SEC v. Novinger

Case: 21-10985 Document: 00516391610 Page: 1 Date Filed: 07/12/2022

United States Court of Appeals

for the Fifth Circuit United States Court of Appeals

Fifth Circuit

FILED

July 12, 2022

No. 21-10985 Lyle W. Cayce

Clerk

Securities and Exchange Commission,

Plaintiff—Appellee,

versus

Christopher A. Novinger; ICAN Investment Group,

L.L.C.,

Defendants—Appellants.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 4:15-cv-358

Before Jones, Stewart, and Duncan, Circuit Judges.

Carl E. Stewart, Circuit Judge:

The defendants settled a civil enforcement action that the Securities

and Exchange Commission (“SEC”) brought against them for alleged

securities violations. Following its standard policy, the SEC barred the

defendants from denying that they engaged in the charged conduct as a

condition of settlement (the “no-deny policy”). The parties executed

consent agreements containing provisions to that effect and submitted them

to the district court, which entered final judgments. Five years later, the

defendants filed a motion under Rule 60(b)(4) and 60(b)(5) seeking relief

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from the final judgments to the extent that they incorporated the no-deny

policy. They argued that the no-deny policy violates their First Amendment

and due process rights. The district court denied the motion, and the

defendants appealed. For the reasons that follow, we AFFIRM.

I. Facts & Procedural History

Since 1972, the SEC has prohibited defendants who settle civil

enforcement actions without admitting guilt from publicly “denying the

allegations in the complaint” filed against them. 37 Fed. Reg. 25,224 (Nov.

29, 1972). The SEC enacted this no-deny policy, which is codified at

17 C.F.R. 202.5(e), after determining that it was “important to avoid

creating, or permitting to be created, an impression that a decree is being

entered or a sanction imposed, when the conduct alleged did not, in fact,

occur.” Id. Under the policy, “a refusal to admit the allegations is equivalent

to a denial, unless the defendant or respondent states that he neither admits

nor denies the allegations.” Id.

In May 2015, the SEC filed a complaint against several defendants

including Christopher A. Novinger and ICAN Investment Group, LLC, a

company that Novinger formed and directed. 1 The SEC alleged that

Novinger and a confederate fraudulently sold $4.3 million worth of securities

by making false or misleading statements to Texas investors, pocketing nearly

$515,000 in commissions. Novinger allegedly funneled some of this money

through ICAN. The SEC claimed that their conduct violated the antifraud

and registration provisions of the securities laws.

The defendants, through counsel, negotiated a settlement with the

SEC and informed the district court that they had amicably resolved the case.

1

Only Novinger and ICAN are parties to this appeal.

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Pursuant to the settlement, the defendants each executed consent

agreements that imposed monetary and injunctive relief. In the consent

agreements, the defendants conceded the district court’s “jurisdiction over

[them] and over the subject matter of this action.” In addition, the

defendants acknowledged that they entered the consent agreements

“voluntarily” and confirmed “that no threats, offers, promises, or

inducements of any kind” caused their agreement.

The defendants also represented that they understood and agreed to

comply with the SEC’s no-deny policy. More precisely, the defendants

agreed that, among other things, they “(i) will not take any action or make or

permit to be made any public statement denying, directly or indirectly, any

allegation in the complaint or creating the impression that the complaint is

without factual basis” and “(ii) will not make or permit to be made any public

statement to the effect that [they do] not admit the allegations of the

complaint, or that this Consent contains no admission of the allegations,

without also stating that [they do] not deny the allegations.” The consent

agreement further provided that if the defendants breached the agreement,

the SEC could “petition the [district court] to vacate the Final Judgment and

restore this action to its active docket.”

