NY & DC AGs v. NRA
ABOUT THE CASE
As a candidate for New York Attorney General in 2018, Letitia James (who, at the time, was a New York Public Advocate) pledged to investigate the NRA, which she referred to as an “organ of deadly propaganda masquerading as a charity for public good.”
In an amazing bit of candor, James admitted that, because the "NRA has an office here in New York State," she would "investigate to see whether or not they have in fact complied with the not-for-profit law in the state of New York.” (See New York Daily News, July 12, 2018.)
In the months that followed, James made it clear that her motivation for the promised investigation was political. In an article, dated September 6, 2018, then candidate James stated that “…we need to again take on the NRA, which holds itself out as a charitable organization. But, in fact, they are not. They are nothing more than a criminal enterprise. We are waiting to take on all of the banks that finance them, their investors.” Later, in an article published by Ebony, candidate James referred to the NRA as a “terrorist organization.”
Therefore, it was no surprise when, after taking office, Attorney General James announced the much-promised investigation into the NRA, as reported in an article in The New York Daily News, dated April 27, 2019.
"The NRA will cooperate with any appropriate inquiry into its finances," says William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to the NRA. "The NRA is prepared for this and has full confidence in its accounting practices and commitment to good governance."
Since the launch of the NYAG’s investigation, the NRA has faced an adversary masquerading as an independent regulator. However, on October 1, 2019, the Attorney General’s office threw all of that pretense aside when it sued Ackerman McQueen, the NRA’s former multipurpose agent, seeking to enforce a subpoena issued in connection with the investigation into the NRA.
At issue: whether the NYAG may contrive a dispute over the production of documents – none of which are being withheld – in order to obtain a court ruling enabling her office to proceed without notice to the NRA by its own agents. In sum, the Attorney General wants a court to overrule the NRA’s contention that it has the right to review potentially privileged information in Ackerman McQueen documents before such documents are turned over to the Attorney General.
As noted in an article from The Hill, dated October 1, 2019, the NRA believes the NYAG’s pursuit violates the NRA’s legal rights.
On October 31, 2019, a hearing on these matters was conducted in New York County State Supreme Court. We noted then that this is not a dispute about whether Attorney General James can access NRA-related documents. It’s a dispute about whether she can do so secretly, in a manner designed to circumvent the NRA’s clear legal rights — including the right to protect our members’ personal information from a political witch hunt.
“The relief sought by the Attorney General is an unprecedented, alarming expansion of the government’s power,” says Brewer. “The Attorney General seeks the ability to upend legally formed, appropriate relationships between fiduciaries without any demonstration of need or an entitlement to do so. In practical terms, the Attorney General – in her zeal to attack the NRA – seeks to conduct a secret investigation in a situation never intended by the legislature or countenanced by any court. The NRA must protect its privileges and its members’ confidential information. We are confident in our legal position, and anxiously await the ruling from the court.”
On November 14, 2019, the NRA got a boost from NYU Law School Professor Arthur R. Miller. The famed legal scholar submitted an affidavit
that endorses the position of the NRA, writing, “…a secrecy order like the one sought by the OAG [Office of the Attorney General of New York] would depart radically from the statutory scheme of the CPLR, and would set a dangerous precedent diminishing the procedural and substantive rights of others who may come into disfavor with New York State authorities.” News of Professor Miller’s position captured front-page headlines in The New York Law Journal.
“Without any indication that a shred of evidence is unavailable to her, the Attorney General seeks an order commanding a witness to produce potentially privileged documents in secret, in order to prevent the owner of the privilege from protecting it,” says Brewer. “As Professor Miller notes, the type of ‘secrecy order’ the Attorney General requests is not only unprecedented, but dangerous.”
Brewer added, “Secret, sweeping subpoenas targeting the Attorney General’s political enemies are the hallmark of a police state, not a free society. The NRA stands against such abuses. It’s no surprise that one of the preeminent scholars of American law stands with us.”
On February 24, 2020, a judge ruled that Ackerman McQueen has no contractual obligation to allow the NRA to conduct a privilege review prior to document production. However, the ruling does allow for in camera review of documents prepared by counsel in anticipation of litigation.
“We are pleased to see the court agree with the NRA on a critical issue: there should be protection via in camera review of certain privileged materials,” says Brewer. “That said, we believe the procedural protections afforded to the NRA should go further – and we are exploring our options in response to a perplexing opinion.”
Brewer added, “Unfortunately, the court ignores, with no evidentiary support, the true nature of the relationship between the NRA and Ackerman McQueen, and misapprehends the full protections that should be afforded to the NRA under the law. The world knows that Ackerman was not only an advertising and PR firm to the Association. The agency was involved in a broad range of legislative, legal and business issues, and the Association believes all privileged and confidential information to which Ackerman was exposed should be protected. The NRA will continue to seek protection for that information.
