Amicus Curiae Brief — Thomas Joseph Powell, et al., Petitioners v. Securities and Exchange Commission

No. 25-1100

In the Supreme Court of the United States

THOMAS JOSEPH POWELL, ET AL.,

Petitioners,

v.

SECURITIES AND EXCHANGE COMMISSION

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF AMICUS CURIAE

THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA

SUPPORTING PETITIONERS

JONATHAN D. URICK

MARIEL A. BROOKINS

U.S. CHAMBER

LITIGATION CENTER

1615 H Street, NW

Washington, DC 20062

(202) 659-6000

DONALD M. FALK

Counsel of Record

SCHAERR | JAFFE LLP

One Embarcadero Center

Suite 1200

San Francisco, CA 94111

(415) 562-4942

dfalk@schaerr-jaffe.com

AARON S. GORDON

SCHAERR | JAFFE LLP

1717 K Street NW

Suite 900

Washington, DC 20006

(202) 787-1060

Counsel for Amicus Curiae

APRIL 2026

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................... iii

INTRODUCTION, SUMMARY, AND

INTEREST OF AMICUS CURIAE ......................... 1

REASONS FOR GRANTING THE PETITION.......... 3

I.

Review Is Warranted To Resolve

Whether The Rule Coerces Restraints On

Speech Rather Than “Voluntary”

Waivers............................................................... 4

A. The Decision Below Undermines

Precedent Recognizing the Coercive

Effect of Conditioning Government

Benefits on Surrenders of

Constitutional Rights. ................................. 4

B. The Decision Below Departs from

Decisions of This Court and Others

Requiring that Government-Imposed

Surrenders of Constitutional Rights

Be Closely Tied to Legitimate

Government Interests. ................................ 8

C. The Uniform, Mandatory Rule Is

Categorically Distinct from Routine

Plea Bargaining or Other

Contractual Negotiations. ......................... 13

II. Review Is Warranted Because The SEC’s

Gag Policy Directly Violates The First

Amendment. ..................................................... 14

A. The Rule’s Gag Policy Fails Strict

Scrutiny...................................................... 14

ii

B. The Rule’s Gag Policy Is an

Unconstitutional Prior Restraint. ............. 16

C. The Decision Below Inappropriately

Restricts Facial First Amendment

Challenges. ................................................ 19

III. The SEC’s Rule Is Contrary To The

Public Interest And Violates Listeners’

Rights. .............................................................. 21

CONCLUSION .......................................................... 27

iii

TABLE OF AUTHORITIES

Cases

Page(s)

Alexander v. United States,

509 U.S. 544 (1993) ................................................ 17

Aptheker v. Secretary of State,

378 U.S. 500 (1964) ................................................ 20

Axon Enterprises, Inc. v. FTC,

598 U.S. 175 (2023) .................................................. 7

Bantam Books, Inc. v. Sullivan,

372 U.S. 58 (1963) .............................................. 5, 18

Bates v. City of Little Rock,

361 U.S. 516 (1960) .................................................. 5

Board of County Commissioners v. Umbehr,

518 U.S. 668 (1996) .................................................. 5

Bordenkircher v. Hayes,

434 U.S. 357 (1978) ............................................ 9, 13

Bousley v. United States,

523 U.S. 614 (1998) .................................................. 9

Brady v. United States,

397 U.S. 742 (1970) .................................................. 9

Branti v. Finkel,

445 U.S. 507 (1980) .................................................. 4

Branzburg v. Hayes,

408 U.S. 665 (1972) ................................................ 25

Bridges v. California,

314 U.S. 252 (1941) ................................................ 12

iv

Butterworth v. Smith,

494 U.S. 624 (1990) ................................................ 16

Cain v. Darby Borough,

7 F.3d 377 (3d Cir. 1993) ....................................... 22

Davies v. Grossmont Union High Sch. Dist.,

930 F.2d 1390 (9th Cir. 1991) .................................. 9

Dolan v. City of Tigard,

512 U.S. 374 (1994) .................................................. 8

Elrod v. Burns,

427 U.S. 347 (1976) .................................................. 4

First Nat’l Bank of Boston v. Bellotti,

435 U.S. 765 (1978) ................................................ 21

Gentile v. State Bar of Nevada,

501 U.S. 1030 (1991) .............................................. 16

Hall v. Ochs,

817 F.2d 920 (1st Cir. 1987) .................................. 12

Interstate Circuit, Inc. v. City of Dallas,

390 U.S. 676 (1968) ................................................ 18

Koontz v. St. Johns River Water

Mgmt. Dist., 570 U.S. 595 (2013) ........................ 6, 8

Landmark Commc’ns, Inc. v. Virginia,

435 U.S. 829 (1978) .......................................... 12, 15

Lynch v. City of Alhambra,

880 F.2d 1122 (9th Cir. 1989) .......................... 21, 22

Mills v. Alabama,

384 U.S. 214 (1966) ................................................ 23

v

Moody v. NetChoice, LLC,

603 U.S. 707 (2024) .......................................... 19, 20

NRA of America v. Vullo,

602 U.S. 175 (2024) .............................................. 5, 8

Overbey v. Mayor of Baltimore,

930 F.3d 215 (4th Cir. 2019) ............................. 24-26

Pickering v. Board of Educ. of Twp. High

Sch. Dist. 205, 391 U.S. 563 (1968) ....................... 23

Price v. U.S. Department of Justice

Attorney Office, 865 F.3d 676

(D.C. Cir. 2017) ...................................................... 12

Reed v. Town of Gilbert,

576 U.S. 155 (2015) ................................................ 14

SEC v. Novinger,

40 F.4th 297 (5th Cir. 2022) .............................. 6, 17

SEC v. Romeril,

15 F.4th 166 (2d Cir. 2021) .................................... 23

SEC v. Vitesse Semiconductor Corp.,

771 F. Supp. 2d 304 (S.D.N.Y. 2011)..................... 25

Secretary of State of Maryland v.

