Law360 Reports on Legal Win for NRA
March 29, 2024 – Law360 reported today on a legal win for the NRA in its lawsuit against the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) over the “pistol brace rule.”
The NRA filed suit in the Northern District of Texas on July 3, 2023, against the ATF, the U.S. Department of Justice, and Steven M. Dettelbach, in his official capacity as director of ATF, seeking to enjoin the ATF’s unconstitutional rule, which would have reversed its long-standing position that pistol braces do not transform pistols into rifles subject to onerous registration and taxation requirements under the National Firearms Act.
As reported, “The court found that the final rule violates the Administrative Procedure Act, which governs how federal agencies develop and issue regulations, and that the NRA had a "substantial likelihood" of succeeding on the merits. According to the opinion, the gun rights group also demonstrated that it had Article III associational standing to bring the action on behalf of its members.”
According to Law360, the NRA successfully argued its members face irreparable harm from the new rule, which subjects law-abiding gun owners to penalties, fines, and potential prison sentences for the use of a brace.
"The NRA has emerged as a leading voice in opposition to this unlawful attempt to limit Second Amendment freedom," said NRA counsel William A. Brewer III in a statement. "When it was determined NRA members could not benefit from other injunctions, the association moved to the tip of the spear in the advocacy and prevailed in obtaining sweeping relief for its members."
Joining Brewer in representing the NRA are firm partners Noah Peters and Matthew H. Davis.
Read more here.
Brewer Firm Scores Legal Victory for NRA in “Pistol Brace” Lawsuit
March 29, 2024 – The National Rifle Association of America (“NRA”) announced a major legal victory today, as a Texas court enjoined the “pistol brace rule” from taking effect against its members. The legal win is the most expansive ruling of its kind to date – protecting millions of NRA members across the nation.
The NRA filed suit in the Northern District of Texas on July 3, 2023, against the ATF, the U.S. Department of Justice, and Steven M. Dettelbach, in his official capacity as director of ATF (“Defendants”), seeking to enjoin the ATF’s unconstitutional rule, which would have reversed its long-standing position that pistol braces do not transform pistols into rifles subject to onerous registration and taxation requirements under the National Firearms Act.
Today, U.S. District Judge Sam A. Lindsay agreed with the NRA that it has “associational standing” to pursue this case because it is a traditional membership organization whose members rely on the NRA to protect their gun rights. In other words, the NRA is the voice of its members. Further, Judge Lindsay applied the Fifth Circuit’s earlier holding in Mock v. Garland that the ATF failed to go through an appropriate notice-and-comment period before issuing its “pistol brace rule,” making major revisions to the rule without acknowledging the hundreds of thousands of negative comments from the NRA and its members across the nation, thus rendering it likely unlawful.
“The NRA has emerged as a leading voice in opposition to this unlawful attempt to limit Second Amendment freedom,” says NRA counsel William A. Brewer III. “When it was determined NRA members could not benefit from other injunctions, the Association moved to the tip of the spear in the advocacy and prevailed in obtaining sweeping relief for its members.”
Joining Brewer in representing the NRA are firm partners Noah Peters and Matthew H. Davis.
New Republic Reports that NRA Appears to “Notch Another Victory” at Supreme Court
March 19, 2024 –New Republic Staff Writer Matt Ford writes that Supreme Court justices appear ready to side with the NRA in its First Amendment case against former New York State Department of Financial Services Superintendent Maria Vullo.
He writes in the article following the Supreme Court arguments in the matter that, "By the end of the arguments, it was clear that whatever uncertain winds were swirling at the outset had shifted decidedly in the NRA’s favor.”
Ford writes that it is “hardly surprising” that the NRA would interpret Vullo’s actions as “unconstitutional threats,” noting that he previously wrote describing former New York Governor Andrew Cuomo’s campaign against the NRA as being blunt and heavy-handed, and Cuomo’s messaging about the NRA as “particularly venomous.” Ford predicted that the former governor’s “overheated rhetoric and ham-fisted tactics will backfire when the court hands down a ruling by the end of June.”
The Brewer firm has represented the NRA on this matter since its inception, advocating alongside First Amendment scholar Eugene Volokh and the ACLU.
The New York Times: Justices Seem Likely to Side with NRA in First Amendment Dispute
March 18, 2024 – The New York Times reports that a "majority of the Supreme Court appeared on Monday to embrace arguments by the National Rifle Association that a New York State official violated the First Amendment" when she encouraged banks and insurance agencies to cut ties with the gun rights organization in 2018.
The Supreme Court agreed to hear the case, NRA v. Maria T. Vullo, in November 2023 after the Second Circuit dismissed the NRA's claims against Vullo, the former head of the New York State Department of Financial Services.
“It was a campaign by the state’s highest political officials to use their power to coerce a boycott of a political advocacy organization because they disagreed with its advocacy,” said David D. Cole, the national legal director for the American Civil Liberties Union (ACLU), who argued on behalf of the NRA. He added that the officials’ actions had cost the group “millions of dollars.”
The Times reports that Solicitor General Elizabeth B. Prelogar described some of the NRA's claims as plausible in a friend-of-the-court brief, specifically that Vullo may have crossed a constitutional line "by coercing regulated entities to terminate their business relationships" with the NRA.
The Brewer firm has represented the NRA on this matter since its inception, advocating alongside First Amendment scholar Eugene Volokh and the ACLU.
