United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 12, 2020 Decided July 6, 2021

No. 20-5054

CATO INSTITUTE,

APPELLANT

v.

SECURITIES AND EXCHANGE COMMISSION, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:19-cv-00047)

Robert J. McNamara argued the cause for appellant. With 

him on the briefs was Jaimie N. Cavanaugh. Paul M. Sherman

entered an appearance.

Bruce D. Brown, Katie Townsend, and Lisa B. Zycherman

were on the brief for amici curiae Reporters Committee for 

Freedom of the Press in support of appellant.

Jeffrey A. Berger, Senior Litigation Counsel, Securities 

and Exchange Commission, argued the cause for appellees. 

With him on the brief were Michael A. Conley, Solicitor, and 

Dina B. Mishra, Senior Counsel. Melinda Hardy, Assistant 

General Counsel, entered an appearance.
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Before: WILKINS and KATSAS, Circuit Judges, and 

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed PER CURIAM.

PER CURIAM: The Cato Institute (“Cato”) brought suit 

against the Securities and Exchange Commission (“SEC”), 

claiming that the SEC’s practice of including no-deny 

provisions in its consent decrees violates the First Amendment. 

The District Court found that Cato had failed to allege an injury 

in fact, and so dismissed Cato’s suit for lack of standing. We 

affirm the District Court’s dismissal on the alternate ground 

that Cato’s alleged injury is not redressable through this 

lawsuit. 

I.

On January 9, 2019, Cato filed a complaint in the District 

Court against the SEC and its chairman and secretary in their 

official capacities, challenging the SEC’s practice of including 

no-deny provisions in its consent decrees in civil and 

administrative proceedings. Consent decrees are 

“compromises in which the parties give up something they 

might have won in litigation and waive their rights to 

litigation.” United States v. ITT Cont’l Baking Co., 420 U.S. 

223, 235 (1975). “Because of its limited resources, the SEC 

has traditionally entered into consent decrees to settle most of 

its injunctive actions.” SEC v. Clifton, 700 F.2d 744, 748 (D.C. 

Cir. 1983). Defendants who enter into consent decrees with the 

SEC gain certain benefits: they may settle the complaint 

against them without admitting the SEC’s allegations, and 

often “seek and receive concessions concerning the violations 

to be alleged in the complaint, the language and factual 

allegations in the complaint, and the collateral, administrative 

consequences of the consent decree.” Id. Since 1972, 
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however, the SEC has adhered to a policy “not to 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,” so as “to avoid creating, 

or permitting to be created, an impression that a decree is being 

entered or a sanction imposed, when the conduct alleged did 

not, in fact, occur.” Consent Decrees in Judicial or 

Administrative Proceedings, 37 Fed. Reg. 25,224, 25,224 

(Nov. 29, 1972) (codified at 17 C.F.R. § 202.5(e)). Cato 

contends that the SEC has applied this policy to prohibit 

defendants from denying any allegations made against them by 

the SEC, including allegations to which their consent decree 

did not require them to admit. Because SEC defendants are 

prohibited from denying any allegations against them, they are 

unable, according to Cato, to report publicly that the SEC 

threatened them with unfounded charges or otherwise coerced 

them into entering into consent decrees. Thus, according to 

Cato, the SEC’s application of 17 C.F.R. § 202.5(e) 

impermissibly stifles public discussion of the SEC’s 

prosecutorial tactics. 

Cato itself has not entered into any consent decree with the 

SEC, but it alleges that it has contracted to publish a certain 

manuscript (“the manuscript”) written by someone who is 

subject to such a consent decree. Cato alleges that it cannot 

publish the manuscript because the consent decree prohibits the 

author from disputing any allegations made by the SEC against 

him, which, in the manuscript, he does. Cato also alleges that 

it has been contacted by other individuals who have entered 

into similar consent decrees with the SEC. Cato claims that but 

for the provisions of their consent decrees forbidding them 

from disputing the SEC’s allegations against them, these 

individuals would be willing to participate in panel discussions 

hosted by Cato on the topic of the SEC’s prosecutorial 

overreach, and to allow Cato to publish their testimonials in 

articles and blog posts. 
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Cato seeks six forms of relief: (1) a declaratory judgment 

that 17 C.F.R. § 202.5(e) as interpreted and enforced by the 

SEC is unconstitutional under the First Amendment; (2) a 

permanent injunction against the enforcement of 17 C.F.R. § 

202.5(e); (3) a declaratory judgment that the no-deny provision 

of the consent decree entered into by the manuscript’s author is 

unenforceable as a matter of law; (4) a declaratory judgment 

that all no-deny provisions in the SEC’s past consent decrees 

are unenforceable; (5) a permanent injunction prohibiting the 

SEC from continuing its practice of non-discretionary use of 

no-deny provisions in civil and administrative settlements; and 

(6) all further and equitable relief as the Court may deem just 

and proper. Cato’s complaint invokes the First Amendment 

and the Declaratory Judgment Act, 28 U.S.C. § 2201, and it 

presumably intends to use a declaratory judgment as the 

predicate for an injunction and further relief pursuant to 28 

U.S.C. § 2202. See Powell v. McCormack, 395 U.S. 486, 499 

(1969). 

