SEC v. Novinger, 40 F.4th 297

SEC policy (17 C.F.R. §202.5(e)) bars defendants who settle without admitting guilt from publicly denying complaint allegations (the “no-deny” policy).
SEC sued Christopher Novinger and ICAN alleging fraudulent securities sales; the parties negotiated settlements and signed consent decrees that incorporated the SEC’s no-deny terms.
The district court entered final judgments on June 6, 2016, incorporating the consent agreements and the no-deny provisions; judgments provided SEC remedy (reopening) for breaches.
Five years later Novinger and ICAN moved under Fed. R. Civ. P. 60(b)(4) and (5) to vacate the judgments insofar as they incorporated the no-deny policy, arguing First Amendment and due process violations.
The district court denied relief; the Fifth Circuit reviewed de novo Rule 60(b)(4) questions and for abuse of discretion Rule 60(b)(5), and affirmed the denial.

Issue	SEC's Argument	Novinger's Argument	Held
Whether judgments are void under Rule 60(b)(4) because of jurisdictional, due process, or First Amendment defects	No jurisdictional defect; defendants had notice, counsel, and voluntarily consented; Espinosa limits 60(b)(4) to jurisdictional or notice-type due process failings	No-deny policy compels silence, violates First Amendment and due process, so judgment is void	Denied: no jurisdictional defect; due process claim not the notice/opportunity-to-be-heard type; First Amendment claims do not render consent judgments "void" under Espinosa; Crosby is distinguishable/nonbinding
Whether relief is warranted under Rule 60(b)(5) because prospective enforcement is inequitable	No significant, unanticipated change in law or fact; parties knowingly agreed to terms; public-interest claim insufficient	Continued enforcement harms public interest by chilling criticism and approves unconstitutional terms	Denied: movants failed to show an unanticipated, significant change in law or fact or that continued enforcement is inequitable; cannot unwind voluntary settlement simply because terms are now inconvenient

United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (2010) (Rule 60(b)(4) relief limited to jurisdictional defects or due process violations that deprive notice or opportunity to be heard)
Brumfield v. La. State Bd. of Educ., 806 F.3d 289 (5th Cir. 2015) (voidness based on a court acting beyond its continuing jurisdiction)
Romeril v. SEC, 15 F.4th 166 (2d Cir. 2021) (declining to apply Crosby to agreed SEC no-deny judgments)
Crosby, 312 F.2d 483 (2d Cir. 1963) (prior-restraint precedent relied on by defendants but distinguished because nonparties were implicated)
Callon Petroleum Co. v. Frontier Ins. Co., 351 F.3d 204 (5th Cir. 2003) (Rule 60(b)(4) jurisdictional voidness requires clear usurpation or total want of jurisdiction)
Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367 (1992) (standard for modifying equitable judgments under Rule 60(b)(5))
Horne v. Flores, 557 U.S. 433 (2009) (movant bears burden to show changed circumstances warranting relief under Rule 60(b)(5))
Klapprott v. United States, 335 U.S. 601 (1949) (extraordinary due process circumstances can render a judgment void)
Carter v. Fenner, 136 F.3d 1000 (5th Cir. 1998) (consent judgment void where settlement violated procedural safeguards protecting minor’s claim)