On May 15, 2020, the NRA filed a motion in the Supreme Court of the State of New York, County of New York, that argues that the court failed to appreciate the confidential and attorney-client privileged nature of material being sought by the NYAG. The NRA seeks to reargue the court ruling. The NRA is joined by Professor Miller in its efforts to overturn the court’s decision.
In an affidavit, Professor Miller recognizes the NRA’s position that Ackerman “served as one of its closest, most trusted collaborators for more than thirty years on matters of strategic importance, entered into contracts on its behalf, represented it in public fora and business transactions, and produced public communications that needed to be collaborated to reflect legal considerations, such as donor-privacy, intellectual property, and Second Amendment matters.” He adds, “The NRA should be given the opportunity to review the documents at issue and assemble its privilege log.”
The New York and District of Columbia Attorneys General File Suit;
The NRA Files Suit Against NYAG James
On August 6, 2020, the NYAG filed a lawsuit seeking to dissolve the NRA.
“This was a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend," said NRA President Carolyn Meadows. "You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle. It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda. This has been a power grab by a political opportunist – a desperate move that is part of a rank political vendetta. Our members won’t be intimidated or bullied in their defense of political and constitutional freedom.”
William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to the NRA, stated, “We will aggressively defend this organization and its members. The investigation reveals the NYAG has aligned herself with disgraced vendors and former partners who would support a contrived narrative for personal gain. The truth is, the transactions in question have been reviewed, vetted and approved – and every dollar spent by the NRA has been in furtherance of its mission to defend constitutional freedom. End of story.”
This same day, on August 6, 2020, the NRA filed a lawsuit against Attorney General James – confronting her partisan investigation. Filed in the United States District Court for the Northern District of New York, the lawsuit notes that, under the guise of protecting New Yorkers and enforcing state nonprofit law, the NYAG has weaponized its regulatory and legal powers to harm a political adversary.
Attorney General James famously vowed to "target the NRA" and "investigate the legitimacy of the NRA as a charitable organization" while on the campaign trail in July 2018 – before spending even one day in office and without any evidence of wrongdoing.
“As evidenced by the lawsuit filed by the NRA today against the NYAG, we not only will not shrink from this fight – we will confront it and prevail,” said Meadows.
In addition to the legal filings in New York, on August 6, 2020, the Washington D.C. Attorney General (“DCAG”) filed a complaint against the NRA and NRA Foundation in D.C. Superior Court. The DCAG asked the Court to impose a "constructive trust over the Foundation’s funds improperly diverted to the NRA, as well as [seek] changes to the Foundation’s policies to ensure future independence from the NRA."
NRA Files Motion to Dismiss DCAG Complaint
In response to the DCAG's complaint, on September 22, 2020, the NRA filed a Motion to Dismiss. It states, in part, that the DCAG "failed to allege the Foundation exceeded or abused the authority conferred upon it by law. In addition, the allegations in the Complaint do not plausibly support the conclusion that the Foundation has acted contrary to its nonprofit purposes."
NRA Files Amended Complaint Against AG James
On October 9, 2020, the NRA filed an amended complaint against Attorney General James in the United States District Court for the Northern District of New York. The complaint alleges selective enforcement of New York Not-for-Profit Corporation Law against the NRA in Violation of the Fourteenth Amendment, among other claims.
“The NRA believes the New York Attorney General singled out the Association because of its public advocacy and support of the Second Amendment – and to disable a potent political adversary,” said Brewer. “Following her much-publicized vow to destroy the NRA if elected, the NYAG wasted no time in making good on her promise. The NRA believes Attorney General James weaponized the powers of her office to selectively target and pursue a political adversary. We bring this action to protect NRA members – and all who fearlessly advocate for the freedoms in which they believe.”
On October 20, 2020, the NRA filed a motion with the Judicial Panel on Multidistrict Litigation, to pursue the transfer of four (4) related actions pending in federal district courts to the Northern District of Texas. This followed the NRA’s motion to dismiss the NYAG action on October 19, 2020.
“The NRA is pursuing the consolidation of cases that involve overlapping issues, facts and witnesses in order to streamline discovery and facilitate disposition of these important actions,” said Brewer. “The NRA also seeks to dismiss or stay the NYAG’s politically-motivated lawsuit. The unambiguous truth is that the NYAG targeted a political adversary – just before a national election. Fortunately, we have a constitution that protects us all from the gross weaponization of government power.”
On November 3, 2020, the NRA filed a motion to transfer venue in the NYAG matter. The NRA seeks to transfer the case from New York County to Albany County based on the NRA's certificate of incorporation. In its motion, the NRA argues that the NYAG's choice of venue in New York County is political.