On February 10, 2020, the District Court issued an order 

and memorandum opinion dismissing Cato’s complaint for 

lack of standing. The District Court found that Cato had failed 

to allege an injury in fact because the SEC’s no-deny 

provisions did not apply to Cato, and because Cato had “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. . . . [or that] 

any specific action is threatened or even contemplated against 

it.” Cato Inst. v. SEC, 438 F. Supp. 3d 44, 52 (D.D.C. 2020) 

(quoting United Presbyterian Church in the U.S.A. v. Reagan, 

738 F.2d 1375, 1378 (D.C. Cir. 1984)) (internal quotation 

marks omitted). The District Court also found that Cato could 

not allege that it had been denied the right to receive 

information, because “it received and is fully aware of the 

contents of the author’s manuscript.” Id. at 54. 
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Cato timely appealed to this Court for review of the 

District Court’s order on March 3, 2020. 

II.

We review de novo the District Court’s dismissal of Cato’s 

claim for lack of standing. Renal Physicians Ass’n v. U.S. 

Dep’t of Health & Human Servs., 489 F.3d 1267, 1273 (D.C. 

Cir. 2007). In doing so, we assume the truth of all material 

factual allegations in Cato’s complaint and construe the 

complaint liberally, granting Cato the benefit of all reasonable 

inferences that can be derived from the facts alleged. See Am. 

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

We also assume that Cato will prevail on the merits of its suit 

and obtain the relief it seeks. Committee on the Judiciary of 

the U.S. House of Representatives v. McGahn, 968 F.3d 755, 

762 (D.C. Cir. 2020) (en banc). 

Cato bears the burden of establishing standing for each 

form of relief it seeks. See Davis v. Fed. Election Comm’n, 554 

U.S. 724, 734 (2008). The irreducible constitutional minimum 

of standing contains three elements: injury in fact, causation, 

and redressability. Lujan v. Defs. of Wildlife, 504 U.S. 555, 

560–61 (1992). To demonstrate injury in fact, Cato must show 

that its injury is concrete—i.e., that it “actually exist[s],” 

Spokeo, Inc. v. Robins, 136 S. Ct 1540, 1548 (2016); that it is 

particularized—i.e., that it “affect[s] the plaintiff in a personal 

and individual way,” Lujan, 504 U.S. at 560 n.1; and that it is 

imminent—i.e., that there is a “substantial probability of 

injury,” Chamber of Commerce v. EPA, 642 F.3d 192, 200 

(D.C. Cir. 2011) (cleaned up). To demonstrate causation, Cato 

must show a “fairly traceable connection” between the 

complained-of conduct of the defendant and the injury claimed. 

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103 (1998). 

And to demonstrate redressability, Cato, whose alleged injury 

arises from the government’s regulation of a third party, must 
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show that there is a “substantial probability” that “if the court 

affords the relief requested, the injury will be removed.” 

Chamber of Commerce, 642 F.3d at 201 (quoting Warth v. 

Seldin, 422 U.S. 490, 504 (1975)) (alterations omitted). 

Cato’s alleged injury is that it is prevented from publishing 

speech by certain SEC defendants averring that the SEC 

threatened them with unfounded charges or otherwise coerced 

them into entering settlement agreements. Cato alleges that it 

would be able to publish this speech but for the fact that the 

SEC defendants are subject to no-deny provisions forbidding 

them from disputing the SEC’s allegations against them and are 

therefore unable and unwilling to allow Cato to publish their 

speech. 

The fatal stumbling block for Cato is that even assuming 

that it will prevail on the merits and obtain the relief it seeks, 

Cato’s alleged injury would not be redressed. That is because 

the no-deny provisions that bind the SEC defendants whose 

speech Cato wishes to publish are contained in consent decrees. 

“A consent decree no doubt embodies an agreement of the 

parties and thus in some respects is contractual in nature. But 

it is an agreement that the parties desire and expect will be 

reflected in, and be enforceable as, a judicial decree that is 

subject to the rules generally applicable to other judgments and 

decrees.” Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 

378 (1992). Violations of court orders are punishable by 

criminal contempt, see United States v. United Mine Workers, 

330 U.S. 258, 294 (1947), and a court may institute criminal 

contempt proceedings against an SEC defendant who violates 

a no-deny provision contained in a consent decree issued by 

that court even absent the SEC’s consent, see Young v. U.S. ex 

rel. Vuitton et Fils S.A., 481 U.S. 787, 793–95 (1987); 

Morrison v. Olson, 487 U.S. 654, 676 (1988). So regardless of 

whether the SEC is enjoined from seeking to enforce the nodeny provisions in its consent decrees, the courts that issued the 
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consent decrees would still be able to enforce the no-deny 

provisions contained therein. And a merits opinion from this 

Court holding the no-deny provisions to be in violation of 

Cato’s rights would not bind district courts “in jurisdictions 

around the country” from enforcing their own judgments. Am. 

