NY Gov. Andrew Cuomo on claim he may put NRA out of business: “I would like to believe it’s true”

NY Gov. Andrew Cuomo on claim he may put NRA out of business: “I would like to believe it’s true”

Among New York Governor Andrew Cuomo’s leading political enemies is the National Rifle Association.

Long before the Parkland Shooting and the national movement to pressure companies to sever ties to the NRA, the NRA was battling Cuomo’s absurd gun control legislation, the so-called SAFE Act. 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 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:

Cuomo took the fight to another level, however, by utilizing the state financial regulators against the NRA, leading the NRA to bring suit in May 2018.

We covered the story at the time, 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….

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.

A copy of the original complaint is here (pdf.), and alleged among other things:

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).

The Defendants filed a motion to dismiss in early July, but before the NRA was required to respond, on July 20, 2018, the NRA filed a First Amended Complaint (pdf.)(full embed at bottom of post). A Motion to Dismiss (pdf.) has been filed by the NY Attorney General on behalf of the state defendants.

The NRA First Amended Complaint received a lot of attention recently due to an article in Rolling Stone magazine on August 3, 2018, The NRA Says It’s in Deep Financial Trouble, May Be ‘Unable to Exist’:

The National Rifle Association warns that it is in grave financial jeopardy, according to a recent court filing obtained by Rolling Stone, and that it could soon “be unable to exist… or pursue its advocacy mission.” (Read the NRA’s legal complaint at the bottom of this story.)

The reason, according to the NRA filing, is not its deep entanglement with alleged Russian agents like Maria Butina. Instead, the gun group has been suing New York Gov. Andrew Cuomo and the state’s financial regulators since May, claiming the NRA has been subject to a state-led “blacklisting campaign” that has inflicted “tens of millions of dollars in damages.”

In the new document — an amended complaint filed in U.S. District Court in late July — the NRA says it cannot access financial services essential to its operations and is facing “irrecoverable loss and irreparable harm.”

Specifically, the NRA warns that it has lost insurance coverage — endangering day-to-day operations. “Insurance coverage is necessary for the NRA to continue its existence,” the complaint reads. Without general liability coverage, it adds, the “NRA cannot maintain its physical premises, convene off-site meetings and events, operate educational programs … or hold rallies, conventions and assemblies.”

The complaint says the NRA’s video streaming service and magazines may soon shut down.

“The NRA’s inability to obtain insurance in connection with media liability raises risks that are especially acute; if insurers remain afraid to transact with the NRA, there is a substantial risk that NRATV will be forced to cease operating.” The group also warns it “could be forced to cease circulation of various print publications and magazines.”

In addition to its insurance troubles, the NRA court filing also claims that “abuses” by Cuomo and the New York State Department of Financial Services “will imminently deprive the NRA of basic bank-depository services … and other financial services essential to the NRA’s corporate existence.”

The allegations in the First Amended Complaint of the threat to the NRA from Cuomo’s use of financial regulators are not substantially different from the predictions of doom in the original Complaint. If you are a Legal Insurrection reader, you were ahead of the curve, once again.

Rather the First Amended Complaint expands on some of the factual allegations, presumably to overcome a motion to dismiss. It also adds two new legal claims, as the NY Times reports:

Last month’s amendments added two more accusations: that state officials had interfered with potential revenue and that they had violated the N.R.A.’s freedom of association.

The Preliminary Statement to the First Amended Complaint reads:

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 rights 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 those 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 financial institutions 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.
Moreover, Defendants’ abuses will imminently deprive the NRA of basic bank-depository services, corporate insurance coverage, and other financial services essential to the NRA’s corporate existence and its advocacy mission.

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 United States 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).

Although the allegations of the threat to the NRA’s existence are not new, the sensationalism of The Rolling Stone article has generated a lot of publicity.

USA Today reported, NRA says it faces financial crisis, claims it might be ‘unable to exist’ in future: lawsuit:

The National Rifle Association claims it’s facing deep financial problems and it might go broke in a lawsuit that blames its problems on the state of New York.

The gun-rights organization said it may soon have to stop producing its magazines and its video streaming service, NRAtv, because of actions by the state of New York, which the NRA accused of running a “blacklisting campaign.”

The campaign appears to be part of a national campaign calling for companies to cut ties with the group in the aftermath of several high profile shootings, most notably with the high school shooting in Parkland, Fla.

The gun lobbying group claims in its lawsuit, which targets Gov. Andrew Cuomo, the New York State Department of Financial Services and Maria Vullo, which heads the department, that the state has caused “irrecoverable loss and irreparable harm” to the organization. But, of course, the organization is making these claims in a lawsuit, which it hopes to win.

The Rolling Stone first obtained the lawsuit and published the 45-page complaint online Friday.

The Independent (UK) reports, NRA has major financial issues – but could it really collapse?

… while the non-profit’s multi-million dollar media entities might actually be in real jeopardy in the coming months, the NRA’s foundation remains mostly intact.

Despite having a track record of financial instability — the group overspent by nearly $46m in 2016, according to a ProPublica investigation — the NRA continues to maintain steady donations from its nationwide members. The organisation saw a spike in donations following the Parkland school shooting earlier this year, increasing by nearly 500 per cent from the week prior to the historic tragedy.

In 2018, the NRA set fundraising records by garnering the most political donations of any group in a single month, according to Federal Elections Commission records. The NRA Political Victory Fund took in nearly $2.4m in the month of March alone, with the majority of those coming from small donors across the country.

The reason why the NRA is sounding the alarm about its financial state is because it reportedly cannot find insurance companies to support its media components. The group said its media liability insurance coverage was ended shortly after Mr Cuomo began his campaign against the organisation adding that it fears other companies could soon cut ties as well.

Cuomo, for his part, is bragging that he hopes it’s true that the NY financial regulators focus on the NRA is threatening the NRA’s existence, NPR reports:

New York Gov. Andrew Cuomo says the National Rifle Association’s federal lawsuit against him is “frivolous.” The lawsuit claims that Cuomo’s policies are trying to deprive the NRA of its First Amendment rights by making it more difficult for the organization to function in the state.

Cuomo described the NRA as a “group of extremists” and says he hopes that his actions against the group will expand to other states.

“I’m hoping to extend this all across the country,” he said in an interview with All Things Considered. “And if they think New York hurt their pocketbook, let’s see what happens when the other states also join in.” ….

Cuomo’s actions, the subject of the NRA’s lawsuit, are broader in scope than the controversy over the Carry Guard insurance policy.

In April, he issued a statement saying that he was directing “the Department of Financial Services to urge insurance companies, New York State-chartered banks, and other financial services companies licensed in New York to review any relationships they may have with the National Rifle Association and other similar organizations.”

Then, he said at the time, “the companies are encouraged to consider whether such ties harm their corporate reputations and jeopardize public safety.” ….

Does Cuomo think his policies are threatening the existence of the NRA? “I would like to believe it’s true,” he said, laughing….

In a press release and tweet, Cuomo made clear his goal is to put the NRA out of business:

It should come as no surprise that someone like Andrew Cuomo has weaponized the state financial bureaucracy to try to put a political opponent out of business. Or that he openly brags that putting them out of business is his goal. Or that he’s encouraging other Democratic Attorney Generals to do the same. Or that he’s happy about it. Or that he laughs about it.

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:

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.

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NRA v. Cuomo – First Amended Complaint by Legal Insurrection on Scribd

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