Block on Trump's Asylum Ban Upheld by Supreme Court
State regulators didn't violate the First Amendment rights of a Nebraska financial adviser when they looked into his regulatory compliance, in part because of his participation in the Tea Party movement and public criticisms of President Barack Obama, the Eighth Circuit ruled today.
Robert Bennie, Jr., had been a vocal critic of the president's, calling him a communist and an "evil man" in an interview with the Lincoln Journal Star. He'd also been playing loose with state disclosure requirements, regulators believed. So, when workers at the Nebraska Department of Banking and Finance started asking questions about Bennie's work, they also touched on his "polarizing" political activities. But while those questions might have crossed a line, they weren't enough for a reasonable person to stop exercising their free speech rights, according to the Eighth Circuit.
Tea Party Diatribes and Advisor Disclosure Laws
Before he was fired in November, 2010, Robert Bennie worked as an agent for LPL Financial, a broker-dealer and the nation's largest organization of independent financial advisors. In 2009, Bennie caught the eye of regulators with the Nebraska Department of Banking and Finance, which reviews financial advisors' public statements and advertisements.
Those regulators were concerned that an old promotional CD of Bennie's didn't meet state disclosure requirements. They also had questions about Bennie's advertising, which included an offer to give customers $100 towards the purchase of a gun.
And then there were Bennie's comments about President Obama. A few days before state regulators contacted LDL about Bennie, Bennie was quoted as calling the president "a communist," "dishonest," and "an evil man," in an article about Nebraska's Tea Party movement.
And as investigators looked into Bennie's regulatory compliance, they kept returning to his criticisms of Obama. In an email to LPL, they asked if the company anticipated disciplining Bennie, to "provide the department with a litter better sense that the firm is 'on top of' addressing this type of activity," including not just Bennie's advertising, but his public, political comments.
In emails, regulators wrote that Bennie "always is seen wearing a cowboy hat lately, so I say 'Hang Him High.'" When Bennie complained to the Governor, investigators urged the department to mention Bennie's political views:
While Mr. Bennie did not author the article, and does not appear to be subject to our regulatory purview regarding it, the comments made regarding the President etc., regardless of anyone's political views do tend to be quite polarizing to say the least, not all that dissimilar to the firearm purchase statement.
Eventually, Bennie was fired. He found out what regulators had been saying about him only after filing a public-records request, at which point he gave up on his Tea Party activities.
Target, Yes. Chilling, No.
Bennie eventually sued the department for violating his free speech rights. The state had threatened him with "continued and heightened regulatory scrutiny" for exercising his constitutionally protected right to political speech, Bennie alleged.
But both the district court and Eighth Circuit agreed: despite the fact that state regulators targeted Bennie partly in retaliation for his speech, "they did not do enough to deter someone of ordinary firmness from continuing to speak."
As the Eighth Circuit noted, did little to retaliate against Bennie. Their actions primarily involved asking LPL about him. Most of their inquiries were motivated by Bennie's supposed violations, the court found. The only action the state took that could directly affect Bennie or his business, an order to cancel a meeting because of a noncompliant invitation, was resisted by LPL.
Of course, the court was not pleased with the state, either. For regulators to allow their disagreement with Bennie's politics to influence how they treated him was "wholly inappropriate" and "absolutely inconsistent with the First Amendment," the court explained. But, wrong though that conduct may be, it was not severe enough to be actionable.