Amicus Curiae Brief — National Rifle Association of America, Petitioner v. Maria T. Vullo

No. 22-842

In The

Supreme Court of the United States

————♦————

THE NATIONAL RIFLE ASSOCIATION OF AMERICA,

Petitioner,

v.

MARIA T. VULLO, both individually

and in her former official capacity,

Respondent.

————♦————

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

————♦————

BRIEF OF AMICI CURIAE

SECOND AMENDMENT FOUNDATION, JOHN

LOCKE FOUNDATION, AND INDEPENDENCE

INSTITUTE IN SUPPORT OF PETITIONER

————♦————

DAVID B. KOPEL

INDEPENDENCE INSTITUTE

727 E. 16th Ave.

Denver, CO 80203

JONATHAN D. GUZE

JOHN LOCKE FOUNDATION

4800 Six Forks Rd., Ste. 220

Raleigh, NC 27609

JOSEPH G.S. GREENLEE

Counsel of Record

GREENLEE LAW, PLLC

PO Box 4061

McCall, ID 83638

(208) 271-2494

joseph@greenlee.law

Counsel for Amici Curiae

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ........................................ii

INTEREST OF THE AMICI CURIAE ........................ 1

SUMMARY OF ARGUMENT ..................................... 2

ARGUMENT ............................................................. 5

I.

The decision below eviscerates this Court’s

freedom of association precedents by allowing

states to dismantle disfavored advocacy

groups through coercive financial “guidance.” .... 5

II. Financial devastation has become a weapon

of oppressive government officials seeking to

stifle and penalize First and Second

Amendment rights. ............................................ 13

A. Abusive litigation by Andrew Cuomo and

other government officials sought to

bankrupt the firearms industry. .................... 14

B. The IRS delayed the processing of

conservative nonprofit applications and

imposed burdensome requirements to

stifle their advocacy. ...................................... 18

C. The Department of Justice choked off

lawful firearms businesses through

“Operation Choke Point.” ............................... 20

III. Then-Governor Cuomo gloated about possibly

bankrupting the NRA through Vullo’s

regulatory actions. ............................................. 23

IV. Vullo’s threats targeted and continue to

imperil all gun rights advocacy organizations. . 27

CONCLUSION .......................................................... 30

ii

TABLE OF AUTHORITIES

Page

CASES

Bates v. City of Little Rock,

361 U.S. 516 (1960) ................................................. 9

Cantwell v. Connecticut,

310 U.S. 296 (1940) ................................................. 9

Louisiana ex rel. Gremillion v. NAACP,

366 U.S. 293 (1961) ...................................... 9, 10, 12

NAACP v. Alabama ex rel. Flowers,

377 U.S. 288 (1964) ..............................................8, 9

NAACP v. Alabama ex rel. Patterson,

357 U.S. 449 (1958) (“Patterson I”) ...... 6, 7, 8, 11, 12

NAACP v. Alabama ex rel. Patterson,

360 U.S. 240 (1959) (“Patterson II”) ........................ 8

NAACP v. Button,

371 U.S. 415 (1963) .............................. 10, 11, 12, 29

NAACP v. Gallion,

368 U.S. 16 (1961) ................................................... 8

NAACP v. State,

274 Ala. 544 (Ala. 1963) .......................................... 8

CONSTITUTIONAL PROVISIONS

U.S. CONST. amend. I....... 2, 3, 4, 10, 11, 12, 13, 19, 20

U.S. CONST. amend. II ..................................... 3, 13, 18

U.S. CONST. amend. V ...........................................3, 19

iii

STATUTES AND REGULATIONS

15 U.S.C. §§ 7901–7903 ............................................ 17

Pub. L. No. 109–92, 119 Stat. 2095 (2005) ............... 17

OTHER AUTHORITIES

146 Cong. Rec. H2017 (Apr. 11, 2000) ...................... 17

151 Cong. Rec. S9063 (July 27, 2005) ...................... 17

Allen, Mike, Colt’s to Curtail Sale of Handguns,

N.Y. TIMES, Oct. 11, 1999 ...................................... 16

Attorney General Jeff Sessions Announces

Department of Justice has Settled with

Plaintiff Groups Improperly Targeted by IRS,

U.S. DEPARTMENT OF JUSTICE, Oct. 26, 2017 ...18, 19

Barrett, Paul, Lawsuits Trigger Gun Firms’

Bankruptcy, WALL ST. J., Sept. 13, 1999 .............. 15

Boyd, Stephen E., Letter to Bob Goodlatte,

Aug. 16, 2017 ......................................................... 22

Boyer, Peter, Big Guns, NEW YORKER,

May 17, 1999 ......................................................... 15

Butterfield, Fox, Lawsuits Lead Gun Maker to

File for Bankruptcy, N.Y. TIMES, June 24, 1999 ... 15

Chasmar, Jessica, Gov. Cuomo: Pro-life, pro-gun

conservatives ‘have no place’ in New York,

WASH. TIMES, Jan. 19, 2014 .................................. 23

Cole, David, ENGINES OF LIBERTY: THE POWER OF

CITIZEN ACTIVISTS TO MAKE CONSTITUTIONAL

LAW (rev. ed. 2017) ................................................ 28

iv

Consent Order, Linchpins of Liberty v. United

States, No. 1:13-cv-00777 (D.D.C. Dec. 11,

2017), ECF No. 143 ..........................................19, 20

Cuomo, Andrew (@andrewcuomo), TWITTER .......24, 25

Governor Cuomo, Andrew

(@NYGovCuomo), TWITTER ........................ 24, 25, 26

Hand, Learned, The Spirit of Liberty, Address at

“I Am an American Day” (May 21, 1944) ............. 28

Inappropriate Criteria Were Used to Identify TaxExempt Applications for Review, U.S. TREASURY

