Bang! Bang! Drill! Drill!
The National Rifle Association’s big victory at the Supreme Court on Thursday puts a target on climate change regulations that have put fossil fuel companies under fire.
The NRA accused Maria T. Vullo, a former superintendent of the New York State Department of Financial Services (DFS), of using her regulatory power to coerce financial institutions into cutting ties with the organization after the 2018 Parkland school shooting. The NRA argued that Vullo’s actions violated their First Amendment rights, and the Supreme Court agreed, sending the case back to the lower court.
The ruling is fantastic news for fossil fuel companies. In recent years, banks and insurance companies have faced increasing pressure from regulators to divest from carbon-intensive projects and disclose climate-related risks. Regulators have used aggressive tactics, often pushing a climate agenda under the guise of risk management. Now, fossil fuel companies have a powerful precedent to challenge these overreaching actions.
The DFS’s Heavy Hand
In the NRA case, New York’s Department of Financial Services (DFS) had issued letters titled “Guidance on Risk Management Relating to the NRA and Similar Gun Promotion Organizations.” The letters warned insurance companies that they needed to take action to manage their risks, including reputational risks, from dealing with the NRA. The companies were told to “review any relationships they have with the NRA” and to “take prompt actions to manage these risks and promote public health and safety.”
“The tragic devastation caused by gun violence that we have regrettably been increasingly witnessing is a public safety and health issue that should no longer be tolerated by the public and there will undoubtedly be increasing public backlash against the NRA and like organizations,” the DFS wrote.
In other words, the New York State government was telling insurers to stop doing business with the NRA—in part because anti-gun rights activists were likely to use the Parkland shooting to gin up support for gun control.
When the NRA cried foul, New York asked the federal courts to dismiss the case. The Second Circuit upheld the dismissal, ruling that the letters constituted permissible government speech and were legitimate acts of law enforcement.
On Tuesday, the Supreme Court overruled that decision. The NRA was entitled to make its case that the DFS was coercing regulated insurance companies to terminate their business relationships with the NRA in order to punish or suppress gun-promotion advocacy.
(Photo: Unsplash)
Climate Policy and Fossil Fuels
Just as the NRA argued that Vullo’s actions violated their rights, fossil fuel companies can now contend that insurance regulators’ climate policies do the same. The arguments that the DFS used to pressure insurance companies to drop the NRA are almost the same arguments it has used to pressure companies to divest themselves from fossil fuels and stop insuring fossil fuel projects.
“Insurers should consider the negative publicity that may be triggered by insurers’ underwriting or investing in sectors perceived as contributing to climate change,” the DFS wrote in a memo entitled “Guidance for New York Domestic Insurers on Managing Financial Risks from Climate Change.”
“This is exemplified by social movements calling for divestment from fossil fuels and cessation of underwriting of coal-fired power infrastructure,” the DFS memo added.
Got that? Insurers were being told to drop underwriting and investment in fossil fuels because activist “social movements” were likely to demand that they do so. Who needs to pass laws when just the possibility of leftwing activism is enough to trigger regulation?
Economic Growth at Stake
The economic impact of regulatory overreach cannot be overstated. Fossil fuel companies are essential to our economy, providing the energy that powers our industries and homes. Regulatory actions that force these companies to divest or drastically alter their business models could have severe economic consequences. The Supreme Court’s decision provides these companies with a potent legal tool to challenge such overreach.
This ruling is a clear win for economic growth. By curbing the power of regulators to impose ideologically driven policies, the Supreme Court has opened the door for fossil fuel companies to continue their essential work without undue interference. This decision could help ensure that energy remains affordable and available, supporting economic stability and growth.
The Supreme Court’s ruling is not just a victory for the NRA but a lifeline for fossil fuel companies. This decision could be the first step in reclaiming their right to operate free from coercive regulatory tactics that purport to turn the position of leftwing activists into required “risk management.“
As the battle over climate change policies continues, this ruling underscores the importance of defending constitutional rights against the encroaching tide of bureaucratic overreach.
While there are important differences between advocacy groups like the NRA and fossil fuel companies, the logical connection is compelling. An oil driller might not be able to get nine votes on the Supreme Court, but there likely are five who would agree to pare back attempts to foist climate change policies on the country through the mask of financial regulation.
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