Joseph H. Munson Co.,

467 U.S. 947 (1984) ................................................ 19

Shelby County v. Holder,

570 U.S. 529 (2013) ................................................ 20

Sherbert v. Verner,

374 U.S. 398 (1963) .................................................. 8

vi

Simon & Schuster, Inc. v. Members

of New York State Crime Victims Bd.,

502 U.S. 105 (1991) .................................................. 6

Siris v. SEC,

773 F.3d 89 (D.C. Cir. 2014) .................................. 17

Snepp v. United States,

444 U.S. 507 (1980) ................................................ 16

Southeastern Promotions, Ltd. v. Conrad,

420 U.S. 546 (1975) ........................................... 16-18

Speiser v. Randall,

357 U.S. 513 (1958) .................................................. 6

Town of Newton v. Rumery,

480 U.S. 386 (1987) .............................. 10, 11, 20, 21

United States v. Alvarez,

567 U.S. 709 (2012) ................................................ 25

United States v. ITT Continental Baking Co.,

420 U.S. 223 (1975) ................................................ 11

United States v. Jackson,

390 U.S. 570 (1968) ................................................ 13

Virginia State Bd. of Pharmacy v.

Virginia Citizens Consumer Council, Inc.,

425 U.S. 748 (1976) ...................................... 1, 21, 25

Statute

15 U.S.C. §45b ........................................................... 23

vii

Regulations

17 C.F.R. §202.5............................................... 2, 13, 19

17 C.F.R. §229.10....................................................... 24

Adoption of Integrated Disclosure System,

47 Fed. Reg. 11380 (Mar. 16, 1982)....................... 24

Rule

Supreme Court Rule 37.6 ............................................ 1

Treatises

Smolla & Nimmer on Freedom of Speech

(Apr. 2026 update) ..................................... 17, 18, 26

Marc I. Steinberg & Ralph C. Ferrara,

Securities Practice: Federal and State

Enforcement (2023) .................................................. 2

Other Authorities

Aaron Gordon,

Imposing Silence Through Settlement:

A First-Amendment Case Study of the

New York Attorney General,

84 Alb. L. Rev. 335 (2021)............ 5, 9, 12, 16, 24, 25

Gerald Hodgkins et al.,

SEC Focused On Fraud As Actions

Markedly Declined in 2025,

Law360 (Nov. 12, 2025) ......................................... 22

Danné L. Johnson,

SEC Settlement: Agency

Self-Interest or Public Interest,

12 Fordham J. Corp. & Fin. L. 627 (2007) .............. 7

viii

Roberta S. Karmel,

Creating Law at the Securities and Exchange

Commission: The Lawyer as Prosecutor,

61 L. & Contemp. Probs. 33 (1998) ......................... 7

Mem. in Opp. to Mot. for Relief

from Judgment, SEC v. Allaire,

No. 1:03-cv-04087-DLC, 2019 WL 6114484

(S.D.N.Y. Nov. 18, 2019), ECF No. 31 ................... 15

Notice of Adoption of an Amendment to

Rule 14a-9 and Statement by the

Commission on Disclosure of Projections

of Future Economic Performance,

S.E.C. Release No. 33-5699,

1976 WL 160385 (Apr. 23, 1976) ........................... 24

Robert Reich,

Smoking, Guns, Am. Prospect

(Dec. 19, 2001) ........................................................ 23

SEC,

Addendum to Div. of Enforcement

Press Release, Fiscal Year 2024

(Nov. 22, 2024) ....................................................... 22

SEC Division of Enforcement,

2020 Annual Report (Nov. 2, 2020) ....................... 22

Andrew N. Vollmer,

Four Ways to Improve SEC Enforcement,

43 Sec. Regul. L.J. 333 (2015) ........................... 7, 23

INTRODUCTION, SUMMARY, AND

INTEREST OF AMICUS CURIAE 1

The Chamber of Commerce of the United States

of America is the world’s largest business federation.

It represents approximately 300,000 direct members

and indirectly represents the interests of more than

three

million

companies

and

professional

organizations of every size, in every industry sector,

and from every region of the country. An important

function of the Chamber is to represent the interests

of its members in matters before Congress, the

Executive Branch, and the courts. To that end, the

Chamber regularly files amicus curiae briefs in cases,

like this one, that raise issues of concern to the

nation’s business community. In particular, many of

the Chamber’s members are subject to securities laws

enforced by the SEC.

The constitutionally guaranteed freedom of

speech is extremely important to the Chamber and its

members. “[T]he free flow of commercial information

is *** indispensable to the formation of intelligent

opinions” about how the economy should “be regulated

or altered.” Virginia State Bd. of Pharmacy v. Virginia

Citizens Consumer Council, Inc., 425 U.S. 748, 765

(1976). That is particularly true in regulated

industries and in interactions with the Securities and

1 Pursuant to Supreme Court Rule 37.6, amicus curiae states that

no counsel for any party authored this brief in whole or in part

and no person or entity other than amicus curiae, its members,

or its counsel made any monetary contribution intended to fund

the preparation or submission of this brief. Counsel of record for

all parties received timely notice of amicus curiae’s intent to file

this brief.

2

Exchange Commission—an agency “vested with

sweeping investigatory and prosecutorial powers.”

25A Marc I. Steinberg & Ralph C. Ferrara, Securities

Practice: Federal and State Enforcement §9:16 (2023).

This case highlights how the Commission has for

decades abused its authority to stifle criticism from

those most familiar with its practices: targets of SEC

enforcement actions who settle with the Commission.

Since 1972, the SEC has applied 17 C.F.R.

§202.5(e) (the “Rule”) to require anyone settling an

SEC enforcement action to submit to a consent-decree

provision forbidding the defendant from taking

any action or mak[ing] or permit[ting] to be

made any public statement denying, directly

or indirectly, any allegation in the complaint

or creating the impression that the [SEC’s]

complaint [against the defendant] is without

factual basis.

See Pet.App.43a.

