US Supreme Court to hear NRA free speech case against New York official

FILE PHOTO: The National Rifle Association (NRA) annual meeting is held in Indianapolis

By Andrew Chung

WASHINGTON (Reuters) -The U.S. Supreme Court on Friday agreed to decide whether a New York state official stifled the ability of the National Rifle Association to exercise free speech rights protected by the Constitution's First Amendment by pressuring banks and insurers to avoid doing business with the influential gun rights group.

The justices took up the NRA's appeal of a lower court's decision to throw out the group's lawsuit against Maria Vullo, a former superintendent of New York's Department of Financial Services. It represents the latest case to come before the Supreme Court involving the NRA, a group closely aligned with Republicans that has opposed gun control measures and backed pivotal lawsuits that have widened U.S. gun rights.

The NRA was founded in New York in 1871 and was incorporated as a non-profit in the state. Its 2018 lawsuit, seeking unspecified monetary damages, accused Vullo of unlawfully retaliating against the NRA for its constitutionally protected gun rights advocacy by targeting the group with an "implicit censorship regime."

At issue was whether Vullo wielded her regulatory power to coerce New York financial institutions into cutting ties with the NRA in violation of its First Amendment rights.

Vullo in 2018 called upon banks and insurers to consider the "reputational risks" of doing business with gun rights groups following another U.S. mass shooting - this one involving 17 people killed at a high school in Parkland, Florida.

She later fined Lloyd's of London and two other insurers more than $13 million for offering an NRA-endorsed product called "Carry Guard" that Vullo's office found was in violation of New York insurance law. The product provided liability coverage for policyholders who caused injuries from gunfire, even in cases involving the wrongful use of a firearm. The insurers agreed to stop selling NRA-endorsed products that New York considered illegal.

The NRA's lawsuit said the state's "blacklisting" campaign would deprive it of basic financial services and threatened its advocacy work.

An attorney for the NRA, Eugene Volokh, said he was pleased the court will hear the case, adding: "This is a very important question: May the government pressure companies into cutting off financial services to a controversial First Amendment-protected advocacy group?"

The NRA is the largest and most powerful gun rights organization in the United States and has been instrumental in thwarting Democratic-backed gun restrictions in the U.S. Congress. The issue of gun rights is among the most divisive of the "culture wars" battles that roil the United States, the country with the world's highest gun ownership rate.

Americans remain deeply divided over how to address firearms violence including frequent mass shootings even as the Supreme Court, which has a 6-3 conservative majority, has taken an expansive view of gun rights.

Vullo said in court papers her statements encouraging financial institutions to examine their ties to pro-gun organizations following the Parkland shooting had not "crossed the line between permissible persuasion and unconstitutional coercion."

A federal judge in 2021 dismissed all claims apart from two free speech claims against Vullo. The Manhattan-based 2nd U.S. Circuit Court of Appeals in 2022 said those also should have been dismissed, prompting the NRA's Supreme Court appeal.

The NRA originally also named Vullo's department and then-New York Governor Andrew Cuomo, a Democrat, as defendants but the case was subsequently narrowed.

The NRA has been engaged in an extensive legal fight with New York state separate from the case involving Vullo.

The state's attorney general, Democrat Letitia James, filed suit in 2020 seeking to dissolve the NRA, accusing it of diverting millions of dollars to fund luxuries for senior officials, with no-show contracts for associates and other questionable expenses. A judge in 2022 rejected her bid to put the NRA out of business despite finding that James presented evidence of "a grim story of greed, self-dealing and lax financial oversight."

The NRA also unsuccessfully sought to reincorporate in Republican-dominated Texas with a bankruptcy filing after James filed her lawsuit.

(Reporting by John Kruzel in Washington; Additional reporting by Andrew Chung in New York; Editing by Will Dunham)