INSPECTOR GENERAL FOR TAX ADMINISTRATION,

May 14, 2013 ......................................................... 18

Kennedy, Merrit, Is Cuomo Threatening NRA’s

Existence? He Says: ‘I’d Like To Believe It’s

True,’ NPR, Aug. 5, 2018....................................... 25

Mocsary, George A., Administrative Browbeating

and Insurance Markets, 68 VILL. L. REV. 579

(2023) ..................................................................... 12

Morris, Aldon D., THE ORIGINS OF THE CIVIL

RIGHTS MOVEMENT (1984) ................................5, 6, 7

Musante, Fred, After Tobacco, Handgun Lawsuits,

N.Y. TIMES, Jan. 31, 1999 ..................................... 14

Olson, Walter, Plaintiffs Lawyers Take Aim at

Democracy, WALL ST. J., Mar. 21, 2000 ................ 14

Olson, Walter, THE RULE OF LAWYERS (2003) .....16, 17

Remarks by Secretary Andrew Cuomo: Handgun

Control, Inc, U.S. DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT, June 20, 2000 ................... 23

v

Riddell, Kelly, Targeted? Gun sellers’ ‘high risk’

label from feds cuts banking options, hurts

business, WASH. TIMES, May 18, 2014 .................. 22

School, NAACP Bills Signed by Gov. Stanley,

WASH. POST, Sept. 30, 1956 .................................. 10

Second Amended Class Action Complaint, Norcal

Tea Party Patriots v. IRS, No. 1:13-cv-00341

(S.D. Ohio Oct. 7, 2014), ECF No. 114 .................. 20

Second Amended Complaint, Linchpins of Liberty

v. United States, No. 1:13-cv-00777 (D.D.C. Oct.

18, 2013), ECF No. 51 ........................................... 19

Settlement Agreement, Norcal Tea Party Patriots

v. IRS, No. 1:13-cv-00341 (S.D. Ohio Mar. 13,

2018), ECF No. 414 ............................................... 20

The Department of Justice’s “Operation Choke

Point”: Illegally Choking Off Legitimate

Businesses?, U.S. HOUSE OF

REPRESENTATIVES COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM, May 29, 2014 .......21, 22

The HUD Gun Suit, WASH. POST, Dec. 17, 1999 ...... 14

Walsh, Sharon, Gun Industry Views Pact as

Threat to Its Unity, WASH. POST, Mar. 18, 2000 ... 15

Weisman, Jonathan, Gun maker, U.S. reach

agreement, BALT. SUN, Mar. 18, 2000 ................... 16

1

INTEREST OF THE AMICI CURIAE1

Second Amendment Foundation (SAF) is a

nonprofit foundation that protects the right to keep

and bear arms through educational and legal action

programs. SAF has over 720,000 members, in every

State of the Union. SAF organized and prevailed in

McDonald v. Chicago.

Founded in 1985 on the eternal truths of the

Declaration of Independence, the Independence

Institute is a 501(c)(3) public policy research

organization based in Denver, Colorado. The briefs

and scholarship of Research Director David Kopel

have been cited in seven opinions of this Court,

including Bruen, McDonald (under the name of lead

amicus Int’l Law Enforcement Educators & Trainers

Association (ILEETA)), and Heller (same). Kopel’s

scholarship and briefs have also been cited in over a

hundred opinions of lower courts. The Institute’s

Senior Fellow in Constitutional Studies, law professor

Robert Natelson, has been cited in a dozen opinions by

Justices of this Court.

The John Locke Foundation was founded in

1990 as an independent, nonprofit think tank. Its

mission is to be North Carolina’s most influential force

driving public policy. It employs research, journalism,

and outreach to promote liberty and limited,

constitutional government as the cornerstones of a

1 No counsel for any party authored this brief in any part. No

person or entity other than amici funded its preparation or

submission. The Independence Institute has received general

contributions from the NRA Foundation, a separate corporation

from the NRA.

2

society in which individuals, families, and institutions

can freely shape their own destinies.

As nonprofit organizations, amici are concerned

that the Second Circuit’s precedent will allow state

financial regulators to cripple any nonprofit or other

corporation whom a regulator dislikes for ideological

reasons.

SUMMARY OF ARGUMENT

Abusive government officials have long sought to

stifle advocacy they deplore. Starting in the 1950s,

southern states tried to dismantle the NAACP.

Alabama tried to prevent the NAACP from registering

as a foreign corporation to preclude it from conducting

business in the state and to compel the disclosure of its

membership list to subject its members to abuse and

intimidation. Louisiana similarly demanded a list of

the Association’s members and officers and also

required affidavits ensuring that none of its officers or

directors belonged to any communist organization.

Virginia sought to cripple the NAACP by outlawing its

method of soliciting legal business. This Court held

that all these tactics violated the First Amendment.

According to the decision below, the southern

states could have eliminated the NAACP branches

simply by having the state banking and insurance

regulators issue a threat letter (“guidance”), warning

banks and insurance companies not to do business

with the NAACP. The Second Circuit’s decision is

incompatible with this Court’s decisions and must be

reversed if they remain good law as a practical matter.

3

In recent decades, government officials have

sought to stifle disfavored advocacy and activities

through financial ruin. Andrew Cuomo was at the

forefront of these efforts as the Secretary of Housing

and Urban Development in the late 1990s. Cuomo

organized federally funded housing authorities to

bring coordinated lawsuits aimed at coercing and

bankrupting firearms manufacturers and retailers.

Dozens of localities did the same. Thirty-three states

and then the federal government ended the assault on

Second Amendment activity by enacting statutes to

prevent the abusive lawsuits.

In 2010, the IRS began delaying the processing of

applications from conservative groups seeking taxexempt status, with some applications crossing two

election cycles. The delay hampered the groups’ ability

to fundraise and collectively advocate. At least two

major lawsuits were brought against the IRS alleging

First and Fifth Amendment violations. One, a classaction, resulted in a multimillion-dollar settlement.

The other resulted in a “sincere apology” from the IRS.

In 2013, the Department of Justice initiated

“Operation Choke Point,” which choked off lawful

businesses that the Obama administration deemed

objectionable—including firearms and ammunition

sales. Financial institutions that served merchants in

these “high-risk” lawful businesses were threatened

with a federal investigation and potential litigation.

Consequently, many federally licensed firearms

merchants had their bank accounts frozen or closed. In

the face of mounting criticism, the Department of

Justice acknowledged that its initiative was

“misguided” and terminated it.

4

Although the attempts to stifle disfavored

advocacy and activities through financial ruin have

been

widely

regarded

as

unconstitutional,

Superintendent Vullo and her then-boss Andrew

Cuomo used the same tactic here.