The First Amendment prohibits the SEC from

forcing all settling parties to abandon the right to

publicly criticize the Commission’s allegations against

them. That these gag clauses are incorporated into

self-styled “consent” orders should not obscure their

coercive nature. In each case, the SEC threatens to

proceed with enforcement action unless the

defendants surrender their freedom to criticize the

Commission’s charges. That surrender is not

voluntary, nor is it closely related to a legitimate SEC

interest in resolving the dispute, as this Court’s

precedent requires.

3

The SEC Rule requires imposition not merely of

restraints on protected speech, but prior restraints—a

particularly pernicious form of censorship. The Ninth

Circuit misapprehended the nature of the Rule’s

restraints, which cannot survive the searching

scrutiny that properly applies.

The Ninth Circuit’s misapplication of core First

Amendment principles further warrants review

because the issue is exceptionally important.

Businesses and the general public have strong

interests in the free flow of information that helps

ensure the SEC responsibly exercises its immense

power. For all these reasons, the Court should grant

certiorari and reverse.

REASONS FOR GRANTING THE PETITION

This Court’s intervention is warranted for

multiple reasons. The petition raises important First

Amendment issues arising from the SEC’s

suppression of all settling defendants’ speech. The

decision below mislabels coercive speech suppression

as voluntary. It approves a Rule amounting to a prior

restraint on hundreds of settling defendants each

year. It then approves this across-the-board restraint

under a forgiving analysis that departs from the

robust scrutiny applied by this Court and other

Circuits in similar circumstances. And it misconstrues

principles governing facial First Amendment

challenges. The SEC’s widespread, mandatory use of

the Rule underscores the exceptional importance of

this case. Businesses and the public have a strong

interest in access to the information the SEC

4

suppresses as a matter of course. For all these reasons,

certiorari should be granted.

I.

Review Is Warranted To Resolve Whether

The Rule Coerces Restraints On Speech

Rather Than “Voluntary” Waivers.

This Court should intervene because the Ninth

Circuit departed from governing precedent in holding

that the surrenders of rights demanded by the SEC’s

gag Rule are voluntary and therefore constitutional.

In reality, the Rule exploits government power to

suppress expression without serving a legitimate and

closely related government interest.

A.

The

Decision

Below

Undermines

Precedent Recognizing the Coercive

Effect of Conditioning Government

Benefits

on

Surrenders

of

Constitutional Rights.

1. The Ninth Circuit concluded that the

surrenders of free-speech rights extracted under the

Rule were voluntary. Pet.App.2a. Under the Rule,

however, the SEC’s threat of reinstituted proceedings

extracts the defendant’s agreement never to publicly

question the Commission’s allegations; silence is won

with a threat of reprisal. Yet this Court and the courts

of appeals have invalidated contractual waivers of

First-Amendment rights if public officials secured

those waivers with threats of reprisal. See Elrod v.

Burns, 427 U.S. 347, 359 n.13 (1976) (plurality

opinion); Branti v. Finkel, 445 U.S. 507, 512 n.6 (1980);

see also Aaron Gordon, Imposing Silence Through

Settlement: A First-Amendment Case Study of the New

5

York Attorney General, 84 Alb. L. Rev. 335, 346 & n.49

(2021) (citing cases).

The Ninth Circuit departed from this authority

when it accepted the SEC’s characterization of its gag

provisions as “voluntary” waivers of First Amendment

rights and upheld them on that basis. See

Pet.App.10a-12a. But settling defendants’ relinquishments of expressive rights are voluntary only on the

surface. And, in the First Amendment context, courts

must “look through forms to the substance” of

government conduct. Bantam Books, Inc. v. Sullivan,

372 U.S. 58, 67 (1963).

Viewed against the backdrop of threatened or

pending enforcement proceedings, settling defendants’

surrender of their speech rights under the SEC’s policy

is anything but “voluntary.” The First Amendment

protects the freedom of speech “not only against heavyhanded frontal attack, but also from being stifled by

more subtle governmental interference.” Bates v. City

of Little Rock, 361 U.S. 516, 523 (1960). Thus,

government officials may violate the Amendment

through informal measures such as “threat[s] of

invoking legal sanctions and other means of coercion,”

Bantam Books, 372 U.S. at 67, including investigations or civil enforcement actions, see NRA of

America v. Vullo, 602 U.S. 175, 188, 191 (2024).

Similarly, under the unconstitutional conditions

doctrine, the government “may not deny [someone] a

benefit *** on a basis that infringes his *** freedom of

speech even if he has no entitlement to that benefit.”

Board of County Commissioners v. Umbehr, 518 U.S.

668, 674 (1996) (cleaned up). This principle applies not

6

only to denying affirmative benefits, but to denying

relief from a legal burden. See Speiser v. Randall, 357

U.S. 513, 518-519 (1958). And the violation remains

when government, by threatening denial of a benefit,

“succeeds in pressuring someone into forfeiting a

constitutional right,” Koontz v. St. Johns River Water

Mgmt. Dist., 570 U.S. 595, 606 (2013).

It follows that the SEC abridges freedom of speech

by demanding as a condition of any settlement that the

defendant never publicly call into doubt the

Commission’s allegations. That condition, enshrined

in the Rule, “operate[s]” as a powerful “disincentive[]

to speak.” Simon & Schuster, Inc. v. Members of New

York State Crime Victims Bd., 502 U.S. 105, 117

(1991). As Judge Edith Jones explained, the SEC tells

defendants, “‘Hold your tongue *** ’—or get bankrupted by having to continue litigating with the SEC.”

SEC v. Novinger, 40 F.4th 297, 308 (5th Cir. 2022)

(Jones, J., concurring). Likewise, after settlement, if “a

defendant breaches” the gag provision, the

Commission may “restore the action to the active

docket.” Pet.App.34a. That—the promised consequence of the Rule—amounts to reprisal for criticism

of the agency.

In dismissing constitutional concerns about its

actions, the SEC has contended that, in settling

proceedings, it does not bestow a “benefit” on the

defendant. Thus, it maintains, no constitutional

constraints on using government power to suppress

speech apply. C.A. Excerpts of Record at ER-60 [Dkt.

17.1].

7

But ending costly, burdensome enforcement

proceedings benefits the SEC’s targets substantially,

no matter how those proceedings might have turned

out. SEC “enforcement actions against regulated

persons and businesses *** have serious adverse

consequences.” Roberta S. Karmel, Creating Law at

the Securities and Exchange Commission: The Lawyer

as Prosecutor, 61 L. & Contemp. Probs. 33, 45 (1998)

(former SEC Commissioner). SEC officials well know

that “[t]he SEC is more powerful than most

respondents” in its enforcement actions, Danné L.

Johnson, SEC Settlement: Agency Self-Interest or

Public Interest, 12 Fordham J. Corp. & Fin. L. 627, 661

(2007) (former SEC enforcement attorney), so “the

pressure to settle is over-powering even when the SEC

case lacks merit,” Andrew N. Vollmer, Four Ways to

Improve SEC Enforcement, 43 Sec. Regul. L.J. 333,

336 (2015) (SEC’s former Deputy and Acting General

Counsel). Unsurprisingly under these circumstances,

the “vast majority” of SEC enforcement actions settle.

See Axon Enterprises, Inc. v. FTC, 598 U.S. 175, 216

(2023) (Gorsuch, J., concurring in judgment).

2. In evaluating the SEC’s uniform gag practice,

the Ninth Circuit undercut this Court’s jurisprudence

about coerced relinquishment of rights. The opinion

below

considered

it

“critical[]”—and largely

dispositive—that “the consequence for violating the

Rule is *** only that the SEC may seek to reopen the

civil enforcement proceedings[.]” Pet.App.24a. But the

threat of costly SEC enforcement proceedings, like any

other “threat of adverse government action,” cannot be

used “to punish or suppress [a defendant]’s speech,”

8

Vullo, 602 U.S. at 191, without exposing that

suppression to full First Amendment scrutiny.

The Ninth Circuit also suggested that the SEC’s

gag provisions are constitutionally unobjectionable

because they merely threaten to “to return things to

how they were before the settlement,” when an

enforcement action was pending. Pet.App.21a. Yet

every condition attached to a governmental benefit

merely threatens “to return things to how they were

before” the benefit was conferred. Nevertheless, “the

libert[y] of *** expression may [not] be infringed by the

*** placing of conditions upon a benefit,” Sherbert v.

Verner, 374 U.S. 398, 404 (1963)—even where such a

condition is arguably nothing more than a threat to

return to the status quo ante. See Koontz, 570 U.S. at

607-608.

The panel opinion’s conflict with precedent

governing the voluntariness of waivers of

constitutional rights calls for this Court’s review.

B.

The Decision Below Departs from

Decisions of This Court and Others

Requiring that Government-Imposed

Surrenders of Constitutional Rights Be

Closely Tied to Legitimate Government

Interests.

The decision below departs from precedent in

another significant respect. This Court has repeatedly

held that government “may not require a person to

give up a constitutional right *** in exchange for a

discretionary [government] benefit” that “has little or

no relationship to” the right being surrendered. Dolan

v. City of Tigard, 512 U.S. 374, 385 (1994). The

9

relationship here is too tenuous to support the acrossthe-board Rule.

1. The Ninth Circuit considered the SEC’s

speech-suppressing settlement clauses no more

constitutionally infirm than waivers of other rights

common in criminal plea agreements and other

contracts to which the government is a party.

Pet.App.11a-13a. Granted, a criminal defendant

accepting a plea deal “inevitab[ly]” forfeits certain

procedural guarantees, such as the right to a jury trial.

See Bordenkircher v. Hayes, 434 U.S. 357, 364 (1978).

But there are limits: public officials may not strongarm settling parties into relinquishments of

constitutional rights that are not reasonably necessary

to settle the underlying dispute. See Gordon, supra, at

347-348 (citing cases). For example, a school district

could not condition a civil settlement on a plaintiff’s

waiver of his First Amendment right to run for office

because “the nexus between the individual right

waived and the dispute” was “not a close one.” Davies

v. Grossmont Union High Sch. Dist., 930 F.2d 1390,

1399 (9th Cir. 1991). Applying the same principle, this

Court has indicated that a plea agreement may be

constitutionally invalid if it includes terms that “by

their nature” have “no proper relationship to the

prosecutor’s business.” Bousley v. United States, 523

U.S. 614, 619 (1998) (quoting Brady v. United States,

397 U.S. 742, 755 (1970)). See also Gordon, supra, at

346-348 (collecting criminal cases invalidating rights

waivers).

In holding that the SEC’s gag clauses were valid

“waiver[s] of First Amendment rights,” Pet.App.13a25a, the decision below relied on Town of Newton v.

10

Rumery, 480 U.S. 386 (1987). That reliance was

misplaced.

In Rumery, this Court upheld a “releasedismissal” agreement in which a criminal defendant,

in return for dismissal of charges against him, waived

the right to file a civil-rights action. The Court

acknowledged “that in some cases these agreements

may infringe” defendants’ rights but rejected “a per se

rule” of invalidity. Rumery, 480 U.S. at 392. The Court

upheld that particular agreement because “the

prosecutor had an independent, legitimate reason to

make th[e] agreement” that was “directly related to his

prosecutorial responsibilities.” Id. at 398. “The

agreement foreclosed both the civil and criminal trials

concerning [the plaintiff], in which [an assault victim]

would have been a key witness.” Ibid. The victim

“therefore was spared the *** embarrassment she

would have endured if she had had to testify in either

of those cases.” Ibid.

Rumery involved the waiver of a statutory, not

constitutional, right. Id. at 392. But even Rumery

required a close nexus between the right waived and

the government’s specific interest in the dispute or its

settlement.

Here, the Ninth Circuit found “a close nexus

between” the SEC’s claimed interest in “proving the

allegations supporting its enforcement actions—and

the specific right waived—the defendant agreeing not

to deny those same allegations.” Pet.App.21a (cleaned

up). On the contrary, however, the speech rights

exacted in the Rule lack the kind of “direct[]

relat[ionship]” to the SEC’s legitimate interests that

11

was present in Rumery. See 480 U.S. at 397-398. The

SEC’s interest in proving its allegations evaporates

when the defendant settles the case; nothing remains

to be proved, and the SEC is in the position it would

have occupied if its proofs had been successful.

Yet the Commission demands from settling

parties more than just a waiver of their right to keep

litigating the allegations against them. Settlors also

must forever surrender their right to publicly criticize

those allegations, which goes beyond the SEC’s

interest in fully resolving the proceedings. By

contrast, in Rumery both the criminal charges and the

civil suit against the prosecutor involved the same

incident and the same victim-witness, so that the

proceedings could not be fully resolved unless both

actions were settled.

Also pertinent to the close-relationship inquiry,

consent decrees “normally” involve “parties giv[ing] up

something they might have won in litigation ***.”

United States v. ITT Continental Baking Co., 420 U.S.

223, 235 (1975). But the First Amendment right that

SEC consent decrees extract from settling parties is

not one they would have lost if the SEC prevailed in

an enforcement action, nor is it one of the rights

necessarily surrendered when a matter is resolved out

of court (such as the right to an impartial adjudicator).

Finally, insofar as the SEC characterizes the

“interest” undergirding its policy more broadly—not

just as settling enforcement proceedings but as

reinforcing in the public’s mind the soundness of the

SEC’s allegations—that is a constitutionally invalid

basis for muzzling speech. The First Amendment

12

subjects “police, prosecutors, and judicial processes to

extensive public scrutiny and criticism,” Landmark

Commc’ns, Inc. v. Virginia, 435 U.S. 829, 839 (1978)

(cleaned up), whether it concerns the legal system

generally or a “particular *** controversy.” Bridges v.

California, 314 U.S. 252, 277-278 (1941).

2. The application of Rumery below departs from

decisions by other courts of appeals. For example, the

D.C. Circuit invalidated a plea agreement provision

that required a criminal defendant to surrender his

right to file FOIA requests about charges against him.

See Price v. U.S. Department of Justice Attorney Office,

865 F.3d 676, 681 (D.C. Cir. 2017). The court of

appeals recognized that a prosecutor’s “set of

legitimate interests places boundaries on the rights

that can be bargained away in plea negotiations.” Ibid.

The government’s attempt to link that condition to its

“interest in finality” under Rumery took that “interest

too far.” Id. at 681-682. But the gag Rule takes the

SEC’s interest in finality even further.

For similar reasons, the First Circuit invalidated

an arrestee’s release of the right to sue police officers

that was imposed as a condition of dismissal of charges

and release from custody after his arrest. See Hall v.

Ochs, 817 F.2d 920, 924 (1st Cir. 1987). The court

noted that the police had no legitimate lawenforcement interest in using the fact of custody as a

lever to extract the release. Ibid. See also Gordon,

supra, at 347-349 (collecting similar cases).

This Court should grant review to ensure a

uniform articulation of the Rumery standard.

13

C.

The Uniform, Mandatory Rule Is

Categorically Distinct from Routine

Plea Bargaining or Other Contractual

Negotiations.

The Ninth Circuit’s effort to analogize the Rule to

plea bargaining highlights another reason for review.

Unlike typical criminal plea bargaining or civil

settlement negotiations, the SEC demands that

defendants surrender their First Amendment rights

under an across-the-board policy. The Commission’s

regulations bind it “not [to] agree to a settlement”

unless it includes a standard gag provision.

Pet.App.34a; see 17 C.F.R. §202.5(e). That presents “a

situation very different from the give-and-take

negotiation

common

in

plea

bargaining.”

Bordenkircher, 434 U.S. at 362-363 (cleaned up). As a

“unilateral imposition of a penalty upon” those who

“cho[ose] to exercise a legal right,” the universal policy

is unconstitutional. Ibid.

Applying the same principles, this Court

invalidated a criminal statute under which only

defendants who pleaded not guilty or demanded jury

trials were eligible for the death penalty. Although

similar conditions might have been imposed via plea

bargaining—where a deal to avoid death would

involve a guilty plea and no jury trial—their

imposition by statute “needlessly chill[ed] the exercise

of basic constitutional rights.” United States v.

Jackson, 390 U.S. 570, 582 (1968). Rule 202.5(e) is

invalid for the same reasons.

* * *

14

Because the right to publicly criticize the SEC is

extraneous to the civil settlement process, the SEC

cannot legitimately extract a waiver of that speech

right as a condition to settling. The SEC’s policy of

silencing settling defendants is a systematic violation

of constitutional rights—not a series of voluntary

waivers. Because the Ninth Circuit’s contrary

conclusion departs from the reasoning of this Court

and other Circuits, prompt review is needed.

II. Review Is Warranted Because The SEC’s

Gag Policy Directly Violates The First

Amendment.

The case also warrants review because the SEC’s

gag clauses violate its enforcement targets’ First

Amendment rights. Because the Rule requires

uniform, nationwide imposition of constitutionally

infirm clauses, the constitutional violation is

widespread and worthy of this Court’s intervention.

A. The Rule’s Gag Policy Fails Strict

Scrutiny.

An SEC gag clause bars a defendant from publicly

“denying” the SEC’s allegations, “directly or

indirectly.” Pet.App.26a (emphasis omitted). Yet the

defendant may voice agreement with those

allegations. This viewpoint-based restriction on

speech is “presumptively unconstitutional and may be

justified only if” it survives “strict scrutiny”: the

government must “prove[] that [the restriction is]

narrowly tailored to serve compelling [government]

interests.” Reed v. Town of Gilbert, 576 U.S. 155, 168,

163 (2015) (cleaned up).

