Small Business Owners Ask Supreme Court to Hear Challenge to “Orwellian” Law That Treats Entrepreneurs as Suspects

Washington, DC—Running a dairy farm shouldn’t require registering your personal information in a federal law-enforcement database. But that’s exactly what Congress demanded when it passed the Corporate Transparency Act (CTA). Today, the Center for Individual Rights (CIR) returned to the Supreme Court a second time seeking a ruling that the law is unconstitutional.

The challengers—local small businesses (including a family dairy), a local political party, and the National Federation of Independent Business—filed a petition for certiorari asking the High Court to hear their challenge to the CTA, a case the Court previously considered on its emergency docket in January 2025.

Under the CTA, tens of millions of small-business owners and nonprofit organizations, that aren’t under suspicion of any wrongdoing, are required to disclose sensitive personal information about those who “control” the organizations to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN): names, home addresses, dates of birth, and copies of passports or driver’s licenses. FinCEN then makes the confidential information available to state and federal law enforcement to search for evidence of crimes. Those who fail to register face civil and criminal penalties.

Although the law is aimed at curbing money laundering, it carves out broad exemptions for entities most likely to be involved in financial crimes—banks, financial institutions, and publicly traded companies—leaving the compliance burdens to fall almost entirely on small, local, and family-owned businesses, like Mustardseed Livestock, Tony Goulart’s family-owned dairy.

“Nearly everything we produce is consumed right here on our Wyoming farm,” said CIR client Tony Goulart. “We are about as local as a business can get. The idea that the federal government has the power to demand our personal information because we might someday engage in interstate commerce is nonsense.”

CIR first secured relief for the owners of 32 million small businesses and civic organizations in December 2024, when a federal district judge issued a nationwide injunction halting the CTA. The relief came less than a month before the government could start issuing $500 per day fines to owners and businesses that didn’t submit the burdensome and invasive reports. The Biden administration responded with emergency appeals over the scope of the injunction, first in the U.S. Fifth Circuit Court and later at the Supreme Court. The high court temporarily stayed the injunction in January 2025, pending the Fifth Circuit’s expedited review. After the change in administrations, newly appointed Treasury officials issued an interim regulation exempting domestic corporations from the CTA’s onerous requirements, and the Fifth Circuit then put its consideration on hold while the administration considers a final rule.

“CIR has already prevented the federal government from forcing millions of small businesses to comply with this unconstitutional mandate,” said CIR Litigation Director Caleb Kruckenburg. “But a temporary reprieve is not enough. The CTA remains on the books unless the Supreme Court strikes it down.”

The Supreme Court petition argues that the CTA exceeds the federal government’s limited power over interstate commerce. An entity’s mere existence under state law is not a sufficient basis for federal control. The petition also argues that the CTA’s collection of private information in a massive dragnet for the express purpose of discovering crime violates the Fourth Amendment’s prohibition on unreasonable searches and seizures.

Today’s petition offers the Supreme Court an opportunity to take up CIR’s case in conjunction with National Small Business United v. Bessent, a similar challenge to the law from the U.S. Eleventh Circuit Court that reached the opposite result from our case. A petition for review of the NSBU case was also recently presented to the justices. The Supreme Court could hear both cases together, as it occasionally does, allowing it to resolve the CTA’s constitutionality in a single, comprehensive ruling.

“The CTA is bad enough, but our challenge is about much more than this one law,” said CIR President Todd Gaziano. “If the federal government can regulate every small business owner in America simply because they have the potential to engage in interstate commerce, there is no meaningful limit left on federal power. The Supreme Court has been clear that such boundless claims of power cannot be sustained.”

To read the petition, click here. For more information on this case, visit our website.

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About the Center for Individual Rights: The Center for Individual Rights is a national public interest legal organization that provides free representation to clients whose rights have been violated or are seriously threatened. Founded in 1989, CIR has a record of landmark victories in the Supreme Court and many other courts, setting legal precedents that restore and protect the individual rights that are necessary for a flourishing and free society. Visit cir-usa.org to learn more.

BakerHostetler has served as co-counsel in this case at all stages of the appellate process since late 2024, with CIR’s special thanks to Andrew M. Grossman and Kristin A. Shapiro.