Indeed, Governor Cuomo repeatedly gloated that

Vullo’s regulatory actions were “forcing the NRA into

financial jeopardy” and promised not to “stop until we

shut them down.” “I think we could make a serious

dent on their coffers and that would be good for

everyone,” Cuomo explained. He made clear that his

goal was “to put the gun lobby out of business,” adding

that he would “have put the @NRA out of business . . .

20 years ago,” if possible. Like the southern states that

assailed the NAACP, Cuomo and Vullo were motivated

by animus and retaliation for lawful advocacy.

While Cuomo and Vullo harbor a peculiar animus

against the NRA, their threats place all gun rights

organizations in peril. Further, consistent with the

Second Circuit’s decision, Vullo’s tactics could be used

to punish any advocacy a particular government

dislikes, including either side of abortion,

immigration, and environmental advocacy. The First

Amendment forbids such retaliation.

5

ARGUMENT

I.

The decision below eviscerates this Court’s

freedom of association precedents by

allowing states to dismantle disfavored

advocacy groups through coercive financial

“guidance.”

Vullo’s abuse of governmental authority to punish

the NRA for its lawful advocacy is functionally similar

to southern states’ efforts to punish the NAACP for its

lawful advocacy in the 20th century.

“[A] coordinated attack against the NAACP

throughout the South began about 1950” and “became

highly organized and effective from 1954 to 1958.”

Aldon D. Morris, THE ORIGINS OF THE CIVIL RIGHTS

MOVEMENT 26 (1984). Southern states—including

Alabama, Louisiana, and Virginia—sought to quash

the

Association

through

various

methods.

Consequently, from 1955 to 1958, the NAACP closed

246 branches and lost roughly 50,000 members in the

South. Id. at 33. Moreover, at the end of 1957, “the

Association was involved in 25 suits in which its rights

to function in the South [were] at issue.” Id. at 34. In

addition to banishing the NAACP, “The Southern

states” were hoping “to break the NAACP by forcing it

to deplete its funds in numerous and costly court

cases.” Id. at 33.

The coordinated attacks “began to recede about

1959,” id. at 26, due to emphatic decisions from this

Court upholding the rights of speech and association,

id. at 32. According to the decision below, however, the

southern states could have eliminated the NAACP

branches simply by having the state banking and

6

insurance regulators issue a threat letter (“guidance”),

warning banks and insurance companies not to do

business with the NAACP. The Second Circuit’s

decision is incompatible with this Court’s decisions

and must be reversed if they remain good law as a

practical matter.

1. NAACP v. Alabama ex rel. Patterson

In 1956, Alabama Attorney General John

Patterson sought to banish the NAACP; he alleged in

an equity suit that the group had failed to qualify as a

foreign corporation. The NAACP’s Birmingham,

Alabama, office was essential, because “NAACP

activities in Florida, Georgia, Mississippi, North

Carolina, South Carolina, and Tennessee were

generated and coordinated from this office.” Morris, at

34. As “People began to observe, ‘If they could close the

NAACP in Alabama, they certainly are able to close it

here.’” Id.

Emphasizing that the NAACP provided “financial

support and furnished legal assistance to Negro

students seeking admission to the state university”

and “supported a Negro boycott of the bus lines in

Montgomery to compel the seating of passengers

without regard to race,” the State argued that “by

continuing to do business in Alabama without

complying with the qualification statute,” the NAACP

was “causing irreparable injury to the property and

civil rights of the residents and citizens of the State of

Alabama[.]” NAACP v. Alabama ex rel. Patterson, 357

U.S. 449, 452 (1958) (“Patterson I”).

The Circuit Court of Montgomery County,

Alabama, issued a restraining order prohibiting the

7

NAACP from conducting any business in the State and

from taking any steps to qualify. Id. at 452–53. The

NAACP moved to dissolve the restraining order,

arguing that it was exempt from the qualification

requirements and that the State’s true objective was

to violate NAACP members’ constitutional rights. Id.

at 453.

The State then demanded the names and

addresses of the Association’s members in discovery,

claiming that it needed the information to respond to

the Association’s claims. When the NAACP refused to

provide its membership list, the court fined the

Association $100,000. Id. at 454.

This Court held the compelled disclosure of the

NAACP’s membership list unconstitutional. The Court

recognized that such disclosure would likely cause

NAACP members to suffer “economic reprisal, loss of

employment, threat of physical coercion, and other

manifestations of public hostility,” and thereby

“induce members to withdraw from the Association

and dissuade others from joining it[.]” Id. at 462–63.

Because the consequences would diminish the group’s

ability to collectively advocate for their beliefs, the

compelled disclosure of its membership list violated

the right “to associate freely with others.” Id. at 466.

This Court did not consider the validity of the

underlying restraining order at that time. As for John

Patterson, he “was elected Governor of Alabama in

1958 after campaigning on a ‘Kill the NAACP’

platform.” Morris, at 32.

8

2. NAACP v. Alabama ex rel. Flowers

After Patterson I, the Supreme Court of Alabama

defied this Court by affirming the judgment of

contempt against the NAACP, which this Court

reversed again. NAACP v. Alabama ex rel. Patterson,

360 U.S. 240 (1959) (“Patterson II”). But the NAACP

still could not obtain a hearing on the merits of the

restraining order in the Alabama courts, so this Court

acted again, directing the federal district court to

“proceed with the trial of the issues,” if the State of

Alabama did not afford the NAACP an opportunity to

be heard by January 2, 1962. NAACP v. Gallion, 368

U.S. 16, 16 (1961). Finally, five years after the

issuance of the restraining order, the NAACP obtained

a hearing on the merits, after which the Circuit Court

of Montgomery County “permanently enjoined the

Association and those affiliated with it from doing any

further business of any description or kind in Alabama

and from attempting to qualify to do business there.”

NAACP v. Alabama ex rel. Flowers, 377 U.S. 288, 292

(1964) (quotation marks omitted). The Supreme Court

of Alabama affirmed the judgment on procedural

grounds without considering the merits, NAACP v.

State, 274 Ala. 544 (Ala. 1963), and this Court granted

certiorari. After determining that the Supreme Court

of Alabama’s ruling was in error, “in view of what has

gone before”—i.e., the Alabama courts’ defiance of this

Court and unjust treatment of the NAACP—this Court

“proceed[ed] to the merits.” Flowers, 377 U.S. at 302.

