Congress Ordered Oregon Business Owners to Report Themselves to a Federal Law-Enforcement Database

Michael Firestone et al. v. Scott Bessent et al.

Michael Firestone runs two farm businesses in Oregon. Lisa Ledson runs a nursing business, and Thomas Reilly owns an auto shop. They and all other Oregon entrepreneurs registered their companies with the state. Under the Corporate Transparency Act, filing with the state meant they had to report on everyone who owns or controls their businesses. The reports are full of personal details, like names, addresses and copies of passports or drivers’ licenses. That sensitive data goes to the Treasury Department, where it can be searched by other federal law enforcement agencies with no warrant.

A treasury department rule has since exempted American companies, but the law itself still stands.

Why it’s illegal:

The Constitution allows Congress to regulate commerce between the states. The act of creating a business under state law is not interstate commerce, which means Congress had no power to pass the CTA. The law also violates the First and Fourth Amendments.

What we’re asking the court to do:

We are asking the Ninth Circuit to block enforcement of the law while the case continues, and we are asking the courts to strike it down.

Why this case matters:

• A ruling would decide whether filing formation papers with a state by itself is enough to put a business under federal surveillance. If it is, Congress’s commerce power has no meaningful limit.
• By the government’s own estimate, the law reaches the owners of more than 32 million existing businesses and 5 million new ones each year. Lobbyists won exemptions for 23 categories of entities, including banks and public companies, so the burden lands on the smallest businesses.
• The rules change with each administration. The Treasury Department exempted domestic companies by an interim rule in 2025 and a final rule in 2026, and two dozen states are already suing to reverse it. Only a final constitutional ruling settles the question.
• CIR brought this case as part of its project to restore federalism and hold federal agencies to the powers the Constitution grants.

The Full Story

Oregon Entrepreneurship, Under the Microscope

Michael owns Firestone Ag Enterprises Co. and co-owns Firestone Processing Co., both of which do work only in Oregon’s farm economy. His wife, Lindsay Berschauer, runs Leona Consulting Co., a political branding and marketing firm, and serves as an elected county commissioner.

Lisa Ledson owns Nursewise Delegations, LLC. Thomas Reilly owns Same Day Auto Service and leads the Oregon Small Business Association, a nonprofit advocacy group with a political action committee. Katerina Eyre runs a small accounting practice, Tayler Hayward owns a jewelry company, and Gerald Earl Cummings II owns stakes in two Oregon companies.

Unconstitutional three times over

First, the CTA exceeds Congress’s power. For more than two centuries, states have governed how corporations and limited-liability companies are created and run. Congress may regulate commerce between the states, but simply existing as a business is not commerce.

The law also reaches anyone with “substantial control” over a business, even someone who has no ownership stake. This means that a relative who helps an entrepreneurial family member with a start-up loan could be caught in a government dragnet.

Second, the CTA violates the First Amendment. In NAACP v. Alabama (1958), the Supreme Court held that forcing a group to reveal its members can chill association as surely as a ban. That danger is sharpest for political clients such as the Libertarian Party of Mississippi, which is a party in a related challenge pending in the Fifth Circuit Court. One of the CTA’s sponsors, Sen. Sheldon Whitehouse, said the law would help track “dark money” behind advocacy he opposed. Money is not “dark” just because it may be used for political speech politicians don’t like, and it doesn’t justify invasions of associational privacy.

Third, the CTA violates the Fourth Amendment. It collects private information for law enforcement without suspicion, a warrant, or a judge’s review.

From Portland to the Ninth Circuit

Business owners sued in the U.S. District Court for the District of Oregon on June 27, 2024. They asked for a preliminary injunction, a court order blocking the law while the case goes on. On Sept. 20, 2024, Judge Michael H. Simon denied that request. He ruled the owners had not shown they were likely to win or would suffer harm that could not be undone.

CIR then joined the case to lead the appeal. Less than a month before reports were due on January 1, 2025, the district court in CIR’s companion case Texas Top Cop Shop v. Bessent issued a nationwide preliminary injunction because the law was “Orwellian” and likely unconstitutional.

The incoming Trump administration issued an interim rule exempting domestic companies from the CTA’s reporting requirements. The Ninth Circuit paused the appeal to wait for Treasury’s final action.

A pause is not a repeal

In August 2026, FinCEN made the exemption permanent. It also planned to delete U.S. companies’ ownership data by February 2027. The government now says the case is moot, meaning there is nothing left for the court to decide.

But in October 2026, Oregon and Illinois Attorneys General led a coalition of states in suing FinCEN in Oregon federal court. Their suit, State of Oregon v. Bessent, claims FinCEN skipped federally-required steps and acted arbitrarily when creating the final rule exempting domestic companies. The states want the exemption thrown out and the ownership database preserved.

That suit shows why our case against the CTA is not moot. An exemption granted by rule can be undone by a single district court or by the next administration, and at least one CIR client still has a reporting obligation under the new rule. The statute still remains on the books. CIR is pressing the Ninth Circuit for a constitutional ruling.