Filed Date: April 14, 2025
Case Ongoing
Clearinghouse coding complete
In this case, a title company in Texas challenged a federal Financial Crimes Enforcement Network (FinCEN) rule—published during the Biden Administration on August 29, 2024 and set to take effect on December 1, 2025—that requires “certain persons involved in real estate closings and settlements to submit reports and keep records on certain non-financed transfers of residential real property to specified legal entities and trusts on a nationwide basis.” Anti-Money Laundering Regulations for Residential Real Estate Transfers 89 FR 70258 (to be codified at 31 CFR Chapter X). Under the rule, “non-financed transfers” are defined as:
[T]ransfers that do not involve an extension of credit to all transferees that is both secured by the transferred residential real property and extended by a financial institution that has both an obligation to maintain an [Anti-Money Laundering] program and an obligation to report suspicious transactions under 31 CFR Chapter X.
89 FR 70258 (31 CFR Chapter X, Section III.C.2.b.).
On April 14, 2025, Flowers Title Companies LLC (doing business as “East Texas Title Companies”) brought this lawsuit in the U.S. District Court for the Eastern District of Texas. Represented by Pacific Legal Foundation, the plaintiff sued the U.S. Department of the Treasury, the Treasury Secretary (Scott Bessent), and the Treasury bureau FinCEN. (To see the Clearinghouse’s collection of litigation and investigations involving the second Trump administration, click here.) Suing under the Administrative Procedure Act (5 U.S.C. §§ 702, 706), the Declaratory Judgment Act (28 U.S.C §§ 2201 and 2202), and Mandamus (28 U.S.C. § 1361), the plaintiff sought a declaratory judgment holding subsections of the Bank Secrecy Act (BSA) (31 U.S.C. § 5318(a)(2) and (g)) unconstitutional; injunctive relief ordering that FinCEN’s rule be set aside and prohibiting enforcement of the rule; and attorneys’ fees.
According to the complaint, FinCEN’s rule mandated that title companies report detailed personal and financial information for non-financed residential property transfers. The plaintiff argued that the new requirement imposed undue regulatory burdens and forced the company to act as a government surveillance arm, violating constitutional protections. The plaintiff claimed that the rule compelled the collection and disclosure of sensitive client information even in routine intrastate transactions under the presumption that such deals may be “suspicious.” Additionally, the plaintiff claimed that the rule would cost the company time and money. The plaintiff's lawsuit asserted that the federal government lacked the constitutional authority and proper rulemaking foundation to impose such reporting obligations. The plaintiff made three primary constitutional claims: (1) the BSA unlawfully delegated legislative power to the executive branch by giving FinCEN unbounded authority to regulate private financial transactions; (2) the rule exceeded Congress’s authority under the Commerce Clause by regulating purely intrastate real estate transactions, and violated the Tenth Amendment; and (3) the rule constituted an unreasonable search under the Fourth Amendment by compelling warrantless disclosures of client information and business records.
The parties agreed to move ahead to the summary judgment stage and to forego a government answer, which the court approved on June 17, 2025. Under the new schedule, the plaintiffs' motion for summary judgment is due on July 16, with the defendants' cross-motion for summary judgment due on August 15.
On July 15, the plaintiff filed an amended complaint, adding a new cause of action. The new count claimed that the final rule exceeded FinCEN's statutory authority. The amended complaint also added certain factual and legal information regarding the new count. The plaintiffs then filed their motion for summary judgment the next day.
The case is ongoing.
Summary Authors
Sylvia Al-Mateen (4/20/2025)
Jeremiah Price (6/27/2025)
For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/69888401/parties/flowers-title-companies-llc-v-bessent/
Kernodle, Jeremy Daniel (Texas)
Nixon, Molly (Texas)
Peikoff, Amy (Texas)
Thompson, Joshua Paul (Texas)
Garcia, Adrian (Texas)
See docket on RECAP: https://www.courtlistener.com/docket/69888401/flowers-title-companies-llc-v-bessent/
Last updated Aug. 21, 2025, 8:06 p.m.
State / Territory: Texas
Case Type(s):
Presidential/Gubernatorial Authority
Special Collection(s):
Trump Administration 2.0: Litigation and Investigations Involving the Government
Trump Administration 2.0: Challenges to the Government (Authority of Independent Agencies )
Key Dates
Filing Date: April 14, 2025
Case Ongoing: Yes
Plaintiffs
Plaintiff Description:
Flowers Title Companies LLC (doing business as “East Texas Title Companies”), a title agent based in Texas.
Plaintiff Type(s):
Public Interest Lawyer: Yes
Filed Pro Se: No
Class Action Sought: No
Class Action Outcome: Not sought
Defendants
U.S. Department of Treasury (- United States (national) -), Federal
The Financial Crimes Enforcement Network (FinCEN) (- United States (national) -), Federal
Defendant Type(s):
Case Details
Causes of Action:
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
Declaratory Judgment Act, 28 U.S.C. § 2201
Constitutional Clause(s):
Unreasonable search and seizure
Federalism (including 10th Amendment)
Available Documents:
Outcome
Prevailing Party: None Yet / None
Nature of Relief:
Source of Relief:
Issues
General/Misc.: