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Financial and Business Law Scholars Back NRA in Cert Petition to U.S. Supreme Court,
File Amicus Brief Seeking Review of “Blacklisting Campaign” Case

March 21, 2023 – Financial and business law scholars, Brian Knight of George Mason University’s Mercatus Center and George Mocsary of the University of Wyoming College of Law, filed an amicus brief today in support of the NRA’s certiorari petition to the Supreme Court. On  February 7, 2023, the NRA petitioned the U.S. Supreme Court to review a controversial judgment issued by the United States Court of Appeals for the Second Circuit in NRA v. Maria Vullo.


As the former Superintendent of the New York State Department of Financial Services (DFS), Vullo, at the behest of former New York Governor Andrew Cuomo, wielded DFS's regulatory power to financially blacklist the NRA – coercing banks and insurers to cut ties with the Association, in order to suppress its pro-Second Amendment speech. The NRA argues that Vullo’s actions were meant to silence the NRA – using “guidance letters” and other measures to cause financial institutions to “drop” the Association.


The NRA's First Amendment claims withstood multiple motions to dismiss. But in 2022, after Vullo appealed the trial court's ruling on qualified immunity, the Second Circuit struck down the NRA's claims – ruling, among other things, that in an era of “enhanced corporate social responsibility,” it was reasonable for New York's financial regulator to warn banks against servicing pro-gun groups based on the “social backlash” against those groups’ advocacy. The court also ruled that Vullo’s guidance was not a directive to the institutions she regulated but rather a mere expression of her political preferences.


Knight and Mocsary write that the trial court erred in “finding the lack of explicitly binding language or threats from [DFS] in its guidance letter meant that no reasonable regulated firm would consider itself bound by those letters. The reality of banking and insurance regulations is that firms frequently feel that they risk sanction if they do not comply with nominally non-binding guidance.” The authors write that the trial court misunderstood the relationship between regulators and financial institutions. Those institutions have historically faced formal and informal penalties for “failure to conform” to such guidance as issued by Vullo.


The authors observe that the regulatory framework makes it difficult for financial institutions to challenge regulators. The head of the DFS wields incredible power and the “nature of banking and insurance regulations, scholarship, and previous, closely analogous examples of regulated charities” demonstrates financial institutions would feel under pressure by a regulatory body – where it made an express threats against them or not.


The authors call the abuse of financial regulatory power a matter of “great significance” for our nation. They warn that Vullo’s actions are “emblematic of a growing effort by financial regulators to use their awesome powers to effect social change, even at the expense of protected constitutional rights.”


They call on the U.S. Supreme Court to grant review and then reverse the decision of the Second Circuit, in order to curtail regulators potentially “abusing their unique positions of power” to nullify cherished constitutional rights such as the right to freedom of speech embodied in the First Amendment.


Read the Amicus Brief.

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