Legal Docket: NRA and the First Amendment

NICK EICHER, HOST: It’s The World and Everything in It for this 8th day of April, 2024, eclipse day. We’re so glad you’ve joined us today! Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Legal Docket.

Advertising is designed to attract attention, but it’s rare when it ultimately attracts the kind of attention that lands at the U.S. Supreme Court. Like this:

DANA LOESH: It happened fast. A bad guy walked in and opened fire. While others were panicking, one man was legally armed and well-trained. That hero acted decisively and saved innocent lives. The police know it’s a lawful shooting. But there’ll still be a long night of interrogations. This is why the NRA created NRA Carry Guard. The most comprehensive training, legal protection, and financial coverage.

EICHER: It’s an ad for a National Rifle Association insurance product called Carry Guard. At the time of need, it would pay expenses that would arise out of the use of a legally possessed firearm used in self defense. Bail, legal fees, court costs.

REICHARD: But New York is one of many states that doesn’t allow for this kind of coverage. Some commentators dubbed the policy “murder insurance.”

At the time, Maria Vullo was superintendent of the state Department of Financial Services. She ran an agency that oversees all financial services institutions and insurance companies that do business in New York. Thousands of them.

EICHER: Vullo opened an investigation of the insurance companies that underwrote Carry Guard.

Here she is on Bloomberg’s Daybreak program in 2017, the same year the NRA introduced Carry Guard.

MARIA VULLO: As regulators, we keep on top of the companies that we regulate. We’re making sure that they do the things that they need to do. Certainly in New York we will always fill whatever gaps that need to be filled to protect New Yorkers. And we’ve done a lot of that in the past year. We’ve done it in, you know, in lots of different areas. We’ll do it in the banking industry, the insurance industry, wherever is needed to make sure that our markets are protected and our consumers are protected.

EICHER: Eventually, she succeeded in fining three insurance entities millions of dollars for underwriting the product. Those insurers admitted some of the products the NRA endorsed broke the law.

A few years later, NRA agreed to pay a penalty of two and a half million dollars.

That isn’t in dispute in this case.

What is, is what Vullo did after that.

She pushed every bank and insurance company in New York to “sever their ties” with the NRA or similar organizations. Vullo promised leniency to businesses that went along.

Her pressure campaign worked. Numerous banks and insurers dropped the NRA out of fear for what Vullo might do next.

REICHARD: So, the NRA sued, seeking to stop the state from interfering with its business relationships. It also alleged violation of its free speech and equal-protection rights.

The dispute attracted plenty of third-party interest. Montana and 17 other states filed an amicus brief with the Supreme Court supporting NRA’s position.

Here’s Montana Attorney General Austin Knudsen on the NRA’s America First Freedom Show, earlier this year.

AUSTIN KNUDSEN: Government should not be able to come in and act like the mafia. And that's really what this was. I mean, you had Maria Vullo come in and act like a mobster and basically threatened companies for doing business with the NRA. And it wasn't overt, right. And that actually was found in the district court filing that you know, she never made any direct threats but it was like a Tony Soprano situation you know, “Boy, that's a nice business you have there. Be an awful shame if anything were to happen to it.” Wink wink nudge nudge.

EICHER: At the Supreme Court, Vullo’s lawyer Neal Katyal argued she was just doing her job. The NRA pushed illegal insurance products, so it’s only logical for her to warn businesses about the NRA. Katyal mentions the term “twiqbal.” That’s a nickname for two Supreme Court precedents that outline how to plead in federal civil lawsuits.

NEAL KATYAL: That’s why what Ms. Vullo was doing here was absolutely explainable. There’s an obvious alternative explanation, to use the Twiqbal words. And that’s why if you let this complaint go forward, you will be saying to government regulators everywhere that you have to be careful about the speech you say. It’s not just the NRA today, it’s every regulated party tomorrow, from TikTok on.

Besides, he argued, Vullo has qualified immunity from this lawsuit.

For the other side arguing on behalf of the NRA, a lawyer for a typical NRA foe: the ACLU!

Lawyer David Cole argued that for the government to target groups the way Vullo did is dangerous business.

DAVID COLE: This was not about enforcing insurance law or mere government speech. It was a campaign by the state’s highest political officials to use their power to coerce a boycott of a political advocacy organization because they disagreed with its advocacy….p 3 Government officials are free to urge people not to support political groups they oppose. What they cannot do is use their regulatory might to add "or else" to that request.

