A federal appeals court has dismissed the National Rifle Association’s First Amendment lawsuits against a former New York insurance regulator that asked insurance companies to consider the risks of doing business with the NRA and other gun groups.
The NRA alleged that former New York Treasury Department Superintendent Maria T. Vullo violated her rights to free speech when she spoke out against gun violence and issued a press release and guides urging New York banks and insurance companies to: “Reputational risks to consider” doing business with gun groups including the NRA.
The gun advocates argued that Vullo’s comments and letters constituted “threats” of adverse action if insurers or banks did not support their efforts to “suppress the NRA’s speech” and quell retaliatory action against the NRA.
But a panel of the US Second Circuit Court of Appeals has now ruled that Vullo was within her rights as a regulator and entitled to qualified immunity for speaking out as she did. The federal court said the NRA’s first amendment claims were based on whether Vullo’s remarks were “implicit threats to use state force to suppress protected speech.” District Judge Denny Chin, writing for the three-member panel, found that was not the case and that Vullo’s words “speak for themselves and cannot reasonably be construed as unconstitutionally threatening or compelling.”
NRA attorney William Brewer told Reuters the NRA could appeal to the Supreme Court.
The case stems from events in 2018 after Vullo’s department investigated NRA-sponsored carry guard insurance schemes offered by broker Lockton and insurer Chubb, and similar schemes taken over by Lloyd’s of London. The DFS investigation concluded that the NRA-sponsored programs violate New York City insurance law by providing coverage for intentional criminal activity. DFS also found that the NRA had advertised Carry Guard as an insurance provider without a license. As a result of the DFS investigation, Lloyd’s of London, Chubb and Lockton signed consent decrees agreeing to stop selling the NRA insurance plans in New York. However, each consent order expressly permitted the companies to continue doing business with the NRA.
Vullo’s comments came two months after the shooting at Marjory Stoneman Douglas High School in Parkland, Fla., that killed 17 high school students and staff. In the wake of the shooting, the NRA and other gun promotion groups faced fierce backlash.
The NRA originally submitted three complaints. A district court dismissed most of the lawsuits, including a selective enforcement action against Vullo. However, the district court declined to dismiss two First Amendment lawsuits against Vullo. The first allegation alleged that Vullo “established an unconstitutional implicit regime of censorship to suppress the NRA’s protected speech” and the second allegation alleged that Vullo engaged in “unconstitutional retaliation against the NRA for its protected speech.”
The District Court first ruled that the NRA had sufficiently asserted violations of the First Amendment. It then concluded that Vullo was not entitled to qualifying immunity at the dismissal motion stage, although it was inclined to agree with Vullo that “there is no case conclusively demonstrating that otherwise protected public statements were entitled solely because of an unlawful threat is an ongoing and independent regulatory investigation.”
Vullo spoke out against gun violence in industry guides and in a press statement from the New York governor. Vullo urged banks and insurance companies doing business in New York to consider the risks, including “reputational risks,” that could arise from doing business with the NRA or “similar gun promotion organizations,” and she urged the banks and Insurance companies to “join other companies that have severed their links with the NRA.
Vullo was quoted in the press release as saying that “businesses can lead the way and create the kind of positive social change needed to minimize the likelihood that we will see more of these senseless tragedies,” and urged “everyone Insurance companies and banks to do business in New York to join the companies that have already terminated their agreements with the NRA and to take immediate action to manage these risks and promote public health and safety.”
Vullo asserted her right to qualified immunity, which the district court denied. However, the Court of Appeal disagreed, noting that immunity must consider whether an officer’s actions violated a clearly stated law and must be seen in the specific context of a case. That is, the “outlines of the law must be sufficiently clear that a reasonable officer would understand that what he is doing violates that right.” While the precise administrative action need not have been previously found unlawful, its illegality must be established in the In the light of existing case-law, the Court of Appeal concluded that Vullo was entitled to immunity.
“[E]Even assuming that the NRA has sufficiently pleaded that Vullo committed unconstitutional threats or coercion, we conclude that Vullo is nevertheless entitled to qualified immunity given the statute’s ambiguity and a breach of the first change would not have been obvious to a reasonable official at the time,” the court concluded.
The court noted that it is not aware of any case in which a government official has been accused of violating the First Amendment by making statements that “use only suggestive language and rely on persuasion.”
The 2nd Circuit said government officials like Vullo have a duty and a right to deal with issues of public interest. The court concluded:
“The complaint’s allegations of fact show that, far from acting irresponsibly, Vullo did her job in good faith. She oversaw an investigation into gross violations of the New York Insurance Act and obtained significant relief for New York residents. She used her office to address political issues of concern to the public. Even assuming their actions were unlawful, which we do not believe was the case, the unlawfulness was by no means obvious. Accordingly, even if the NRA plausibly alleges a breach of the First Amendment, Vullo would in any event be protected by qualified immunity.”
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