This Court held that none of Alabama’s 11 offered

reasons—including alleged violations of the law and

breaches of the peace—justified the NAACP’s ouster.

Id. at 302–09. The Court recognized that, “in truth,”

9

the case “involve[d] not the privilege of a corporation

to do business in a State, but rather the freedom of

individuals to associate for the collective advocacy of

ideas. ‘Freedoms such as [this] are protected not only

against heavy-handed frontal attack, but also from

being stifled by more subtle governmental

interference.’” Id. at 309–10 (quoting Bates v. City of

Little Rock, 361 U.S. 516, 523 (1960)). Thus, “[t]he

power to regulate must be so exercised as not, in

attaining a permissible end, unduly to infringe the

protected freedom.’” Id. at 307 (quoting Cantwell v.

Connecticut, 310 U.S. 296, 304 (1940)). Alabama

unduly infringed on the NAACP’s right of association,

so the restraining order was invalidated.

After eight years and four favorable decisions from

this Court, the NAACP was finally able to qualify to do

business and resume operations in Alabama.

3. Louisiana v. NAACP

In 1956, Louisiana sought to “enjoin [the NAACP]

from doing business in the State” for failing to comply

with two statutes. Louisiana ex rel. Gremillion v.

NAACP, 366 U.S. 293, 294 (1961). One statute—which

allegedly had not been enforced against any other

organization for about three decades—required the

Association to file a complete list of its members’ and

officers’ names and addresses with the State. Id. at

295. The other required the Association to file

annually an affidavit that none of its officers or

members of its board of directors was a member of a

communist,

communist-front,

or

subversive

organization. Id. at 294–95.

10

This Court held the laws violative of the First

Amendment, noting that “regulatory measures . . . no

matter how sophisticated, cannot be employed in

purpose or in effect to stifle, penalize, or curb the

exercise of First Amendment rights.” Id. at 297.

4. NAACP v. Button

In 1956, Virginia Governor Thomas B. Stanley

signed a “package of anti-integration measures,”

including “a half dozen bills designed to curb the

National Association [for the Advancement] of Colored

People in promoting school segregation court tests.”

School, NAACP Bills Signed by Gov. Stanley, WASH.

POST, Sept. 30, 1956, at B1. “The ‘NAACP’ laws

require[d] pressure groups attempting to influence

racial legislation or litigation to register with the State

Corporation Commission and report information on

finances and membership. They also prohibit[ed] such

groups from soliciting litigation.” Id.

Most of the laws were held unconstitutional by

lower courts. See NAACP v. Button, 371 U.S. 415, 418

(1963). This Court considered one that forbade the

NAACP’s method of soliciting legal business:

the legislature amended . . . the provisions of

the Virginia Code forbidding solicitation of

legal business by a ‘runner’ or ‘capper’ to

include, in the definition of ‘runner’ or

‘capper,’ an agent for an individual or

organization which retains a lawyer in

connection with an action to which it is not a

party and in which it has no pecuniary right

or liability.

Id. at 423.

11

This Court held that the law violated the

“protected freedoms of expression and association.” Id.

at 437. As the Court emphasized, the First

Amendment “protects vigorous advocacy, certainly of

lawful ends, against governmental intrusion.” Id. at

429. The “abridgment of such rights, even though

unintended, may inevitably follow from varied forms

of governmental action.” Id. at 439 (quoting Patterson

I, 357 U.S. at 461).

Concurring, Justice Douglas pointed out that the

law “is not applied across the board to all

groups . . . but instead reflects a legislative purpose to

penalize the N.A.A.C.P. because it promotes

desegregation of the races.” Id. at 445 (Douglas, J.,

concurring).

This case bears several similarities to the NAACP

cases. Just as Louisiana’s enforcement of the

membership disclosure statute applied only to the

NAACP, Vullo’s investigation “targeted none of the

available self-defense insurance products except” the

NRA-endorsed product, Pet. App. 207, and Vullo’s

“affinity-insurance enforcement action” focused “solely

on those syndicates which served the NRA,” id. at 223.

Just as Alabama retaliated against the NAACP

“because it promotes desegregation of the races,”

Button, 371 U.S. at 445 (Douglas, J., concurring), Vullo

“retaliate[d] against the NRA for” its “political

advocacy,” Pet. App. 198. And just as Virginia

intended to cripple the NAACP by outlawing its

method of soliciting legal business, Button, 371 U.S. at

423, Vullo intended to jeopardize the NRA’s “existence

as a not-for-profit organization and [its ability to]

fulfill its advocacy objectives,” Pet. App. 203.

12

This case presents merely a different approach to

penalizing an organization for lawful advocacy that

the government disfavors—i.e., one of the “varied

forms of governmental action” that constitutes an

“abridgment of [First Amendment] rights.” Button,

371 U.S. at 439 (quoting Patterson I, 357 U.S. at 461).

While here the government actions were coercion

through backchannel threats, guidance documents,

and press releases, “regulatory measures . . . no matter

how sophisticated, cannot be employed in purpose or

in effect to stifle, penalize, or curb the exercise of First

Amendment rights.” Louisiana ex rel. Gremillion, 366

U.S. at 297.

According to the Second Circuit’s decision, the

southern states could have circumvented this Court’s

decisions and dismantled the NAACP by simply

financially blacklisting the Association. As explained

in the amici curiae brief of the Financial and Business

Law Scholars, the notion that a “guidance” threat

letter to highly regulated businesses is noncoercive is

implausible. Financial and Business Law Scholars Br.

3–27; see also George A. Mocsary, Administrative

Browbeating and Insurance Markets, 68 VILL. L. REV.

579, 597 (2023) (noting that the New York Department

of Financial Services “is widely viewed as one of the

nation’s most aggressive state regulators”) (quotation

marks omitted). Therefore, if this Court’s now

universally revered freedom of association decisions

protecting the NAACP’s advocacy remain good law,

the decision below must be reversed.

13

II.

Financial devastation has become a weapon

of oppressive government officials seeking

to stifle and penalize First and Second

Amendment rights.

In recent decades, government officials have

sought to stifle disfavored advocacy and activities

through financial ruin. Like the southern states that

assailed the NAACP, these officials sought to punish

lawful conduct that they disapproved of. Specifically,

government officials brought abusive lawsuits to

coerce and bankrupt firearms manufacturers and

retailers; the IRS delayed the processing of

applications from conservative groups seeking taxexempt status to hamper their ability to fundraise and

collectively advocate; and the Department of Justice

threatened financial institutions that served firearms

merchants with federal investigations and litigation.