The parties submitted the consent agreements, along with proposed

final judgments, to the district court for entry. The district court granted the

motion and “issue[d] final judgments against all Defendants in the forms

agreed upon by the parties.” The final judgments reiterated that the

defendants “consented to the [district court’s] jurisdiction over [them] and

the subject matter of this action” and that they “consented to entry of this

Final Judgment without admitting or denying the allegations of the

Complaint []except as to jurisdiction.” Finally, the final judgments

referentially incorporated the consent agreements “with the same force and

effect as if fully set forth herein” and stated that the defendants “shall

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comply with all of the undertakings and agreements” established in those

documents. The district court entered the final judgments on June 6, 2016.

Five years later, on June 17, 2021, the defendants filed a motion for

relief from the judgments against them under Federal Rule of Civil Procedure

60(b)(4) and 60(b)(5). The defendants argued that the judgments were void

to the extent that they incorporated the no-deny policy, which the defendants

claimed violated the First Amendment and denied them due process.

Allegedly, the no-deny policy prevents Novinger from “engag[ing] in

truthful public statements concerning SEC’s case against him and ICAN”

for fear of having the case reopened. The district court denied the motion,

concluding that the defendants failed to meet their burden under either Rule

60(b)(4) or 60(b)(5). The defendants timely appealed.

II. Standard of Review

This court reviews de novo a district court’s denial of a Rule 60(b)(4)

motion to set aside a judgment as void. Callon Petroleum Co. v. Frontier Ins.

Co., 351 F.3d 204, 208 (5th Cir. 2003). “Rule 60(b)(4) motions leave no

margin for consideration of the district court’s discretion as the judgments

themselves are by definition either legal nullities or not.” Brumfield v. La.

State Bd. of Educ., 806 F.3d 289, 296 (5th Cir. 2015) (quoting Carter v.

Fenner, 136 F.3d 1000, 1005 (5th Cir. 1998)).

Rule 60(b)(5) motions, in contrast, “are directed to the sound

discretion of the district court, and its denial of relief upon such motion will

be set aside on appeal only for abuse of that discretion.” Id. (quoting Seven

Elves v. Eskenazi, 635 F.2d 396, 402 (5th Cir. 1981)). “A district court abuses

its discretion if it: (1) relies on clearly erroneous factual findings; (2) relies on

erroneous conclusions of law; or (3) misapplies the law to the facts.” Texas

v. Alabama-Coushatta Tribe of Tex., 918 F.3d 440, 446–47 (5th Cir. 2019)

(quoting In re Volkswagen of Am., Inc., 545 F.3d 304, 310 (5th Cir. 2008) (en

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banc)). This court reviews de novo “any questions of law underlying the

district court’s decision.” Id. at 447 (quoting Frew v. Janek, 780 F.3d 320,

326 (5th Cir. 2015)).

III. Discussion

“Rule 60(b) allows a party to seek relief from a final judgment, and

request reopening of his case, under a limited set of circumstances,” making

it “an exception to finality.” Gonzalez v. Crosby, 545 U.S. 524, 528–59

(2005). As relevant here, the rule authorizes a district court to “relieve a

party or its legal representative from a final judgment, order, or proceeding”

because “(4) the judgment is void” or “(5) . . . applying it prospectively is no

longer equitable.” Fed. R. Civ. P. 60(b)(4)–(5). The defendants challenge

the district court’s denial of their Rule 60(b) motion, contending that they

are entitled to relief under Rule 60(b)(4) and 60(b)(5). We address their

arguments in turn.

A. Rule 60(b)(4)

The defendants first argue that they are entitled to Rule 60(b)(4) relief

because certain defects rendered void the final judgments that the district

court entered. “[A] void judgment is one so affected by a fundamental

infirmity that the infirmity may be raised even after the judgment becomes

final. The list of such infirmities is exceedingly short; otherwise, Rule

60(b)(4)’s exception to finality would swallow the rule.” United Student Aid

Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010) (citations omitted). A legal

error, standing alone, does not render a judgment void. Id. Rather, “Rule

60(b)(4) applies only in the rare instance where a judgment is premised either

on a certain type of jurisdictional error or on a violation of due process that

deprives a party of notice or the opportunity to be heard.” Id. at 271; see also

Brumfield, 806 F.3d at 298 (“An order ‘is void only if the court that rendered

it lacked jurisdiction of the subject matter, or of the parties, or it acted in a

