New York Judge Joel Cohen rejected a bid Thursday from the National Rifle Association (NRA) to move or dismiss a lawsuit brought by New York Attorney General Letitia James to dissolve the organization following investigations of “extensive fraud.”
The lawsuit, filed in August, alleges that several NRA executive officers “breached their fiduciary duties” and illegally withdrew funds from the organization for lavish personal use. James charged the group as a whole in addition to specific executive and board members for abusing their power and “[facilitating] the diversion of tens of millions of dollars from the NRA” including hunting trips, no-show contracts, golfing trips and other expenditures.
Less than a week before the court order, the NRA announced that the organization had filed for Chapter 11 bankruptcy and plans to reincorporate in the “gun-friendly” state of Texas. The NRA has operated in New York as a 501(c)(4) non-profit, charitable corporation since 1871. Cohen rejected the NRA’s claims that its bankruptcy filing would interfere with its legal proceedings.
Cohen denied the NRA’s motion for a temporary hold on the case until it settles a suit against one of its former advertising agencies. “I would not be proceeding unless I was confident, based on my own research, that there were reasonable grounds to do so,” he said in Thursday’s virtual hearing.
Although the NRA argued that the case should be moved from the Manhattan court to the federal court in Albany, New York, or be dismissed outright, Cohen ruled that the case should proceed in the New York state court. He noted that “[i]t would be inappropriate to find that the attorney couldn’t pursue her claims in state court just because one of the defendants wants to proceed in federal court.”
“Today’s order reaffirms what we’ve known all along: the NRA does not get to dictate if and where they will answer for their actions,” said James in a press release. “We thank the court for allowing our case to move forward and look forward to holding the NRA accountable.”