NYAG Moves to Dismiss NRA's Lawsuit; NRA and 16 Attorneys General Respond
On November 20, 2020, the NYAG filed a motion to dismiss the NRA's lawsuit against her.
On December 21, 2020, the NRA filed a memorandum of law in opposition to NYAG James' motion to dismiss. The NRA's filing states that it has "meritorious constitutional claims, the dismissal of which could radically alter how states regulate non-profits engaged in political speech.”
"In this filing, the NRA confronts the efforts of the New York Attorney General to avoid legal scrutiny for the obvious abuse of the powers of her office,” said Brewer. "The NRA believes James' open hostility toward the Association and its law-abiding members is unconscionable. Courts have repeatedly held that the underlying chilling effects of conduct like James’ require judicial scrutiny."
Joining the NRA in opposing Attorney General James is Arkansas Attorney General Leslie Rutledge, who filed an amicus brief in support of the NRA's case. Arkansas is joined in the amicus brief by Alaska, Georgia, Idaho, Mississippi, Oklahoma, Kansas, Kentucky, Louisiana, Missouri, Ohio, South Carolina, South Dakota, Texas, Utah, and West Virginia.
In their brief, the Attorneys General state that the "New York AG cannot be allowed to wield the power of her Office to discriminate against the NRA simply because she doesn't like its members' political views, advocacy, and defense of a fundamental constitutional right.... Her motion should be denied, and the NRA's suit should move forward."
Judge Dismisses Two Claims Against NRA in DCAG Case
On December 21, 2020, the Superior Court of the District of Columbia, Civil Division, issued a ruling that dismisses two claims asserted against the NRA by the DC Attorney General. (The lawsuit by the DC Attorney General was filed on the same day, August 6, 2020, that the NYAG filed its case against the NRA.) Judge Jose M. Lopez issued the opinion in response to the NRA’s motion to dismiss.
“We are encouraged by the court’s decision to significantly whittle away at the case filed by the DC Attorney General,” said Brewer. “Importantly, both counts asserted against the NRA were dismissed. We believe this lawsuit, filed in concert with the New York Attorney General, is another partisan attack – designed to harm a political adversary.”
DCAG Case Stayed
On February 1, 2021, Judge Jose M. Lopez of the Superior Court of the District of Columbia, Civil Division, issued an order concluding that the action filed by the DC Attorney General against the NRA and the NRA Foundation is stayed as a result of the NRA’s January 15, 2021, bankruptcy filing.
Judge Lopez found that the action could not proceed while the NRA is in the midst of its bankruptcy reorganization since the relief sought by the DC Attorney General would “place the interests of the District above those of NRA creditors.”
NRA Responds to NYAG Lawsuit, Countersues for NYAG Trying to Dissolve ‘Political Enemy’
In a legal filing, dated February 23, 2021, the NRA responded to the August 2020 lawsuit filed by NYAG James. The filing responds to the contrived narrative by the NYAG, and alleges that the case she filed is part of a crusade to silence a powerful political opponent and its commitment to Second Amendment advocacy.
As reported by Reuters, “ The National Rifle Association has filed a countersuit against New York Attorney General Letitia James, saying she lacks authority to invoke state laws governing nonprofits to dissolve ‘political entities’ such as itself.”
According to the filing, “James’s threatened, and actual, regulatory and civil reprisals are a blatant and malicious retaliation campaign against the NRA and its constituents based on her disagreement with the content of their speech. This wrongful conduct threatens to destroy the NRA and chill the speech of the NRA, its members, and other constituents, including like-minded groups and their members.”
The NRA will continue to confront the NYAG’s weaponization of power – to the benefit of the Association, its millions of members, and all who believe in constitutional freedom.
NRA Moves to Expedite State Court Action Against NYAG Letitia James
On June 4, 2021, the NRA announced that it is taking steps to expedite resolution of its Constitutional claims against New York Attorney General Letitia James. To accomplish that objective, the Association voluntarily withdrew its action against NYAG James that had been pending in federal court in Albany, New York, in favor of pursuing the same claims against James in New York State court in Manhattan.
This procedural step is significant and important because it will ensure that the NRA’s claims against NYAG James will be tried in the same court and by the same jury that will hear her lawsuit seeking to dissolve the NRA.
NYAG Letitia James Files An Amended and Supplemental Complaint
On August 16, 2021, the NYAG filed an amended complaint (see here) based, in part, on recent federal court proceedings in Dallas. As reported by Bloomberg, the NRA disputed the attorney general’s claims. “It is now more evident than ever that the NYAG’s action is a politically-motivated attack,” William A. Brewer III, counsel to the NRA, said in an email. “In 2018, without a shred of evidence to support her action, the NYAG called the NRA a ‘terrorist organization’ and a ‘criminal enterprise.’ Predictably, she now quotes selectively from a federal court ruling and suggests that it supports her claims against the NRA.”
