In what was the suit to dissolve NRA, NRA filed some counterclaims against NY, arguing that it should receive damages because the Attorney General was suing out of spite, and was discriminating (filing against it while not filing against other nonprofits). We blogged these claims earlier, and said they were worthless, and that they would just be “one more in a long chain of legal disasters for NRA.”
The judge just ruled, dismissing the counterclaims with prejudice. Yes, one more legal disaster.
“So, while the NRA’s own internal investigation uncovered evidence of impropriety, it argues that outside investigation by the Attorney General (exercising her clear statutory authority with respect to not-for-profit corporations) somehow violated its constitutional rights. Endorsing that kind of theory would severely frustrate law enforcement objectives (Wayte, 470 US at 607), and is not the basis for a valid constitutional claim.”
“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” (In re Natl. Rifle Assn. of Am., 628 BR 262, 285 [Bankr ND Tex 2021]). 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” (id. at 283-284).”