NATIONAL RIFLE ASSOCIATION OF AMERICA v. ANDREW CUOMO, both individually and in his official capacity; MARIA T. VULLO, both individually and in her official capacity;
1:18-CV-0566
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
Filed 03/15/21
THOMAS J. McAVOY, Senior United States District Judge
DECISION and ORDER
I. INTRODUCTION
New York Governor Andrew Cuomo (“Gov. Cuomo“), the New York State Department of Financial Services (“DFS“), and Linda A. Lacewell, the current DFS superintendent (“Supt. Lacewell“), move to dismiss claims in the Second Amended Complaint (“SAC“). See Dkt. No. 210. Former DFS Superintendent Maria T. Vullo (“Ms. Vullo“) appeals Magistrate Judge Hummel‘s decision granting Plaintiff‘s motion to amend the Complaint, and moves to dismiss the claims against her in the SAC. See Dkt. No. 211. Plaintiff National Rifle Association (“NRA” or “Plaintiff“) opposes these motions.
II. PROCEDURAL BACKGROUND
The Court assumes the parties’ familiarity with the procedural history of this case and the underlying claims. It will not restate
III. DISCUSSION
a. Ms. Vullo‘s Motion
Rule 72 Objection
In moving for leave to amend, Plaintiff asserted to Judge Hummel that it sought to amend to replead its selective enforcement claims, substitute Supt. Lacewell for Ms. Vullo in its claim for injunctive relief, and make minor, nonsubstantive changes to the pleading. Dkt. No. 202 at 4-5. Judge Hummel found that Plaintiff did not exercise due diligence in moving to amend. See Dkt. No. 202. But, because mere delay absent a showing of bad faith or undue prejudice does not provide a basis to deny the right to amend, he then preceded to addressed these issues. Id. He declined to find that the motion to amend was brought in bad faith, and determined that Ms. Vullo had not established that she would be subjected to undo prejudice such to warrant outright denial of the motion to amend. Id. He then preceded to determine whether the proposed repleaded selective enforcement claim against Ms. Vullo was futile, using a the
Ms. Vullo challenges Judge Hummel‘s determinations relative to whether the NRA acted in bad faith in seeking to amend, and whether Ms. Vullo will be unduly prejudiced by amendment. Whether applying the clearly erroneous or contrary to law standard of review set out in
On the
Selective Enforcement Claim
In the selective enforcement claim, Plaintiff asserts that DFS received information from the New York County District Attorney‘s Office that the NRA was offering an affinity insurance program known as Carry Guard that was illegal under
Chubb, Lockton, and Lloyd‘s entered into consent orders with DFS in which they agreed that some of the NRA insurance programs they were involved in violated New York Insurance Laws, agreed not to provide these and other insurance programs to the NRA, and agreed to pay substantial civil monetary penalties. See SAC ¶ 62 and Ex. E (Chubb Consent Order); id. ¶¶ 54-55 and Ex. D (Lockton Consent Order); id. ¶ 74 and Ex. I (Lloyd‘s Consent Order); see also id. ¶ 78.4 Ms. Vullo signed the consent orders on behalf of DFS. Plaintiff contends that Chubb, Lockton, and Lloyd‘s “were coerced to terminate their business arrangements with the NRA and its members—including arrangements having nothing to do with the allegedly unlawful conduct cited by DFS.” Id. ¶ 21; see also id. ¶ 93;5 ¶ 102.6 Plaintiff asserts that “DFS has not announced—
Plaintiff asserts that based on the NRA‘s “political views and speech relating to the
58. Several of the purported “violations” assessed pursuant to the Lockton Consent Order concern programs commonly engaged in by numerous additional affinity associations that do not publicly advocate for Second Amendment rights and, therefore, are not targets of Defendants’ unconstitutional conduct. Several such organizations are clients of Lockton—yet the Consent Order does not compel Lockton to discontinue its purportedly unlawful conduct with respect to these clients.
59. For example:
- DFS claims that Lockton Affinity violated
Insurance Law § 2122(a)(1) by referring to the insurer‘s AM Best rating. Yet, at the time this lawsuit was filed, Lockton Affinity‘s affinity program for the American Optometric Association through AOAExcel (“AOAExcel“) touted the “backing of a carrier that is rated A+ (Superior) by A.M. Best. Similarly, Lockton Affinity currently advertises that coverage for the affinity programs designed for the Veterans of Foreign Wars (“VFW“) and Moose International Inc. (“Moose“) was through companies “rated ‘Excellent’ or higher by A.M. Best.”- DFS claims that Lockton Affinity violated
Insurance Law § 2324(a) by giving or offering to give no cost insurance to NRA members in good standing. Yet, Lockton Affinity currently made that same offer to members of both the Professional Photographers of America (“PPA“) and the VFW.- DFS claims that Lockton Affinity violated
Insurance Law § 2116 by compensating the NRA based on actual premiums collected. Yet, Lockton Affinity paid AOAExcel, Moose, the VFW, the PPA, and dozens of other clients in the same or similar manner.
