New York AG’s Motion to Dismiss

In the suit to dissolve the NRA, the NRA filed a counter-suit, claiming the NY AG’s suit was based on persecuting the NRA for political reasons. The NY AG has moved to dismiss, and the motion is blistering. A few selections:

“The NRA’s Counterclaims are the most recent in a series of attempts – all unsuccessful – to evade litigating the merits of the Attorney General’s claims in this Court.A few hours after the commencement of this Action, the NRA filed the Federal Countersuit,

which asserted claims that are identical to its Counterclaims here. Connell Ex. F, NYSCEF 272. The OAG moved to dismiss the Federal Countersuit on several dispositive grounds.8 That motion was fully briefed and submitted on January 4, 2021, but before the motion was decided, on June 4, 2021, the NRA withdrew its complaint in the Federal Countersuit. Connell Ex. G, NYSCEF 273.

The NRA also moved to transfer, dismiss, or stay this Action on the basis that federal court would be a more convenient forum to litigate the OAG’s (Office of Atty General) claims. See NYSCEF 70-99, 133-141. In January 2021, the NRA’s motions were denied by this Court. NYSCEF 211-215, 220.

The NRA also unsuccessfully applied to the Judicial Panel on Multidistrict Litigation (JPML) to transfer and consolidate four cases in the United States District Court for the Northern District of Texas. Connell Ex. H (JPML Order), NYSCEF 274. In February 2021, the JPML denied the NRA’s application. Id.

On January 15, 2021, the NRA filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Texas.9 Following an eleven-day trial, on May 11, 2021, the court concluded: “there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme.” Connell Ex. I at 2. The court found that “the primary purpose of the bankruptcy filing was to avoid potential dissolution” in this Action, id. at 26, which gave the court “great concern . . . because [the NRA’s] purpose is to avoid dissolution that is being sought as a remedy in a state regulatory action,” id. at 27. The Court further held that the NRA’s purpose “was to deprive the [OAG] of the remedy of dissolution, which is a distinct litigation advantage” and not a good faith basis for seeking bankruptcy protection. Id. at 29.10 The NRA did not appeal the court’s order dismissing the bankruptcy.” In other words, judge, the NRA has been floundering around, trying everything and losing time after time, anything but stand here in court and honestly defend and say we are wrong.

The Counterclaims are contradicted by factual admissions in the NRA’s Answer, seeNYSCEF 230, which acknowledge much of the misconduct that gave rise to the investigation and commencement of this Action, including that:

  • it funneled NRA executive travel and entertainment expenses through its former vendor, Ackerman McQueen, in violation of applicable accounting controls. Id. ¶ 5.
  • it entered into a poison pill employment agreement with Mr. LaPierre. ¶ 419.
  • its Executive Vice President and codefendant Wayne LaPierre had to reimburse the NRAfor excess benefits related to Mr. LaPierre’s private travel. ¶¶ 8, 145, 152, 159.
  • it has made numerous payments to vendors outside of the existing contracts (in violation of the NRA Bylaws)—including vendors whose owner allowed Mr. LaPierre to use hisyacht every summer for years. ¶ 166.
  • whistleblowers raised concerns about its codefendants Wilson Phillips (former NRACFO) and Joshua Powell (former Chief of Staff to Mr. LaPierre). ¶ 220.
  • Mr. Phillips also took a trip on a yacht owned by the same person whose yacht Mr. LaPierre used, and that Mr. Phillips’s trip had to be submitted for purported retroactiveratification by the NRA’s Audit Committee. ¶¶ 221, 228.
  • the Audit Committee did not review Mr. Phillips’ extremely lucrative no-showconsulting agreement before his retirement. ¶ 233.

Mr. Powell’s employment was terminated for reasons including the misappropriation ofNRA funds, and that Mr. Powell negotiated an agreement with a vendor that hademployed his wife. ¶¶ 247, 257, 259.

a senior advisor to Mr. LaPierre caused the NRA to pay approximately $18,000 for herson’s wedding expenses. ¶ 288.”

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