The New Civil Liberties Alliance filed a complaint seeking declarative and injunctive relief against the U.S. Securities and Exchange Commission (SEC) in the U.S. District Court for the Southern District of California in the case of Ray Lucia and his former company. The suit before Judge Sabraw seeks to prevent Mr. Lucia from being compelled to submit—yet again—to a proceeding before an unconstitutional Administrative Law Judge (ALJ) at the SEC. NCLA also represents Mr. Lucia in the related matter remanded for hearing before “a properly appointed official … or the Commission itself.”
Mr. Lucia suffered irreparable professional, reputational and financial harm from the SEC’s first unconstitutional proceeding. Since then, he’s endured nearly seven years of protracted litigation successfully taking his case all the way to the U.S. Supreme Court based on the argument that the first ALJ he appeared before was improperly appointed.
Rather than retrying the remanded Lucia case before the Commission itself or in federal district court, as it easily could have done, the SEC chose to proceed once again in front of a constitutionally defective ALJ. This time, the SEC knows full well that the ALJ is defective, because the U.S. Solicitor-General conceded as much in filings and argument before the U.S. Supreme Court. The problem is that the ALJ enjoys multiple layers of protection from removal, which the Supreme Court has deemed unconstitutional. Mr. Lucia should not have to endure another years-long, constitutionally flawed ALJ proceeding before getting heard—and vindicated—on his remaining constitutional objections.