To demonstrate Ms. Vullo‘s knowledge of comparator affinity programs, Plaintiff alleges that Vullo had conversations and meetings with senior officials of Lloyd‘s in the spring of 2018 during which she learned of comparator programs. See Id. ¶ 110. Plaintiff asserts that during these conversations and meetings, Ms. Vullo expressed an intention not to prosecute violations provided Lloyd‘s stopped providing insurance to the NRA and other gun promotion organizations. See id. ¶ 21;7 ¶ 67;8 ¶ 69.9
As an alternative to Ms. Vullo‘s direct knowledge of comparators, the SAC asserts that “Vullo should have known of similarly situated individuals at the time DFS launched its investigation and any purported lack of knowledge was due to a ‘see-no-evil’ policy of enforcement, which Vullo and DFS abandoned solely to further their vendetta against the NRA.” SAC ¶ 111. “The ‘see-no-evil’ enforcement policy was confirmed by DFS‘s continued ignorance toward the violations of the similarly situated comparators.” Id. The NRA further alleges that “[b]y virtue of the position held by Vullo at the time DFS launched its investigation, Vullo knew the actions taken by DFS against NRA affinity insurance programs were unprecedented. No other similarly situated programs have faced even close to the same treatment for analogous violations. However, Vullo and DFS failed to inquire about whether there were any other similarly situated affinity programs when the investigation was launched.” Id. ¶ 112.
Absolute Immunity
“Courts have recognized two forms of immunity: absolute and qualified.” DiBlasio v. Novello, 344 F.3d 292, 296 (2d Cir. 2003) (citing Buckley v. Fitzsimmons, 509 U.S. 259, 268 (1993)). “Absolute immunity gives ‘public officials entrusted with sensitive tasks a protected area of discretion within which to carry out their responsibilities.‘” Mangiafico v. Blumenthal, 471 F.3d 391, 394 (2d Cir. 2006) (quoting Barr v. Abrams, 810 F.2d 358, 361 (2d Cir. 1987)). “‘The presumption is that qualified rather than absolute immunity is sufficient to protect government officials in the exercise of their duties,’ and hence courts are generally ‘quite sparing’ in their recognition of absolute immunity.” DiBlasio, 344 F.3d at 296 (quoting Burns v. Reed, 500 U.S. 478, 486-87 (1991) (citations omitted)). However, “there are some officials whose special functions require a full exemption from liability.” Butz v. Economou, 438 U.S. 478, 508 (1978). “The Supreme Court has accorded absolute immunity to a limited range of government officials whose duties are deemed, as a matter of public policy, to require that protection to enable them to function without fear of undue interference or harassment.” Mangiafico, 471 F.3d at 394. “Absolute immunity is accorded to judges and prosecutors functioning in their official capacities and, under certain circumstances, is also extended to officials of government agencies ‘performing certain functions analogous to those of a prosecutor’ or a judge.” DiBlasio, 344 F.3d at 296-97 (quoting Butz, 438 U.S. at 515). “In considering whether the procedures used by [an] agency are sufficiently similar to judicial process to warrant a grant of absolute immunity,” the Court employs a functional approach. Id. at 297 (citing Cleavinger v. Saxner, 474 U.S. 193, 201-02 (1985), in turn citing Harlow v. Fitzgerald, 457 U.S. 800, 810 (1982)). Under the functional approach, the Court looks “to whether the actions taken by the official are ‘functionally comparable’ to that of a judge or a prosecutor.” Id. (quoting Butz, 438 U.S. at 513, and citing Imbler v. Pachtman, 424 U.S. 409, 423 n. 20, (1976); Young v. Selsky, 41 F.3d 47, 51 (2d Cir. 1994)). “Government actors who seek absolute immunity ‘bear the burden of showing that public policy requires an exemption of that scope.‘” Id. (quoting Butz, 438 U.S. at 506). “However, once a court determines that an official was functioning in a core judicial or prosecutorial capacity, absolute immunity applies ‘however erroneous the act may have been, and however injurious in its consequences it may have proved to the plaintiff.‘” Id. (quoting Cleavinger, 474 U.S. at 199-200, 106 S. Ct. 496 (internal quotations and citations omitted)). Further, because the focus of absolute immunity is on the function performed, once absolute immunity is established the Court does not consider allegations of ill intent or discriminatory enforcement. See Dory v. Ryan, 25 F.3d 81, 83 (2d Cir. 1994) (“[The Supreme Court decision in Buckley] indicates that absolute immunity protects a prosecutor from § 1983 liability for virtually all acts, regardless of motivation, associated with his function as an advocate. This would even include, for purposes of this case, allegedly conspiring to present false evidence at a criminal trial.“); see also Verbeek v. Teller, 158 F. Supp. 2d 267, 282 (E.D.N.Y. 2001) (granting motion to dismiss claims against prosecutorial official because conspiracy allegation does not “negate her entitlement to absolute immunity“)(citing Dory, 25 F.3d at 83). New York‘s state law absolute immunity is essentially the same as federal absolute immunity. See Arteaga v. State, 72 N.Y.2d 212, 216 (N.Y. 1988).10
As a general principle, a government official “is entitled to absolute immunity when functioning as an advocate of the state in a way that is intimately associated with the judicial process.” Mangiafico, 471 F.3d at 396 (citing Imbler v. Pachtman, 424 U.S. 409, 430 (1976)). By contrast, a government official “is entitled only to qualified immunity when functioning in an administrative or investigative capacity.” Id. (citing Mitchell v. Forsyth, 472 U.S. 511, 520-21 (1985) (no absolute immunity for the Attorney General‘s exercise of his national security functions); Buckley, 509 U.S. at 274-76 (no absolute immunity when a prosecutor acts in administrative capacity); Burns, 500 U.S. at 492-95 (no absolute immunity for a prosecutor offering legal advice to the police regarding interrogation practices)).