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manner inconsistent with due process of law.’” (quoting Williams v. New

Orleans Pub. Serv., Inc., 728 F.2d 730, 735 (5th Cir. 1984))).

i. Jurisdiction

The Supreme Court has not “define[d] the precise circumstances in

which a jurisdictional error will render a judgment void.” Espinosa, 559 U.S.

at 271; see also Brumfield, 806 F.3d 301 (“The Supreme Court . . . has not

definitively interpreted this rule.”). This court has previously held that “a

Rule 60(b)(4) challenge to jurisdiction should be sustained only where there

is a ‘clear usurpation of power’ or ‘total want of jurisdiction.’” Callon,

351 F.3d at 208 (quoting Nemaizer v. Baker, 793 F.2d 58, 64–65 (2d Cir.

1986)). Here, however, the parties agree that no jurisdictional error renders

void the relevant judgments. As the defendants wrote in their appellate brief,

“Novinger does not contest the [district] court’s jurisdiction for SEC’s

prosecution of him under the securities laws.” Moreover, the defendants

repeatedly acknowledged the district court’s personal and subject matter

jurisdiction below in the consent agreements and agreed final judgments. 2

And even without these concessions, the district court had jurisdiction over

the parties and the subject matter under the federal securities laws and

federal question statute. See 15 U.S.C. §§ 77t(b), 78u(d)–(e), 78aa; 28 U.S.C.

2

The district court considered these concessions, along with its own independent

analysis, “an arguable basis for jurisdiction” that defeated the defendants’ Rule 60(b)(4)

motion to the extent that it asserted a jurisdictional defect. See Espinosa, 559 U.S. at 271

(“Federal courts considering Rule 60(b)(4) motions that assert a judgment is void because

of a jurisdictional defect generally have reserved relief only for the exceptional case in which

the court that rendered judgment lacked even an ‘arguable basis’ for jurisdiction.” (quoting

Nemaizer, 793 F.2d at 65)). Because the defendants do not challenge the consent judgments

on jurisdictional grounds, “[t]his case presents no occasion to engage in such an ‘arguable

basis’ inquiry or to define the precise circumstances in which a jurisdictional error will

render a judgment void.” Id.

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§ 1331. The defendants therefore must offer another basis for receiving relief

under Rule 60(b)(4).

ii. Due Process

Although the defendants concede that the district court had

jurisdiction to enter the final judgments, they contend that the judgments are

void under Rule 60(b)(4) based on purported due process violations. As the

defendants put it, their due process claims “hinge on the non-voluntariness

of an ‘agreement’ to an SEC-mandated gag and . . . consists of more than just

notice and an opportunity to be heard.” They assert that the SEC has denied

them a fundamental due process right by penalizing them for attempting to

“speak truthfully.” The defendants also lodge numerous other purported

due process violations, including that the no-deny policy is unconstitutionally

vague, ultra vires, and lacks any time restriction.

The SEC responds that, despite their broad ranging allegations, the

defendants have not identified a due process violation of the type that Rule

60(b)(4) contemplates. It notes that, under Espinosa, the due process

violation must be one that “deprives a party of notice or the opportunity to

be heard.” 559 U.S. at 271. Espinosa further explained that the due process

right that Rule 60(b)(4) implicates is the right to “notice ‘reasonably

calculated, under all the circumstances, to apprise interested parties of the

pendency of the action and afford them an opportunity to present their

objections.’” Id. at 272 (quoting Mullane v. Central Hanover Bank & Trust

Co., 339 U.S. 306, 314 (1950)). Finally, it observed that “jurisdictional and

notice failings . . . define void judgments that qualify for relief under Rule

60(b)(4).” Id. at 273 (emphasis added).

