By Jonathan Stempel
NEW YORK (Reuters) -A federal appeals court on Thursday ordered the dismissal of the National Rifle Association's lawsuit accusing a New York state official of violating its free speech rights by coercing banks and insurers to avoid doing business with it.
The 2nd U.S. Circuit Court of Appeals in Manhattan said Maria Vullo, a former superintendent of New York's Department of Financial Services, was immune from the NRA's claims under the U.S. Constitution's First Amendment because
the law addressing her conduct was unclear at the time.
In May 2024, a unanimous U.S. Supreme Court had said the NRA could pursue its First Amendment case, reversing an earlier 2nd Circuit decision, but did not address whether Vullo was immune from being sued.
Neither the NRA nor its lawyers had an immediate comment. Vullo, in a statement, said she was pleased the court "dismissed this baseless case, which was based on false allegations."
The lawsuit stemmed from a probe into "Carry Guard," an NRA-branded program that according to Vullo violated New York law because it provided liability coverage to gun owners for intentional, wrongful use of firearms.
After 17 people were killed in a 2018 mass shooting at the Marjory Stoneman Douglas High School in Parkland, Florida, Vullo called on banks and insurers to consider the "reputational risks" of doing business with gun rights groups.
She also fined three insurance businesses that worked on Carry Guard--Chubb, Lloyd's of London and Lockton Cos--and they agreed to curtail business with the NRA.
LAW NOT 'CLEARLY ESTABLISHED'
The NRA said this "blacklisting" campaign amounted to unlawful retaliation for its gun rights advocacy.
But a three-judge appeals court panel said Vullo deserved qualified immunity because there was no "clearly established" law at the time that she illegally pressured banks and insurers her office regulated into disassociating from the NRA.
"Reasonable officials in Vullo's position would not have known for certain ... that her conduct crossed the line from forceful but permissible persuasion to impermissible coercion and retaliation," Circuit Judge Denny Chin wrote.
Chin also found the relationship between Vullo's actions against NRA business partners and her treatment of the NRA itself "too attenuated" to support a retaliation claim.
Andrew Cuomo, the former New York governor and current New York City mayoral candidate, had also been a defendant but was dismissed from the case in 2021.
The appeals court returned the case to a federal district judge in Binghamton, New York, to formally dismiss all claims against Vullo.
The case is National Rifle Association of America v Vullo, 2nd U.S. Circuit Court of Appeals, No. 21-0636.
(Reporting by Jonathan Stempel in New York, Editing by William Maclean and Marguerita Choy)