The NRA‘s selective enforcement claim is premised on two actions: First, Ms. Vullo‘s decision to enter into the Lockton, Lloyd‘s and Chubb Consent Orders—and their precise terms. The NRA‘s purported comparators are based on violations agreed to in those Consent Orders. As Ms. Vullo asserts, were it not for those Consent Orders the NRA could not allege selective enforcement based on Ms. Vullo‘s conduct. Second, Ms. Vullo‘s alleged decision not to bring charges against the purported comparators. For reasons discussed below, these are both prosecutorial actions premised on enforcement decisions intimately associated with the judicial process.
There is not merit to Plaintiff‘s contention that absolute immunity does not apply because Ms. Vullo‘s relevant conduct was investigative in nature. As the NRA states in its brief, “the date that DFS opened its investigation into the NRA‘s insurance programs is irrelevant. The relevant date or dates is the date DFS took action against the NRA, or its business partners.” Dkt. 220 at 15. As explained here, the NRA‘s selective enforcement claim is premised on two enforcement decisions. Plaintiff‘s argument that “[t]he NRA also alleges that Vullo violated its Equal Protection rights by selectively targeting the NRA in DFS‘s investigation of certain affinity programs, but failing to make similar inquiries into other similar membership affinity programs,” id. at 18 (emphasis in original), does not remove the selective enforcement claim and Ms. Vullo‘s enforcement decisions from absolute immunity consideration. A selective investigation
To determine whether the process in which the government official acts “share enough of the characteristics of the judicial process, and whether the official[] [herself was] functioning in a manner sufficiently analogous to a judge or prosecutor,” the Court assesses the six non-exhaustive factors outlined in Butz that are characteristic of the judicial process. DiBlasio, 344 F.3d at 297-98 (citing Butz, 438 U.S. at 513; Cleavinger, 474 U.S. at 202 (internal quotation marks and brackets omitted). These factors are: (a) the need to assure that the individual can perform [her] functions without harassment or intimidation; (b) the presence of safeguards that reduce the need for private damages actions as a means of controlling unconstitutional conduct; (c) insulation from political influence; (d) the importance of precedent; (e) the adversary nature of the process; and (f) the correctability of error on appeal. Butz, 438 U.S. at 512.
As Superintendent of DFS, Ms. Vullo was charged with the enforcement of the
Absolute immunity protects officials “from personal liability for the performance of certain discretionary acts. Such immunity extends to prosecutors [and] to executive officers initiating administrative proceedings.” Spear v. Town of W. Hartford, 954 F.2d 63, 66 (2d Cir. 1992) (citing Imbler v. Pachtman, 424 U.S. 409, 430-31 (1976) and Butz, 438 U.S. at 515-17); see Butz, 438 U.S. at 516 (absolute immunity encompasses “decision to initiate or continue a proceeding subject to agency adjudication“); Mangiafico, 471 F.3d at 395-96 (“[A]gency officials who perform functions analogous to those of a prosecutor are entitled to absolute immunity from such liability for their participation in the decision to initiate or to continue agency proceedings.“)(citing Butz, 438 U.S. at 512-13); Douglas v. New York State Adirondack Park Agency, 895 F. Supp. 2d 321, 340 (N.D.N.Y. 2012) (absolute immunity for park agency officials’ initiation of an agency enforcement proceeding).
The Supreme Court, in extending prosecutorial immunity to the executive branch, explained that
agency officials performing certain functions analogous to those of a prosecutor should be able to claim absolute immunity with respect to such acts. The decision to initiate administrative proceedings against an individual or corporation is very much like the prosecutor‘s decision to initiate or move forward with a criminal prosecution.... The discretion which executive officials exercise with respect to the initiation of administrative proceedings might be distorted if their immunity from damages arising from that decision was less than complete.
Spear, 954 F.2d at 66 (quoting Butz, 438 U.S. at 515). The targets of
The Second Circuit has also “consistently afforded absolute immunity to a government attorney‘s decision whether or not to initiate litigation on behalf of the state.” Mangiafico, 471 F.3d at 396; see Ying Jing Gan v. City of New York, 996 F.2d 522, 530 (2d Cir. 1993) (“A prosecutor thus has absolute immunity in connection with the decision whether or not to commence a prosecution.“). “[A]s a matter of logic, absolute immunity must . . . protect the prosecutor from damages suits based on the decision not to prosecute.” Schloss v. Bouse, 876 F.2d 287, 290 (2d Cir. 1989) (emphasis in original)(citing Dacey v. Dorsey, 568 F.2d 275, 278 (2d Cir. 1978) (United States Attorney who chose not to seek injunction under
Though not all of the concerns discussed in Imbler indicate a need for absolute immunity with respect to a decision not to prosecute, many of the same factors may come into play. For example, the decision not to prosecute could expose the prosecutor to a suit by the complainant asserting that the complainant was denied the equal protection of the law. Further, absolute protection from a damages suit for not prosecuting is warranted simply because the decision with respect to any given charge is an either-or proposition. A decision to prosecute logically eliminates the nonprosecution option, and vice versa. If the prosecutor had absolute immunity only for the decision to prosecute and not for a decision not to prosecute, his judgment could be influenced in favor of a prosecution that sound and impersonal judgment would eschew. Thus, the contours of absolute prosecutorial immunity should be drawn to avoid skewing the prosecutor‘s judgment in either direction, both to eliminate the appearance that personal considerations may be a factor, see, e.g., Imbler v. Pachtman, 424 U.S. at 424-25, 96 S. Ct. at 992 (“[t]he public trust of the prosecutor‘s office would suffer if he were constrained in making every decision by the consequences in terms of his own potential liability in a suit for damages“), and to avoid establishing a doctrine that would “discourage prosecutors from dismissing meritless actions before trial, since only by pursuing . . . charges would the prosecutor be fully immune,” Haynesworth v. Miller, 820 F.2d 1245, 1270 n. 200 (D.C. Cir. 1987).
