Supreme Court rules NRA can sue New York official

The U.S. Supreme Court on Thursday unanimously ruled that the Second Circuit Court of Appeals erred in a ruling that dismissed the National Rifle Association’s lawsuit against New York officials over alleged First Amendment violations. The NRA alleges that former New York Department of Financial Services Superintendent Maria Vullo used her status and position to attack the NRA in response to its protected free speech activities.

What happened in this case? In 2017, DFS received a tip about a firearm insurance program called “Carry Guard” that the NRA had with three insurance companies: Lockton Companies LLC, Chubb Limited, and Lloyd’s of London. Under the program, the companies would underwrite firearm insurance policies for NRA members, and the NRA would receive a portion of the insurance premiums.

DFS at the time said its investigation found that the policy insured intentional criminal acts—a violation of New York law—and that the NRA was promoting the insurance policy without an insurance producer license—another violation of New York law. Lockton and Chubbs suspended the program shortly after the investigation began. DFS then expanded its investigation to include NRA relationships with other companies to provide insurance affinity programs.

After the 2018 shooting at Marjory Stoneman Douglas High School in Parkland, Fla., where a gunman slaughtered 17 students and staff, many financial institutions began cutting ties with the NRA over their support for gun rights, according to the Supreme Court. Many companies did it due to the social backlash surrounding guns, according to the court. However, according to the high court’s ruling, the NRA contends that some of those companies did so because they feared punishment from Vullo and New York’s DFS.

As businesses were cutting ties, Vullo also began meeting with finance and insurance institutions with insurance ties to the NRA. She met specifically with the insurance company Lloyd’s of London and urged them to stop insuring and working with the National Rifle Association. She also allegedly accused Lloyd’s and other insurance companies of committing unrelated legal infractions and vowed not to prosecute the company if Lloyd’s agreed to sever its relationship with the NRA. As a result, Lloyd’s agreed to cease underwriting firearm-related insurance policies in exchange for the New York DFS focusing its enforcement activities elsewhere, according to court documents.

After the Lloyd’s meeting, Vullo wrote two virtually identical letters, one to financial institutions and another to insurance companies regulated by New York’s DFS, according to court documents. In the letters, she applauded efforts by companies and institutions that had already cut ties with the NRA—saying their actions were “fulfilling their corporate social responsibility.” She encouraged other companies and institutions to reevaluate their relationships with the NRA and manage any risks those relationships might pose to public safety. In a press release the same day, she more explicitly urged financial institutions and insurance companies to cease business with the NRA.

Following the letters and the press release, New York’s DFS entered into consent decrees with Lockton, Lloyd’s, and Chubb, where the companies accepted fines related to the issues involved in Carry Guard. As part of the terms, the companies agreed not to provide further firearm insurance through the NRA in the future.

The NRA sued Vullo, the DFS, and New York Gov. Andrew Cuomo. The trial court denied a motion by Vullo to dismiss the charges. The Second Circuit Court of Appeals reversed that denial, dismissing the charges. The NRA then appealed to the U.S. Supreme Court to either reverse that dismissal or decide the case in favor of the NRA. The court chose to reverse the dismissal.

What exactly is the NRA saying Vullo did wrong? The NRA alleges that Vullo weaponized her position and regulatory authority over insurance and financial institutions to pressure them into severing ties with the NRA. The court ruled that it is permissible for a public official to criticize the speech of others, but weaponizing a government position to crack down on that speech is impermissible. The NRA argued that Vullo’s actions could legitimately constitute unconstitutional government pressure on companies that effectively cracked down on free speech. According to the NRA, there is a clear First Amendment question at issue in the case.

What does Vullo have to say? According to the Supreme Court, Vullo alleged that she was regulating business practices and relationships, which was within her authority, and was not attacking the NRA’s free speech. She also argued that she was punishing conceded violations of New York law and that a decision in favor of the NRA would interfere with the government’s ability to function properly and regulate commercial activity, according to court documents.

What happens now? The Supreme Court has ordered the case to return to the trial court level for proceedings consistent with its opinion. The actual claims about First Amendment violations will now go to trial.

Dig deeper: Listen to Mary Reichard and Nick Eicher’s report on The World and Everything in It podcast about the NRA’s lawsuit against New York.