Similarly, this court has held that “[i]f a court has both subject matter

and personal jurisdiction,” then “the ‘only inquiry is whether the district

court acted in a manner so inconsistent with due process as to render the

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judgment void.’” Callon, 351 F.3d at 210 (quoting New York Life Ins. Co. v.

Brown, 84 F.3d 137, 143 (5th Cir. 1996)). This rule applies in “rare”

circumstances “because due process in civil cases usually requires only

proper notice and service of process and a court of competent jurisdiction.”

Id. Thus, the SEC argues that the defendants, who undoubtedly had notice

of this matter below, failed to allege a relevant due process violation under

Rule 60(b)(4).

We agree that the defendants have not alleged a due process violation

of the type that Rule 60(b)(4) contemplates. To show otherwise, the

defendants contend that it is an “all-too-common error” to “reduc[e] due

process to notice and opportunity to be heard” where there would have been

“no settlement” absent their capitulation to the no-deny policy. But this

general assertion does not upend Espinosa’s holding that a relevant due

process violation must “deprive[] a party of notice or the opportunity to be

heard.” 559 U.S. at 271. The defendants, represented by counsel, waived

service in this case, answered the SEC’s complaint, and litigated the case for

nearly a year before proposing a settlement. The defendants then executed

consent agreements, stipulating that they did so “voluntarily” and without

“inducements of any kind.” Because the defendants “received actual notice

of the filing and contents of” the judgments, their due process rights were

“more than satisfied.” Id. (emphasis in original). In sum, “[t]he due process

right implicated by Rule 60(b)(4) does not extend to the claims of due process

asserted . . . here.” SEC v. Romeril, 15 F.4th 166, 174 (2d Cir. 2021), cert.

denied sub nom. Romeril v. SEC, No. 21-1284, 2022 WL 2203361 (U.S. June

21, 2022). Accordingly, the defendants are not entitled to relief under Rule

60(b)(4) for any purported due process violations.

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iii. First Amendment

The Supreme Court has rejected attempts “to expand the universe of

judgment defects that support Rule 60(b)(4) relief” where parties are

“[u]nable to demonstrate a jurisdictional error or a due process violation.”

Espinosa, 559 U.S. at 273. Yet that is exactly what the defendants seek to do.

Specifically, they argue that the judgments are void because the district court

lacked authority to issue them considering the First Amendment violations

that allegedly flow from the no-deny policy. They assert a grab bag of First

Amendment challenges against the no-deny policy. Allegedly, the policy,

among other things, is a prior restraint, compels and restricts the content of

speech, forbids truthful speech, and improperly conditions settlement on the

renunciation of First Amendment rights. Given these alleged First

Amendment violations, the defendants contend that the judgments

incorporating the no-deny policy must be set aside under Rule 60(b)(4).

The defendants primarily rely on Crosby, 312 F.2d 483, a 59-year-old

Second Circuit case that the defendants describe as “the seminal case on

Rule 60(b)(4) voidness for violation of the First Amendment.” In Crosby, a

district court entered an agreed order enjoining a litigant from publishing

statements about certain individuals. 312 F.2d at 484–85. The Second Circuit

then held that the order was an unconstitutional prior restraint on speech that

the district court was “without power to make” notwithstanding the parties’

agreement. 312 F.2d at 485. Because the district court lacked authority to

enter an order that violated the First Amendment, the Second Circuit

declared the order “void” and granted relief from it under Rule 60(b)(4). Id.

According to the defendants, Crosby justifies granting Rule 60(b)(4) relief

here.

This argument is unavailing. To begin with, Crosby is an out-of-circuit

case that does not bind this court. What is more, the Second Circuit recently

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declined to apply Crosby in this exact context. See Romeril, 15 F.4th at 173

(“Crosby does not control this case.”). Like the defendants here, the Romeril

defendant sought Rule 60(b)(4) relief from an agreed judgment incorporating

the no-deny policy because it allegedly violated the First Amendment. Id. at

168. In response to his reliance on Crosby, the Second Circuit stated that

Crosby “was decided more than fifty years ago, long before Espinosa and . . .

other cases . . . limited the grounds for relief under Rule 60(b)(4).” Id. at 173.