Id.
These same considerations apply to Ms. Vullo‘s decision not to prosecute the Insurance Law violations identified in paragraph 59 of the SAC of which she was purportedly aware. Without the protection absolute immunity affords, a DFS Superintendent‘s
As to the second Butz factor, the NRA argues that “[a]lthough there are some safeguards to protect parties from unconstitutional conduct by the DFS Superintendent, the efficacy of those safeguards is diminished by other provisions of the Financial Services Law. Specifically, although a party is entitled to notice and a hearing, the ‘independence’ of any hearing is severely undermined because it is held before the Superintendent or an individual directly designated by the Superintendent. Additionally, the hearing officer only has the power to suggest a course of action, while the Superintendent has the final authority to reject the recommendation and issue whatever order she desires.” Dkt. No. 220, at 20 (citing
In DiBlasio, in addressing the second Butz factor the Second Circuit held that although some procedures of
The procedures involving Insurance Law violations are much different than the procedures involving a summary suspension of a physician‘s license pending a hearing as examined in DiBlasio, and do not give the DFS Superintendent “virtually unfettered ability to act in an unconstitutional manner.” Under applicable law, had Lockton, Lloyd‘s, or Chubb not admitted liability, each would have had the opportunity to proceed with a DFS evidentiary hearing, be represented by counsel in front of an
The third Butz factor, insulation from political influence, weighs against absolute immunity because Ms. Vullo served at the will of the Governor. See
On the fourth Butz factor, the importance of precedent, the NRA asserts that no provision of the Financial Services Law or the Insurance Law indicates that DFS or its Superintendent place any value on precedent when making decisions with respect to violations of the Insurance Law. Because Ms. Vullo bears the burden of establishing her entitlement to absolute immunity, and because she has not addressed this issue, the Court finds that the fourth Butz factor weighs against absolute immunity.
Finally, the fifth Butz factor directs the Court to assess the correctability of error on appeal. In arguing against this factor, the NRA cites to DiBlasio where the Circuit held:
Butz also requires us to consider whether a wrongful summary suspension is “correctabl[e] on appeal.” Butz, 438 U.S. at 512, 98 S.Ct. 2894. The district court reasoned that the hearing required by
§ 230(10)(f) and the availability of an Article 78 proceeding provide prompt review of a summary suspension, hence weighing in favor of absolute immunity. In the context of determining whether absolute immunity is appropriate, the hearing available under§ 230 , while providing an avenue for review of the charges themselves, provides no meaningful review of the summary suspension because, as happened here, the commissioner is free to ignore the hearing committee‘s recommendation. In addition, in the context of determining whether absolute immunity is appropriate, Article 78 proceedings are generally not considered adequate avenues for “appeal.” See [Young v. Selsky, 41 F.3d 47, 54 (2d Cir. 1994)].
As explained above, in the DFS Insurance Law enforcement context, a hearing is held and a decision rendered before adverse consequences can be imposed. This differs substantially from the situation addressed in DiBlasio. Further, upon the imposition of an adverse determination, a respondent is entitled to appeal the determination through an Article 78 proceeding asking to have the adverse consequences
As indicated, DiBlasio involved a summary suspension before resolution of the underlying charges. If Lockton, Lloyd‘s, or Chubb had declined to admit liability, they would have had a full evidentiary hearing that mirrors a judicial one, with the significant due process protections described above, before any penalty or suspension could be imposed. And they would have had the right to seek to vacate an adverse decision by an Article 78 proceeding. Unlike in DiBlasio where an Article 78 proceeding after the fact of a summary suspension afforded the plaintiff inadequate relief, the same cannot be said of a post-hearing Article 78 proceeding.
Young is also distinguishable from the situation here. In Young, the Circuit held that damages, which were the only viable remedy for the due process deprivation in issue, were unavailable in an Article 78 proceeding, rendering it inadequate for appellant. See Young, 41 F.3d at 54.12 The situation in Young is quite different than the situation that would arise if Lockton, Lloyd‘s, or Chubb had proceeded to a hearing, received an adverse determination, and appealed via an Article 78 proceeding. Unlike in Young, such an appeal could afford an entity relief from an unconstitutional or improper decision entered by Ms. Vullo.
The Court finds that an Article 78 proceeding provides a sufficient avenue for a party that receives an adverse decision in a DFS enforcement proceeding to correct an error on appeal. Accordingly, the Court finds that the fifth Butz factor weighs in favor of absolute immunity.
Weighing all of the Butz factors, and considering Ms. Vullo‘s functions that underlie the selective enforcement claim, the Court finds that she is entitled to absolute immunity on the selective enforcement claim. Accordingly, the claim, under both federal and state law, is dismissed.
