The Other Big Lawsuit that Could Destroy the NRA :: 01/19/2022

Over the past several years, there has been much reporting and speculation over the lawsuit filed by New York Attorney General Leticia James calling for the dissolution of the National Rifle Association.

The New York suit is just one in a blizzard of lawsuits filed by or against the nation’s largest firearms organization. It has been perceived as the most significant, posing the greatest threat to the Association, but when all the cards are laid out, it may not be the most significant.

District of Columbia vs NRA Foundation Inc

Concurrent with the NYAG’s suit against NRA and four of its former and current officers, the Attorney General of Washington, DC filed suit against the NRA Foundation, a 501(c)(3) charitable foundation created by the NRA to raise money and fund various educational projects and programs.

The suit claims that the Foundation’s board of directors – which consists primarily of members of the NRA Board of Directors – has been too subservient to NRA leadership, allowing funds from the Foundation to be inappropriately diverted from qualified, charitable purposes, into the general coffers of the NRA and the NRA’s political activities. Unlike the NY suit, the DC suit does not call for the dissolution of the Foundation, but rather calls for the Foundation’s board to be revamped and supervised to ensure monies are used only for qualified purposes, and that improperly disbursed funds be recouped.

Reading the DC suit, it doesn’t seem to be nearly as outrageous or unreasonable as the New York suit, but there’s a really big catch in that call for funds to be recouped. The DC suit claims that something in excess of $400 million dollars has been diverted from the Foundation to the NRA in recent years. If the DC suit is successful, and the court agrees with the DC AG’s assessment as to how much money has been improperly diverted to the NRA, it is quite likely that the Foundation would be forced to sue the NRA to recoup those funds.

If that happens, a win for the Foundation would bankrupt the NRA. And we’re not talking about a bogus, “We’re financially sound, but want to move to Texas” sort of bankruptcy, but a full-blown dissolution – empty the bank accounts, sell the building, auction off the furniture and fixtures, bankruptcy.

Perhaps the Foundation would be able to take over the building and the museum, then, over time, re-create the NRA and NRA-ILA as new organizations under the Foundation’s umbrella, but there are a lot of complications that would come into play, and the whole mess would take years, if not decades, to resolve.

There’s no telling how this might end up, but the potential clearly exists for the NRA Foundation to be forced to sue the NRA out of existence.

Both the New York suit and the DC suit have been delayed, and they’re both likely to be delayed even further in the coming months. The New York suit was supposed to enter the Discovery phase beginning next month, with a trial expected by May, but the judge recently granted NY a 90-day delay in prepping for discovery, so instead of that happening in February, March, and April, it is now scheduled for April, May, and June. The trial isn’t likely to start until November or December, and if it’s that late, might be pushed back to next year.

That’s assuming it happens at all. Some legal analysts we’ve spoken to suggest that, if NRA’s attorney, Bill Brewer, sticks with his standard game plan, the trial will be delayed as long as possible, while Brewer collects huge payments, and then he’ll tell them that they must try to negotiate a settlement. Given Letitia James’ visceral hatred of the NRA, the terms of a settlement are too scary to even contemplate.

Meanwhile, the DC suit has been muddling forward, with NRA winning a minor victory in December when the judge, in that case, dismissed two counts that specifically named the NRA as a co-defendant in the suit. How that impacts the overall case remains to be seen, and the victory could be short-lived since DC is fighting that ruling and a new judge has since been assigned to the case. The original judge was a G.H.W. Bush appointee who seemed relatively reasonable, but the new judge is a Barack Obama appointee who came up through the “social justice” ranks and is much more likely to have a chip on her shoulder regarding the NRA.

This case is also facing delays in the discovery phase, with the latest argument being over the protection of “proprietary” information that might come out in discovery. It appears that NRA and Foundation attorneys might have screwed up and failed to get an agreement to shield and protect the identities and personal information of Foundation donors. DC has filed a motion to have the agreement certified, which they and the NRA attorneys worked out, without the inclusion of a last-minute “donor protection” footnote that NRA attorneys tacked on after the negotiations were closed. If that doesn’t get settled in NRA’s favor, there could be some upset donors soon.

At this moment, the DC suit looks like it’s running about two months ahead of the New York suit. All of that could easily change as the cases move forward, but it creates the potential for the NRA Foundation to be filing suit against the NRA, right before the NRA goes to trial in the NY case. At best, that would be pretty poor optics for the Association, and at worst, it could potentially pull the financial rug right out from under the mother organization, just before the trial.

It’s all a complicated mess that is difficult to unravel, but the potential for total disaster is abundantly clear, even to a layman such as myself. And, of course, the saddest part of the whole mess is that it could have been completely avoided, had it not been for the greed and arrogance of NRA’s “leaders,” and the blind obedience of its docile Board.

https://www.ammoland.com/2022/01/other-big-lawsuit-could-destroy-nra/#axzz7IT17GbAT