                            UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA
____________________________________
                                    )
CATO INSTITUTE                      )
                                    )
                  Plaintiff,        )
                                    )
      v.                            )                Civil Action No. 19-0047 (ABJ)
                                    )
UNITED STATES                       )
SECURITIES AND                      )
EXCHANGE COMMISSION, et al.,        )
                                    )
                  Defendants.       )
____________________________________)


                                 MEMORANDUM OPINION

       Plaintiff Cato Institute (“Cato” or “plaintiff”) has brought this action against the United

States Securities and Exchange Commission (“SEC”); Jay Clayton, in his official capacity as

Chairman of the SEC; and Vanessa A. Countryman, in her official capacity as Secretary of the

SEC. Plaintiff seeks to challenge the SEC’s policy of including “no-deny” provisions in its consent

judgments in civil or administrative proceedings. Am. Compl. [Dkt. # 11]. These provisions

preclude a settling party from publicly denying the allegations in a complaint resolved by consent.

Id. ¶ 1. Plaintiff claims that the agency’s policy of silencing the subjects of its investigations

violates the First Amendment of the Constitution. Id. ¶ 73. But the Cato Institute was not the

subject of any investigation, and it is not party to any consent judgment; it brings this action

alleging that its ability to publish and promote the parties’ stories has been compromised.

       Defendants moved to dismiss the complaint on the grounds that plaintiff lacks standing to

bring the case and that it has failed to state a claim upon which relief can be granted. Defs.’ Mot.

to Dismiss Pl.’s Am. Compl. [Dkt. # 12] (“Defs.’ Mot.”). Because the Court finds that plaintiff
lacks standing to challenge the SEC’s “no-deny” policy, the Court will grant defendants’ motion

to dismiss for lack of subject matter jurisdiction. Because the Court has no power to hear the case,

this opinion does not address the merits of the dispute, and it should not be read to express any

view about the wisdom of the policy.

                                         BACKGROUND

       In 1972, the SEC promulgated a regulation adopting a formal policy that it would not

“permit a defendant or respondent to consent to a judgment or order that imposes a sanction while

denying the allegations in the complaint or order for proceedings.” 17 C.F.R. § 202.5(e) (1972).

The agency explained that “in any civil lawsuit brought by [the SEC] or in any administrative

proceeding of an accusatory nature pending before it, it is important to avoid creating, or permitting

to be created, an impression that a decree is being entered or a sanction imposed, when the

conducted alleged did not, in fact, occur.” Id.

       Plaintiff alleges that the SEC has carried out this policy by requiring that an express “no-

deny” provision be included in the consent judgment as a condition of settling any civil or

administrative action brought by the agency. Am. Compl. ¶ 16. The provision prohibits settling

defendants from “publicly asserting that any of the SEC’s allegations are untrue or otherwise lack

a factual basis.” Id. ¶ 21. And, according to the complaint, since 2002, the SEC has had a steady

settlement rate of approximately ninety-eight percent. Id. ¶ 26, citing Priyah Kaul, Admit or Deny:

A Call for Reform of the SEC’s ‘Neither-Admit-Nor-Deny’ Policy, 48 U. MICH. J. L. REFOR. 535,

536 (2015).

       The events that form the basis of plaintiff’s suit began in 2018, when Cato’s Vice President

for Criminal Justice, Clark Neily, “privately received a copy of a manuscript written by an author

who claimed he had been the victim of prosecutorial overreach at the hands of officials at the

SEC.” Am. Compl. ¶ 31. The amended complaint states that the manuscript “describes a long and

                                                  2
expensive battle at the end of which the author . . . ultimately [settled and] admitted to engaging

in certain limited conduct in order to avoid crippling litigation expenses.” Id. ¶ 32.