First Amendment Claims13
Count One of the SAC alleges that “Defendants’ actions—including but not limited to the issuance of the April 2018 [Guidance] Letters and the accompanying backroom exhortations, the imposition of the Consent Orders upon Chubb and Lockton, and the issuance of the Cuomo Press Release—established a ‘system of informal censorship’ designed to suppress the NRA‘s speech.” SAC ¶ 90.14 Plaintiff
These are essentially the same claims that the Court examined in tandem in the November 6, 2018 Decision & Order, Dkt. No. 56. In doing so, the Court found that “[t]he Guidance Letters and Cuomo Press Release, read in isolation, clearly fit into the government-speech doctrine as they address matters of public importance on which New York State has a significant interest.” Id. at 16-17. But in analyzing these claims, the Court wrote:
“First Amendment rights may be violated by the chilling effect of governmental action that falls short of a direct prohibition against speech.” Zieper v. Metzinger, 474 F.3d 60, 65 (2d Cir. 2007)(quoting Aebisher v. Ryan, 622 F.2d 651, 655 (2d Cir. 1980)); see also Dorsett v. Cty. of Nassau, 732 F.3d 157, 160 (2d Cir. 2013)(“To plead a First Amendment retaliation claim a plaintiff must show: (1) he has a right protected by the First Amendment; (2) the defendant‘s actions were motivated or substantially caused by his exercise of that right; and (3) the defendant‘s actions caused him some injury.“)). As applicable to the allegations in Counts One and Two, “the First Amendment prohibits government officials from encouraging the suppression of speech in a manner which ‘can reasonably be interpreted as intimating that some form of punishment or adverse regulatory action will follow the failure to accede to the official‘s request.‘” Zieper, 474 F.3d at 65-66 (quoting Hammerhead Enters., Inc. v. Brezenoff, 707 F.2d 33, 39 (2d Cir. 1983)). In determining whether government statements impede upon First Amendment rights, “what matters is the ‘distinction between attempts to convince and attempts to coerce.‘” Id., at 66 (quoting Okwedy v. Molinari, 333 F.3d 339, 344 (2d Cir. 2003) (per curiam).
Id. at 18. The Court noted that the First Amendment “require[s] courts to draw fine lines between permissible expressions of personal opinion [by public officials] and implied threats to employ coercive state power to stifle protected speech.” Id. (quoting Hammerhead, 707 F.2d at 39). However, after examining the totality of the allegations, and accepting the factual allegations as true, the Court found:
While neither the Guidance Letters nor the Cuomo Press Release specifically directs or even requests that insurance companies and financial institutions sever ties with the NRA, a plausible inference exists that a veiled threat is being conveyed. Viewed in the light most favorable to the NRA, and given DFS‘s mandate—“effective state regulation of the insurance industry” and the “elimination of fraud, criminal abuse and unethical conduct by, and with respect to, banking, insurance and other financial services institutions,”
N.Y. Fin. Servs. Law § 102(e), (k) —, the Cuomo Press Release and the Guidance Letters, when read objectively and in the context ofDFS‘s regulatory enforcement actions against Chubb and Lockton and the backroom exhortations, could reasonably be interpreted as threats of retaliatory enforcement against regulated institutions that do not sever ties with the NRA.
Id. at 24-25.
Ms. Vullo argues that she is entitled to qualified immunity on the First Amendment claims because it was objective reasonably for her to believe her statements in the Guidance Letters and press release were lawful, and there “is no case clearly establishing that otherwise protected public statements transform into an unlawful ‘threat’ because there is an ongoing (and unrelated) regulatory investigation.” Dkt. No. 211-1 at 31. She further maintains that at the time she made her “public statements, DFS had made no public statements about the Carry Guard investigation. Nor do the NRA‘s (false) allegations that Ms. Vullo coupled her public statements with ‘backroom exhortations’ change the analysis, because they are vague and conclusory—there is no specific allegation that Ms. Vullo directly threatened unlawful government enforcement.” Id. She argues that “[r]easonable officials would believe it lawful to privately express the sentiments that are lawful to express publicly.” Id. The NRA counters that qualified immunity is a fact-specific inquiry that should be undertaken after fact discovery, and that the conduct alleged by the NRA was not “objectively reasonable” but rather violated clearly established constitutional rights.
The Court is inclined to agree with Ms. Vullo that there is no case clearly establishing that otherwise protected public statements transform into an unlawful threat merely because there is an ongoing, and unrelated, regulatory investigation. See Zieper, 474 F.3d at 68 (granting qualified immunity against First Amendment claim because it was not “apparent to a reasonable officer that defendants’ actions crossed the line between an attempt to convince and an attempt to coerce“); see also Simon v. City of N.Y., 893 F.3d 83, 92 (2d Cir. 2018)(“A right is clearly established when its ‘contours ... are sufficiently clear that every reasonable official would have understood that what he is doing violates that right.‘“)(quoting Ashcroft v. al-Kidd, 563 U.S. 731, 741 (2011))(alteration in original); Gerard v. City of New York, No. 19-3102, 2021 WL 485722, *1 (2d Cir. Feb. 10, 2021).15 But here the Court found that, in the context of the factual allegations asserted in the Amended Complaint, it was plausible to conclude that the combination of Defendants’ actions, including Ms. Vullo‘s statements in the Guidance Letters and Cuomo Press Release as well as the purported “backroom exhortations,” could be interpreted as a veiled threat to regulated industries to disassociate with the NRA or risk DFS enforcement action.
