NRA sues NY Gov. Andrew Cuomo for using financial regulator to “blacklist” NRA

NRA sues NY Gov. Andrew Cuomo for using financial regulator to “blacklist” NRA

The NRA has been under assault from liberal politicians and political groups for decades. But those attacks have intensified after the Parkland school shooting.

Student David Hogg, backed by powerful groups like Media Matters, launched a campaign to pressure companies to sever membership discount programs with the NRA. That campaign was largely successful, but it did not stop there.

There were efforts to deplatform NRA-TV, that is, to pressure streaming service providers not to carry NRA-TV.

But it did not stop there. Liberal politicians are getting into the act.

There is a long history of conflict between the NRA and New York Governor Cuomo relating to New York’s SAFE Act, the extreme gun control bill he signed into law. That legislation had to be partially rewritten because, among other things, it would have exposed police to criminal liability and effectively banned most pistols because of the limitation of magazines to 7 bullets.

The SAFE Act is hated and a big electoral issue throughout upstate NY, the vast flyover country north and west of New York City. The SAFE Act has been rejected by the county legislatures in almost every upstate county. The NRA has run ads against Cuomo over the SAFE Act, such as this 2014 ad:

According to a lawsuit just filed by the NRA in the U.S. District Court for the Northern District of New York (based in Syracuse), after the Parkland shooting Cuomo enlisted his Department of Financial Services, which is part of the Executive Branch under Cuomo’s control (unlike the Attorney General, which is a separately elected constitutional provision), to “blacklist” the NRA.

In a press release announcing the lawsuit, the NRA writes in part:

The National Rifle Association of America (“NRA”) today announced that it filed a lawsuit against the New York State Department of Financial Services (“DFS”), New York Governor Andrew Cuomo, and DFS Superintendent Maria T. Vullo alleging violations of the NRA’s First Amendment rights.

…  the lawsuit claims that Cuomo, Vullo, and DFS engaged in a “campaign of selective prosecution, backroom exhortations, and public threats” designed to coerce banks and insurance companies to withhold services from the NRA. The NRA argues that such tactics vastly overstep DFS’s regulatory mandate, and seek to suppress the speech of Second Amendment supporters and retaliate against the NRA and others for their political advocacy….

… Among other things, the lawsuit cites a pair of “guidance” letters issued on April 19, 2018, by the DFS to the CEOs of banks and insurance companies doing business in New York. Styled as regulatory “risk management” advisories, the letters encourage institutions to “take prompt actions” to manage “reputational risk” posed by dealings with “gun promotion organizations.” The same day, Cuomo issued a press release in which Vullo directly urged “all insurance companies and banks doing business in New York” to “discontinue[] their arrangements with the NRA.”

The lawsuit claims that the “guidance” letters were accompanied by back-channel communications and targeted enforcement actions, which further reinforced the Cuomo administration’s message that it is bad business in New York to do business with the NRA.

The lawsuit explains that the DFS mandate – preceded by an “investigation” orchestrated by gun-control activists into insurance programs sponsored by the NRA – has already caused several insurance companies to sever relationships with the NRA and to plan to cancel the insurance policies of law-abiding New York consumers….

The lawsuit says, “As a direct result of this coercion, multiple firms have succumbed to Defendants’ demands and entered into consent orders with DFS that compel them to terminate longstanding, beneficial business relationships with the NRA both in New York and elsewhere. Tellingly, several provisions in the orders bear no relation to any ostensible regulatory infraction. Instead, the orders prohibit lawful commercial speech for no reason other than that it carries the NRA brand.” ….

The Complaint (pdf.)(full embed at bottom of post) summarizes the case in a Preliminary Statement:

This case is necessitated by an overt viewpoint-based discrimination campaign against the NRA and the millions of law-abiding gun owners that it represents. Directed by Governor Andrew Cuomo, this campaign involves selective prosecution, backroom exhortations, and public threats with a singular goal – to deprive the NRA and its constituents of their First Amendment right to speak freely about gun-related issues and defend the Second Amendment.

The foundation of Defendants’ selective-enforcement and retaliation campaign is a series of threats to financial institutions that DFS, an agency created to ensure the integrity of financial markets after the 2008 credit crisis, will exercise its extensive regulatory power against entities that fail to sever ties with the NRA. To effect their sweeping agenda, Defendants issued public demands that put DFS-regulated institutions on notice to “discontinue[] their arrangements with the NRA” and other “gun promotion organizations” if they planned to do business in New York.

At the same time, Defendants engaged in back-channel communications to reinforce their intended purpose. Simply put, Defendants made it clear to banks and insurers that it is bad business in New York to do business with the NRA.

As a direct result of this coercion, multiple firms have succumbed to Defendants’ demands and entered into consent orders with DFS that compel them to terminate longstanding, beneficial business relationships with the NRA, both in New York and elsewhere. Tellingly, several provisions in the orders bear no relation to any ostensible regulatory infraction. Instead, the orders prohibit lawful commercial speech for no reason other than that it carries the NRA brand.

