(HONOLULU, Hawaii)–Freedom of speech is among our most important and cherished rights. No law or rule can arbitrarily strip us of this right. The Liberty Justice Center has filed an amicus brief with the Supreme Court of the United States in Powell v. United States Securities and Exchange Commission to protect this principle. The brief urges the Court to uphold the First Amendment rights of Americans who have legal cases with government agencies.
In 1972, the U.S. Securities and Exchange Commission (SEC) silently created a rule that when people settle a regulatory enforcement case with the agency, they must remain silent about their case. If they make a public statement regarding the case, the SEC is entitled to reopen it. The Liberty Justice Center argues that this rule is designed to prevent the SEC from looking bad and unfairly silences Americans, violating their First Amendment rights.
This is not the first time the Liberty Justice Center has weighed in on this case. In 2024, the Liberty Justice Center filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in support of the petitioners. That court rejected this challenge, but did so “on necessarily narrow grounds,” noting how this rule “could impermissibly intrude on First Amendment rights.” Now, LJC is asking the U.S. Supreme Court to make it clear that the government cannot coerce people into giving up their free speech in order to settle a case.
The brief argues that the SEC’s gag rule violates the First Amendment in several ways:
- It acts like a lifelong speech ban.
- It stops people from speaking to reporters, lawmakers and fellow citizens about their own experiences.
- It blocks criticism of the government, which is one of the most protected kinds of speech under the First Amendment.
- It coerces Americans into trading away their constitutional right in exchange for a benefit.
- It empowers the SEC to retaliate against individuals who choose to speak about their cases.
“The federal government has criminal law enforcement authority to punish criminals,” said Reilly Stephens, Senior Counsel and Director of Amicus Practice for the Liberty Justice Center. “This is not meant to be a point of leverage for the government to strip citizens of their first amendment rights. And if ruling for the plaintiff here means that some federal enforcement actions might fall under public scrutiny, that’s how democracy is supposed to work.”
Suppressing speech to avoid criticism is not a legitimate government interest under the First Amendment and generates a multitude of violations regarding Americans’ individual rights. For this reason and more, the Liberty Justice Center asks the Supreme Court to protect freedom of speech by finding the SEC’s gag rule unconstitutional.
The Liberty Justice Center’s amicus brief in Powell v. SEC is available here.