New York Governor Andrew Cuomo violated the First Amendment by pressuring banks and insurers in New York State to stop providing services to the National Rifle Association because he hated its opposition to gun control. The NRA responded by bringing a First Amendment lawsuit in federal court. A federal judge has now rejected Cuomo’s attempt to dismiss the lawsuit, finding that there is a quite plausible argument that he violated the First Amendment.
Cuomo should be forced to pay damages — including punitive damages — to the NRA, because he not only violated the First Amendment but committed a flagrant and obvious violation, which legally justifies stripping him of his qualified immunity against having to pay damages. It is well-established under binding federal appeals court decisions that government officials like Cuomo are not allowed to pressure organizations or businesses to cut off services to someone because of their political stances or expression — even when the government official uses informal pressure as opposed to explicit threats. (See, e.g., Rattner v. Netburn, 930 F.2d 204 (2d Cir. 1991)).
As Reason Magazine’s Jacob Sullum notes in a recent column and as Judge Thomas McAvoy explained in his decision, there is clear evidence that Cuomo and Maria Vullo, New York’s banking regulator, are in fact threatening banks and insurers that dare to do business with organizations that oppose the governor’s gun control proposals.
In a press release last year, Cuomo announced that he was “directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities.” Vullo was more explicit in pressuring banks and insurers, saying “DFS urges all insurance companies and banks doing business in New York to join the companies that have already discontinued their arrangements with the NRA.”
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Vullo’s menacing “Guidance” memos to banks and insurers reinforced that intimidating message, warning that “reputational risks … may arise from their dealings with the NRA or similar gun promotion organizations” and urging “prompt actions to manage these risks.” The next day, Cuomo tweeted: “The NRA is an extremist organization. I urge companies in New York State to revisit any ties they have to the NRA and consider their reputations, and responsibility to the public.”
As Sullum notes:
The press release, memos, and tweet were quickly followed by consent degrees in which the companies that had managed and underwritten the NRA’s Carry Guard insurance program in New York not only agreed to pay fines for violations of state law but promised to stop doing business with the NRA. During this period, according to the NRA, Vullo’s department engaged in “backroom exhortations,” warning “banks and insurers with known or suspected ties to the NRA that they would face regulatory action” if they failed to cut ties.
Such “regulatory action” can easily violate the First Amendment. Indeed, burdensome investigations to discourage or retaliate against speech can violate the First Amendment, even when no fine is ever imposed. For example, the Ninth Circuit Court of Appeals ruled that investigating citizens for eight months under the Fair Housing Act in response to their speech violated their clearly established First Amendment rights, even though the investigation was belatedly dropped without imposing any fine. (See White v. Lee, 227 F.3d 1214 (9th Cir. 2000)).
“The temporal proximity between the Cuomo Press Release, the Guidance Letters, and the Consent Orders plausibly suggests that the timing was intended to reinforce the message that insurers and financial institutions that do not sever ties with the NRA will be subject to retaliatory action by the state,” Judge McAvoy observed. “The allegations in the Amended Complaint are sufficient to create a plausible inference that the Guidance Letters and Cuomo Press Release, when read together and in the context of the alleged backroom exhortations and the public announcements of the Consent Orders, constituted implicit threats of adverse action against financial institutions and insurers that did not disassociate from the NRA.”
As Sullum notes, “Those threats had a noticeable impact, causing insurers and banks to either end existing relationships with the NRA or decline new business.” And Cuomo crowed about this chilling effect. “If the @NRA goes bankrupt because of the State of New York,” he tweeted, “they’ll be in my thoughts and prayers. I’ll see you in court.”
As Sullum further notes, “Now that Cuomo has gotten to court, comments like that present a problem if he wants to deny that he is abusing his powers to pursue an unconstitutional vendetta against his political opponents.” “The Guidance Letters and the Cuomo Press Release indisputably are directed at the NRA and similar groups based on their ‘gun promotion’ advocacy,” McAvoy observed. “However controversial it may be, ‘gun promotion’ advocacy is core political speech entitled to constitutional protection. The Guidance Letters and Cuomo Press Release’s comments directed to this protected speech provides a sufficient basis to invoke the First Amendment on these claims.” Thus, “the critical question here is whether Defendants’ statements, including the Guidance Letters and Cuomo Press Release, threatened adverse action against banks and insurers that did not disassociate with the NRA.” As Sullum concludes, the answer is a clear “yes.”
Judge McAvoy rightly reaffirmed that the suspicious timing of hostile government acts is evidence of retaliation. I appreciate this principle, because in April 2016, I experienced such suspiciously-timed hostile acts from those working in concert with New York’s state government, after I exercised my right to free speech.
Days after I and a colleague at the Competitive Enterprise Institute criticized multistate investigations of Exxon by New York Attorney General Eric Schneiderman and his allies related to climate change, CEI was hit with an extremely broad and burdensome subpoena demanding ten years’ worth of documents relating to a wide range of topics. The subpoena was issued by a member of Schneiderman’s coalition, Virgin Islands Attorney General Claude Walker.
The subpoena closely followed our objections to their investigation. On April 1, 2016, CEI’s Myron Ebell criticized the investigation, and warned that it signaled a potential “shakedown” of the oil industry. On March 29, I was quoted by LegalNewsline criticizing their investigation at length as a threat to climate science and the First Amendment. I also authored an earlier commentary at CNS News criticizing Attorney General Schneiderman and arguing that his investigation was a violation of court rulings protecting free speech against oppressive investigations and speech-chilling lawsuits (decisions such as White v. Lee (2000) and in In re School Asbestos Litigation (1994)).
The fact that that subpoena so closely followed our speech critical of the investigation, which had begun the prior fall in the office of the New York Attorney General, was suspicious, to say the least. It raised red flags under the First Amendment. Courts can find that adverse action is motivated by speech based on the fact that it closely follows the speech. [See Quinn v. Green Tree Credit Corp., 159 F.3d 759, 769 (2d Cir.1998); Reed v. A.W. Lawrence & Co., Inc., 95 F.3d 1170, 1178 (2d Cir.1996); Holava-Brown v. General Electric, 1999 WL 642966, *4 (2d Cir. Aug. 10, 1999)].
After we raised legal objections to the subpoena, it was withdrawn. But there is a danger it will be reissued, and if so, CEI staff could be forced to spend well over a thousand hours combing CEI’s files for the records the subpoena demanded. Forcing someone to go through time-consuming paperwork in retaliation for their speech violates the First Amendment. (See Taoh v. Freeh (1994)).
The New York Attorney General’s office may have an additional retaliatory motive: It likely resents the fact that it was forced to pay thousands of dollars in attorneys fees to my former employer, CEI. It was ordered to pay those fees after it violated New York’s freedom of information law by not giving me and CEI the public records we requested. CEI exercised its First Amendment right to freedom of petition by suing the New York attorney general’s office for that violation.