As Bloomberg reported, Brewer also cited the opinion of the bankruptcy judge, who wrote that trial testimony “suggests that the NRA now understands the importance of compliance.” Outside of bankruptcy, “the NRA can pay its creditors, continue to fulfill its mission, continue to improve its governance and internal controls, contest dissolution in the NYAG Enforcement Action, and pursue the legal steps necessary to leave New York,” the judge wrote.
Motions to Intervene
On September 8, 2021, the New York State Supreme Court denied a motion to intervene in the NYAG's 2020 lawsuit against the NRA. Filed by two NRA lifetime members, Francis ("Frank") Tait and Mario Aguirre, the motion sought to intervene in order to derivatively assert defenses, cross-claims and counterclaims on behalf of the NRA. The proposed intervenors also opposed the NYAG’s effort to dissolve the NRA.
Following oral arguments, the Court ruled, among other things, that the proposed intervenors lacked standing to intervene and assert derivative claims on behalf of the NRA under the New York Not-for-Profit Law because they do not represent at least 5% of any class of NRA members.
The Court also held that the intervenors failed to allege that they made a demand on the NRA Board of Directors for the relief they sought upon intervention, but that they were denied by the Board, as is also required under New York law. The Court further stated there was no showing that a majority of the Board was complicit in any alleged wrongdoing. The Court also held that the proposed intervenors’ rights are adequately represented by the NRA and by the NYAG.
On the heels of the court's decision, on September 24, 2021, NRA Board Member Rocky Marshall filed yet another motion to intervene in the lawsuit against the NRA. Marshall is represented by the same Alabama law firm that filed the prior motion.
In the filing, Marshall said he opposed James' efforts to dissolve the NRA, but contended that the court should appoint a temporary receiver to run the organization.
“The court has previously rejected a similar application by these same attorneys just a few days ago,” says Brewer. “Now, with literally only days left of his appointment as a board member, Mr. Marshall appears to object to the NRA’s current, winning strategy: defend the political attacks of the NYAG and maintain a commitment to good governance.”
NRA Second Vice President Willes K. Lee added, “It is unfortunate that Mr. Marshall aligns himself with those who continually attempt to intervene in the handling of NRA’s matters by its elected leadership. The NRA is a well-managed, actively engaged membership organization. We will continue on our current course of action – in the interests of our five million members and their Second Amendment freedoms.”
NRA Prevails Over NYAG: Court Rules Association Cannot be Dissolved
On March 2, 2022, the NRA scored a major legal victory, as a New York court struck down attempts by the NYAG to dissolve the organization. Following a two-hour hearing on December 10, 2021, the Hon. Joel M. Cohen of the New York State Supreme Court issued an opinion vindicating the NRA’s position: the NYAG’s effort to shut down the Association ran afoul of common sense, New York law, and the First Amendment.
“This is a resounding win for the NRA, its 5 million members, and all who believe in this organization,” says NRA President Charles Cotton. “The message is loud and clear: the NRA is strong and secure in its mission to protect constitutional freedom.”
The NRA will defend against the surviving claims in the lawsuit – but the court's ruling declares that the NYAG cannot shut down the Association or seize its assets.
“We applaud the court’s recognition that dissolution is neither appropriate nor justified,” says Brewer. “We look forward to continuing the defense of the NRA – and proving that it acts in the best interests of its members and the Second Amendment freedoms in which they believe.”
Judge Dismisses Counterclaims Against James; NRA Appeals
On June 10, 2022, the Hon. Joel M. Cohen dismissed the NRA's counterclaims against James.
In the opinion, Judge Cohen recognized that the scope of the NRA’s counterclaims was narrowed as a result of his March 2022 dismissal of the NYAG’s dissolution claims. The NRA previously said that the dismissal vindicates the NRA’s position: The NYAG’s effort to shut down the Association ran afoul of common sense, New York law, and the First Amendment.
Commenting on the decision dismissing the counterclaims against the NYAG, Brewer said, “Naturally, we are disappointed in the opinion. However, we understand the court’s decision that certain counterclaims were rendered moot by the NRA’s recent victory against the NYAG – when the Court struck down her efforts to dissolve the Association. And, as the record reflects, the NRA is committed to good governance and is transparent about its efforts in that regard.”
On March 14, 2023, the NRA appealed the decision. In its appeal, filed in the Appellate Division, First Department, the NRA states that the "lower court’s opinion practically draws a roadmap for how officials can abuse state power to destroy the ability for non-profits to advocate for positions disfavored by the government. An official can run for office with the stated aim of taking adverse action to a silence a disfavored speaker."
The appeal continues, "Under the lower court’s decision, so long as the targeted entity has committed any technical infraction whatsoever, it would have no redress for the blatant violation of its First Amendment rights. This would mark a decisive and dangerous break with both federal and New York law."