(CN) — Labeling the insurance program marketed by the National Rifle Association as “murder insurance,” an attorney for Maria Vullo says the former superintendent of the New York Department of Financial Services was working to get a “dangerous product off the market” when she fined several companies that sold or underwrote “carry guard” policies.
Meant to protect owners sued after using their gun in self-defense, Carry Guard is marketed by the NRA and other gun advocates as insurance coverage for the “lawful self-defense use of a firearm.”
Vullo said the coverage extends to individuals who were found to have used a gun with criminal intent, however, and the state opened an investigation of the policy in fall 2017. The NRA sued Vullo and the state the following year when three companies that provide the Carry Guard program entered into consent orders with New York admitting the insurance product violated state law and together paid more than $13 million in penalties.
Today, Vullo is appealing a decision by a federal judge that says she not entitled to qualified immunity because it is unclear whether she threatened the companies that do business with the NRA.
Vullo's attorney Andrew Celli Jr. called it imperative that the Second Circuit reverse.
“This is precisely the kind of case that qualified immunity applies in," Celli argued, saying government officials should not have to second-guess their decisions for fear of deep-pocketed organizations like banks or the NRA suing them for money damages.
Celli said the NRA’s allegations are not plausible because none of the discovery conducted to date has unearthed any statement by Vullo made that was coercive.
As the brief from Celli underscores, many companies that previously dealt with the NRA took stock of those relationships, not because of Vullo, but because of the 2018 mass shooting at Stoneman Douglas High School in Parkland, Florida.
Organizations like Best Western Hotels, Avis Rental Cars and Delta Airlines all severed their NRA ties, saying they would no longer recognize the organization's rewards programs.
Vullo said she was acting as “the voice of the gubernatorial administration” of then-New York Governor Andrew Cuomo when she sent out guidance letters to companies in the banking and insurance companies saying they should reconsider the “reputational risks of associating their services and products with gun advocacy groups.”
But the NRA said during that time Vullo made “backchannel threats” to insurers and banks to sever ties to the NRA. It claims she told one insurer that the Department of Financial Services would be less interested in pursuing regulatory infractions in the affinity-insurance marketplace if they ended their relationship with the NRA.
“The NRA does not dispute that public officials have a right to speak about political issues,” the nonprofit wrote in its brief. “But they do not have a right to use the levers of state power to threaten regulated entities to disassociate from the NRA based on the latter’s political viewpoint and advocacy.”
Challenged by Vullo’s attorneys in their briefing to point to just one similar case where an official was found to be coercive for offering leniency, the NRA’s attorney Sarah Rogers spent the opening moments before the Second Circuit doing just that.
Rogers, of the firm Brewer, Attorneys & Counselor, described a 2015 decision by the Seventh Circuit that found a sheriff used government coercion against Visa and MasterCard because they allowed payments to the website Backpage.com. The website that offered classified ads was seized by the federal government in April 2018 after its owners were charged with using the site to facilitate prostitution.
In the 2015 case, the sheriff had sent a cease-and-desist letter asking credit card companies to stop doing business with Backpage.com. Rogers said there was no explicit threats in the sheriff’s letter, just “legal sounding terminology.” Even though the sheriff had a legitimate duty to prevent sex trafficking, his actions violated the First Amendment, Rogers explained.
Thursday's panel meanwhile noted that specifics of Vullo’s alleged coercion, describing what words she supposedly used, for instance, remain lacking.
Rogers said she did not have a recording of the meeting and she did not know what specific words were said, adding the NRA is “trying to plead these allegations rigorously and truthfully.”
U.S. Circuit Judge Rosemary Pooler, a Clinton appointee, heard Thursday's appeal alongside U.S. Circuit Judges Denny Chin and Susan Carney, both Obama appointees.
As the panel adjourned for the day, it said the two attorneys engaged in “lively argument,” adding that it would rule at a later date.
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