Raised in the Los Angeles, California area, Gray earned his undergraduate degree from the University of California, Los Angeles in 1966, after which he taught in the Peace Corps in Costa Rica. Gray returned to California and earned a law degree from the University of Southern California Law School in 1971.

From 1972 through 1975, Gray practiced law with the Judge Advocate General's Corps, U.S. Navy in Guam and California.

After five years in private practice, he was named to the Santa Ana Municipal Court in 1983 and then to the Orange County Superior Court in 1989. Much of Gray's legal career has dealt with drug-related issues.

Gray, previously a Republican, joined the Libertarian Party and, in November 2003, declared his candidacy for the U.S. Senate seat occupied by Barbara Boxer in California. He was a keynote speaker at the 2004 Libertarian National Convention.

In March 2004, Gray defeated former Libertarian Party of California chair Gail Lightfoot in a statewide primary for the party's nomination. Gray suspended his judicial activities while running for the Senate, against incumbent Democratic Senator Barbara Boxer and Republican Bill Jones. Gray received 216,522 votes, 1.8% of the total vote, finishing behind Boxer, Jones, and Peace and Freedom Party candidate Marsha Feinland. Gray picked up a newspaper endorsement from the Long Beach Press-Telegram.

Gray wrote Why Our Drug Laws Have Failed and What We Can Do About It - A Judicial Indictment of the War on Drugs (2001) about the War on Drugs and has argued for legalization of marijuana.

He is featured in the 2007 documentary The Last White Hope.

Gray is an outspoken critic of drug laws, especially in the state of California. He has released a video on behalf of the Regulate, Control and Tax Cannabis Act of 2010 campaign in which he asserts that violent criminals are receiving light sentences and early release due to the costs and infrastructure demands required to convict and house non violent criminals.

Gray currently resides in Newport Beach, California, is married, and has four children.