The plaintiffs in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al. are requesting an en banc rehearing based on several arguments related to the panel decision to grant a stay of the district court’s preliminary injunction.[^1] The plaintiffs contend that the panel decision conflicts with Supreme Court precedent, improperly weighed the equities, and failed to consider key aspects of the case.

Conflict with Supreme Court Precedent:

The plaintiffs argue that the panel decision conflicts with the Supreme Court’s ruling in NFIB v. Sebelius by upholding the Corporate Transparency Act (CTA), which the plaintiffs argue exceeds the federal government’s enumerated powers. The plaintiffs believe that the CTA regulates business entity status rather than actions, which they argue is a power reserved for the states, similar to the individual mandate in the Affordable Care Act that was rejected in NFIB v. Sebelius.

Improper Weighing of Equities:

The plaintiffs assert that the panel improperly discounted or ignored serious harms they and the public would suffer. The plaintiffs contend that the panel dismissed the compliance costs associated with the CTA as “minimal,” despite evidence and stipulations that the plaintiffs would face non-recoverable expenses.
The panel allegedly refused to weigh the plaintiffs’ constitutional injuries related to First and Fourth Amendment violations, claiming these were not addressed in the district court’s merits assessment. The plaintiffs, however, state that the district court did assess these on the equities and determined that they weighed in the plaintiffs’ favor as to irreparable injury. They argue that constitutional injuries should be weighed separately from the merits of the claim.
The panel’s decision to reinstate the January 1st reporting deadline was made with little consideration of the consequences on the plaintiffs and the public. The plaintiffs state that the panel overlooked the practical implications of reinstating the deadline with only days left, disregarding the interests of millions of other entities subject to the CTA.

Threat to Court’s Jurisdiction:

The plaintiffs argue that the panel decision threatens the court’s jurisdiction over the remaining First and Fourth Amendment claims. They explain that by forcing compliance with the CTA, the court risks mooting these claims because the plaintiffs will be compelled to disclose the very private information that forms the basis of these claims.

Public Interest:

The plaintiffs contend that the panel’s decision deferred to the government’s assertion of public interest based on the “urgent” need to implement the reporting requirement, even though the government had previously delayed it for three years.
The plaintiffs believe that the public interest lies in preventing the enforcement of a law that is likely unconstitutional. They state that the panel’s decision ignored the public interest by focusing on the government’s need to implement the CTA rather than the potential harm to the public caused by an unconstitutional law.

Other Points:

The plaintiffs highlight the procedural history of the case, pointing out that the district court granted a preliminary injunction after finding the CTA likely unconstitutional. They note that the district court denied the government’s motion for a stay, asserting the government’s interests were superseded by the CTA’s constitutional flaws.
The plaintiffs argue that the panel’s decision conflicts with the principle that a preliminary injunction should maintain the status quo pending litigation, pointing out that the panel reinstated a reporting deadline that had never been in effect.
The plaintiffs are seeking a rehearing en banc because they believe the panel’s decision raises questions of exceptional importance related to the balance between government interests and individual constitutional rights.

In summary, the plaintiffs in this case are asking for an en banc rehearing to address what they believe are serious errors in the panel’s decision, errors that have implications for constitutional law, the rights of businesses, and the role of the judiciary.

This quick summary was prepared with assistance from Google’s NotebookLM tool to analyze the filing.

[^1]: Plaintiffs-Appellees’ Emergency Petition for Rehearing En Banc - Texas Top Cop Shop, Inc., CA5, December 24, 2024, https://www.currentfederaltaxdevelopments.com/s/govuscourtsca52221871430.pdf