        The “no-deny” provision contained in the author’s settlement agreement provides:

                Defendant understands and agrees to comply with the Commission’s policy
                “not to permit a defendant or respondent to consent to a judgment or order
                that imposes a sanction while denying the allegation in the complaint or
                order for proceedings.” 17 C.F.R. § 202.5. In compliance with this policy,
                Defendant agrees not to take any action or to make or cause 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. Defendant may testify truthfully about any matter under oath in
                connection with a legal or administrative proceeding, whether or not under
                subpoena . . . . If Defendant breaches this agreement, the Commission may
                petition the Court to vacate the Final Judgment and restore this action to its
                active docket. 1

Id. ¶ 37. The author asked Neily to assess the validity of the policy and the prospects for

challenging or being relieved from the no-deny provision, so that he could publish his manuscript.

Id. ¶ 31. In Neily’s view, publishing the author’s manuscript would “advance important public-

policy goals of the Cato Institute”; the document addresses issues that have already been the

subject of the organization’s work, including “prosecutorial discretion, routine over-charging, and

the danger of coercive settlements or plea bargains.” Id. ¶ 33. In 2018, Cato entered into a contract

with the author to publish his manuscript. 2 Id. ¶ 34.

        Plaintiff alleges that it has taken substantial steps towards publication, but that it “cannot”

complete the process because the author is bound by the “no-deny” provision contained in his




1       The provision goes on: “[n]othing in this paragraph affects Defendant’s: (i) testimonial
obligations, or (ii) right to take legal or factual positions in litigation or other legal proceedings in
which the [SEC] is not a party including, but not limited to, legal proceedings arising out of the
matters filed in the bankruptcy court.” Am. Compl. ¶ 37.

2      The complaint does not allege that the author or the contract placed any restrictions on the
Cato Institute’s right to publish the manuscript.
                                                   3
settlement agreement. Am. Compl. ¶¶ 35–36. Plaintiff claims it “cannot exercise what would

otherwise be its contractual right to publish and promote the SEC manuscript”; “[b]ut for the gag

order,” it “would immediately complete its editorial process and publish the SEC manuscript.”

Id. ¶¶ 39–40. Plaintiff says it would also “undertake promotional activities relating to the

book . . . [such as] writing about the book in newspapers and on the internet as well as sponsoring

promotional events.” Id. ¶ 41. According to the complaint, the publication of the author’s

manuscript and the public promotion of the book would be a violation of the author’s settlement

agreement with the SEC. 3 Id.

       Plaintiff also alleges that there are other individuals who signed “no-deny” provisions as a

condition of settling enforcement actions who are willing to speak out against the SEC’s policy.

Am. Compl. ¶ 42. They contacted Cato and Vice President Neily in the wake of this lawsuit and

voiced an interest in publicly contesting the SEC’s allegations in their cases. Id. Plaintiff alleges:

               But for the gag orders in place, these individuals would also be willing to
               permit the Cato Institute to publicly tell their stories or portions of their
               stories, including by repeating relevant details or quotations in essays, op-
               eds, or blog posts. Because and only because of the gag orders, the Cato
               Institute is unable to publish essays, op-eds, or blog posts containing any of
               these details or quotations.

Id. ¶ 44. Plaintiff also alleges that it “has begun to plan a panel discussion,” since the “direct

testimony of the individuals . . . would be the most effective way to advance their public

argument.” Id. ¶ 45. According to plaintiff, “[b]ut for the existence of the gag orders, Cato would

be able to very quickly complete its plans and hold this public discussion . . . [and] host additional

events . . . .” Id. ¶¶ 46–47. Plaintiff concludes in Count I that the policy and practice of demanding




3      Again, the amended complaint does not allege that either the author or the SEC has asked
Cato to desist from such activities.
                                                  4
no-deny provisions violates the First Amendment, and that their use and enforcement impose

content-based restrictions on the right to speak freely. Id. ¶¶ 73–75.

