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The New York state attorney general filed a motion in federal court Friday seeking to dismiss a suit filed by the National Rifle Association for allegedly violating the gun rights organization’s First Amendment rights and threatening its existence by putting pressure on insurers and banks doing business with the group.
“New York will not be intimidated by the NRA’s frivolous lawsuit to advance its dangerous gun-peddling agenda,” New York Gov. Andrew Cuomo said in a statement.
National Rifle Association of America v. Andrew Cuomo, both individually and in his official capacity; Maria T. Vullo, both individually and in her official capacity; and The New York Department of Financial Services was filed in May in the U.S. District Court in Albany, New York, and amended in July.
The NRA’s original complaint charged that Gov. Cuomo and the New York State Department of Financial Services and the department’s superintendent, Maria T. Vullo, conducted a campaign involving “selective prosecution, backroom exhortations, and public threats with a singular goal — to deprive the NRA and its constituents of their First Amendment right to speak freely about gun-related issues and defend the Second Amendment.”
The NRA amended its complaint on July 20 to charge that through Gov. Cuomo’s and Ms. Vullo’s actions it has “sustained and is continuing to sustain economic damages from lost prospective business relations,” including lost royalty payments from future affinity programs and attorneys’ fees and costs.
“Simply put,” the NRA said, “the defendants made it clear to banks and insurers that it is bad business in New York to do business with the NRA.”
The state’s actions, the NRA said, “will imminently deprive the NRA of basic bank-depository services, corporate insurance coverage, and other financial services essential to the NRA’s corporate existence and its advocacy mission.”
In the state’s response, New York Attorney General Barbara Underwood said the NRA’s suit was intended “to distract from its involvement in various violations of the law.”
“While the NRA’s violations of the New York Insurance Law may have been stymied by Defendants’ acts, the NRA’s ability to continue its mission, and communicate its message, in opposition to the regulation of firearms has not,” the motion said.
The NRA “presents a speculative and implausible ‘parade of horribles,’” the attorney general said in the motion, “which starts with the lawful regulation of affinity insurance programs and ends with the inexplicable loss of general banking services and corporate insurance coverage, resulting in the ultimate demise of the NRA.”
In October, the department of financial services investigated the NRA-branded Carry Guard insurance program, which the DFS determined unlawfully provided liability insurance to gun owners.
The policies issued through the Carry Guard program were underwritten by Illinois Union Insurance Co., a subsidiary of Chubb Ltd. through Lockton Affinity L.L.C., an affiliate of Lockton Cos. L.L.C.
Lockton suspended the Carry Guard program on in Nov. 17, 2017, and is no longer making Carry Guard policies available to New York residents to purchase.
On Monday, Gov. Cuomo called on other governors to follow New York’s lead and block the sale of the NRA’s Carry Guard program.
On May 2, Lockton agreed to pay $7 million to New York regulators to settle charges that the Carry Guard program, administered by the brokerage’s Lockton Affinity L.L.C. unit, violated state law and breached excess and surplus lines placement rules. A short time later, Chubb agreed to pay a $1.3 million fine for underwriting the Carry Guard through Lockton Affinity.
“When stripped of its rhetoric and repeated conclusory statements, the Complaint alleges only that Defendants’ actions caused the NRA to lose existing, and prospective, business relationships with companies in the insurance industry,” the motion to dismiss said. “More specifically, the Complaint alleges that agreements to provide the NRA affinity insurance plans have been terminated. However, the federal and state constitutions do not protect against such a deprivation, especially where the underlying business interest is plainly unlawful.”
Lockton Cos. L.L.C. agreed Wednesday to pay $7 million to New York regulators to settle charges that the brokerage’s National Rifle Association-branded insurance program violated state law and breached excess and surplus lines placement rules.