Supreme Court Decides Government Speech / Government Threats First Amendment Case

Supreme Court Decides Government Speech / Government Threats First Amendment Case

Yesterday, in National Rifle Association v. Vullo, the Supreme Court unanimously held that while the government is free to “‘say what it wishes’” and “select the views that it wants to express,” it may not “wield its power… in order to punish or suppress” speech.  In this case, the Court found the NRA (at the motion to dismiss stage) had plausibly alleged that a former superintendent of the New York Department of Financial Services (DFS), Vullo, had violated the First Amendment by using her power to threaten enforcement actions against regulated insurance entities to punish or suppress the NRA’s speech.  The case does not on its face break new ground and relies on Bantam Books v. Sullivan, 372 U.S. 58 (1963) for its holding and thus seems to preserve the core principles of government speech.  That said, the Court has yet to issue a second case involving a nearly identical issue – Murthy v. Missouri – so it will be important to review both cases in tandem to understand the parameters of where the line is between government speech and government threats and undue coercion.

The NRA offers insurance programs to its members and contracts with insurance companies to administer the programs.  The program at issue in this case is Carry Guard, which covers NRA members’ criminal defense costs related to their use of their licensed firearm even if they used the firearm in a criminally negligent way.

The New York County DA’s Office advised DFS of the possible illegality of Carry Guard. DFS subsequently opened an investigation into Carry Guard, focusing on Lockton and Chubb and then later Lloyd’s (the insurance companies)

On February 14, 2018, while the investigation was ongoing, the Parkland school shooting occurred. The insurance companies all severed ties with the NRA after the Parkland shooting.

The NRA alleges that the insurance companies did so, not on their own volition, but due to threats of enforcement action and “fear of reprisal” from Vullo.  Specifically, the NRA alleges that Vullo met with executives at the insurance companies two weeks after the shooting and “presented [her and then-Governor Cuomo’s] views on gun control and their desire to leverage their power to combat the availability of firearms, including specifically by weakening the NRA.”  During this meeting, she alluded to a number of technical regulatory infractions that are allegedly common in the affinity insurance market, and she told the executives that DFS would be “less interested in pursuing these infractions” (which were unrelated to NRA business) if they “ceased providing insurance to gun groups, especially the NRA.”   They allegedly struck a deal to that effect.

Thereafter, Vullo issued public Guidance Letters to financially regulated entities in which she “encouraged” them to “continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations”; (2) “review any relationships they have with the NRA or similar gun promotion organizations”; and (3) “take prompt actions to manag[e] these risks and promote public health and safety.”

The same day that she issued the Guidance Letters, she and Governor Cuomo issued a join press release echoing many of these same sentiments.  In it, Vullo urges “all insurance companies and banks doing business in New York” to join those “‘that have already discontinued their arrangements with the NRA.”

Two weeks after the press release, DFS entered into consent decrees with Lockton and Chubb stipulated that Carry Guard violated New York law.  Both insurance companies agreed not to provide any NRA endorsed insurance programs – even lawful ones – and they agreed to fines.

The NRA sued Vullo for violating the First Amendment.  The district court denied Vullo’s motion to dismiss but the Second Circuit reversed, finding that Vullo had engaged in permissible government speech and therefore did not violate the First Amendment.

In a unanimous opinion authored by Justice Sotomayor, the Supreme Court reversed.  The Court relied on Bantam Books, in which the Court held that a government’s “‘threat of invoking legal sanctions and other means of coercion’” against a third party “‘to achieve the suppression’” of disfavored speech violates the First Amendment.”  Here, the Court explained that the NRA’s allegations are that Vullo did precisely what Bahtam Books prohibits.

The Court emphasized the importance of government speech and noted that Vullo was free to criticize the NRA and to pursue violations of New York law.  However, the Court explained that criticism may not turn to punishment and here, the NRA had plausibly alleged under Iqbal and Twombly that Vullo had “pressured regulated entities to help her stifle the NRA’s pro-gun advocacy by threatening enforcement actions against those entities that refused to disassociate from the NRA and other gun-promotion advocacy groups.”

The Court noted that lower courts have used a four factor test since Bantam Books to determine whether the challenged communication constitutes an impermissible threat or permissible government speech.  Those lower court factors included: “(1) word choice and tone; (2) the existence of regulatory authority; (3) whether the speech was perceived as a threat; and, perhaps most importantly, (4) whether the speech refers to adverse consequences.”  The Court calls this approach a “useful, though nonexhaustive guide.”  But ultimately, the Court explains “[t]o state a claim that the government violated the First Amendment through coercion of a third party, a plaintiff must plausibly allege conduct that, viewed in context, could be reasonably understood to convey a threat of adverse government action in order to punish or suppress the plaintiff ’s speech.”

In terms of how the foregoing cashes out in this case, the Court starts with Vullo’s authority as it is a relevant factor as to “whether a reasonable person would perceive the official’s communication as coercive.”  And the Court notes that the “greater and more direct the government official’s authority, the less likely a person will feel free to disregard a directive from the official.”  Here, Vullo had enforcement authority over the insurance companies and the fact that she could initiate prosecution against them and impose monetary penalties strongly colored how her statements would be perceived by those regulated entities.  For example, noting that she would not pursue minor and common regulatory infractions if the companies ceased doing business with the NRA was coercive per the Court.  And the insurance companies, according to the allegations, perceived it as coercive given their agreement at the meeting to stop doing business with the NRA.  The Court noted that the Guidance Letters and accompanying press release “viewed in context” also reinforced the NRA’s claims.

The Court rejected Vullo’s arguments that the admitted illegality of the Carry Guard program provided a defense against the First Amendment claim here.  Instead, the Court noted, the same was true in Bantam Books.  And the Court explained, Vullo was free to pursue criminal sanctions, but she cannot do so if her purpose is to punish or suppress protected speech.

IMLA filed an amicus brief in this case in support of neither party.  The purpose of the brief was to underscore the importance of government speech, to remind the Court that there are many circumstances in which local governments may seek to influence private speech and that doing so does not cross the line absent threats or coercion, and to request concrete guidance for local governments as to how to properly avoid liability in this area.

The Court purports to break no new ground and that may be so.  However, there are a couple aspects of the decision which may prove challenging, and the Court’s analysis was not overly helpful in terms of providing concrete guidance on how to avoid liability.  For example, while it may make analytical sense that governments cannot avoid liability simply by pointing to illegal activity, the fact that the government’s motive is front and center as to the analysis will make it easier to bring a First Amendment claim in these cases.  Additionally, while the threat to go easy on a regulated entity if they suppress speech may be an easier case, the Court did not provide any guidance for situations where no overt threats are made.  That said, we are still waiting for the companion case, Murthy v. Missouri, which may provide additional guidance that is lacking in this decision.  Finally, this case should be viewed in light of the procedural posture of the case – namely that it was at the motion to dismiss stage.

To read the Court’s decision, click here.

To read IMLA’s amicus brief, click here.

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