The U.S. Supreme Court unanimously held that a lawsuit against a New York State insurance regulator can proceed.
The NRA lawsuit accuses the regulator of violating the First Amendment by coercing insurance companies not to do business with the gun advocacy group.
In 2018, the trial court allowed the lawsuit to proceed, as Legal Insurrection reported, but an appeals court reversed, finding the regulator engaged in government speech, not coercion. The NRA then appealed to the Supreme Court.
The NRA alleged the regulator told insurers it was “less interested in pursuing” enforcement actions against insurers who did not do business with the NRA and other gun advocacy groups.
The Court rejected the state’s argument that the regulator engaged in government speech immune to the First Amendment while pursuing “legitimate enforcement action.”
The Court acknowledged that the government is free to adopt a viewpoint and attempt to persuade others when pursuing its favored policy. The Court, however, distinguished persuasion from coercion, when the government “relies on the ‘threat of invoking legal sanctions and other means of coercion . . . to achieve the suppression’ of disfavored speech.”
The Court held that the appeals court, which earlier found for the government, failed to consider all the factors necessary to determine whether the government engaged in coercion. The Court noted that these factors include the regulator’s authority and communications and the insurance company’s reaction to those communications.
The Court remanded the case to the appeals court for further consideration, including “whether Vullo is entitled to qualified immunity.”
The case stems from a 2018 meeting between the New York Department of Financial Services superintendent Maria Vullo and “senior executives at Lloyd’s,” an insurance company that underwrote NRA-sponsored insurance policies.
Vullo’s office had previously discovered an NRA-sponsored insurance policy that violated state law by covering intentional criminal acts. Lloyd’s ceased underwriting this policy before the 2018 meeting.
At the 2018 meeting, Vullo expressed her support for gun control and implied her office would be less likely to investigate insurance companies that “ceased providing insurance to gun groups, especially the NRA.”
Vullo then provided letters to insurers titled “Guidance on Risk Management Relating to the NRA and Similar Gun Promotion Organizations.”
The letters encouraged insurance companies to evaluate risks associated with “dealings with the NRA,” to “review any relationships they have with the NRA,” and to “take prompt actions to manag[e] these risks and promote public health and safety.”
A joint press release with then-Governor Cuomo encouraged insurance companies to cease doing business with the NRA.
The opinion:
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