Multiple State Libertarian Parties, Pennsylvania We The People Party File Amicus Brief in Supreme Court Asset Forfeiture Case

Nine state Libertarian Parties and the We The People Party of Pennsylvania have filed an amicus brief calling on the U.S. Supreme Court to take up Barton v. the Securities and Exchange Commission, arguing that the commission’s use of receiverships raises the same constitutional problems they see in civil asset forfeiture.

In the November 17 filing, the Idaho, Kentucky, Maine, Maryland, Mississippi, Nebraska, Oregon, Pennsylvania, and Tennessee affiliates of the Libertarian Party, along with the We The People Party of Pennsylvania, warn that SEC receiverships “fundamentally operate similar to civil asset forfeiture practices” they similarly oppose at the state level, calling the practice “revenue-driven enforcement” and arguing it violates the Fourth, Fifth, Eighth, and Fourteenth Amendments.

“SEC receiverships, like those challenged here, function analogously to civil forfeiture by freezing assets pre-conviction,” the brief reads. “If unchecked, they undermine the objective standards—enacted by Congress and enforced by courts—that Amici’s members require for secure property rights. Amici submit this brief to defend the principle of divided, accountable power that sustains American liberty.”

In 2022, the U.S. District Court for the Northern District of Texas imposed a receivership as part of the SEC’s civil enforcement action against Timothy Barton, who is accused of participating in a scheme that misappropriated investor funds from Chinese nationals. Under current practice, federal courts may appoint a receiver to take control of a defendant’s assets and business entities when regulators allege fraud or serious misuse of investor funds, helping investors potentially recover what remains.

Barton appealed the decision, and in 2023, the U.S. Court of Appeals for the Fifth Circuit vacated the original order, finding that the district court had applied an incorrect legal standard and improperly extended the receivership to entities not shown to have benefited from the alleged misconduct. On remand earlier this year, the district court narrowed the scope and reappointed a receiver under more limited terms consistent with the Fifth Circuit’s ruling.

The ten groups say the practice gives the government the power to freeze assets before any criminal conviction, which they contend enables the state to seize or restrain property on suspicion rather than proof. They argue this creates “incentives for abusive policing for profit,” undermines predictability in the law, and burdens individuals who must then navigate costly civil procedures to reclaim property.

Throughout their filing, the parties point to numerous prior Supreme Court rulings they say show the Court previously policing disproportionate penalties and pre-conviction restraints on property, citing a list including Timbs v. Indiana, Culley v. Marshall, and United States v. Bajakajian. They contend the Court should therefore apply similar limits to SEC receiverships to ensure clearer statutory boundaries and stronger procedural protections.

“The Amici submits that liberty, progress, and constitutional structure are intertwined,” the brief further reads. “Honoring boundaries enables confident enterprise; breaching them invites overreach. Granting certiorari would reaffirm predictable rights as prosperity’s foundation.”

Citing the need for predictability once more by referencing Justice Neil Gorsuch in Loper Bright Enterprises v. Raimondo, the parties urge the Supreme Court to grant certiorari, vacate the decision below, and remand with several specific reforms, including limiting pre-conviction asset restraints, improving innocent-owner defenses, and requiring evidentiary showings that go beyond mere suspicion before major seizures and receiverships are authorized.

Credit to Richard Winger of Ballot Access News, who first published an accessible copy of the brief.