Olson: Progressive governments’ economic war on the NRA fails in court
By Walter Olson |
Some politicos just can’t stop grandstanding, even if it means their court case goes down in flames. Consider what just happened in a federal court in Los Angeles.
Not long ago, progressive state and local officials nationwide were vowing to take down the hated National Rifle Association by targeting its pocketbook. When city authorities in Los Angeles and San Francisco gave that idea a try, they were following the lead of Governor Andrew Cuomo, who had unleashed New York financial regulators to go after the gun-rights organization’s access to insurance and banking services.
Now all three are facing a reckoning in court, based not on the Second Amendment but on the First. Without needing to even consider the issue of gun rights, federal courts are recognizing that boycotts enforced by government power can menace free speech and free association.
The amusing part is that the public officials themselves are helping to provide the basis for these rulings by tweeting and speechifying about how much damage they intend to do the NRA.
In December, a federal court in California granted a preliminary injunction against a Los Angeles ordinance requiring city contractors to disclose any business links to, or memberships in, the gun group. It found the evidence “overwhelming” that the city’s intent in passing the law was “to suppress the message of the NRA.”
Public officials have been on notice about this sort of thing for at least two decades, since the 1996 Supreme Court case Board of County Commissioners v. Umbehr. In that case, the Court held that a county’s having terminated a government contract in retaliation for the contractor’s persistent and annoying political speech could violate the First Amendment. Controversial and unpopular speech is protected speech; officials cannot yank a contract from some business, or threaten to, just because it has donated to, or partnered in some venture with, the Sierra Club, the NAACP, or the NRA.
Lawyers for Los Angeles tried to defend their ordinance by saying all it did was require disclosures from contractors, which wouldn’t necessarily amount to punishing or chilling speech. But this sort of First Amendment claim comes down to a question of intent. And the court found that the city’s lawmakers had made their intent to suppress speech and association utterly clear. They had done so in the text of the ordinance itself, in its legislative history, and in the statements made at the time by its chief sponsor, Councilmember Mitch O’Farrell (Hollywood-Silver Lake).
The ordinance starts off with a long preamble that, amid much demagogy, cites the NRA’s $163 million (2015) in membership dues and asserts that those dues go toward foiling beneficent legislative ends. That helped establish nicely that part of the bill’s aim was “to cut off revenue to the NRA because of its pro-firearm advocacy,” as the court put it.
Then there were O’Farrell’s various pronouncements. Earlier in the year, he had motioned the city to “rid itself of its relationships with any organization that supports the NRA” and further moved that the city’s chief legislative analyst “report back with options for the City to immediately boycott those businesses and organizations” that do business with the NRA “until their formal relationship with the NRA ceases to exist.”
Were doubt left about his intentions, O’Farrell’s Twitter outbursts through 2018 told of his efforts to jawbone businesses such as FedEx and Amazon into cutting off business relations with the NRA, often tagging friendly accounts such as @everytown, @momsdemand, @shannonrwatts, and @bradybuzz. It was unnecessary to show that the city had actually cut off any businesses, or that any such businesses had cut ties with the NRA for fear of city displeasure. So long as the ordinance was intended to chill speech and association, as it was, it would fall.
San Francisco’s similar ordinance, although also the subject of a brief challenge in court, collapsed as a practical matter even more quickly. The measure’s tantrum-like preamble branded the NRA a domestic terrorist group, in a move calculated to draw wide national attention. The text of the ordinance proclaimed that the city should “take every reasonable step to limit those entities who do business with the City and County of San Francisco from doing business with” the gun-rights organization. Commentators promptly pointed out that any such step would fail in court as unconstitutional.
Soon thereafter, San Francisco mayor London Breed issued a memo clarifying that “the City’s contracting processes and policies have not changed and will not change as a result of the Resolution” because only an actual ordinance can enact changes to city law. The NRA is suing anyway, but by the city’s own account the measure at this point does nothing except beam out vain hostility.
Governor Cuomo was shrewder. He avoided the blatant statements of intent that tripped up his California counterparts. But did he retain enough deniability to survive a court challenge? In April 2018, he issued a statement saying he was directing “the Department of Financial Services to urge insurance companies, New York State-chartered banks, and other financial services companies licensed in New York to review any relationships they may have with the National Rifle Association and other similar organizations.” Review such relationships for what, exactly? Well, “the companies are encouraged to consider whether such ties harm their corporate reputations and jeopardize public safety.” In a press release, he made things a tad more explicit, saying that he was directing his financial regulators “to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message” (emphasis added).
Those regulators, of course, have the discretion to make life very unpleasant for insurers and banks dense enough not to take the hint. Sure enough, the NRA in short order was cut off by some long-term business partners, notable among them one major insurer and one major insurance broker. The state declared that it had found regulatory infractions in NRA-branded insurance-affinity offerings, and in the ensuing settlements with the insurer and the broker it got them to promise never to do business with the NRA again, in New York or anywhere else. Yet at the same time, the NRA says, the state took no action against similarly marketed affinity products sold by others. Cuomo’s financial regulator made things a little more explicit still: “DFS urges all insurance companies and banks doing business in New York to join the companies that have already discontinued their arrangements with the NRA.”
In November 2018, a federal court in New York found that all in all, there was enough plausible evidence of “direct and implied threats to insurers and financial institutions because of these entities’ links with the NRA” to allow the group to proceed with a First Amendment suit. While Cuomo was of course free to express his own views, the Constitution would have something to say about it if he or his appointees had made veiled threats against banks and insurers to encourage them to disassociate from the NRA. The court also asked for more evidence documenting a selective-enforcement claim, and this summer, against stiff legal resistance from the state, the NRA succeeded in getting discovery of some state files. In a filing on December 20, the NRA said it had found new documentation of both the pressure and the selective enforcement.
One reason the California disputes went so well for the NRA is that the officials just couldn’t help grandstanding at every turn in search of followers’ applause. That’s how O’Farrell, in Los Angeles, helped tweet his side of the case right out of court. But Cuomo, while he’s been more circumspect, has not covered himself as thoroughly as he might have. “If I could have put the NRA out of business, I would have done it 20 years ago,” he declared in response to one legal development.
Tell us more, Governor.
Walter Olson is a senior fellow at the Cato Institute and writes the blog Overlawyered.