       Plaintiff initiated this action on January 9, 2019 and filed an amended complaint on March

1, 2019. Compl. [Dkt. # 1]; Am. Compl. It contends that the SEC’s policy of including “no-deny”

provisions in its consent judgments is a content-based regulation of speech that violates the First

Amendment. See Am. Compl. ¶¶ 49–61. Plaintiff seeks: (1) a declaratory judgment that the SEC’s

“no-deny” policy is unconstitutional and unenforceable under the First Amendment; and (2) a

permanent injunction barring the enforcement of preexisting “no-deny” provisions and prohibiting

the implementation of the policy in the future. Id. at 16.

       On May 10, 2019, defendants moved to dismiss the amended complaint pursuant to Federal

Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defs.’ Mot. at 1. Plaintiff opposed the motion on

May 24, 2019, Pl.’s Opp. to Defs.’ Mot. [Dkt. # 13] (“Pl.’s Opp.”), and defendants filed a reply on

June 7, 2019. Reply Mem. in Supp. of Defs.’ Mot. [Dkt. # 15] (“Defs.’ Reply”). Plaintiff also

submitted a Notice of Supplemental Authority on July 12, 2019, see [Dkt. # 16-1] (“Pl.’s Notice”),

to which defendants responded to on July 17, 2019. Defs.’ Response to Pl.’s Notice [Dkt. # 17].

                                   STANDARD OF REVIEW

       In evaluating a motion to dismiss, the Court must “treat the complaint’s factual allegations

as true and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts

alleged.’” Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000) (internal

citation omitted), quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979); see also

Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011), quoting Thomas v. Principi,

394 F.3d 970, 972 (D.C. Cir. 2005). Nevertheless, the Court need not accept inferences drawn by

the plaintiff if those inferences are unsupported by facts alleged in the complaint, nor must the



                                                 5
Court accept plaintiff’s legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir.

2002).

         Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a

preponderance of the evidence. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992); Shekoyan

v. Sibley Int’l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002). Federal courts are courts of limited

jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.” Kokkonen v.

Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Gen. Motors Corp. v. EPA, 363

F.3d 442, 448 (D.C. Cir. 2004) (“As a court of limited jurisdiction, we begin, and end, with an

examination of our jurisdiction.”). “[B]ecause subject-matter jurisdiction is ‘an Art[icle] III as

well as a statutory requirement . . . no action of the parties can confer subject-matter jurisdiction

upon a federal court.’” Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003),

quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982).

         When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a

motion to dismiss under Rule 12(b)(6), the court “is not limited to the allegations of the complaint.”

Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S.

64 (1987). Rather, “a court may consider such materials outside the pleadings as it deems

appropriate to resolve the question [of] whether it has jurisdiction to hear the case.” Scolaro v.

D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000), citing Herbert v. Nat’l

Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992); see also Jerome Stevens Pharms., Inc. v. FDA,

402 F.3d 1249, 1253 (D.C. Cir. 2005).

                                            ANALYSIS

         This case begins and ends with the Cato Institute’s constitutional standing to challenge a

policy the SEC follows when it settles enforcement actions against others. Notably, Count I never



                                                  6
states whose First Amendment rights are being violated, and that is the problem at the heart of the

case.

         “To state a case or controversy under Article III, a plaintiff must establish standing.” Ariz.

Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 133 (2011); accord Lujan, 504 U.S. at 560

(“standing is an essential and unchanging part of the case-or-controversy requirement of Article

III”). Standing is a necessary predicate to any exercise of federal jurisdiction; if it is lacking, the

dispute is not a proper case or controversy under Article III, and federal courts have no subject

matter jurisdiction to decide the case. Dominguez v. Ual Corp., 666 F.3d 1359, 1361 (D.C. Cir.

2012).

         To establish constitutional standing, plaintiff must demonstrate: (1) that it has suffered a

concrete, particularized, and actual or imminent “injury-in-fact”; (2) that the injury is “fairly

traceable” to the challenged action of the defendant; and (3) that it is “likely, as opposed to merely

speculative, that the injury will be redressed by a favorable decision.” Lujan, 504 U.S. at 560–61,

quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41 (1976) (internal quotation marks

omitted); see also Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180–81 (2000).

