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The NRA's Future Rests In The Hands of One Court Case. Here's Why.

The National Rifle Association of America (NRA) has filed a collective lawsuit against New York Governor Andrew Cuomo (D), New York State's Superintendent of Financial Services Maria T. Vullo and the New York State Department of Financial Services (DFS). 


Why These Defendants?

The NRA claims Cuomo, Vullo and DFS knowingly went to banks and insurance companies to tell them not to work with the pro-gun group, Rolling Stone first reported. 

"Simply put, Defendants made it clear to banks and insurers that it is bad business in New York to do business with the NRA," the lawsuit says. "As a direct result of this coercion, multiple financial institutions have succumbed to Defendants’ demands and entered into consent orders with DFS that compel them to terminate longstanding, beneficial business relationships with the NRA, both in New York and elsewhere."

According to the NRA, Everytown for Gun Safety reached out to Cuomo's office in Sept. 2017 over NRA's Carry Guard insurance program. Specifically, Everytown "prompt[ed] a crackdown by sympathetic government officials that would target alleged compliance infirmities in Carry Guard."

In Oct. 2017, DFS launched an investigation into Carry Guard despite other companies who offer a similar product, something the NRA says was done by design. Eventually, Carry Guard was banned in New York State and its broker was slapped with a $7 million fine.

"Of course, Carry Guard was not Defendants’ true focus, and the scope of the DFS investigation rapidly expanded," the lawsuit says. "Defendants’ goal, from the outset, was to disrupt any and all business arrangements between the NRA and any insurance administrator, broker, or underwriter—indeed, any financial institution."


Lockton, the NRA's long-standing insurance provided, dropped all NRA-related services after receiving threats of extortion by DFS. The lawsuit alleges that Lockton and the NRA were in contract negotiations over a policy renewal. They were set to lock-in the deal when Lockton came back and said they would not provide the NRA with any services moving forward.

"Although it had previously indicated it would be willing to extend the NRA’s General Liability, Umbrella, and Media Liability coverage on favorable terms consistent with the NRA’s favorable claims history, the Corporate Carrier now stated that it was unwilling to renew coverage at any price," the lawsuit says. "The Corporate Carrier severed mutually beneficial business arrangements with the NRA because it learned of Defendants’ threats directed at Lockton, and feared it would be subject to similar reprisals." 

Lockton was permanently restricted form conducting business with the NRA in New York State, meaning they could not insure any New York residents under NRA's Carry Guard program. If Lockton did, they would face a civil monetary penalty of $7 million.

Chubb Group Holdings, another one of the NRA's insurance policy providers, had a similar content order placed on them. If Chubb participated in any NRA-endorsed program then they would be slapped with a civil monetary penalty of $1.3 million.


The Need For Financial Services

According to the lawsuit, Cuomo and Vullo's actions have made it almost impossible for the NRA to fulfill their pro-gun advocacy without basic essential financial services:

"Tellingly, several provisions in the orders bear no relation to any ostensible regulatory infraction. Moreover, Defendants’ abuses 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."

Without basic banking services, the NRA would not be able to collect donations from memberships and events. They wouldn't be able to take that money and apply it to operational expenses, like payroll, either. 

The Need For Insurance Coverage

The NRA needs overall insurance coverage for off-site meetings and events, including Annual Meetings, the Great American Outdoor Show and any other events and rallies the group decides to host.

In addition to general insurance coverage, the pro-gun group also needs media liability coverage to protect their hosts from lawsuits.

"Finally, for any organization that produces and disseminates original media content—especially a controversial speaker like the NRA—media liability coverage is a practical necessity. Absent such coverage, it is likely that NRATV would be forced to cease operating; moreover, the NRA could be forced to cease circulation of various print publications and magazines," the lawsuit says.


The Primary Legal Argument 

In their lawsuit, the NRA says the actions taken by Cuomo, Vullo and DFS has had a negative impact on their ability to find a corporate insurance carrier. 

"Defendants’ concerted efforts to stifle the NRA’s freedom of speech and to retaliate against the NRA based on its viewpoints are causing other insurance, banking, and financial institutions doing business with the NRA, such as Lloyd’s of London (“Lloyd’s”), to rethink their mutually beneficial business relationships with the NRA for fear of monetary sanctions or expensive public investigations," the lawsuit says.

Lloyd's terminated all of their insurance policies for the NRA. That announcement was made on May 9.

The NRA has contacted other corporate carriers about potential coverage. Each one of them has expressed fear of retaliation by DFS. 

"The NRA has spoken to numerous carriers in an effort to obtain replacement corporate insurance coverage; nearly every carrier has indicated that it fears transacting with the NRA specifically in light of DFS’s actions against Lockton and Chubb," the lawsuit says.

DFS' actions against the NRA has also made it difficult for the pro-gun group to find banking services.

"Multiple banks withdrew their bids in the NRA’s RFP process following the issuance of the April 2018 Letters, based on concerns that any involvement with the NRA—even providing the organization with basic depository services—would expose them to regulatory reprisals," the lawsuit says.


The lawsuit claims that the defendants violated the NRA's First and Fourteenth Amendments and that Cuomo and Vullo, in their individual capacities, were part of a conspiracy.

The Desired Outcome

The NRA is seeking a trial by jury and would like a preliminary and permanent injunction, ordering DFS, its agents, representatives, employees and servants and all persons and entities in concert or participation with it, Cuomo (in his official capacity), and Vullo (in her official capacity):

(1) to immediately cease and refrain from engaging in any conduct or activity which has the purpose or effect of interfering with the NRA’s exercise of  the rights afforded to it under the First and Second Amendment to the United States Constitution and Section 8 to the New York Constitution;

(2) to immediately cease and refrain from engaging in any conduct or activity which has the purpose or effect of interfering with, terminating, or diminishing any of the NRA’s contracts and/or business relationships with any organizations;

(3) to immediately cease and refrain from further selective enforcement of the Insurance Laws to the NRA endorsed policies; and

(4) to enjoin or preclude the enforcement of the provisions of the Lockton and Chubb Consent Orders purporting to prohibit Lockton and Chubb from doing business with the NRA;

b. Granting such other injunctive relief to which the NRA is entitled;

c. Awarding the NRA actual damages, including compensatory and consequential

damages, in an amount to be determined at trial;

d. Awarding the NRA exemplary or punitive damages;

e. Awarding the NRA pre-judgment and post-judgment interest at the highest lawful


f. Awarding the NRA such costs and disbursements as are incurred in prosecuting

this action, including reasonable attorneys’ and experts’ fees; and

g. Granting the NRA such other and further relief as this Court deems just and proper.


The NRA did not respond to Townhall's request for comment.

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