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Gibson v. SEC

Did we achieve our litigation objective? No. Christopher Gibson was forced to endure a second costly hearing before an unconstitutional SEC administrative law judge.

Court Outcome: The Supreme Court declined to review the Eleventh Circuit’s decision.

Larger Impact: A few years later, the Supreme Court reached these same issues in another NCLA case. In SEC v. Cochran, the Supreme Court ruled unanimously that people like Michelle Cochran and Christopher Gibson are legally entitled to raise constitutional challenges in federal court without having to wait for the conclusion of the potentially unconstitutional administrative proceeding. As a result, the SEC will no longer be able to use administrative proceedings as a barrier to evade constitutional scrutiny. Christopher Gibson made this possible.

Summary: Mr. Gibson’s case against the U.S. Securities and Exchange Commission (SEC) was disturbingly similar to scores of cases where that agency insisted on putting people through pointless administrative proceedings before unconstitutional administrative law judges (ALJs) that are destined to be vacated.

Mr. Gibson’s case was one of more than one-hundred invalid SEC hearings nullified following the Lucia v. SEC decision. In 2014 the SEC entered a formal order of investigation of Gibson that focused on trading activities. An ALJ found him in violation of securities laws in a 2017 hearing. Gibson filed a petition for review of that decision which sat undecided before the Commission for over two years. In June 2018, the Supreme Court’s decision in Lucia v. SEC vacated the ALJ’s initial decision. Rather than retry Gibson before the Commission itself, the SEC subjected him to a second hearing before another constitutionally defective ALJ. This time, the problem was that the ALJ enjoyed multiple layers of removal protection.

Under an earlier precedent called Free Enterprise Fund v. Public Co. Accounting Oversight Board, the Supreme Court made clear that officers of the U.S. may not be insulated from removal by more than one layer of tenure protection without running afoul of the clause in Article II of the Constitution that requires the President to “take Care that the Laws be faithfully executed.” Free Enterprise Fund also squarely held that district court jurisdiction existed under the very statutory provision at issue in Mr. Gibson’s case.

Seeking to avoid a second unconstitutional proceeding, Gibson brought suit in the United States District Court in the Northern District of Georgia to stop the invalid administrative proceeding.   Both the trial judge and a panel of the Eleventh Circuit Court of Appeals dismissed his suit for lack of jurisdiction following an earlier decision called Hill v. SEC, which was one of a growing handful of federal appellate cases that were closing the courthouse doors to people facing Gibson’s dilemma.

In February of 2020, New Civil Liberties Alliance asked the full Eleventh Circuit Court of Appeals to reconsider this disturbing trend, but the court declined to review its precedent.

On August 31, 2020, NCLA filed a petition for certiorari to the U.S. Supreme Court asking the Supreme Court to step in and put a stop to this illogical, costly, unjust, and pointless judge-made rule withholding court jurisdiction from Americans and requiring them to undergo an unconstitutional proceeding before they can challenge its constitutionality.

NCLA also represented Michelle Cochran in her successfull U.S. Supreme Court case against the SEC for trying to force her to appear before another invalid ALJ.

Christopher Gibson, Plaintiff

Mark Chenoweth
President and Chief Legal Officer
Margaret A. Little
Senior Litigation Counsel

Reply Brief for Petitioner in the Supreme Court of the United States

December 21, 2020 | Read More

Brief of the Cato Institute, the Competitive Enterprise Institute, and the Chamber of Commerce of the United States of America as Amici Curiae in Support of Petitioner

October 5, 2020 | Read More

Motion for Leave To File and Brief Amicus Curiae of Pacific Legal Foundation in Support of Petitioner

October 5, 2020 | Read More

Brief of Amicus Curiae Southeastern Legal Foundation in Support of Petitioner

October 5, 2020 | Read More

Brief of George R. Jarkesy, Jr. as Amicus Curiae Supporting Petitioner

October 5, 2020 | Read More


U.S. Supreme Court Will Not Hear Case Challenging Removal Protections for SEC’s In-House Judges

January 11, 2021 | Read More

NCLA Asks Supreme Court to Address Constitutional Defect in SEC Administrative Law Judges

December 21, 2020

Six Amici Curiae File in Support of NCLA Constitutional Case Against SEC Administrative Law Judges

October 5, 2020 | Read More

NCLA Asks Supreme Court to Vindicate Right to Sue in Federal District Court over SEC ALJ Defect

August 31, 2020 | Read More

NCLA Asks Eleventh Circuit to Rehear Case that Consigns SEC Defendants to Repeated Proceedings Before Unconstitutional ALJs

February 14, 2020 | Read More


SEC Administrative Law Judges are Unconstitutional, Peggy Little

The Ross Kaminsky Show

February 7, 2023

Challenging SEC ALJs Shouldnt Be Illogical, 5th Circ. Told


February 7, 2023

High Court Wont Take Up SEC In-House Judges Debate


February 7, 2023

SEC Tells Justices Not To Hear Challenge To In-House Judges


February 7, 2023

Chamber, Others Say SEC ‘Seeking to Barricade the Courthouse Doors’ in Supreme Court Filing


February 7, 2023




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