“The party invoking federal jurisdiction bears the burden of establishing” standing, Lujan, 504

U.S. at 561, although “[a]t the pleading stage, general factual allegations of injury resulting from

the defendant’s conduct may suffice.” Id. (internal citations omitted).

         The Court finds that plaintiff has not alleged sufficient facts to satisfy the first element.

To allege an injury-in-fact, a plaintiff must allege that it has suffered “an invasion of a legally

protected interest that is (a) concrete and particularized and (b) actual or imminent, not conjectural

or hypothetical.” Id. at 560–61 (internal citations omitted), quoting Allen v. Wright, 468 U.S. 737,

756 (1984). To be “concrete,” the injury “must actually exist,” meaning that it is real, and not



                                                   7
abstract, although concreteness is “not . . . necessarily synonymous with ‘tangible.’” Spokeo, Inc.

v. Robins, 136 S. Ct. 1540, 1548–49 (2016); Warth v. Seldin, 422 U.S. 490, 501 (1975) (the injury

must be “distinct and palpable”). And to be “particularized,” the injury must affect a plaintiff “in

a personal and individual way.” Spokeo, 136 S.Ct. at 1548, quoting Lujan, 504 U.S. at 560 n.1.

“[A] plaintiff raising only a generally available grievance about government – claiming only harm

to his and every citizen’s interest in proper application of the Constitution and laws, and seeking

relief that no more directly and tangibly benefits him than it does the public at large – does not

state an Article III case or controversy.” Lujan, 504 U.S. at 573.

        Plaintiff contends that it has been injured as both a would-be listener and a would-be

speaker. Pl.’s Opp. at 2. Its opposition to the motion to dismiss explains that the complaint alleges

that SEC’s enforcement of its orders “is chilling the speech of individuals who would . . . otherwise

be speaking today,” id., and that the orders and the individuals’ fear of their enforcement “stand in

the way of Cato’s activities.” Id. at 3. Plaintiff posits that this adds up to an allegation that its own

expression is being chilled. Id. at 4. The amended complaint asserts that “in the absence of an

order . . . declaring the . . . gag order unenforceable,” Cato will be “unable” to (1) exercise its

contractual rights to publish the author’s book; (2) finalize plans for hosting a panel discussion

featuring alleged victims of the SEC’s overreach; and (3) publish articles, blog posts, and other

commentaries on the SEC’s prosecutorial tactics. See Am. Compl. ¶¶ 66–68.

        Cato’s attempt to premise a constitutional violation that it has standing to vindicate on a

chilling effect theory fails in the absence of an allegation that it has suffered, or it is facing the

threat of, actual concrete harm. “[A]t an irreducible minimum, Art. III requires the party who

invokes the court’s authority to ‘show that he personally has suffered some actual or threatened

injury as a result of the putatively illegal conduct of the defendant.’” Valley Forge Christian Coll.



                                                   8
v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 472 (1982), quoting

Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91, 99 (1979). In Laird v. Tatum, 408 U.S.

1, 13–14 (1972), the Supreme Court held that “allegations of a subjective ‘chill are not an adequate

substitute for a claim of specific present objective harm or a threat of specific future harm.” And

the D.C. Circuit has reiterated that the sort of “chilling effect” alleged here is foreclosed as a basis

for standing by the Laird decision. United Presbyterian Church in the U.S.A. v. Reagan, 738 F.2d

1375, 1378 (D.C. Cir. 1984).

        In United Presbyterian, the plaintiffs were political and religious organizations and private

individuals who were active in political, religious, academic, or journalistic affairs. Id. at 1377.