15

What compelling interest might this restriction

serve? The SEC has warned that allowing settling

parties to criticize it could “undermine confidence in

the Commission[]” by “creating an unfair impression”

of its enforcement practices. Mem. in Opp. to Mot. for

Relief from Judgment 20, SEC v. Allaire, No. 1:03-cv04087-DLC, 2019 WL 6114484 (S.D.N.Y. Nov. 18,

2019), ECF No. 31 (“Allaire Opp.”). But few interests

are less “compelling.” It is “firmly established *** that

injury to official reputation,” including agencies’

“institutional reputation[s],” “is an insufficient reason

for repressing speech that would otherwise be free.”

Landmark Commc’ns, 435 U.S. at 841-842 (cleaned

up).

The Ninth Circuit acknowledged that the SEC’s

claimed interest in “silenc[ing] defendants in order to

promote public confidence in the SEC’s work” is

“improper.” Pet.App.23a. But the court of appeals

implicitly approved that “improper” rationale by

holding that the SEC’s suppression of subsequent

public discussion of the allegations underlying

enforcement proceedings was justified by two SEC

interests: (1) proving facts for which settling

defendants already agree to accept remedial

consequences, and (2) resolving proceedings generally.

See Pet.App.21a-25a. That relabels a desire to be

insulated from public criticism as an interest in

settlement.

The SEC has also suggested that its settlement

provisions are permissible under authority upholding

gag orders on trial participants. See Allaire Opp. at 18.

But such orders “have been upheld only where

necessary

either

to

ensure

the

impartial

16

administration of justice in pending proceedings, or to

prevent dissemination of private or confidential

information acquired by participants through their

involvement in the trial process.” See Gordon, supra,

at 377. Neither rationale applies to the SEC’s gags.

Because the proceeding is over, the suppressed views

on the SEC’s allegations cannot “have a materially

prejudicial effect” on “a pending case.” Gentile v. State

Bar of Nevada, 501 U.S. 1030, 1076 (1991). And in

stifling criticism of the Commission’s allegations, the

gag clauses go far beyond prohibiting disclosure of any

confidential information defendants may have

obtained during SEC investigations. See Butterworth

v. Smith, 494 U.S. 624, 631-632 (1990). 2 The Rule

cannot survive strict scrutiny.

B.

The

Rule’s

Gag

Policy

Is

Unconstitutional Prior Restraint.

an

Review is further warranted because the SEC’s

gag clauses are not just restraints on speech, but prior

restraints. For prior restraints, the presumption of

invalidity “is heavier—and the degree of protection

broader—than that against limits on expression”

enforced by subsequent punishment. Southeastern

Promotions, Ltd. v. Conrad, 420 U.S. 546, 558-559

(1975).

2 Similarly,

the Ninth Circuit’s invocation of Snepp v. United

States, 444 U.S. 507 (1980) (per curiam), see Pet.App.13a, is

misguided. Snepp upheld contractual limits on a former CIA

agent’s ability to publish writings discussing CIA activities

without agency pre-approval. While the government’s compelling

interest in national security would justify such restrictions even

without an agreement, see id. at 510 n.3, no such interest arises

here.

17

The SEC formalizes its settlements in consent

decrees. See Pet.App.31a-32a. A gag provision in a

consent decree is a “classic” prior restraint, see

Alexander v. United States, 509 U.S. 544, 550 (1993),

in that violators of such orders cannot challenge their

validity in subsequent proceedings—a principle

known as the collateral bar rule. See 2 Smolla &

Nimmer on Freedom of Speech §15:72 (Apr. 2026

update). The SEC’s speech-suppressing clauses are

prior restraints even if the penalty for violation is

reopening proceedings; a restriction “need not effect

total suppression in order to create a prior restraint.”

Southeastern Promotions, 420 U.S. at 556 n.8.

Yet the panel assumed away the collateral-bar

rule. According to the panel, were the SEC to “seek to

reopen the civil enforcement proceedings” based on a

gag-clause violation, a court would address any FirstAmendment issue at that time, or when entertaining

a request for relief from a consent judgment.

Pet.App.24a. But that is unrealistic: courts

consistently reject First Amendment objections as

grounds for relief from an SEC consent judgment. See

Novinger, 40 F.4th at 307. Nor may parties to a

consent decree challenge its validity in subsequent

proceedings to enforce that judgment. See Siris v.

SEC, 773 F.3d 89, 96 (D.C. Cir. 2014). The Ninth

Circuit’s assurance that settlors may someday assert

as-applied challenges to SEC settlements (see

Pet.App.26a-27a) rings hollow.

Even if they fell outside the collateral-bar rule,

the SEC’s gag clauses would constitute prior

restraints. Under this Court’s “broader definition,”

Alexander, 509 U.S. at 553, a “prior restraint” includes

18

most “orders or administrative rules that operate to

forbid expression before it takes place.” 2 Smolla &

Nimmer, supra, §15:1. In Interstate Circuit, Inc. v. City

of Dallas, for instance, this Court found an

unconstitutional prior restraint in an administrative

board’s power to classify films as “not suitable for

young persons,” thereby requiring a license to show

the films, even though those classifications received de

novo judicial review after the fact. 390 U.S. 676, 681682, 685 (1968).

Because the gag clauses cannot survive strict

scrutiny, they certainly cannot meet the still more

demanding standards for prior restraints. First, a

prior-restraint system must provide procedural

“safeguards *** against the suppression of ***

constitutionally

protected[] matter,”

including

“judicial superintendence” and “an almost immediate

judicial determination of the validity of the restraint.”

Bantam Books, 372 U.S. at 70. The SEC’s policy, far

from ensuring prompt judicial review, gags the

defendant for life regarding the allegations. Prior

restraints are also potentially permissible “only [in]

narrow *** situations,” such as “obscenity, ***

imminent threats to national security, or as a last

resort to protect a defendant’s right to a fair trial.” 2

Smolla & Nimmer, supra, §15:7. Criticism of the

SEC’s allegations does not “fit within” any of these

“narrowly

defined”

categories.

Southeastern

Promotions, 420 U.S. at 559.

19

C.

The Decision Below Inappropriately

Restricts Facial First Amendment

Challenges.

