to the employer requires them to do so.

The standards were published in the US Federal Register this morning and you can read a copy or download the regulations in PDF form here: COVID-19 Vaccination and Testing; Emergency Temporary Standard.

As always, if you have questions or want more information about this or any other Legal Bytes posting, don’t hesitate to contact me, Joe Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

 

20 Years Ago on September 10th . . .

On September 10th, 20 years ago, 2,606 people in the New York metropolitan area went to sleep in preparation for their jobs, meetings, interviews or visits to the World Trade Center in the morning.

Another 246 people went to sleep in preparation for their morning flights, most bound for Los Angeles and some heading to San Francisco. That night, another 125 military personnel, contractors and workers went to bed, knowing they had to get to the Pentagon early to get to work the next day.

There were 343 Firefighters of the New York City Fire Department (including a Chaplain and two paramedics) who went to sleep on September 10th, as well as 23 police officers of the New York City Police Department and 37 police officers of the Port Authority of New York and New Jersey Police Department.

There were 8 emergency medical technicians and paramedics from private emergency medical services, 3 New York State Court Officers and 1 Patrolman from the New York Fire Patrol, all of whom went about their normal routine that evening of September 10th, going to bed as they normally would. Some were scheduled for routine morning patrols or shifts at work, while others knew they might be called on to respond to any emergency that might need some extra help.

None of them saw past 10:08 am Eastern time on Sept 11, 2001.

Of the 2,977 people who died in the initial attacks on September 11th, 2,605 were U.S. citizens. There were also 372 non-U.S citizens, from over 90 countries who perished that day. They were from the United Kingdom, the Dominican Republic, India, Greece, South Korea, Canada, Japan, Columbia, Jamaica, Philippines, Mexico, Trinidad and Tobago, Ecuador, Australia, Germany, Italy, Bangladesh, Ireland, Pakistan and Poland.

So tonight before you go to sleep in preparation for your life tomorrow, kiss those you love, hold your children a little tighter, call that friend or relative you figured you can call tomorrow and never take even one moment of your life or the lives of those you hold dear, for granted.

In one single moment life may never be the same.  For those left behind by the nearly 3,000 souls that perished that day, it can never be the same.

It will never be the same for any of us.

SEC Adds Chinese Government Interference to Required Risk Reporting

Debbie Klis, a Rimon partner based in Washington, DC, has published a post on the Rimon IM Report noting that just yesterday (26 July 2021) a senior SEC official advised that Chinese companies listed on stock exchanges in the United States, must disclose the potential risks associated with the Chinese government interference as part of their normal reporting requirements.

You can read the entire post Chinese Companies Listed on US Exchanges Must Disclose Potential Risk Associated with Potential Government Interference.

You can also learn more about Debbie and her practice here:  Bio: Debbie A. Klis and if you want to obtain more information, feel free to contact Debbie A. Klis directly. Of course you can always contact me, Joe Rosenbaum, or the Rimon Law lawyer with whom you regularly work.