The federal appeals court in New York overturned a lower court and dismissed two remaining First Amendment charges filed by the National Rifle Association against former New York State Department of Financial Services Superintendent Maria T. Vullo in connection with her investigation of the association’s relationship with insurers and a broker that had partnered with it in a program.

Ms. Vullo’s investigation into the NRA’s Carry Guard Program led to the New York’s Department of Financial Services’ $7 million settlement in May 2018 with Lockton Cos. LLC, which administered programs that provided liability insurance to members of the Fairfax, Virginia-based gun rights advocacy group.

In addition, in May 2018 Chubb Ltd. also settled charges filed by New York regulators for $1.3 million in 2018 in connection with the program.

Ms. Vullo also had held discussions with Lloyd’s of London, which served as underwriter for at least 11 other NRA-endorsed programs, according to the ruling by the 2nd U.S. Circuit Court of Appeals in New York National Rifle Association of America v. Maria T. Vullo.

Lloyd’s announced its decision to terminate its insurance-related relationship with the NRA in May 2018.

Two days later, the NRA sued then-New York Gov. Andrew Cuomo, the New York State Department of Financial Services, Ms. Vullo’s successor, Linda A. Lacewell and Ms. Vullo in U.S. District Court in Albany, New York, for allegedly violating the gun rights’ organization’s First Amendment rights related to the NRA-branded “Carry Guard” insurance program.

In March 2021, the district court dismissed all claims against the defendants except for two First Amendment claims against Ms. Vullo.

It held that the NRA had sufficiently pleaded First Amendment violations, that Ms. Vullo was not entitled to qualified immunity at the motion-to-dismiss stage, and that there was “a question of material fact” as to whether Ms. Vullo had explicitly threatened Lloyd’s with DFS enforcement if it did not disassociate with the NRA.

In overturning the lower court and dismissing the case, a three-judge appeals court said, “far from acting irresponsibly, Vullo was doing her job in good faith.

“She oversaw an investigation into serious violations of New York insurance law and obtained substantial relief for the residents of New York.

“She used her office to address policy issues of concern to the public.  Even assuming her acts were unlawful, and we do not believe they were, the unlawfulness was not apparent by any means.”

Ms. Vullo said in a statement, “For four years, the NRA has proceeded with this baseless case while I remained steadfast in my position. 

“I thank the Court for upholding the rule of law, as I sought to do each day as DFS Superintendent, including against aggressive adversaries that use litigation threats (and, then, litigation) as a method to stifle public officials from enforcing the law without fear or favor.’”

William A. Brewer III, counsel to the NRA, said in a statement the decision “misstates the facts, and offends the First Amendment. The NRA is exploring its options, including certiorari to the Supreme Court.”

He said the opinion “endorses a radical idea: that financial regulators can selectively punish businesses to advance ‘public policy,’ including ‘social issues’ such as gun control. This is a derogation of the First Amendment that should not prevail.”