The decision below also warrants certiorari

because it misapplies principles of judicial review

established by this Court. The Ninth Circuit treated

NCLA’s rulemaking petition “as a facial challenge” to

Rule 202.5(e), which the court rejected because it was

unconvinced that “a substantial number of [the Rule’s]

applications are unconstitutional, judged in relation to

the [Rule’s] plainly legitimate sweep.” Pet.App.9a

(quoting Moody v. NetChoice, LLC, 603 U.S. 707, 723

(2024)). In the Ninth Circuit’s view, “First Amendment

concerns could well arise,” but only “in a more

particularized type of challenge.” Pet.App.10a.

That is wrong. The gag policy is facially

unconstitutional “not simply [because] it includes

within its sweep some impermissible applications, but

[because] in all its applications it operates on a

fundamentally mistaken premise,” Secretary of State

of Maryland v. Joseph H. Munson Co., 467 U.S. 947,

966 (1984): that the SEC may stifle criticism to protect

its reputation. And the SEC exerts the same coercive

pressures on all settling defendants. Even if some of

the speech suppressed by the SEC’s consent decrees

could be restricted consistent with the First

Amendment—if, say, a settling defendant acquired

sensitive nonpublic information through involvement

in an SEC investigation—that would not save the Rule

in its current form. And the prospect that the

Commission theoretically might draft a different gag

rule that would only apply to such confidential

information does not mean that the existing Rule is

20

constitutional in some cases. See Aptheker v. Secretary

of State, 378 U.S. 500, 515 (1964). Because the Rule

targets speech using invalid criteria in every case, it is

unconstitutional in every case. See Shelby County v.

Holder, 570 U.S. 529, 554-555 (2013).

Even if some applications of the SEC’s speechsuppressant policy could be constitutional, the opinion

below wrongly assumed without analysis that the

proportion of applications that were unconstitutional

was not “substantial.” This Court recently admonished

that such summary treatment of First Amendment

facial challenges is improper: “neither parties nor

courts can disregard the requisite inquiry into how a

[challenged] law works in all of its applications.”

Moody, 603 U.S. at 744. A “court must evaluate the full

scope of the [challenged] law’s coverage. It must then

decide which of the law’s applications are

constitutionally permissible and which are not,”

“weigh[ing] the one against the other.” Ibid.

Because the record compels the conclusion that

the proportion of the Rule’s applications that are

unconstitutional is at least “substantial” compared to

any legitimate applications, see Moody, 603 U.S. at

718, the correct application of Moody here is

straightforward and requires reversal on the merits.

That is especially so given the government’s burden of

proving on a case-by-case basis that a compelled

waiver of constitutional rights is justified. See

Rumery, 480 U.S. at 399, 401 (opinion of O’Connor,

21

J.). 3 Review would simply clarify how facial First

Amendment challenges operate.

III. The SEC’s Rule Is Contrary To The Public

Interest And Violates Listeners’ Rights.

This Court’s review is particularly appropriate

because the issue presented is exceptionally important

to the Nation. The speech-suppressing provisions

required by the Rule stifle speech about the SEC’s

enforcement activities, an issue of paramount

importance to businesses and the public. And the Rule

ensures that the suppressive clauses are imposed

hundreds of times each year across the country.

The First Amendment “serves significant societal

interests” beyond “those of the party seeking ***

vindication” of its right to speak. First National Bank

of Boston v. Bellotti, 435 U.S. 765, 776 (1978). In

particular, the protection extends to recipients of

speech. Virginia State Board, 425 U.S. at 756.

Thus, even a voluntary contractual waiver of

constitutional rights “is unenforceable if the interest

in its enforcement is outweighed in the circumstances

by a public policy harmed by enforcement of the

agreement.” Rumery, 480 U.S. at 392. Under Rumery,

the government must prove, on a case-by-case basis,

that a waiver is in the public interest. See id. at 399,

401 (O’Connor, J., concurring). This the SEC cannot do

because its policy operates by categorical Rule rather

than case-by-case negotiation.

3 Parts

of Justice O’Connor’s opinion are controlling in this

respect. See, e.g., Lynch v. City of Alhambra, 880 F.2d 1122, 1127

(9th Cir. 1989).

22

In reaching the opposite conclusion, the court

below rejected Petitioners’ facial challenge to the

SEC’s Rule but suggested the public interest might

weigh against enforcing the speech-suppressant

provisions in particular cases. See Pet.App.25a-27a.

Rumery, however, calls for “a case-specific showing”

that each government-demanded waiver of rights is

appropriate, ruling out a “blanket policy” of

demanding waivers in a whole “class of cases.” Cain v.

Darby Borough, 7 F.3d 377, 382-383 (3d Cir. 1993) (en

banc). “[A] district court [must] hear the evidence and

evaluate whether the public interest is served by

enforcement of [each] agreement.” Lynch, 880 F.2d at

1128. The SEC’s blanket policy requiring speechsuppressant clauses in settlements makes case-bycase consideration impossible before the restraint is in

place.

Moreover, in light of the SEC’s broad prerogatives

and voluminous enforcement docket, the Rule has

grave consequences for businesses seeking to

communicate with their customers, and for the

Nation. In the past decade, the SEC brought 4,556

standalone enforcement actions (against far more

defendants). See Gerald Hodgkins et al., SEC Focused

On Fraud As Actions Markedly Declined in 2025,

Law360 (Nov. 12, 2025), https://tinyurl.com/57s69n5v;

SEC, Addendum to Div. of Enforcement Press Release,

Fiscal Year 2024, at 1 (Nov. 22, 2024),

https://tinyurl.com/ypedekyx;

SEC

Division

of

Enforcement, 2020 Annual Report 16 (Nov. 2, 2020),

https://tinyurl.com/ms8ccjej. The SEC’s policy has

forever foreclosed thousands from freely speaking

about the Commission’s allegations against them.

23

The SEC’s regulation-by-settlement tactics

compound the importance of this enforced silence.

Even when the Commission’s “legal theory is new and

untested,” “the pressure to settle is over-powering.”

Vollmer, supra, at 336. Settlement thus affords

regulators “extra-ordinary discretion” to press “novel

legal theories” that “no judge will ever scrutinize.”

