Mediaboss Marketing

This is the case I wrote about in March, and again last week, when I noted the amicus briefs from state attorneys general, from the Foundation for Individual Rights and Expression, and from two financial and business law scholars. I also noted last week that the New York state government defendants didn't file a response to the petition.

Today, the Supreme Court called for a response; this doesn't guarantee that the Court will agree to hear the case, but it does suggest some interest on the part of at least one Justice. It also gives an extra 30 days for any other people or groups to file amicus briefs in support of the petition: "An amicus curiae brief submitted in support of a petitioner before the Court's consideration of a petition for a writ of certiorari" may be "filed within 30 days after a response is called for by the Court." It will be interesting to see whether any other amicus briefs come in. And it will of course also be interesting to see what the state argues in opposing the petition, and whether there will be amicusbriefs filed in support of the state.

Here again is the Introduction from the cert. petition:

It also permits selective investigations and penalties targeting business arrangements with disfavored speakers, even where the regulator premises its hostility explicitly on an entity's political speech and treats leniently, or exempts, identical transactions with customers who lack controversial views. In sum, it lets government officials, acting with undisguised political animus, transmute "general backlash" against controversial advocacy into a justification for crackdowns on advocates (and firms who serve them), eviscerating free speech rights.

Reaching this result, the Second Circuit disregards basic pleading standards and undermines fundamental First Amendment freedoms. It also departs from this Court's precedent inBantam Books, Inc.v.Sullivanand from the Seventh Circuit's precedent inBackpage.com, LLCv.Dart.

This case arises from a series of actionsincluding press releases, official regulatory guidance, and contemporaneous investigations and penaltiesissued by or on behalf of New York's powerful Department of Financial Services ("DFS") against financial institutions doing business with the NRA. Among other things, the Complaint states that Superintendent Maria Vullo: (1) warned regulated institutions that doing business with Second Amendment advocacy groups posed "reputational risk" of concern to DFS; (2) secretly offered leniency to insurers for unrelated infractions if they dropped the NRA; and (3) extracted highly-publicized and over-reaching consent orders, and multi-million dollar penalties, from firms that formerly served the NRA. Citing private telephone calls, internal insurer documents, and statements by an anonymous banking executive to industry press, the Complaint alleges that numerous financial institutions perceived Vullo's actions as threatening and, therefore, ceased business arrangements with the NRA or refused new ones.

The NRA brought First Amendment claims against Vullo and Governor Andrew Cuomo in their official and individual capacities. The individual-capacity claimsagainst Vullo, which were the subject of the Second Circuit's decision, withstood two motions to dismiss. But when Vullo appealed the District Court's refusal to grant her qualified immunity at the pleading stage, the Second Circuit held that the NRA's allegations fail to state a First Amendment claim at all.

In effect, the Second Circuit holds that a government official must explicitly threaten adverse consequences for disfavored speechand must do so in the absence of any contemporaneous assertion of a regulatory interestfor a First Amendment retaliation claim to arise. The Second Circuit's opinion thereby creates a circuit split with the Seventh Circuit's decision inBackpage.com, which held that a government official violated the First Amendment in circumstances closely comparable to these.

In addition, the Second Circuit refuses to accept the Complaint's allegation that Vullo clearly and unambiguously threatened insurers in private meetings, and selectively parses Vullo's official communications to disregard key passages and deny NRA the favorable inferences to which it is entitled on a motion to dismiss. The Second Circuit's decision thus defies this Court's command that, in evaluating qualified immunity, "courts must take care not to define a case's 'context' in a manner that imports genuinely disputed factual propositions."

The Second Circuit denudes Vullo's regulatory guidance of the "context" that made it ominous, while importing favorable "context" to frame Vullo's contemporaneous, selective targeting of NRA business associates as benign. "The 'context' here," the Circuit opines, "was an investigation, commenced months before the meetings, that was triggered by a referral from the DA's Office." The Circuit ignores boasts by Vullo's boss, Governor Cuomo, that her regulatory actions were "forcing the NRA into financial jeopardy." And the Second Circuit's suggestion that Vullo had non-retaliatory motives for investigating the insurance policies at issue is rebutted by the facts pleaded in the Complaint.

The Second Circuit goes on to suggest that even if Vullo did make threats, such threats were justified by the "general backlash" against the NRA "and businesses associated with them" which "was intense after the Parkland shooting." Indeed, this backlash "continues today," with many people "speaking out" against the NRA's gun rights advocacy. Such "backlash" against a speaker's viewpoint, the Second Circuit opines, "likely" has financial consequences that would justify financial blacklisting of that speaker for its controversial advocacy.

In support, the Second Circuit cites a "diversity, equity, and inclusion" consultant who charges companies for "consulting packages" to implement "corporate social responsibility" programs, as well as a "survey" commissioned by a marketing company that "strives to insert the brand's social mission and innovations into mainstream conversations through traditional and social media." The reliance on such sources underscores the unsoundness of the opinion below.

This Court has not hesitated to summarily overturn circuit court decisions, like the Second Circuit's, that disregard the applicable pleading standard in determining qualified immunity. Here, the Second Circuit makes the same error as the lower courts inLombardov.City of St. Louis, Missouri, 141 S. Ct. 2239 (2021) (per curiam),Sausev.Bauer, 138 S. Ct. 2561 (2018) (per curiam), andTolanv.Cotton, 572 U.S. 650 (2014) (per curiam). In all three, this Court summarily reversed because the circuit courts refused to accept well-pleaded facts and draw reasonable inferences in favor of the non-moving party in determining qualified immunity.

The public importance of this case cannot be overstated. A regulatory regimeeven a facially content-neutral onethat "inhibit[s] protected freedoms of expression and association" violates the First Amendment. SeeNAACPv.Button, 371 U.S. 415, 437-38 (1963);NAACPv.Alabama ex rel. Patterson, 357 U.S. 449, 460-62 (1958). An overt campaign by state officials to wield regulatory power against a disfavored civil rights organizationhere the NRAprecisely because of its disfavored speech at least as clearly merits this Court's attention and reversal.

Reversal is urgent because the Second Circuit's opinion threatens basic First Amendment rights at a time when the First Amendment is under widespread attack. As the American Civil Liberties Union ("ACLU") has warned, "If the NRA's allegations were deemed insufficient to survive the motion to dismiss, it would set a dangerous precedent for advocacy groups across the political spectrum."

(Note: William Brewer, Sarah Rogers & Noah Peters of Brewer Attorneys & Counselors and I are the counsel on the petition.)

Originally posted here:
S. Ct. Calls for Response in NRA v. Vullo - Reason