Although these actions were roundly denounced as

unconstitutional, Superintendent Vullo’s actions at

issue here shared the same objective: to make it

financially impossible to engage in lawful conduct that

the government disfavors.

Notably, Andrew Cuomo, while Secretary of

Housing and Urban Development in the late 1990s,

spearheaded efforts to throttle lawful conduct through

financial ruin. During the events that gave rise to this

litigation, Vullo was serving as Cuomo’s appointee and

at his pleasure, as the head of a department Cuomo

created as New York’s governor. Pet. App. 198 n.15,

201–02.

14

A. Abusive litigation by Andrew Cuomo and

other government officials sought to

bankrupt the firearms industry.

When legislatures declined to enact as much gun

control as some executive branch officials desired, the

officials brought abusive lawsuits aimed at coercing

and bankrupting firearms manufacturers and

retailers. The lawsuits attempted to hold lawful

firearms manufacturers and retailers responsible for

the criminal misuse of their products. Starting in

1998, a coordinated series of lawsuits were filed by

dozens of local governments. Andrew Cuomo, as the

Secretary of Housing and Urban Development,

organized federally funded housing authorities to

bring additional suits. The HUD Gun Suit, WASH.

POST, Dec. 17, 1999. Although rarely successful, the

litigation imposed heavy legal costs on the firearms

industry and made it impossible for many

manufacturers to obtain loans.

Secretary Cuomo threatened manufacturers with

“death by a thousand cuts.” Walter Olson, Plaintiffs

Lawyers Take Aim at Democracy, WALL ST. J., Mar. 21,

2000. Bridgeport, Connecticut, mayor Joseph Ganim

described his lawsuit as “creating law with litigation.”

Fred Musante, After Tobacco, Handgun Lawsuits,

N.Y. TIMES, Jan. 31, 1999. “The Bridgeport suit named

12 American firearms manufacturers, three handgun

trade associations, and a dozen southwestern

Connecticut gun dealers, and asked for damages in

excess of $100 million.” Id. (internal quotations

omitted).

Bridgeport’s lawsuit was typical in that it sued

firearms trade associations, including the National

15

Shooting Sports Foundation. These trade associations

did not manufacture or sell firearms. Rather, they

were standard trade associations: advocating for their

industry and promoting best practices within the

industry. The suits were retaliation for the trade

associations’ often-successful public advocacy and thus

assailed the freedom of speech.

Brought in as many jurisdictions as possible and

well-designed to resist consolidation, the lawsuits

were organized to destroy: “If twenty cities do bring

suits, defending against them, according to some

estimates, could cost the gun manufacturers as much

as a million dollars a day.” Peter Boyer, Big Guns, NEW

YORKER, May 17, 1999.

Plaintiffs’ attorney John Coale aimed for “critical

mass . . . where the costs alone of defending these suits

are going to eat up the gun companies.” Fox

Butterfield, Lawsuits Lead Gun Maker to File for

Bankruptcy, N.Y. TIMES, June 24, 1999. In Coale’s

words, “the legal fees alone are enough to bankrupt the

industry.” Sharon Walsh, Gun Industry Views Pact as

Threat to Its Unity, WASH. POST, Mar. 18, 2000.

As intended, some manufacturers did go

bankrupt, including Sundance Industries, Lorcin

Engineering, and Davis Industries. Paul Barrett,

Lawsuits Trigger Gun Firms’ Bankruptcy, WALL ST. J.,

Sept. 13, 1999. Davis Industries was “one of the 10

largest makers of handguns.” Butterfield, Lawsuits

Lead Gun Maker to File for Bankruptcy.

The most venerable manufacturers were driven to

the brink. Colt’s Manufacturing Company stopped

producing handguns for the public. Facing “28

16

lawsuits from cities and counties hoping to punish gun

makers . . . the company could no longer get loans to

finance manufacturing because the lawsuits ‘could be

worth zero, or a trillion dollars.’” Mike Allen, Colt’s to

Curtail Sale of Handguns, N.Y. TIMES, Oct. 11, 1999.

Owned by a British conglomerate, Smith &

Wesson was ordered to accept the Cuomo demands in

exchange for immunity from some of the litigation.

“Smith & Wesson made it clear . . . that the company

was driven to the agreement by the lawsuits. The

settlement would ensure ‘the viability of Smith &

Wesson as an ongoing business entity in the face of the

crippling cost of litigation,’ the company said in a

statement.” Jonathan Weisman, Gun maker, U.S.

reach agreement, BALT. SUN, Mar. 18, 2000.

“[T]he litigants vowed to press on until all the

manufacturers joined.” Id. Indeed, “to get more

aggressive.” Id. Alex Panelas, Mayor of Miami-Dade

County, Florida, warned that the Smith & Wesson

deal would be “‘a floor, not a ceiling’ for any other gun

maker that wants to sign on.” Id.

Under the terms accepted by Smith & Wesson, the

company’s practices would be perpetually controlled

by a five-member Oversight Commission. The cities,

counties, and states that joined the litigation would

select three members, while those that had declined to

sue were excluded. The ATF would select one member,

leaving gun manufacturers with only one member of

their own. Walter Olson, THE RULE OF LAWYERS 125–

26 (2003). In effect, corporate control would be

removed from the stockholders and given to the new

gun control committee.

17

No other company signed the agreement. Glock

came closest. As the company was wavering, New York

Attorney General Eliot Spitzer warned a Glock

executive: “if you do not sign, your bankruptcy lawyers

will be knocking at your door.” 146 Cong. Rec. H2017

(Apr. 11, 2000) (Rep. Stearns). Spitzer and

Connecticut Attorney General Richard Blumenthal

announced they would sue other manufacturers for

shunning Smith & Wesson—for instance, by no longer

sharing joint legal defense with them. Olson, THE

RULE OF LAWYERS, at 127. This would have been “the

first antitrust action in history aimed at punishing

smaller companies for not cooperating with the largest

company in the market in an agreement restraining

trade.” Id. Blumenthal did not have evidence of illegal

behavior; “the point was sheer intimidation.” Id.