b. Cuomo, DFS, and Lacewell‘s Motion
Relevant Procedural Background
On Defendants’
Sovereign Immunity
Defendants DFS and Gov. Cuomo (collectively “Defendants“) argue that all remaining claims against DFS, Supt. Lacewell in her official capacity,17 and Gov. Cuomo in his official capacity must be dismissed as barred by Eleventh Amendment sovereign immunity. This includes, Defendants contend, Plaintiff‘s claims against DFS under the New York State Constitution and the claims for injunctive and declaratory relief sought in the SAC. Defendants also assert that “in addition to barring the NRA‘s claims against DFS, the Eleventh Amendment also bars all claims against the Governor in his official capacity, including requested injunctive relief.” Dkt. No. 210-1 at 3. Plaintiff counters that “Defendants’ conduct throughout this litigation is wholly incompatible with their belated claim of sovereign immunity.” Dkt. No. 219 at 2. Plaintiff contends that “[a]lthough Defendants did assert sovereign immunity regarding certain claims for money damages against DFS, and Cuomo and Vullo in their official capacities, Defendants never asserted sovereign immunity with respect to the NRA‘s First Amendment claims for declaratory and injunctive relief.” Id. Plaintiff asserts that there is no valid reason why Defendants “should belatedly be permitted to assert” the Eleventh Amendment defense now, and thus Defendants have waived sovereign immunity. Id. Plaintiff also argues that Defendants waived sovereign immunity by appearing in this case and defending on the claims asserted herein.
The Eleventh Amendment bars suits against New York State unless it has consented to be sued, or federal legislation has overridden the State‘s sovereign immunity. Will v. Michigan Dep‘t. of the State Police, 491 U.S. 58, 64 (1989); see Gollomp v. Spitzer, 568 F.3d 355, 366 (2d Cir. 2009)(“[A]s a general rule, state governments may not be sued in federal court unless they have waived their Eleventh Amendment immunity, or unless Congress has abrogated the states’ Eleventh Amendment immunity.“). Eleventh Amendment immunity also extends to suits against state officers in their official capacities. See Will, 491 U.S. at 71 (“[A] suit against a state official in his or her official capacity is not a suit against the official but rather is a suit against the official‘s office. As such, it is no different from a suit against the State itself.“)(citations
There is no merit to the argument that sovereign immunity should be denied because it was belatedly asserted. Defendants had previously raised the sovereign immunity defense in their Answer and in a motion to dismiss. See Dkt. No. 59, at p. 55; Dkt. No. 63-1 at pp. 4, 6-7. The fact that it was not previously addressed to the claims for relief in the SAC is of no moment. Sovereign immunity may be asserted at anytime in a proceeding. See McGinty v. New York, 251 F.3d 84, 94 (2d Cir. 2001)(“[T]he Supreme Court and this Court have repeatedly held that a state may assert Eleventh Amendment sovereign immunity at any time during the course of proceedings.“)(citing Calderon v. Ashmus, 523 U.S. 740, 745 n. 2 (1998)(the Eleventh Amendment is jurisdictional in that it limits a federal court‘s judicial power, and may be invoked at any stage of the proceedings); Pennhurst, 465 U.S. at 99 n. 8 (same); Richardson v. N.Y. State Dep‘t of Corr. Serv., 180 F.3d 426, 449 (2d Cir. 1999)(the defense of Eleventh Amendment immunity need not be raised in trial court to be considered on the merits); Leonhard v. United States, 633 F.2d 599, 618 n. 27 (2d Cir. 1980)(sovereign immunity need not be expressly raised in the district court or on appeal since it is a jurisdictional defect and may be raised at any time)). The fact that the NRA incurred expenses related to discovery and other matters in this hotly contested matter does not, by itself, provide a basis to deprive New York State of sovereign immunity. See Beaulieu v. Vermont, 807 F.3d 478, 491 (2d Cir. 2015)(“It is true that Defendants changed their strategy and that earlier invocation of Vermont‘s immunity might have resulted in earlier dismissal, sparing Plaintiffs some burden and expense. But there is no record of duplicitous conduct by Defendants or of serious unfairness to Plaintiffs resulting from the tardy invocation of immunity.“). Similarly, the fact that Defendants did not respond to Plaintiff‘s query whether Defendants would waive sovereign immunity on the state constitutional claims after Plaintiff conceded that DFS is not a person subject to suit under
There is also no merit to Plaintiff‘s argument that Defendants waived sovereign immunity by litigation in this matter. “Eleventh Amendment immunity is lost only if Congress unequivocally abrogates states’ immunity or a state expressly consents to suit.” Cosby v. LaValley, 2015 WL 13843440, *4 (N.D.N.Y. Nov. 16, 2015). Because of the “vital role of the doctrine of sovereign immunity in our federal system[,]” waiver will only be found where it is “unequivocally expressed.” Pennhurst, 465 U.S. at 99. The courts that have found that a State waived its sovereign immunity by litigation occurred in situations where a State voluntarily and affirmatively invoked a federal court‘s jurisdiction to resolve a claim presented by the State. See, e.g., Lapides v. Bd. of Regents of Univ. Sys. of Georgia, 535 U.S. 613, 619 (2002)(“And the Court has made clear in general that ‘where a State voluntarily becomes a party to a cause and submits its rights for judicial determination, it will be bound thereby and cannot escape the result of its own voluntary act by invoking the prohibitions of the Eleventh Amendment.‘“)(quoting Gunter v. Atlantic Coast Line R. Co., 200 U.S. 273, 284 (1906) (emphasis added in Lapides); Fifth Ave. Assocs., L.P. v. N.Y. State Dep‘t of Taxation & Fin. (In re 995 Fifth Ave. Assocs., L.P.), 963 F.2d 503, 506 (2d Cir. 1992)(finding waiver where, after a debtor sought a declaration in bankruptcy court that it was exempt from the tax and entitled to a refund from the state, the State filed an administrative expense claim for additional gains tax liability); Gulino v. Bd. of Educ. of the City Sch. Dist. of the City of New York, No. 96 CIV. 8414, 2016 WL 7320775, at *7 (S.D.N.Y. July 18, 2016), report and recommendation adopted, No. 96 CIV. 8414 (KMW), 2016 WL 7243544 (S.D.N.Y. Dec. 14, 2016)(“[T]he cases involving waiver-by-litigation premise the waiver on a State actually appearing as a party and submitting its rights for judicial determination.“)(collecting cases). By contrast, the courts have found no waiver where a State is involuntarily a defendant in a case but proceeds only to defend itself on a claim brought by a plaintiff. See, e.g., McGinty v. New York, 251 F.3d 84, 94 (2d Cir. 2001)(“What distinguishes the present case from 995 Fifth Avenue Associates is that here no affirmative claim was made by the State of New York, the Department or the Retirement System. Thus, their involvement in the EEOC proceeding constitutes no waiver of sovereign immunity.“); see also Lapides, 535 U.S. at 622 (“[T]he Eleventh Amendment waiver rules are different when a State‘s federal-court participation is involuntary.“)(citing Hans v. Louisiana, 134 U.S. 1, 10 S. Ct. 504, 33 L.Ed. 842 (1890);
The Court finds no reason to deprive New York or its officers acting in their official capacities of sovereign immunity, or to deem that immunity waived. Accordingly, all claims against DFS are dismissed. The claims against New York‘s officers acting in their official capacities are also dismissed unless an exception to Eleventh Amendment immunity applies.
