The
unanimous decision by a five-judge panel of the Appellate
Division in Manhattan came 1-1/2 weeks before a scheduled Jan. 8
trial, where James is seeking remedies including the removal of
NRA Chief Executive Wayne LaPierre.
James, a Democrat, sued the NRA in August 2020 saying it
diverted millions of dollars to fund luxuries for officials
including LaPierre.
She also said NRA officials failed to obtain board approval for
conflicts of interests and insider transactions, and retaliated
against whistleblowers who suspected financial misconduct.
In seeking a dismissal, the NRA accused James of violating the
First Amendment for trying to silence its speech because she
disliked what it stood for.
It also accused her of selective enforcement, including through
her unsuccessful effort to dissolve the group.
But the appeals court said James had probable cause to
investigate and sue the NRA, citing her authority to enforce
state laws governing nonprofits, and the "ample evidence of
malfeasance" she claimed to uncover.
It also rejected the selective enforcement claim, saying other
nonprofits where dissolution had been sought agreed to overhaul
their leaderships, while the NRA had not.
Neither lawyers for the NRA nor James' office had immediate
comments.
Thursday's decision upheld a June 2022 ruling by Justice Joel
Cohen of the New York state court in Manhattan, who would
oversee the trial.
Cohen had in March 2022 blocked James' effort to dissolve the
NRA, finding a lack of evidence that the group deserved the
"corporate death penalty."
At trial, jurors may assess how much four current and former NRA
officials including LaPierre should repay the group, and
recommend whether LaPierre and NRA Secretary John Frazer should
be removed. Cohen would later consider the removal requests.
Jury selection begins on Jan. 2. The trial may last six weeks.
The case is New York v. The National Rifle Association of
America Inc et al, New York State Supreme Court, Appellate
Division, 1st Department, No. 1026-28.
(Reporting by Jonathan Stempel in New York; Editing by Daniel
Wallis)
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