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Supreme Court grapples with claim that New York pressured businesses to cut ties with NRA

By John Fritze, CNN

(CNN) — The Supreme Court on Monday wrestled with an unusual First Amendment appeal from the National Rifle Association against a New York financial regulator who persuaded banks and insurance companies to sever ties with the gun rights group.

The NRA claims that Maria Vullo, the former superintendent of the New York State Department of Financial Services, not only leaned on insurance companies to part ways with the gun lobby group but also threatened enforcement actions against those firms if they failed to comply – a point that Vullo disputes.

Several members of the court seemed particularly concerned with a meeting Vullo had with Lloyd’s of London in 2018 in which the NRA claims Vullo offered to not prosecute other violations as long as the company helped with the campaign against gun groups.

Vullo says her enforcement targeted an insurance product that is illegal in New York: third-party policies sold through the NRA that cover personal injury and criminal defense costs following the use of a firearm. Critics dubbed the policies “murder insurance.”

Justice Samuel Alito, a conservative, at one point suggested Vullo’s position would hypothetically mean that even if the superintendent had pulled “out a pistol” and held it to the heads of the companies and encouraged them to drop ties with the NRA that that would not be enough to “even allege” coercion because Vullo could argue she was simply targeting illegal insurance products.

It wasn’t just the court’s conservatives who posed tough questions of Vullo. Several members of the court’s liberal wing also asked why her efforts appeared to extend beyond products that were illegal under New York law.

“What she was seeking was a ban even on potentially lawful programs,” Justice Sonia Sotomayor said at one point.

The court’s decision later this year will test how far government regulators – liberal or conservative – may go in pressuring the companies they police to do business with controversial entities.

“The worry is we don’t necessarily want to allow state governments to start using this kind of regulatory force to engage in a kind of third-party pressuring,” said Caroline Fredrickson, a Georgetown Law professor.

The danger, she said, is that regulators in both red and blue states could start leaning on insurance companies and banks to drop coverage for disfavored advocacy groups or companies.

“On the other hand,” Fredrickson said, “you don’t want to restrict regulators from being able to have any impact on who an insurance company … is insuring.”

If other insurance companies distanced themselves from the NRA, Vullo argues, it was because they no longer wanted to do business with the group. At least some of the entities split with the NRA after the 2018 mass shooting at a Parkland, Florida, high school that left 17 people dead.

The case may turn in part on a meeting Vullo had with Lloyd’s of London in 2018 in which the NRA claims Vullo offered to not prosecute other violations as long as the company helped with the campaign against gun groups.

“Government officials are free to speak their minds, but not to wield their authority to pressure others to penalize speech based on its viewpoint,” the NRA told the high court in a brief.

Vullo has waved off the significance of the meeting in court papers, arguing the NRA’s allegations are not specific.

Vullo served in Democratic former Gov. Andrew Cuomo’s administration. She left the post in 2019.

A US district court denied some of the NRA’s claims but allowed its First Amendment arguments to proceed against Vullo. The 2nd US Circuit Court of Appeals reversed that decision, concluding that Vullo’s actions were not coercive. It also ruled that Vullo was entitled to qualified immunity, a legal doctrine that shields government officials from lawsuits in some circumstances.

“Government officials cannot, for example, use their regulatory powers to coerce individuals or entities into refraining from protected speech,” US Circuit Judge Denny Chin wrote. “At the same time, however, government officials have a right – indeed, a duty – to address issues of public concern.”

The NRA is relying on a 1963 Supreme Court precedent, Bantam Books v. Sullivan, that dealt with a Rhode Island commission that had threatened to refer distributors to police if they sold books deemed to be obscene. The Supreme Court held that such “informal censorship” was unconstitutional.

The Supreme Court heard a related case Monday, one that implicates the White House, federal agencies and social media. There, Republican officials in two states and five social media users claim the Biden administration violated the First Amendment by trying to pressure – coerce, in their reading – platforms like Facebook and X to remove disinformation.

A majority of the Supreme Court appeared deeply skeptical of arguments raised by the two states.

This story and headline have been updated with additional devlopments.

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