Ex parte Young
Plaintiff contends that if immunity applies, the exception to Eleventh Amendment immunity articulated in Ex parte Young applies to Gov. Cuomo in his official capacity. Under the doctrine of Ex Parte Young, a “plaintiff may avoid the Eleventh Amendment bar to suit and proceed against individual state officers, as opposed to the state, in their official capacities, provided that [the] complaint[:] (a) alleges an ongoing violation of federal law[;] and (b) seeks relief properly characterized as prospective.” Clark v. DiNapoli, 510 F. App‘x 49, 51 (2d Cir. 2013)(internal quotation marks and citation omitted). The Supreme Court has declined to extend the reasoning of Ex Parte Young to claims for retrospective relief. See Green v. Mansour, 474 U.S. 64, 68 (1985) (citations omitted). “The line between prospective and retrospective relief is drawn because ‘[r]emedies designed to end a continuing violation of federal law are necessary to vindicate the federal interest in assuring the supremacy of that law,’ whereas ‘compensatory or deterrence interests are insufficient to overcome the dictates of the Eleventh Amendment.‘” Ward v. Thomas, 207 F.3d 114, 119 (2d Cir. 2000)(quoting Green, 474 U.S. at 68). “Accordingly, suits against states and their officials seeking damages for past injuries are firmly foreclosed by the Eleventh Amendment.” Id. (citations omitted). “In determining whether the doctrine of Ex Parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a ‘straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.‘” Verizon Maryland Inc. v. Public Serv. Comm‘n. Of Maryland, 553 U.S. 635, 645 (2002)(quoting Idaho v. Coeur d‘Alene Tribe of Idaho, 521 U.S. 261, 296 (1997)).
Past Conduct
Defendants contend that Ex parte Young is inapplicable because the claims in the SAC concern only past conduct. In this regard, Defendants argue that the First Amendment and State Constitutional free speech claims, the only claims remaining as to Defendants, challenge the press releases and “backroom exhortations” that supposedly occurred in the past. Thus, Defendants maintain, the SAC‘s claims rely exclusively on past conduct. Plaintiff asserts that its suit alleges an ongoing violation of federal law, citing to paragraphs 93 and 102 of the SAC to support this proposition. Dkt. No. 219 at 7 (citing SAC ¶¶ 93,19 10220). In addition, Plaintiffs points
Just as the Court indicated in its decision denying Plaintiff‘s request for a preliminary injunction, Plaintiff‘s First Amendment claims are premised upon actions that took place in 2018. See Dkt. 218 at pp. 2-4.21 Plaintiff‘s citation to paragraphs 93 and 102 of the SAC does not change this conclusion as these allegations concern Defendants’ past actions. Similarly, the allegations in paragraphs 61, 80, 81, and 82 of the SAC allege disruptions of the NRA‘s relationships with regulated industries caused by Defendants’ past conduct. To the extent Plaintiff asserts that it still has trouble maintaining business relationships with regulated industries, that appears to be because of Defendants’ past alleged unconstitutional acts, not because of similar ongoing conduct. The fact that DFS issued a subpoena to a regulated entity associated with the NRA that Plaintiff contends demonstrates a continuation of “DFS‘s selective enforcement,” SAC ¶ 79, does not indicate that Defendants are continuing to engage in conduct intended to deprive Plaintiff of its rights to free speech - the claims that remain against DFS - or selective enforcement. A subpoena seeks information but it is not an enforcement action like those that form the basis of the claims in this action. Plaintiff‘s citation to the DFS enforcement action against the NRA does not indicate that Defendants are continuing the allegedly illegal conduct that forms the basis of this lawsuit. Although the NRA was well aware for some time that DFS was investigating it for Insurance Law violations, see Dkt. No. 56 at 4 (“As part of its investigation, DFS learned that, although it did not have an insurance producer license from DFS, the NRA engaged in marketing of, and solicitation for, the Carry Guard program.“), there is no allegation in the SAC that this conduct is the basis of the free speech or equal protection claims asserted therein.22 Plaintiff‘s professed need for an
Injunctive Relief23
Defendants argue that even if it could be construed that there is an ongoing constitutional violation asserted in the SAC, Plaintiff seeks an improper “obey the law” injunction. The injunction that Plaintiff seeks is, at least in part, an improper “obey the law” injunction. Further, the totality of the sought-after injunction is improper because it violates the specificity requirements set forth at
“[U]nder
Rule 65(d) , an injunction must be more specific than a simple command that the defendant obey the law.” Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 51 (2d Cir. 1996). “To comply with the specificity and clarity requirements, an injunction must ‘be specific and definite enough to apprise those within its scope of the conduct that is being proscribed.‘” N.Y. State Nat‘l Org. for Women v. Terry, 886 F.2d 1339, 1352 (2d Cir. 1989)(quoting In re Baldwin–United Corp., 770 F.2d 328, 339 (2d Cir. 1985)). “This rule against broad, vague injunctions ‘is designed to prevent uncertainty and confusion on the part of those to whom the injunction is directed,’ and to be sure ‘that the appellate court knows precisely what it is reviewing.‘” Rosen v. Siegel, 106 F.3d 28, 32 (2d Cir. 1997)(quoting Calvin Klein Cosmetics Corp. v. Parfums de Coeur, Ltd., 824 F.2d 665, 669 (8th Cir. 1987)).