REICHARD: So the question is where’s the line between urging and coercing? Justice Samuel Alito searched for it in this exchange with Cole for the NRA:

JUSTICE ALITO: On the question of the meaning of coercion, I can think of a spectrum. And on one end of the spectrum, a government official says, “Look, suppress this speech and, if you don't do it, I have legal weapons I can use against you and I'm going to punish you using those.” That's very clear coercion. At the other end, the -- the government official who has no authority to do anything for any practical purposes to the entity that the government official is speaking to says you should do this. It -- it would be a good thing to do, you'd be a good citizen if you did it. And in between, there are a lot of different gradations, particularly when the official who's making this request has that power and you have to assume that the person or the entity to whom or to which the request is being made knows that, just as I -- I am sure that these insurance companies were well aware of the power of Ms. Vullo. So how do you define when it goes too far along that line?

COLE: So I do think that the power of the official over those to whom she is speaking is a relevant factor in the assessment, but the assessment is, at the end of the day, is would a reasonable person in this situation feel that the government is coercing it. That it is implying some sort of threat of action against it…

REICHARD: Interestingly … the Department of Justice argued in support of the NRA here, too. Mainly to say there’s enough here that the lower court was wrong to throw the case out.

The DOJ contrasted this case with another government interference case I covered two weeks ago, Murthy versus Missouri. The question in Murthy is whether government officials pressured social-media companies to silence certain voices in violation of their rights.

Listen to Assistant to the Solicitor General Ephraim McDowell try to distinguish the two cases. Murthy contained no direct threat, and at worst, an indirect one. But Vullo in New York wasn’t even subtle:

MCDOWELL: So coercion in our view requires a threat of adverse action connected to a specific instruction such that it's saying, if you don't do X, we will do Y to you.

EICHER: But Justice Elena Kagan expressed Vullo’s perspective that’s it’s fair to consider how certain associations can hurt business:

JUSTICE KAGAN: If -- if -- reputational risk is a real thing, and if gun companies or gun advocacy groups impose that kind of reputational risk, isn't it a bank regulator's job to point that out?

Cole answered, it may well be. And Supreme Court precedent does say there’s a safe harbor when it comes to genuine advice about law enforcement.

But Vullo’s communications? They’re very different. Cole brings up a meeting she had with insurance giant Lloyds of London:

COLE: This was not genuine advice about law enforcement. Why would she spend four paragraphs, you know, denouncing guns? That actually has nothing to do with whether there's reputational risk. That has everything to do with what she said in the meeting with Lloyd's she was trying to do: leverage her authority to weaken the NRA because she disagreed with its political viewpoints.

Justice Alito later got down to basics and reminded everyone who has to prove what:

JUSTICE ALITO: This is a First Amendment case. All they need to do is to show that the desire to suppress speech was a motivating factor. They don’t have to prove that the ... regulatory action would have been taken even if Ms. Vullo didn’t have this motivation.

REICHARD: I think it’s safe to say that a majority of justices will find this state official took her power and authority much too far.

Sometimes it’s good to get back to basics. This case and the Murthy case is about power, and about how concentrated power threatens the civil liberties of regular citizens.

The Bill of Rights is supposed to protect them by reining in government. But without a judiciary willing to pull the reins … those rights are just words on parchment … as the late Justice Antonin Scalia used to say. Listen to him before the Senate Judiciary Committee in October 2011:

JUSTICE SCALIA: If you think that a Bill of Rights is what sets us apart, you're crazy. Every Banana Republic in the world has a Bill of Rights. The Bill of Rights of the former evil empire, the Union of Soviet Socialist Republics, was much better than ours. I mean it literally, it was much better. We guarantee freedom of speech and of the press. Big deal! They guaranteed freedom of speech, of the press, of street demonstrations and protests and anyone who is caught trying to suppress criticism of the government will be called to account. Whoa! That is wonderful stuff! Of course, just words on paper. What our framers would have called a parchment guarantee. That constitution of the Soviet Union did not prevent the centralization of power in one person or in one party. And when that happens, the game is over.

REICHARD: But thankfully, the game’s still on. And that’s this week’s Legal Docket!

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