As Florida Representative Cliff Stearns explained,

“the government lawyers and private lawyers” were

“conspiring to coerce private industry into adopting

public policy changes through the threat of abusive

litigation. The option? Adopt our proposals or you will

go bankrupt.” 146 Cong. Rec. H2017 (Apr. 11, 2000).

Stearns would go on to co-sponsor the Protection of

Lawful Commerce in Arms Act, which protects the

firearms industry from abusive litigation. Pub. L. No.

109–92, 119 Stat. 2095 (2005) (codified at 15 U.S.C. §§

7901–7903). By the time that legislation was enacted

in 2005, “Thirty-three State legislatures [had already]

acted to block similar lawsuits,” 151 Cong. Rec. S8910

(July 26, 2005) (Sen. Sessions), reflecting widespread

recognition that the suits represented a malicious

attack on lawful activity. One reason federal

legislation was necessary was that the New York

18

legislature, never friendly to Second Amendment

rights, had taken no corrective action.

B. The IRS delayed the processing of

conservative nonprofit applications and

imposed burdensome requirements to

stifle their advocacy.

In 2010, according to a U.S. Treasury Department

Inspector General report, the Internal Revenue

Service began using “inappropriate criteria that

identified for review Tea Party and other

organizations applying for tax-exempt status based

upon their names or policy positions[.]” Inappropriate

Criteria Were Used to Identify Tax-Exempt

Applications for Review, U.S. TREASURY INSPECTOR

GENERAL FOR TAX ADMINISTRATION, May 14, 2013, at

i.2 “These criteria included names such as ‘Tea Party,’

‘Patriots,’ or ‘9/12’ or policy positions concerning

government spending or taxes, education of the public

to ‘make America a better place to live,’ or statements

criticizing how the country was being run.” Attorney

General Jeff Sessions Announces Department of

Justice has Settled with Plaintiff Groups Improperly

Targeted by IRS, U.S. DEPARTMENT OF JUSTICE, Oct.

26, 2017.3

2 https://www.tigta.gov/sites/default/files/reports/2022-

06/201310053fr_0.pdf.

3 https://www.justice.gov/opa/pr/attorney-general-jeffsessions-announces-department-justice-has-settled-plaintiffgroups.

19

Consequently, as the U.S. Attorney General later

acknowledged, “the IRS transferred hundreds of

applications to a specifically designated group of IRS

agents for additional levels of review, questioning and

delay.” Id. As part of the additional review, the IRS

requested highly sensitive information, “including

requests for the identities of donors, identification of

issues important to the organization and the

organization’s position(s) on those issues, the type of

conversations and discussions members and

participants had during organizational activities,

whether officers or directors planned to run for public

office, political affiliations of officers and directors, and

information about other organizations.” Consent

Order at 6, Linchpins of Liberty v. United States, No.

1:13-cv-00777 (D.D.C. Dec. 11, 2017), ECF No. 143.

In addition to the expense and intrusion of

complying with the requests, the processing time for

the applications was sometimes more than 1,000

days—far longer than the 121 days the IRS set as its

goal

for

ordinary

applications—with

“some

[applications]

crossing

two

election

cycles.”

Inappropriate Criteria Were Used to Identify TaxExempt Applications, at 1, 14. All the while, the

organizations were denied their freedoms of speech

and association.

Tea Party and other conservative groups filed

lawsuits against the United States and IRS alleging,

among other allegations, violations of rights protected

by the First and Fifth Amendments. Second Amended

Complaint at 61–65, Linchpins of Liberty v. United

States, No. 1:13-cv-00777 (D.D.C. Oct. 18, 2013), ECF

No. 51; Second Amended Class Action Complaint at

20

58–66, Norcal Tea Party Patriots v. IRS, No. 1:13-cv00341 (S.D. Ohio Oct. 7, 2014), ECF No. 114. The

Department of Justice settled a class-action suit that

included 428 members and another lawsuit brought by

41 plaintiffs.

The class-action suit resulted in a multimilliondollar settlement. Settlement Agreement at 4–5,

Norcal Tea Party Patriots v. IRS, No. 1:13-cv-00341

(S.D. Ohio Mar. 13, 2018), ECF No. 414. The other case

resulted in an IRS acknowledgment that “the First

Amendment generally prohibits the government from

discriminating against citizens on the basis of the

viewpoint(s) of their protected speech and/or their

protected associational interests” and a “sincere

apology” for discriminating against conservative

groups. Consent Order at 11, Linchpins of Liberty v.

United States.

Consistent with the Second Circuit’s decision here,

the federal government instead of going to all the

trouble of extra review for nonprofit applications could

have lawfully and permanently dismantled the

disfavored groups by sending a “guidance” threat to

their banks and insurers.

C. The Department of Justice choked off

lawful firearms businesses through

“Operation Choke Point.”

In 2013, the Department of Justice initiated

“Operation Choke Point.” The “ostensible goal” of the

Operation was “to combat mass-market consumer

fraud by foreclosing fraudsters’ access to payment

systems.” The Department of Justice’s “Operation

21

Choke Point”: Illegally Choking Off Legitimate

Businesses?, U.S. HOUSE OF REPRESENTATIVES

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

May 29, 2014, at 2.4 In fact, as the U.S. House

Committee on Oversight and Government Reform

discovered, the true goal was “to ‘choke out’ companies

the [Obama] Administration consider[ed] a ‘high risk’

or otherwise objectionable, despite the fact that they

are legal businesses.” Id. at 1.

Under the Operation, “merely providing normal

banking services to certain merchants create[d] a

‘reputational risk’ that [wa]s an actionable violation

under Section 951” of the Financial Institutions

Reform, Recovery, and Enforcement Act of 1989. Id. at

8. “Suddenly, doing business with a ‘high-risk’

merchant” became “sufficient to trigger a subpoena by

the Department of Justice” and a “threat of a federal

investigation.” Id. at 8–9. Banks were thus “put in an

unenviable position: discontinue longstanding,

profitable relationships with fully licensed and legal

businesses, or face a potentially ruinous lawsuit by the

Department of Justice.” Id. at 9.