Compl. ¶ 42. (It is “established doctrine that persons subject 

to an injunctive order issued by a court with jurisdiction are 

expected to obey that decree until it is modified or reversed, 

even if they have proper grounds to object to the order.” GTE 

Sylvania, Inc. v. Consumers Union of the U.S., 445 U.S. 375, 

386 (1980).) Moreover, Cato expressly disclaims that it seeks 

an order controlling how a district court—even a District of 

Columbia district court—enforces its particular consent decree. 

Reply Br. at 24–25. Instead, Cato seeks only to enjoin the SEC 

from threatening to enforce a decree or settlement or from 

taking steps to enforce a decree or settlement. Id. Therefore, 

even assuming that Cato prevails on the merits and obtains the 

relief it seeks, the SEC defendants would remain unable to 

allow Cato to publish their speech, and Cato’s injury would not 

be redressed. 

The cases upon which Cato primarily relies—Overbey v. 

Mayor of Baltimore, 930 F.3d 215 (4th Cir. 2019), and Pitt 

News v. Fisher, 215 F.3d 354 (3d Cir. 2000)—are not to the 

contrary. In Overbey, the Fourth Circuit found that plaintiffs 

had standing to challenge the Baltimore Police Department’s 

use of non-disparagement clauses in its settlement agreements. 

930 F.3d at 226–230. The Fourth Circuit did not find that the 

Baltimore Police Department’s settlement agreements were 

incorporated in consent decrees, and even if it had, those 

consent decrees all would have likely been issued by Maryland 

courts within the Fourth Circuit. More importantly, however, 

the Fourth Circuit did not analyze redressability, and so its 

opinion established no precedent on that issue. See Steel Co., 

523 U.S. at 91. In Pitt News v. Fisher, the Third Circuit found 

that plaintiffs had standing to challenge a Pennsylvania law the 
8

enforcement of which they alleged would violate their First 

Amendment rights. 215 F.3d at 358. Plaintiffs’ injury was 

redressable in that case because were they to succeed on the 

merits, enforcement of the law would be enjoined. Id. at 361;

see also Pitt News v. Pappert, 379 F.3d 96 (3d Cir. 2004) 

(same). By contrast, were Cato’s suit to succeed, enforcement 

of the no-deny provisions would not be enjoined for the reasons 

given above. 

Cato also asserts in its briefing that SEC defendants are 

sometimes bound by no-deny provisions that are not part of a 

consent decree or incorporated by reference into a final 

judgment, see Appellant Br. at 7 n.2; Reply Br. at 24. The 

District Court, however, construed Cato’s complaint to allege 

that the SEC defendants whose speech Cato wishes to publish 

are bound by no-deny provisions contained in consent decrees. 

See Cato Inst. v. SEC, 438 F. Supp. 3d at 47 (“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.”). We find no error in that 

construction. Indeed, the regulation whose application Cato 

challenges in its complaint, 17 C.F.R. § 202.5(e), refers 

specifically to consent decrees. See Consent Decrees in 

Judicial or Administrative Proceedings, 37 Fed. Reg. at 25,224; 

Am. Compl. ¶¶ 13–30. Moreover, Cato has neither alleged in 

its complaint, nor asserted in its briefing, that the no-deny 

provisions that bind the SEC defendants whose speech it 

wishes to publish are not part of a consent decree or 

incorporated by reference into a final judgment. When 

assessing standing at any stage of the litigation, we do not 

accept inferences that are unsupported by the facts alleged in 

the complaint. In re U.S. Office of Pers. Mgmt. Data Sec. 

Breach Litig., 928 F.3d 42, 54 (D.C. Cir. 2019). We therefore 

construe the complaint, as did the District Court, to allege that 
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the SEC defendants whose speech Cato wishes to publish are 

bound by no-deny provisions contained in consent decrees. 

Because the SEC defendants whose speech Cato wishes to 

publish are bound by no-deny provisions contained in consent 

decrees, and because an order from this Court enjoining the 

SEC from seeking to enforce its consent decrees would not 

prevent the courts that entered those decrees from enforcing the 

no-deny provisions therein, Cato’s injury is not redressable 

through this suit. Cato therefore lacks standing and its 

complaint must be dismissed. See Steel Co., 523 U.S. at 109–

110.

So ordered.