NRA Update: Court Take Dissolution Off Table, But NY AG Case Can Still Proceed

As reported in numerous media outlets, the New York trial court hearing New York Attorney General Letitia James’ lawsuit against the National Rifle Association and four of its current and former officers has dismissed the AG’s attempt to dissolve the NRA. At the same time, the court sustained most of the remaining claims based on alleged violations under New York state law. Here is the court’s summary of its decision (footnote omitted):

    The Attorney General’s claims to dissolve the NRA are dismissed. Her allegations concern primarily private harm to the NRA and its members and donors, which if proven can be addressed by the targeted, less intrusive relief she seeks through other claims in her Complaint. The Complaint does not allege that any financial misconduct benefited the NRA, or that the NRA exists primarily to carry out such activity, or that the NRA is incapable of continuing its legitimate activities on behalf of its millions of members. In short, the Complaint does not allege the type of public harm that is the legal linchpin for imposing the “corporate death penalty.” Moreover, dissolving the NRA could impinge, at least indirectly, on the free speech and assembly rights of its millions of members. While that alone would not preclude statutory dissolution if circumstances otherwise clearly warranted it, the Court believes it is a relevant factor that counsels against State-imposed dissolution, which should be the last option, not the first.

    The Attorney General’s remaining claims against the NRA and the Individual Defendants for violations of the Not-For-Profit Corporations Law (“N-PCL”), the Estates Powers and Trusts Law (“EPTL”), and the Executive Law are sustained. Two other claims – common law unjust enrichment and violation of the Prudent Management of Institutional Funds Act, which seek essentially the same financial relief as other claims – are dismissed on statutory grounds.

Lloyd Mayer