NRA Will Not Be Dissolved

Judge Joel Cohen issued a ruling today in the New York Attorney General’s dissolution suit against the National Rifle Association. He dismissed four of the 18 causes of action in the amended complaint brought by Attorney General Letitia James but allowed the remain 14 to continue. Specifically, Judge Cohen dismissed the first, second, 16th, and 18th causes of actions.

The first and second causes of action sought the dissolution of the NRA. In the first cause of action, the NRA was said to have “conducted its business in a persistently illegal manner and abused its powers contrary to the public policy of the State of New York by operating without effective oversight or control by its officers and directors” which was grounds for dissolution under N-PCL § 1109(b)(1). The second cause alleged that “directors or members in control of the NRA have looted or wasted the corporate assets, have perpetuated the corporation solely for their personal benefit, or have otherwise acted in an illegal, oppressive or fraudulent manner.” This would be grounds for dissolution under N-PCL § 1109(b)(1).

He wrote in dismissing those two causes of action:

In arguing for dissolution, the Attorney General’s allegations fail to delineate between the NRA, on the one hand, and its leaders on the other, who acted “without regard to the NRA’s best interests” (see id. ¶ 143 [“LaPierre, together with his direct reports, including Defendants Phillips, Frazer and Powell, instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA . . . without regard to the NRA’s best interests.”]; id. ¶ 646 [“Despite a conflict of interest and his lack of authority to do so, LaPierre unilaterally determined to place the NRA into bankruptcy to evade a regulatory action in which he was named as a defendant . . . cost[ing] the NRA tens of millions of dollars”]). Conflating the Individual Defendants with the NRA writ large for purposes of dissolution is inappropriate here for the reasons discussed supra. It also ignores the allegations that the wrongdoers in control of the NRA do not necessarily speak for other NRA members, some of whom have tried to instigate reform within the organization but have been met with resistance from entrenched leadership (see, e.g., id. ¶ 491). (emphasis mine)

The 16th cause of action involved the prudent management of institutional funds. This cause of action was dismissed by Judge Cohen as it didn’t properly distinguish between “program-related funds” and “institutional funds”.

The 18th cause of action was specifically against LaPierre, Frazer, Phillips, and Powell. It accused them of common law “unjust enrichment” and sought to recover monies paid to them that were “excessive, unreasonable, and/or unauthorized.” Judge Cohen based his dismissal of this cause of action as it ran afoul of earlier NY Court of Appeals rulings about unjust enrichment. In other words, this was only dismissed due to a technicality.

While the NRA will not be dissolved, this is not to say that the NRA, Wayne LaPierre, and the others are in the clear. The third and fourth causes of action against LaPierre and John Frazer allege breach of fiduciary duty. This was allowed to proceed onwards. Likewise, Judge Cohen found that the allegations contained in the seventh and eighth causes of action which accuse both LaPierre and Frazer of failing to properly administer charitable assets were sufficient to proceed.

The 11th and 14th causes of action were against LaPierre and the NRA respectively. These accuse LaPierre and the NRA of engaging in “unlawful related party transactions.” Judge Cohen found that both claims were sustained.

The 15th cause of action which was allowed to go forward involved violation of the New York whistleblower protections. Judge Cohen said there was sufficient evidence to show that the NRA, Powell, and LaPierre retaliated against whistleblowers and that Frazer was incompetent in carrying out the whistleblower policy. The retaliation against Oliver North as well as the freezing out of directors such as Tim Knight and Esther Schneider from committee assignments is coming back to haunt the NRA.

The final cause of action sustained against the moves by LaPierre and Frazer to have them dismissed is the 17th. That cause of action stated that the NRA and Frazer “made materially false and misleading statements and omissions in the annual reports the organization filed with the Attorney General.” Judge Cohen said that the NRA didn’t contest the falsity of the filings for now and the allegations against Frazer were specific enough that they should continue.

It should be noted that neither Josh Powell nor Woody Phillips sought to have the specific causes of action against them dismissed.