“Firearm Sales” and “Ammunition Sales” were

among the merchant categories associated with “highrisk” activity. Id. at 8. Consequently, many federally

licensed firearms merchants “abruptly had their bank

accounts frozen or terminated.” Id. According to one

firearms manufacturer whose account was dropped by

Bank of America, “thousands of small gun-shop

4 https://oversight.house.gov/wpcontent/uploads/2014/05/Staff-Report-Operation-ChokePoint1.pdf.

22

owners across the country were in the same situation.”

Kelly Riddell, Targeted? Gun sellers’ ‘high risk’ label

from feds cuts banking options, hurts business, WASH.

TIMES, May 18, 2014. A firearms training and supply

business whose account was closed by BankUnited

N.A., received an explanatory email stating: “This

letter in no way reflects any derogatory reasons for

such action on your behalf. But rather one of industry.

Unfortunately your company’s line of business is not

commensurate with the industries we work with.” Id.

The House Committee concluded that because

Operation Chokepoint was an illegitimate exercise of

the Department of Justice’s legal authorities that

“unfairly harm[ed] legitimate merchants and

individuals . . . . it is necessary to disavow and

dismantle Operation Choke Point.” The Department of

Justice’s “Operation Choke Point”: Illegally Choking

Off Legitimate Businesses?, at 11.

After years of public criticism, Congressional

investigations, and litigation challenging the

Operation’s legality, the Department of Justice

committed to ending Operation Choke Point in 2017.

See Letter from Assistant Attorney General Stephen

E. Boyd to Chairman of the Committee on the

Judiciary Bob Goodlatte, Aug. 16, 2017.5

Government officials have attempted to

circumvent the Constitution by imposing financial

burdens that make it impossible to engage in advocacy

and activities they oppose. This Court may take

5 Available at https://alliedprogress.org/wpcontent/uploads/2017/08/2017-8-16-Operation-ChokepointGoodlatte.pdf.

23

cognizance of the determinations of lower courts and

Congress that the federal government’s actions

violated the Constitution. Vullo’s regulatory abuse is

no different.

III.

Then-Governor

Cuomo

gloated

about

possibly bankrupting the NRA through

Vullo’s regulatory actions.

As the NRA alleged and demonstrated,

Superintendent Vullo and her then-boss Governor

Cuomo undertook their regulatory actions to “retaliate

against the NRA’s core political speech.” Pet. App. 234;

see also id. at 195–99. In addition to Cuomo’s efforts to

bankrupt the firearms industry through the HUDorchestrated lawsuits, supra Part II.A, Cuomo

described right to arms advocates as “the enemy,”

Remarks by Secretary Andrew Cuomo: Handgun

Control, Inc, U.S. DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT, June 20, 2000.6 And he

declared that “pro-assault-weapon” conservatives

have “no place in the state of New York.” Jessica

Chasmar, Gov. Cuomo: Pro-life, pro-gun conservatives

‘have no place’ in New York, WASH. TIMES, Jan. 19,

2014.7

After Vullo threatened New York banks and

insurance businesses with adverse regulatory action if

they serve the NRA, Cuomo tweeted, “The regulations

6 https://archives.hud.gov/remarks/cuomo/speeches/handgu

ncontrl.cfm.

7

https://www.washingtontimes.com/news/2014/jan/19/govcuomo-pro-life-conservatives-have-no-place-new/.

24

NY put in place are working. We’re forcing the NRA

into financial jeopardy. We won’t stop until we shut

them down.” Andrew Cuomo (@andrewcuomo),

TWITTER (Aug. 3, 2018, 12:57 PM).8 Hours later,

linking to an article about this case, he declared, “If I

could have put the @NRA out of business, I would have

done it 20 years ago.” Governor Andrew Cuomo

(@NYGovCuomo), TWITTER (Aug. 3, 2018, 3:35 PM). 9

The following day, Governor Cuomo bragged that “NY

is forcing the NRA into financial crisis. It’s time to put

the gun lobby out of business. #BankruptTheNRA.”

Andrew Cuomo (@andrewcuomo), TWITTER (Aug. 4,

2018, 8:47 AM).10 From his government account that

same day, he taunted: “If the @NRA goes bankrupt

because of the State of New York, they’ll be in my

thoughts and prayers.” Governor Andrew Cuomo

(@NYGovCuomo), TWITTER (Aug. 4, 2018, 2:09 PM).11

The next day, he tweeted, “New York has the NRA

on the brink. Together, we can end the gun lobby’s

stranglehold on American politics. And I’ll be sure to

remember them in my thoughts and prayers.” Andrew

8 https://twitter.com/andrewcuomo/status/102545563275590

8608.

9 https://twitter.com/NYGovCuomo/status/10254954335048

49923.

10 https://twitter.com/andrewcuomo/status/10257551556885

13538.

11 https://twitter.com/NYGovCuomo/status/10258361519307

98082.

25

Cuomo (@andrewcuomo), TWITTER (Aug. 5, 2018, 11:00

AM).12

Asked in an interview that day whether his

regulatory actions threaten the NRA’s existence,

Governor Cuomo replied, “I would like to believe it’s

true, to tell you the truth. . . . I’m hoping to extend this

all across the country. . . . I think we could make a

serious dent on their coffers and that would be good for

everyone.” Merrit Kennedy, Is Cuomo Threatening

NRA’s Existence? He Says: ‘I’d Like To Believe It’s

True,’ NPR, Aug. 5, 2018.13

Two days later, on August 7, 2018, Governor

Cuomo tweeted a video about his actions “draining

[the NRA’s] bank account” while asking, “Did you

think it was impossible to stop the @NRA? Think

again.” Andrew Cuomo (@andrewcuomo), TWITTER

(Aug. 7, 2018, 10:39 AM).14

On August 13, 2018, Governor Cuomo called

Donald Trump and the NRA “bankrupt bedfellows:

literally and morally,” and declared, “Unlike Trump,

I’m not afraid to take on the NRA.” Governor Andrew

Cuomo (@NYGovCuomo), TWITTER (Aug. 13, 2018,

6:38 PM).15 On April 29, 2019, then-President Trump

accused Governor Cuomo of “illegally using the State’s

12 https://twitter.com/andrewcuomo/status/10261509412114

55490.

13 https://www.npr.org/2018/08/05/635789292/is-cuomothreatening-nras-existence-he-says-i-d-like-to-believe-it-s-true.

14 https://twitter.com/andrewcuomo/status/10268704035018

83392.