Robert Reich, Smoking, Guns, Am. Prospect (Dec. 19,

2001), https://prospect.org/features/smoking-guns/.

The potential for abuse of this authority

highlights the need for open discourse regarding SEC

allegations. The First Amendment, after all,

“protect[s] the free discussion of governmental affairs”

precisely to expose “abuses of power.” Mills v.

Alabama, 384 U.S. 214, 218-219 (1966). The public

interest suffers when the Commission silences targets

of its investigations, as they are “most likely to have

informed and definite opinions” on the SEC’s

practices. Pickering v. Board of Educ. of Twp. High

Sch. Dist. 205, 391 U.S. 563, 572 (1968). For similar

reasons, Congress banned even private companies’

inclusion of nondisparagement clauses in consumer

contracts in 2016. See 15 U.S.C. §45b. The rationale

for this prohibition surely applies with greater force to

government agencies like the SEC, where First

Amendment values are at their apex.

Perhaps most concerning, the SEC’s gag clauses

contemplate suppression of truthful speech. By

including in its gag provision the proviso that settlors

may criticize the SEC’s allegations if “testimonial

obligations” so require, SEC v. Romeril, 15 F.4th 166,

170 (2d Cir. 2021), the SEC effectively admits to

suppressing some truthful criticisms of its conduct.

24

Indeed, settling parties remain silenced even

when their alleged misdeeds are no longer unlawful.

For instance, the SEC once generally prohibited

forward-looking projections of economic performance

in firms’ public disclosures. In 1976, however, the

Commission amended its rules to permit such

projections. See Notice of Adoption of an Amendment

to Rule 14a-9 and Statement by the Commission on

Disclosure of Projections of Future Economic

Performance, S.E.C. Release No. 33-5699, 1976 WL

160385, at *2 (Apr. 23, 1976). And in 1982, the SEC

adopted its current policy of “encourag[ing]” such

projections. 17 C.F.R. §229.10(b); Adoption of

Integrated Disclosure System, 47 Fed. Reg. 11380,

11402 (Mar. 16, 1982).

Yet parties who settled SEC charges of unlawful

forecasting under the former regulations are forever

forbidden from publicly criticizing the basis for those

charges. That suppressed speech would offer unique

contributions to the public debate over the scope and

exercise of SEC regulatory authority.

Citing similar public-interest concerns, many

courts have invalidated contractual gag clauses, even

between private parties where no coercion was

present. See Gordon, supra, at 372-373 (citing cases).

In an example involving a local government, the

Fourth Circuit applied Rumery in a way that conflicts

with the Ninth Circuit’s decision below. The Fourth

Circuit held that a would-be plaintiff who settled her

civil-rights claims against city police was not bound by

a nondisparagement clause in her settlement

agreement. Overbey v. Mayor of Baltimore, 930 F.3d

215, 224 (4th Cir. 2019). “[E]nforcement of [such a]

25

clause *** was contrary to the citizenry’s First

Amendment interest” in hearing “speech critical of the

government.” Id. at 224-225. Here, too, a powerful lawenforcement agency silences its critics: defendants

forced to settle the SEC’s charges against them. “The

disservice to the public inherent in such a practice is

palpable.” SEC v. Vitesse Semiconductor Corp., 771 F.

Supp. 2d 304, 309 (S.D.N.Y. 2011).

To the SEC’s concern that defendants might tell

the public self-serving accounts of the charges after

settlement, the SEC could advance its own counternarrative instead of silencing critics. After all, the

normal remedy for unwelcome speech is more speech.

United States v. Alvarez, 567 U.S. 709, 727 (2012)

(plurality opinion). The SEC “has not shown, and

cannot show, why counterspeech would not suffice to

achieve its interest.” Id. at 726. Indeed, apart from the

CFTC and New York Attorney General for civil

settlements, see Gordon, supra, at 338-339, the

Chamber’s counsel know of no prosecutors or other

government agencies that routinely insist on similar

gag provisions in plea agreements or civil settlements.

The presence of media petitioners challenging the

Rule as a violation of their First-Amendment rights to

“news gathering,” Branzburg v. Hayes, 408 U.S. 665,

707 (1972), underscores the public interests

supporting review. This Court has recognized that,

where there is “a willing speaker” who would

communicate in the absence of a challenged restraint,

the First Amendment protects both the source and the

would-be recipients of the suppressed communication.

Virginia State Board, 425 U.S. at 756. The record

includes declarations from parties bound by SEC gag

26

clauses stating that they would speak to the media

petitioners but for the speech-suppressant provisions.

C.A. Further Excerpts of Record at FER4-FER5,

FER19-FER20 [Dkt. 66.1]. These declarants

constitute “willing speakers” for First-Amendment

purposes even if one believes they consented to the

gags when entered. Overbey, 930 F.3d at 228.

Whatever the standard to evaluate their rights—

whether “exacting scrutiny,” or a likelihood of

prejudice to ongoing proceedings, 2 Smolla & Nimmer,

supra, §15:42—the Rule cannot survive it. As

explained above, it fails strict scrutiny; it cannot meet

the requirements for prior restraints; and, after a

settlement, there is no risk of prejudicing the outcome

of any proceeding.

The significant adverse public-policy effects

underscore the need for this Court’s review.

27

CONCLUSION

The petition for a writ of certiorari should be

granted.

APRIL 2026

Respectfully submitted.

JONATHAN D. URICK

MARIEL A. BROOKINS

U.S. CHAMBER

LITIGATION CENTER

1615 H Street, NW

Washington, DC 20062

(202) 659-6000

DONALD M. FALK

Counsel of Record

SCHAERR | JAFFE LLP

One Embarcadero Center

Suite 1200

San Francisco, CA 94111

(415) 562-4942

dfalk@schaerr-jaffe.com

AARON S. GORDON

SCHAERR | JAFFE LLP

1717 K Street NW

Suite 900

Washington, DC 20006

(202) 787-1060

Counsel for Amicus Curiae