They sought to challenge the legality of President Reagan’s Executive Order No. 12333, which

established procedures for intelligence surveillance and collection. Id. Plaintiffs characterized

their injury as the “‘chilling’ of constitutionally protected activities which they may refrain from

pursuing out of fear that such activities would cause them to be targeted for surveillance under the

order” in violation of the First Amendment. Id. The Court ruled that “[t]he harm of ‘chilling

effect’ is to be distinguished from the immediate threat of concrete, harmful action[,]” id. at 1380,

and it distinguished the alleged “present deterrence from First Amendment conduct” from

“imminence of concrete, harmful action such as threatened arrest for specifically contemplated

First Amendment activity,” which would support standing. Id. Here, plaintiff suffers only from

“present deterrence from First Amendment conduct” and the Court is bound by Supreme Court

and Circuit precedent to conclude that the complaint does not allege an actual, concrete injury.

        In reaching its decision in United Presbyterian, the Court of Appeals reviewed the cases in

which the Supreme Court had found an alleged “chilling effect” to be sufficient, and it observed

that in all of the cases, the plaintiff had “unquestionably suffered some concrete harm (past or



                                                   9
immediately threatened) apart from the ‘chill’ itself.” Id. at 1378–79. For example, a plaintiff was

found to have alleged a concrete injury where he had been “denied admission to the bar,”

“discharged from state employment,” “denied the delivery of mail,” or “required to take an oath

on pain of dismissal from state employment.” Id., citing Baird v. State Bar of Arizona, 401 U.S.

1 (1971); Keyishian v. Board of Regents, 385 U.S. 589 (1967); Lamont v. Postmaster General, 381

U.S. 301 (1965); Baggett v. Bullitt, 377 U.S. 360 (1964).

       The Supreme Court explained in Laird v. Tatum:

               [I]n each of these cases, the challenged exercise of governmental power was
               regulatory, proscriptive, or compulsory in nature, and the complainant was
               either presently or prospectively subject to the regulations, proscriptions, or
               compulsions that he was challenging.

408 U.S. at 11. And as the D.C. Circuit observed, the “[c]hilling effect is cited as the reason why

the governmental imposition is invalid rather than as the harm which entitles the plaintiff to

challenge it.” United Presbyterian, 738 F. 2d at 1378–79. (emphasis in original).

       This is the critical problem with plaintiff’s case. The “no-deny” provision does not apply

to Cato, it does not govern Cato’s conduct, and a breach of the contractual provision would not

result in any consequences to it. Rather, the “no-deny” provision applies to third parties not before

the Court, and it provides that if they were to engage in certain activities, the SEC might seek to




                                                 10
reopen their consent judgments. 4 Plaintiff – despite the conclusory allegation that it is “unable”

to do so – has not alleged that there is any actual impediment to its exercise of its contractual rights

to publish the book, to its sponsorship of a panel discussion, or to its promotional activities. And,

more important, as in United Presbyterian, plaintiff fails to allege that “any specific action is

threatened or even contemplated against [it].” 738 F.2d at 1380.

        The most plaintiff alleges is that some individuals feel constrained not to come forward

because of the risk of SEC action, 5 but “the plaintiff generally must assert his own legal rights and

interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Warth,



4        Defendants argue that the alleged harm is too hypothetical and speculative to support
Article III standing. They point out that in the event an individual party to a consent judgment
with a no-deny provision breaches the provision, several events must occur. First, the SEC must
decide to pursue reopening the case – it is not compelled to do so by statute or regulation. Defs.’
Mot. at 16. Then, the SEC must move to vacate the consent judgment in the court in which the
judgment was entered. Id. The court then must grant the SEC’s motion – which the court can of
course refuse to do. Id. For these reasons, defendants argue, any injury would be contingent on
future events and the actions of numerous third parties, and so it is too speculative to support
standing. Id.; Whitmore v. Arkansas, 495 U.S. 149, 158 (1990) (a “possible future injury” cannot
satisfy the requirements of Article III; an injury must be “certainly impending” to constitute injury-
in-fact); Pub. Citizen, Inc. v. Nat’l Highway Traffic Safety Admin., 489 F.3d 1279, 1293 (D.C. Cir.
2007) (“[T]he asserted injury must be . . . certainly impending and immediate—not remote,
speculative, conjectural, or hypothetical.”).
         But these considerations would affect an action brought by the author or the other
individuals described in their complaint, and the Court need not address whether they could allege
an injury that is sufficiently imminent. Plaintiff is not alleging that it would be harmed in the
future; it is alleging it cannot speak freely now. Pl.’s Opp. at 3–4. So the problem with the
complaint is the first prong of the injury-in-fact test – the lack of a concrete and particularized
harm – and not whether that alleged injury is actual and imminent, as opposed to merely
hypothetical or conjectural, under the second prong.