If after all the court proceedings are finished, it could result in the all four of the individual defendants being being barred from the NRA or other New York non-profits and forced repayment of their ill-gotten gains. Moreover, I can foresee a forced restructuring of the NRA in such a way as to prevent the abuses we have seen and are now seeing.

The bottom line is while the NRA has escaped dissolution this is not the end of things.

You can read the full 42-page opinion by Judge Cohen below. It makes for interesting reading.

451625 2020 People of the State of v People of the State of DECISION ORDER on 611 by jpr9954 on Scribd

7 thoughts on “NRA Will Not Be Dissolved”

  1. Well, that’s better than I expected.

    If Wayne had only retired several years ago I’m assuming none of this would be happening.

    I only hope that they can clawback some of that Brewer money.

  2. So… does this mean we likely won’t have to pay LaPierre’s retirement/golden parachute deal when he’s kicked out for cause? I was very pleased to see that dissolution is off the table. I want the NRA back.

  3. Nice bolded statement in the opinion. Makes me wonder what could have been done if more of those board members who resigned would have stuck it out and ganged together to try to force the issue. I know there’s the whole liability question, but I don’t see how an individual board member, or a group of board members, who work together and document the abuses and their efforts to stop them could be held liable for continuing abuses. Now we just have the occasional individual board member versus a prosecutor with a grudge against the organization who clearly doesn’t have the best interests of the general membership at heart.

  4. Good. The NRA will not be healed until the cancer called WLP is cut out, poisoned or burned with radiation

  5. That is some good reading. Just finished it. My reaction to the opening summary of the parties – NRA – awesome mission and organization; WLP, etc. – holy f*ck!! corrupt bastards – if you use the rule that 50% of what you’re hearing is likely true, there’s enough in there to send those guys up the river. Wayne doesn’t get any sympathy by coming across so out of touch about commercial airlines. Spending $15-30k to fly his neice’s husband’s cat’s birth mother to Nebraska because “yknow, flights are hard to get n’ stuff and we needed a babysitter”. *eye roll* These were not just crooks, but the worst of entitled corporate thieves.

    I thought the bankruptcy filing was a long shot attempt to avoid the NY charges directly, but maybe they knew it would not succeed but counted on such a judgement to get the estoppel. Y’know, thinking a few moves ahead. Well if so, that failed too. I’m a little surprised that count 17 or 18 – the one where NYAG was bringing a claim against the individuals on behalf of the NRA failed. I’m not sure I fully understood the reasoning there for dismissing before giving NYAG opportunity to demonstrate the fault/negligence. Also, I wouldn’t be surprised if some of these dismissed claims get tweaked and resubmitted – there are some technicalities that could be corrected, it seems, and refiled. But also pleased that dissolution is off the table. Chuffed, in fact. 1870, folks. Let’s keep our organization. We need a smaller board with strong governance, competent leadership, mission-focus. NRA is suffering directly from this, while also missing out on a huge surge in new gun ownership. Tragic, tragic, tragic.

  6. The question I have is how many (more) years is this all going to take to hash through before the NRA can rid themselves of these parasites and return to sound footing? It’s great that the NRA members can breathe a little easier. The core mission of the NRA is still an admirable one and the NRA members and staff that actually run the programs do yeoman’s work in organizing and coordinating events, training, outreach etc. That’s an important mission and I’m glad it will continue.

    The problem is as long as this is going on, ridiculous amounts of member’s money is going to continue to be p155ed away on legal fees and on continuing to line Wayne and Co’s pockets.

    The only money the NRA is getting from me until this is all over is (probably) my fees for renewing my instructor quals…and honestly, I’m not completely convinced to even do that. We’ll see what’s happening when they come due again.

    I’m definitely not donating anything to the Wayne LaPierre Legal Defense fund any time in the near future…not even through those “round up” programs. I’ve got better things to do with my pennies that give them to shyster lawyers in defense of shyster NRA leadership.

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