It added that “Crosby is distinguishable, as the rights of non-parties were

implicated by the prohibition on public comment at issue in the case.” Id. “In

that sense, the district court lacked jurisdiction over these other persons, who

were not before the court and likely had not had notice of the proceedings or

an opportunity to be heard.” Id. at 174. In contrast, the judgment at issue in

Romeril affected only the defendant, “who was before the court and had an

opportunity to be heard.” Id. Crosby was therefore inapposite. Id. Likewise,

because the judgments binding the present defendants to the no-deny policy

affect only them, Crosby—which, in any event, is nonbinding authority—

does not help the defendants.

This court’s opinions in Brumfield, 806 F.3d 289, and Carter, 136 F.3d

1000, are not to the contrary. The defendants argue that, in denying their

motion for Rule 60(b)(4) relief, the district court adopted a cribbed view of

Espinosa that this court rejected in Brumfield. In Brumfield, this court

explained that Espinosa did not “definitively interpret[]” Rule 60(b)(4) as it

relates to jurisdictional errors because the parties there, as here, agreed that

the judgment at issue was jurisdictionally sound. 806 F.3d at 301 (citing

Espinosa, 559 U.S. at 270). Emphasizing this statement, the defendants argue

that Brumfield confirms that Rule 60(b)(4) relief is not limited to

jurisdictional defects or due process violations implicating notice. The SEC

counters that Brumfield did not break new ground in this court’s Rule 60(b)

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jurisprudence and instead merely “illustrate[s] when a judgment may be void

for lack of jurisdiction.”

The defendants read Brumfield too broadly. That decision expressly

recognized that “a judgment is void under Rule 60(b)(4) only if the court

lacked jurisdiction of the subject matter, or of the parties, ‘or it acted in a

manner inconsistent with due process of law.’” Id. (quoting Williams, 728

F.2d at 735). As explained above, no jurisdictional error renders the relevant

judgments void. The defendants suggest, however, that Brumfield adopted an

expansive view of “due process” authorizing them to challenge their

judgments as void on constitutional grounds. But Brumfield granted Rule

60(b)(4) relief based on a jurisdictional defect, not a due process violation of

the type that Espinosa sanctioned. The district court in Brumfield “retained

continuing jurisdiction for the remedial purpose laid out in [an earlier] order,

which was to prevent future state aid to discriminatory private schools.” Id.

at 298. Although the district court’s continuing jurisdiction extended only to

“the correction of the constitutional infirmity,” the challenged order went

“beyond correcting—and indeed ha[d] nothing to do with—the violation

originally litigated in [the] case.” Id. (quotation omitted). Accordingly, this

court held that the challenged order was “void for lack of subject matter

jurisdiction” because it exceeded “the scope of the district court’s

continuing jurisdiction.” Id. at 291. Put simply, the opinion did not turn on a

due process violation, and the defendants’ reliance on Brumfield is therefore

misplaced. Cf. Matter of Novoa, 690 F. App’x 223, 227 (5th Cir. 2017)

(“Brumfield does not endorse the view that an order exceeding

nonjurisdictional limits on a court’s statutory authority is void.”).

Additionally, the defendants make several passing references to

Carter, 136 F.3d 1000. There, this court held that a consent judgment

memorializing a settlement in a wrongful-death action brought by a mother

on behalf of her minor child was void for Rule 60(b)(4) purposes. 136 F.3d at

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1009. That was because she failed to comply with a Louisiana statute

requiring her to obtain state-court approval before settling the minor’s claim.