5       With respect to the other individuals who came forward after the complaint was filed,
plaintiff alleges that they are unwilling to make public statements or to allow them to be made
because of the orders that bind them. Am. Compl. ¶ 43; see also id. ¶ 46. But plaintiff does not
even allege that the author, whose manuscript prompted this lawsuit, has withheld his permission
or impeded publication in any way. It says only that the author is barred from public comment,
id. ¶ 38, and then simply asserts that “as a direct result of this gag order,” plaintiff cannot publish.
Id. ¶¶ 39–40.


                                                   11
422 U.S. at 499 (plaintiffs lacked standing to allege that a town’s zoning ordinance unlawfully

excluded people of low income and of certain ethnic backgrounds because they did not allege that

they had been personally injured by the ordinance, but only that they shared attributes common to

persons that may have been excluded from the town); see also Vietnam Veterans of Am. v. Shinseki,

599 F.3d 654, 662 (D.C. Cir. 2010) (finding that two veterans’ advocacy groups lacked standing

to bring an action against the Secretary of the Department of Veterans Affairs alleging that the

average time it took the agency to process veterans’ claims for service-related disability benefits

violated the Administrative Procedure Act and the Due Process Clause of the Constitution, because

it was “apparent that they were presenting a claim not for themselves but for others” and “one can

not have standing in federal court by asserting an injury to someone else”).

       Plaintiff suggests that these principles do not apply to a would-be publisher. It submits that

“it is far from unusual in the First Amendment context for a publisher to bring a claim that hinges

on the free-speech rights of others whose speech it wants to publish.” See Pl.’s Opp. at 7–8. But

these cases are distinguishable from the instant situation: each involved laws that directly

regulated publishers. See, e.g., Simon & Schuster, Inc. v. Member of the N.Y. State Crime Victims

Bd., 502 U.S. 105, 109 (1991) (“Son of Sam” law required publishers contracting with convicted

persons to turn over income under the contract to the New York State Crime Victims Board);

Retail Dig. Network, LLC v. Appelsmith, 810 F.3d 638, 647 (9th Cir. 2016), on reh’g en banc sub

nom. Retail Digital Network, LLC v. Prieto, 861 F.3d 839 (9th Cir. 2017) (because plaintiff could

face criminal penalties for placing certain advertisements on its retail displays, it could bring a

First Amendment challenge to the law proscribing its conduct).

       Plaintiff also relies heavily on Pitt News v. Pappert, 379 F.3d 96 (3d Cir. 2004), suggesting

it “presents almost precisely the same scenario as this case.” Pl.’s Opp. at 7–8. In that case, a



                                                12
university newspaper challenged a law prohibiting alcoholic beverage advertisements in any

publication associated with an educational institution. Pitt News, 379 F.3d at 102–03. After a

local restaurant was threatened with sanctions and cancelled its advertising contract with the Pitt

News, “the paper, in order to protect advertisers, felt compelled to stop accepting alcoholic

beverage advertisements.” Id. at 103. As a result, the newspaper “lost approximately $17,000 in

revenue, and this loss affected the length of the newspaper [and] its ability to make capital

expenditures.” See id.

       In the opinion cited by the plaintiff, the court ruled on the merits that “[i]mposing a

financial burden on a speaker based on the content of the speaker’s expression is a content-based

restriction.” Id. at 106. But the decision did not address the standing issue. It recites the prior

procedural history of the case, though, and it points out that a previous panel of the court decided

“that The Pitt News did not have standing to assert the third-party claims of its advertisers and

readers,” but that it “did have standing to raise its own First Amendment claims. Noting the paper’s

loss of advertising revenue, the panel held that the paper had ‘demonstrated a personal stake in the

outcome of this litigation.’” Id. at 103–04. In the absence of similar factual allegations here, the

Pitt News case, which would not be binding in any event, is not analogous.