15 https://twitter.com/NYGovCuomo/status/10291653627833

79456.

26

legal apparatus to take down and destroy this very

important organization [the NRA],” to which Governor

Cuomo responded, “Unlike you, NY is not afraid to

stand up to the NRA. As for the NRA, we’ll remember

them in our thoughts and prayers.” Governor Andrew

Cuomo (@NYGovCuomo), TWITTER (Apr. 29, 2019, 9:04

AM).16 Finally, on February 29, 2020, Governor Cuomo

tweeted that “The NRA are a bunch of political

bullies,” and repeated his standard insult, “If the NRA

goes away, I’ll remember them in my thoughts and

prayers.” Governor Andrew Cuomo (@NYGovCuomo),

TWITTER (Feb. 29, 2020, 2:55 PM).17

These statements were made in addition to many

others blaming the NRA for crimes and accidents

involving firearms. See, e.g., Governor Andrew Cuomo

(@NYGovCuomo), TWITTER (Mar. 15, 2018, 12:13

PM)18 (blaming the NRA for several school shootings);

Governor Andrew Cuomo (@NYGovCuomo), TWITTER

(Mar. 20, 2018, 12:24 PM)19 (same).

Governor Cuomo has long been explicit about his

desire to stifle gun rights advocacy, and he specifically

targeted the NRA. Cuomo’s longtime colleague and

appointee, Vullo, acted at his behest. See Pet. App.

198–99. The Second Circuit erred by failing to consider

16 https://twitter.com/NYGovCuomo/status/11228794233788

04736.

17 https://twitter.com/NYGovCuomo/status/12338734466664

73473.

18 https://twitter.com/NYGovCuomo/status/97434792536614

9121.

19 https://twitter.com/NYGovCuomo/status/97616251038989

1074.

27

the retaliatory motives demonstrated in the

complaint, which are buttressed by the statements

above.

IV.

Vullo’s threats targeted and continue to

imperil

all

gun

rights

advocacy

organizations.

While Cuomo and Vullo harbor a peculiar animus

against the NRA, their threats targeted all gun rights

organizations, including amicus Second Amendment

Foundation.

Superintendent Vullo issued Guidance Letters to

the heads of all licensed financial institutions and

insurers doing business in New York, entitled,

“Guidance on Risk Management Relating to the NRA

and Similar Gun Promotion Organizations.” Pet. App.

246, 249. Pointing to “the social backlash against the

National Rifle Association . . . and similar

organizations that promote guns that lead to senseless

violence,” id., Vullo directed insurers to consider the

“reputational risks, that may arise from their dealings

with the NRA or similar gun promotion

organizations,” and “to review any relationships they

have with the NRA or similar gun promotion

organizations,” id. at 248, 251.

In a press release entitled, “Governor Cuomo

Directs Department of Financial Services to Urge

Companies to Weigh Reputational Risk of Business

Ties to the NRA and Similar Organizations,” Governor

Cuomo declared, “I am directing the Department of

Financial Services to urge insurers and bankers

statewide to determine whether any relationship they

28

may have with the NRA or similar organizations sends

the wrong message to their clients and their

communities[.]” Id. at 243–44.

Thus, Vullo’s regulatory abuse threatened all gun

rights organizations, and consistent with the Second

Circuit’s decision, could still be weaponized against

them. Moreover, liberty-oriented think tanks that

advocate for the right to arms, along with many other

issues, could be targeted under the same rationale.

Pro-gun advocacy could be largely expelled from public

discourse—at least by any speakers who need banking

services, which is to say all of them.

As detailed by ACLU National Legal Director

David Cole, associations dedicated to constitutional

ideals—including the ACLU, NRA, NAACP, Freedom

to Marry, and Center for Constitutional Rights—are

essential, for they foster civic engagement defending

and advancing constitutional rights. “Associations of

citizens dedicated to constitutional ideals help ensure

that ‘liberty lies in the hearts of men and women.’”

David Cole, ENGINES OF LIBERTY: THE POWER OF

CITIZEN ACTIVISTS TO MAKE CONSTITUTIONAL LAW,

Kindle Pos. 318 (rev. ed. 2017) (quoting Judge Learned

Hand, The Spirit of Liberty, Address at “I Am an

American Day” (May 21, 1944)).20

The same regulatory abuses at issue in this case

can easily be weaponized against all sorts of citizen

associations and activists—if this Court, by upholding

the Second Circuit, signals that the NAACP cases are

now easy to evade. In states where political incentives

20 See https://www.thefire.org/research-learn/spirit-libertyspeech-judge-learned-hand-1944.

29

are different from those in New York, the potential

targets will include organizations that advocate for

abortion rights, for rights of unlawful aliens, or for

“defund the police” and similar ideas. In states where

political incentives are similar to New York’s, the

groups on the opposite side of the above issues could

be prime targets.

The Second Circuit has created an untenable legal

distinction between explicit threats and obvious

implied ones. Suppose one organized crime underboss

tells a building contractor, “If you keep buying cement

from that company we do not like, you will be

swimming with the fishes”; and a more clever

underboss says, “Just some friendly non-binding

guidance: if you keep doing business with that cement

supplier, you might get a bad reputation. They’re not

very popular around here.” This Court should not

condone threat-laundering, especially to very heavily

regulated businesses.

Regulatory retribution for protected free speech

defies this Court’s assurance that “the Constitution

protects expression and association without regard to

the race, creed, or political or religious affiliation of the

members of the group which invokes its shield, or to

the truth, popularity, or social utility of the ideas and

beliefs which are offered.” Button, 371 U.S. at 444–45.

30

CONCLUSION

For the above reasons, and those stated by the

Petitioner, the decision below should be reversed.

Respectfully submitted,

JOSEPH G.S. GREENLEE

Counsel of Record

GREENLEE LAW, PLLC

PO Box 4061

McCall, ID 83638

(208) 271-2494

joseph@greenlee.law

DAVID B. KOPEL

INDEPENDENCE INSTITUTE

727 E. 16th Ave.

Denver, CO 80203

(303) 279-6536

david@i2i.org

JONATHAN D. GUZE

JOHN LOCKE FOUNDATION

4800 Six Forks Rd., Ste. 220

Raleigh, NC 27609

(919) 375-2021

jguze@lockehq.org