Absent injunctive relief, Defendants’ blacklisting campaign will continue to damage the NRA and its members, as well as endanger the free speech and association rights guaranteed by the constitutions of the United States and the State of New York. It is well-settled that viewpoint discrimination applied through “threat[s] of invoking legal sanctions and other means of coercion, persuasion, and intimidation” violates the Constitution where, as here, such measures chill protected First Amendment activities.1

Defendants’ de facto censorship scheme cannot survive judicial scrutiny. Nor should it.

1. See, e.g., Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 72 (1963).

NRA seeks injunctive and monetary relief:

WHEREFORE the NRA respectfully requests that the Court enter judgment in the NRA’s
favor and against Defendants, as follows:
a. Declaring, pursuant to 28 U.S.C. § 2201, that Defendants have violated the NRA’s rights to free speech, due process, and equal protection under both the Federal and New York Constitutions;
b. Granting a preliminary and permanent injunction, pursuant to 28 U.S.C. § 1651 (a),
42 U.S.C. § 1983, and Rule 65 of the Federal Rules of Civil Procedure, ordering DFS, its agents,
representatives, employees and servants and all persons and entities in concert or participation with it, Cuomo (in his official capacity), and Vullo (in her official capacity):

(1) to immediately cease and refrain from engaging in any conduct or activity which has the purpose or effect of interfering with the NRA’s exercise of the rights afforded to it under the First and Second Amendment to the United States Constitution and Section 8 to the New York Constitution;
(2) to immediately cease and refrain from engaging in any conduct or activity which has the purpose or effect of interfering with, terminating, or diminishing any of the NRA’s contracts and/or business relationships with any organizations;
(3) to immediately cease and refrain from further selective enforcement of the Insurance Laws to the NRA endorsed policies; and
(4) to enjoin or preclude the enforcement of the provisions of the Lockton and Chubb Consent Orders purporting to prohibit Lockton and Chubb from doing business with the NRA;

b. Granting such other injunctive relief to which the NRA is entitled;
c. Awarding the NRA actual damages, including compensatory and consequential damages, in an amount to be determined at trial;
d. Awarding the NRA exemplary or punitive damages;
e. Awarding the NRA pre-judgment and post-judgment interest at the highest lawful rates;
f. Awarding the NRA such costs and disbursement as are incurred in prosecuting this action, including reasonable attorneys’ and experts’ fees; and
g. Granting the NRA such other and further relief as this Court deems just and proper.

It’s very important that the NRA win this lawsuit, as Cuomo insisted in reaction to the lawsuit that he’s not letting up, as The NY Daily News reports:

Cuomo ripped the NRA’s lawsuit as a “futile and desperate attempt to advance its dangerous agenda and to sell more guns.”

Citing New York’s tough firearm laws, Cuomo said he’s proud of his “F” rating from the NRA while the gun group “ignores students across the nation who are saying enough is enough.”

“In New York, we won’t be intimidated by frivolous court actions from a group of lobbyists bent on chipping away at common sense gun safety laws that many responsible gun owners actually support,” Cuomo said. “We have an obligation to protect New Yorkers, and this sham suit will do nothing to stop that. ”

Vullo called it incumbent upon her agency to “supervise and guide regulated entities to mitigate the risks to their safety and soundness that may derive from a variety of sources, including reputational risk.”

“It is equally as important that DFS enforce New York law and take appropriate enforcement action when necessary to protect consumers and ensure the integrity of our financial markets,” she said.

None of this is really surprising. While liberals want to gut the 2nd Amendment, they have their eyes on the 1st Amendment as well, as I predicted in late February 2018.  I renewed my NRA membership because attacks on 2nd Amendment rights never stop there:

It should surprise no one that what starts with an attack on 2nd Amendment rights quickly moved to an attack on free speech via the handful of internet oligopolies. Leftists have identified a weak point — private entities are not constrained by the 1st Amendment the way the government is, but they perform on the internet quasi-governmental functions over internet infrastructure and access.

I wrote about this in our 9th Anniversary post:

If the assault on the Electoral College was the game changer for me, a runner up was waking up to implications of the concentration of power in a small number of social media and internet companies who have been weaponized to shut down speech and expression. Google, Facebook, Twitter and two handfuls of other companies now completely control our ability to communicate with each other, while internet backbone companies are poised to block internet access altogether.

Imagine living in a repressive country in which the government blocked access to and suppressed internet content. You don’t need to move. It’s coming here but from private industry. This is, in many ways, more dangerous than government suppression of free speech because at least in the U.S. the government is subject to the First Amendment, and can be voted out of office.

I don’t know if there are any uncorrupted institutions left that matter.

If you think the attacks on the NRA are only about the 2nd Amendment, then you haven’t been paying attention. These people are totalitarian in nature, and that nature is on full display.

So I’ve renewed my lapsed NRA membership, which had lapsed.

Cuomo also tweeted:

If the NRA is suing you, you know you’re doing something right.

Or maybe, you’re violating citizens’ rights by weaponizing the bureaucracy and improperly repurposing a financial regulator to serve as a political baseball bat.

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NRA v. Cuomo – Complaint by Legal Insurrection on Scribd

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