       Finally, plaintiff attempts to ground its standing in its rights as a receiver of information.

In the First Amendment context, the Supreme Court has recognized that “where a speaker

exists . . . the protection afforded [by the First Amendment] is to the communication, to its source

and to its recipients both.” See Va. State Bd. of Pharmacy v. VA Citizens Consumer Council, Inc.,

425 U.S. 748, 756–57 (1976) (holding that consumers have standing to assert the First Amendment

protection enjoyed by advertisers because “[i]f there is a right to advertise, there is a reciprocal

right to receive the advertising”). Thus, the D.C. Circuit has recognized that “listeners . . . can



                                                13
suffer injury from government regulations that prevent speakers from saying what the listeners

wish to hear.” Competitive Enter. Inst. v. U.S. Dep’t of Transp., 856 F.2d 1563, 1566 (D.C. Cir.

1988). This has been framed as the “right to receive information.” Gregg v. Barrett, 771 F.2d

539, 547 (D.C. Cir. 1985). And plaintiff points out that courts “have routinely found . . . that third

parties have standing to challenge protective orders and confidentiality orders in an effort to obtain

access to information or judicial proceedings.” Pl.’s Opp. at 6, citing Pansy v. Borough of

Stroudsburg, 23 F.3d 772, 777 (3d Cir. 1994) (footnote omitted); Ford v. City of Huntsville, 242

F.3d 235, 241 (5th Cir. 2001); Appl. of Dow Jones & Co., 842 F.2d 603, 607 (2d Cir. 1988).

       In these cases, however, the parties seeking information identified their lack of access to

information as the actionable injury. Here, plaintiff does not assert that it has been denied access

to any information; it alleges that it received and is fully aware of the contents of the author’s

manuscript, and it grounds this lawsuit on a claimed inability to disseminate it further. 6 Therefore,




6       For the same reason, the case can be distinguished from Overbey v. Mayor of Baltimore,
930 F.3d 215 (4th Cir. 2019). See generally Pl.’s Notice. In that case, the Fourth Circuit found
that the Baltimore Brew’s “interest in newsgathering” was impeded because parties who settled
police brutality suits – subject to non-disparagement clauses – refused to discuss their suits with
the Brew. Overbey, 930 F.3d at 221. The Court found that “the Brew [had] sufficiently alleged
that the City’s pervasive use [of] non-disparagement clauses in settlement agreements with police
brutality claimants [had] interfered with its right to receive newsworthy information from willing
speakers.” Id. at 228 (emphasis added). Unlike the newspaper in Baltimore, plaintiff Cato has
received information from willing speakers, and the comparison fails.


                                                 14
plaintiff has not alleged any injury it suffered as a listener that could be the basis for Article III

standing. 7

                                          CONCLUSION

        Because the Court finds that plaintiff lacks standing to challenge the constitutionality of

the SEC’s “no-deny” provision, the Court will grant defendants’ motion to dismiss under Federal

Rule of Civil Procedure 12(b)(1), and it need not address the sufficiency of the claims under Rule

12(b)(6).

        A separate order will issue.




                                               AMY BERMAN JACKSON
                                               United States District Judge

DATE: February 10, 2020




7       Plaintiff argues that the “unconstitutional conditions” doctrine – that the government may
not condition a benefit on the waiver of a constitutionally protected right – invalidates the
contractual provisions at issue. Pl.’s Opp. at 13–17. The complaint does not allege that the settling
individuals’ waivers of their right to speak publicly were made in exchange for a governmental
benefit, but more important, Cato is not bound by the provisions, and it has no standing to challenge
their validity, or whether any waivers were knowing and voluntary.
                                                 15