Id. at 1008–09. The defendants offer Carter as an example of this court

“setting aside [a] judgment[] in whole or in part for reasons other than a total

want of jurisdiction.” According to them, Carter “involved neither a

jurisdictional defect nor a due process claim” and yet granted Rule 60(b)(4)

relief. They also generally rely on language from Carter stating that Rule

60(b)(4) “should be construed in order to do substantial justice.” 136 F.3d at

1007. The SEC implies in response that Carter is inconsistent with Espinosa

and its progeny. To the extent that the cases are consistent, the SEC argues

that they are distinguishable because Carter involved relevant due process

issues.

Carter does not support granting Rule 60(b)(4) relief here. That case

is best understood as involving a judgment rendered void by a due process

violation: the mother’s failure to follow applicable procedural safeguards

before “compromising the claim of her son.” 136 F.3d at 1008. 3 Accordingly,

Carter and Espinosa are reconcilable. And to the extent that they are

irreconcilable, Espinosa—which the Supreme Court decided a decade after

this court decided Carter—controls. See, e.g., United States v. Short, 181 F.3d

620, 624 (5th Cir. 1999) (“[T]his panel is bound by the precedent of previous

panels absent an intervening Supreme Court case explicitly or implicitly

overruling that prior precedent . . . .”). In either case, the defendants’ claim

for Rule 60(b)(4) relief fails.

Finally, the defendants also cite Klapprott v. United States, 335 U.S.

601 (1949), to support their argument that Espinosa did not “define[] the

3

See, e.g., 11 Charles Alan Wright & Arthur Miller, Federal

Practice & Procedure § 2862 n.11 (3d ed.) (including Carter in its discussion of

voidness based on actions “inconsistent with due process of law”).

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entire universe of cases where relief is justified under Rule 60(b)(4).” In their

view, Klapprot demonstrates that the Supreme Court has declared a

judgment void for Rule 60(b)(4) purposes based on a district court’s alleged

lack of statutory power to act. They say that Espinosa did not implicitly

overturn Klapprot, which predates Espinosa by sixty-one years. This

argument is unpersuasive. As an initial matter, the defendants did not raise

this argument either before the district court or in their opening appellate

brief, making it arguably waived. See Sindhi v. Raina, 905 F.3d 327, 333 (5th

Cir. 2018) (“[A]rguments not raised before the district court are waived and

cannot be raised for the first time on appeal.” (quotation omitted)); Jones v.

Cain, 600 F.3d 527, 541 (5th Cir. 2010) (“Arguments raised for the first time

in a reply brief are generally waived.”).

In any event, Klapprot is consistent with Espinosa’s statement that

Rule 60(b)(4) applies only where a judgment is either jurisdictionally or

procedurally defective. Espinosa, 559 U.S. at 271. “The Klapprot case was a

case of extraordinary circumstances.” Ackermann v. United States, 340 U.S.

193, 199 (1950). It concerned whether Rule 60(b)(4) afforded relief from a

district court’s entry of a default judgment depriving a naturalized citizen of

his “citizenship without hearings or evidence.” Klapprott, 335 U.S. at 602.

Demonstrating the “unfairness” of the situation, the default judgment

stripped the defendant of his citizenship even though he was “absent” and

unrepresented by counsel. Id. at 610. Moreover, the government offered “no

evidence,” and “the only basis for action was a complaint containing

allegations” that were “questionable from a procedural and substantive

standpoint” and that were acquired “from looking at hearsay statements.”

Id. In other words, the judgment in Klapprott resulted from “a violation of

due process that deprive[d] a party of notice or the opportunity to be heard,”

rendering it void. Espinosa, 559 U.S. at 271. As Justice Frankfurter recognized

in dissent, “[t]he only possible provision on which an argument can be based

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that citizenship cannot be canceled by a default judgment is the Due Process

Clause of the Fifth Amendment.” Klapprott, 335 U.S. at 627–28

(Frankfurter, J., dissenting) (rejecting the “suggestion” that a due process

violation occurred). Thus, Klapprott and Espinosa are of a piece; neither

supports the defendants’ expansive reading of Rule 60(b)(4). It follows that

the defendants are not entitled to relief under this provision of the rule based

on any alleged First Amendment violations. 4

B. Rule 60(b)(5)

The defendants alternatively argue that they are entitled to relief

under Rule 60(b)(5). That provision authorizes relief from a final judgment

if, among other things, “applying it prospectively is no longer equitable.”

