Holding Court: Tyranny!

Holding Court is a series by retired Rye City Court Judge Joe Latwin. Latwin retired from the court in December 2022 after thirteen years of service to the City.

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By Joe Latwin

Tyranny is oppressive power exerted by government. Posit that a government goes after you because it does not like your position, political stand, or support or opposition to a favored position or candidate. It happened in the 1960s when some States went after civil rights groups and their leaders. It happened again in New York a few years ago. This week, the Supreme Court unanimously struck a blow against tyranny.

An unelected New York State officer in charge of regulating banks and insurance companies doing business in New York with the power to investigate and levy fines went after a civil rights organization. The organization worked with insurers and others to make liability insurance available to its members – so called “affinity” insurance policies. The organization also took positions on political issues bearing on its members and rated politicians on their stance on relevant issues. The officer began investigating one of these affinity insurance policy companies. She met with senior executives at Lloyd’s, the insurance giant, and expressed her views in favor of the positions advocated by the organization. She told the Lloyd’s executives that her department was less interested in pursuing infractions of the law unrelated to any business “so long as Lloyd’s ceased providing insurance to the civil rights groups, especially the particular civil rights group’s members. The officer and Lloyd’s struck a deal: Lloyd’s “would instruct its syndicates to cease underwriting policies for the group’s members and would scale back its related business,” and “in exchange, the department would focus its forthcoming affinity-insurance enforcement action solely on those syndicates which served the civil rights group.”

The officer issued letters of Guidance on Risk Management Relating to the organization and Similar minded Promotion Organizations. In the Guidance Letters, she encouraged her department-regulated entities to: (1) “continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the organization or similar organizations”; (2) “review any relationships they have with the organization or similar organizations”; and (3) “take prompt actions to manage these risks and promote public health and safety.” The officer and the Governor also issued a joint press release echoing many of the letters’ statements and urging all insurance companies and banks doing business in New York to join those that have already discontinued their arrangements with the organization.

The organization sued the officer alleging that she violated the First Amendment by coercing her department’s regulated parties to punish or suppress the organization’s advocacy. After losing in the District Court and the Court of Appeals, the case went to the Supreme Court.

The Supreme Court, by a 9-0 vote, reversed the Court of Appeals and reinstated the case. It held that the officer violated the First Amendment by coercing regulated entities to terminate their business relationships with the organization to punish or suppress its advocacy. Justice Sotomayor said “At the heart of the First Amendment’s Free Speech Clause is the recognition that viewpoint discrimination is uniquely harmful to a free and democratic society. While a government official can share her views freely and criticize particular beliefs in the hopes of persuading others, she may not use the power of her office to punish or suppress disfavored expression. The Court explained that the First Amendment prohibits government officials from relying on the “threat of invoking legal sanctions and other means of coercion . . . to achieve the suppression” of disfavored speech.

To state a claim that the government violated the First Amendment through coercion of a third party, a plaintiff must plausibly allege conduct that, viewed in context, could be reasonably understood to convey a threat of adverse government action in order to punish or suppress speech.

The organization’s allegations, if true, highlight the constitutional concerns with the kind of strategy that the State officer purportedly adopted. Although the organization was not the directly regulated party here, the officer allegedly used the power of her office to target advocacy by going after the organization’s business partners. The takeaway is that the First Amendment prohibits government officials from wielding their power selectively to punish or suppress speech, directly or (as alleged here) through private intermediaries. If they can do it to them, they can do it to you!

As William Wallace would shout, “Freedom!”