NRA loses bid to end New York AG suit seeking LaPierre's removal

New York Attorney General Letitia James definitely had it in for the National Rifle Association before she ever assumed office. As a candidate, she called the group a “terrorist organization” and vowed to launch an investigation into the New York-charted group if elected. That was one promise she was happy to fulfill, and her investigation and case against the NRA has gone on for three years now.

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James vowed to dissolve the organization as well, but she was prevented from doing so by the judge overseeing the case against the NRA, who declared earlier this year that while the Attorney General has laid out plenty of details of “greed, self-dealing, and lax financial oversight”, she failed to prove that of that actually benefitted the group itself and not individual leaders and higher-ups in the group. It was inappropriate to shut down the group itself, ruled Justice Joel Cohen, but James could continue her case with an eye towards removing the NRA’s leadership.

The NRA objected to Cohen’s decision, arguing that James had launched her investigation solely because of her bias against the group and asking that the judge throw out the James’ modified complaint, but on Friday, Cohen issued a ruling that allows James to move forward in trying to ban CEO and Executive Vice President Wayne LaPierre and three others from ever holding a position within the NRA, as well as installing an independent monitor to oversee the group’s books.

The NRA has failed to prove that James pursued the NRA only because of her political views, the judge ruled.

Instead, James’ allegations of “fraud, waste, and looting” are enough to justify her lawsuit, regardless of her political beliefs, the judge wrote.

“There are no factual allegations suggesting that the stated concerns driving the investigation — reports of fraud, waste, and looting within the NRA — were imaginary or not believed by the Attorney General,” the judge wrote.

None of the AG’s claims are frivolous, Cohen added.

“In fact, the NRA itself recognized many of the same issues about corporate governance underlying the Attorney General’s investigation,” the judge wrote.

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LaPierre’s control of the NRA has been challenged internally as well, but the 76-member Board of Directors has solidly stood behind him over the last few years. Allen West’s attempt to become Executive Vice President during the recent Annual Meetings resulted in him getting just one vote, with another seven board members abstaining, and more than 50 votes cast in favor of retaining LaPierre in his current position.

While Cohen was careful to note in his opinion that James has yet to prove all of her claims, he did call them “objectively well-founded”, and, as noted above, pointed out that even the NRA itself “recognized many of the same issues about corporate governance underlying the Attorney General’s investigation.”

Within the NRA, whistleblowers “push[ed] for additional documentation and transparency,” an effort which was “met with resistance from a handful of its executives and vendors”. One executive “was fired by the NRA for many of the same issues alleged in the Complaint,” while the group “became embroiled in litigation” against others who “abused its trust”. And in this action, current NRA members have sought leave to intervene to address “concerns . . . about the NRA’s management by the Individual Defendants and current Board”.

Further, when the NRA sought to evade the Attorney General’s actions in New York by filing for bankruptcy in Texas, the federal bankruptcy court there underscored concerns about the NRA’s corporate governance. For example, the bankruptcy court noted “the surreptitious manner in which [Wayne] LaPierre obtained and exercised authority to file bankruptcy for the NRA,” finding the decision to “[e]xclude[] so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer, and the general counsel, . . . nothing less than shocking”. The court also alluded to “cringeworthy facts” about the NRA’s past misconduct. It found “[s]ome of the conduct that gives the Court concern is still ongoing,” including “very recent[ ] violat[ions]” of the NRA’s internal procedures and “lingering issues of secrecy and a lack of transparency”.

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Cohen went on to say that “[i]n the end, an objectively reasonable investigation – here, one uncovering credible evidence of wrongdoing – is not rendered unconstitutional solely by the investigator’s subjective state of mind,” declaring that even if James had a personal animus against the NRA, the organization hasn’t demonstrated “a sufficient causal link between the animus and the adverse action”; in this case, the original lawsuit filed by James to dissolve the NRA and the revised complaint seeking his (and others) removal from the organization.

There’s still plenty of legal wrangling to be done (and millions of dollars in legal expenses for the organization to be billed) before this case goes to trial, likely some time next year, but I doubt that Cohen’s ruling is going to be overturned on appeal.

I do believe that James’ original motivation was more of a fishing expedition than anything else, but unfortunately for the NRA and its leadership, what she found can’t be as easily dismissed by Justice Cohen as her attempt to dissolve the organization was.

 

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