Fed. R. Civ. P. 60(b)(5). Rule 60(b)(5) does not provide relief “when it is

no longer convenient to live with the terms of a [judgment].” Rufo v. Inmates

of Suffolk Cnty. Jail, 502 U.S. 367, 383 (1992). Rather, it “provides a means

by which a party can ask a court to modify or vacate a judgment or order if ‘a

significant change either in factual conditions or in law’ renders continued

enforcement ‘detrimental to the public interest.’” Horne v. Flores, 557 U.S.

433, 447 (2009) (quoting Rufo, 502 U.S. at 384). “Ordinarily, however,

modification should not be granted where a party relies upon events that

actually were anticipated at the time it entered into a [consent judgment].”

Rufo, 502 U.S. at 385. The movant “bears the burden of establishing that

changed circumstances warrant relief.” Horne, 557 U.S. at 447.

The defendants assert that the judgments here should “be set aside as

violating the public interest under Rule 60(b)(5).” They argue that retaining

the no-deny policy in the judgments harms the public interest in two ways:

(1) it eliminates “healthy criticism” of the SEC’s tactics, cloaking the SEC’s

4

The Second Circuit reached the same conclusion in Romeril, 15 F.4th 166.

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“expansion of powers” and its unfair settlement practices; and (2) it gives

judicial approval to unconstitutional provisions, which inherently harms the

public interest. The SEC responds that the defendants are not entitled to

relief because they failed to identify any unexpected changes in the facts or

law. The defendants do not address the SEC’s arguments concerning this

issue in their reply brief.

The district court correctly denied the defendants’ Rule 60(b)(5)

motion because the defendants have not shown that it has become “no longer

equitable” to apply the judgment prospectively. Fed. R. Civ. P. 60(b)(5).

On appeal, the defendants have not attempted to demonstrate a significant

factual or legal change that justifies relief, much less one that was

unanticipated when they entered the consent judgments. Although the

defendants argue that the terms incorporated into the judgments produce

harmful effects, those are the terms to which they agreed. The defendants

are not entitled to relief simply because “it is no longer convenient to live

with [those] terms.” Rufo, 502 U.S. at 383. Accordingly, the defendants

failed to meet their “burden of establishing that changed circumstances

warrant relief,” Horne, 557 U.S. at 447, and the district court properly denied

their motion as a result.

IV. Conclusion

For the foregoing reasons, we AFFIRM the judgment of the district

court.

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Edith H. Jones, Circuit Judge, joined by Duncan, Circuit Judge,

concurring:

I am pleased to concur in my colleague’s opinion denying relief on

these defendants’ post-judgment motions. I write to note that nothing in the

opinion (or in the district court opinion, for that matter) approves of or

acquiesces in the SEC’s longstanding policy that conditions settlement of any

enforcement action on parties’ giving up First Amendment rights. 17 C.F.R.

§ 202.5(e). If you want to settle, SEC’s policy says, “Hold your tongue, and

don’t say anything truthful--ever”—or get bankrupted by having to continue

litigating with the SEC. A more effective prior restraint is hard to imagine.

The defendants’ brief informed us that a petition to review and revoke this

SEC policy was filed nearly four years ago. New Civil Liberties Alliance,

Petition to Amend (Oct. 30, 2018), available at http://bit.ly/2xfFD3Z.

However, SEC never responded to the petition. Given the agency’s current

activism, I think it will not be long before the courts are called on to fully

consider this policy.

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