S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 240–41 (2d Cir. 2001).
Plaintiff‘s request for a injunction requiring Defendants 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” is vague and does not describe in reasonable detail the act or acts sought to be restrained. The injunction is not specific and definite enough to apprise those within its scope of the conduct that is being proscribed. See id. Further, the injunction does “not require a defendant to do anything more than that already imposed by law,” subjects the defendants
The second part of the requested injunction also seeks an injunction that fails to comply with
Because the SAC fails to allege an ongoing violation of federal law, and seeks an improper injunction as prospective relief, Ex parte Young does not avoid an Eleventh Amendment bar to suit against either Gov. Cuomo or Supt. Lacewell in their official capacities relative to the sought-after injunction.
Declaratory Relief24
Defendants argue that because Plaintiff‘s Section 1983 claims against DFS have been withdrawn and any requests for monetary or injunctive relief are barred by the Eleventh Amendment, “Plaintiff‘s bald request for a declaration pursuant to the [Declaratory Judgment Act (DJA)] that Defendants have violated the NRA‘s rights to free speech and equal protection under both the Federal and New York Constitutions is insufficient to confer subject matter jurisdiction over DFS.” Dkt. 210-1 at 12; see also id. at 11-12 (citing cases for the propositions that the DJA does not expand the jurisdiction of the federal courts, the DJA does not provide an independent basis for jurisdiction, and a plaintiff seeking relief under the DJA must have an independent basis for jurisdiction). Based on the cases cited by Defendants, the Court agrees.
Defendants also argue that even if there were a jurisdictional basis to entertain Plaintiff‘s request for declaratory relief, the NRA‘s sought-after declaration would be barred as against Defendants by the Eleventh Amendment. Id. at 12-13. The Court agrees.
As indicated above, the two counts that remain against Defendants allege that DFS violated the NRA‘s rights to free speech in the past. The declaration Plaintiff seeks would declare that Defendants’ past conduct violated Plaintiff‘s rights under both the Federal and New York Constitutions. The Second Circuit has explained that in circumstances like these where a declaration “could say no more than that [a State] had violated [the] law in
IV. CONCLUSION
For the reasons set forth above, the motion by DFS and Gov. Cuomo in his official capacity seeking to dismiss claims in the Second Amended Complaint, Dkt. No. 210, is GRANTED. Plaintiff‘s claims in the Second Amended Complaint against DFS, Gov. Cuomo in his official capacity, and Supt. Lacewell in her official capacity, including the claims for injunctive and declaratory relief, are DISMISSED as barred by the Eleventh Amendment.
Ms. Vullo‘s motion appealing Magistrate Judge Hummel‘s decision granting leave to amend, and seeking to dismiss the claims against her in the Second Amended Complaint, Dkt. No. 211, is GRANTED in part and DENIED in part. The selective enforcement claim against Ms. Vullo is DISMISSED, the motion is denied as to the First Amendment claims, and the appeal of Judge Hummel‘s decision granting leave to amend is denied.
IT IS SO ORDERED.
Dated: March 15, 2021
Thomas J. McAvoy
Senior, U.S. District Judge
Notes
Arteaga v. State, 72 N.Y.2d at 216 (citations and quotations marks omitted).The absolute immunity for quasi-judicial discretionary actions is founded on public policy and is generally said to reflect the value judgment that the public interest in having officials free to exercise their discretion unhampered by the fear of retaliatory lawsuits outweighs the benefits to be had from imposing liability. Not all discretionary actions, however, are accorded absolute immunity.
Whether an action receives only qualified immunity [under New York law], shielding the government except when there is bad faith or the action taken is without a reasonable basis, or absolute immunity, where reasonableness or bad faith is irrelevant, requires an analysis of the functions and duties of the particular governmental official or employee whose conduct is in issue. The question depends not so much on the importance of the actor‘s position or its title as on the scope of the delegated discretion and whether the position entails making decisions of a judicial nature--i.e., decisions requiring the application of governing rules to particular facts, an exercise of reasoned judgment which could typically produce different acceptable results.