FOX News Reports on NRA’s Argument Before Supreme Court
March 18, 2024 – FOX News reports today on arguments before the U.S. Supreme Court in a leading First Amendment case – NRA v. Vullo.
As reported, “Before the high court is the case National Rifle Association of America v. Vullo, which questions whether a government regulator threatens regulated entities with adverse regulatory actions if they do business with a controversial speaker, allegedly because of the government's own hostility to the speaker's viewpoint, violates the First Amendment.” Oral arguments are set for March 18.
FOX reports, “Dozens of political leaders, lawmakers, scholars and organizations have filed or joined amicus briefs in support of the NRA’s position, including the American Civil Liberties Union (ACLU)…”
"Public officials cannot be allowed to abuse their regulatory powers to blacklist an organization just because they oppose its political views. If New York is allowed to do this to the NRA, it will provide a playbook for other state officials to abuse their authority to target groups they don’t like," said ACLU Legal Director David Cole.
"This case is important to the NRA and all advocacy organizations who rely upon the protections of the First Amendment," says NRA counsel and Brewer Partner William A. Brewer III. "Many groups will benefit when the Court reminds government officials that they cannot use intimidation tactics, backdoor censorship, or regulatory blacklisting to silence those with whom they disagree."
New York Sun Reports on Supreme Court Argument
March 14, 2024 – The New York Sun reports on an upcoming Supreme Court argument in the NRA v. Vullo matter. According to the Sun, an “epic First Amendment clash” surrounds the legal case – filed in 2018 by the NRA against former New York state financial regulator Maria T. Vullo.
According to the article, “The NRA – noting the immense power of New York financial regulators to oversee licensing, impose fines, and launch investigations – contends that the superintendent of the state’s Department of Financial Services, Maria Vullo – under the direction of Governor Cuomo – abused that power by encouraging insurers and banks to blacklist the NRA because of their distaste with the group’s Second Amendment advocacy.”
“If the NRA prevails, it will be positioned to pursue damages against Governor Cuomo, Maria Vullo, NYAG Letitia James, and the State of New York. The message will be loud and clear: the First Amendment belongs to the people, and public officials cannot wield government power to censor, suppress, or bankrupt their political enemies,” NRA’s counsel, William A. Brewer III, tells the Sun.
The case is important to any advocacy organizations that rely on First Amendment protections, he added.
See the report here: The Sun
New York Sun Publishes Editorial in Support of NRA
March 5, 2024 – The New York Sun published an editorial today in support of Brewer client the NRA. The editorial, “Good News for the NRA – and New York,” commented on the “dissolution lawsuit” filed by the New York Attorney General against the NRA. A jury trial recently concluded in the matter.
The Sun wrote, “We wouldn’t want the week to go by without a word of congratulations to the National Rifle Association, one of America’s most venerable and distinguished civil rights organizations. The worst of the legal onslaught launched by Governor Andrew Cuomo and Attorney General Letitia James has passed. Despite their best efforts to close the doors of the NRA, a Manhattan jury’s verdict leaves the organization intact.”
The publication continued, “Someday, no doubt, the historians are going to mark what happened in this case as a politically motivated prosecution designed to dismantle a non-profit organization whose views cut against the liberal orthodoxy prevailing in the Empire State. Why else would General James emphasize the NRA’s role as “the largest and most influential pro-gun organization in the nation” when she filed her suit “seeking to dissolve” the group?”
NRA Responds to New York Trial Verdict; Decision Validates NRA’s Position Regarding Wrongdoing by Certain Vendors and Insiders
February 23, 2024 – A jury verdict in a high-profile New York trial confirms what the National Rifle Association of America (NRA) contended all along – that it was victimized by certain former vendors and “insiders” who abused the trust placed in them by the Association. The jury found no cause to remove NRA General Counsel and Secretary John Frazer, the remaining NRA employee who is an individual defendant in the action.
NRA officials set a confident tone today following the verdict in the New York Attorney General v. NRA lawsuit. In August, 2020, the NYAG filed a “dissolution lawsuit” against the NRA, along with claims against four individual defendants: former EVP Wayne LaPierre; Frazer; former CFO Wilson Phillips; and former Chief of Staff Joshua Powell.
The NYAG originally sought to put the NRA out of business. She had claimed the actions in question led “to the loss of more than $64 million in just three years.” But the allegations by the NYAG that survived to the jury-verdict stage were starkly diminished relative to their complaint: as jury deliberations approached, the government was forced to drop half of its whistleblower allegations for lack of evidence, along with a number of conflict-of-interest claims.
During a 24-day jury trial, the NRA established the NYAG cannot prove self-dealing or bad faith by the NRA Board of Directors. The NRA disputed key allegations in the NYAG’s complaint – namely, that any governance issues at the NRA are “persistent.” As importantly, the NRA established that it adopted new policies and accounting controls, displaced vendors and “insiders” who abused the Association, and accepted reparations for costs determined to be excess benefits. Most of these corrective measures – part of an internal investigation ignited by the NRA Board – were adopted before the NYAG filed her lawsuit.
The NRA’s commitment to good governance was on full display during the trial proceedings.
“We appreciate the service of the jury and the opportunity to present evidence about the positive direction of the NRA today,” says NRA President Charles Cotton. “NRA members should be heartened by the NRA’s commitment to best practices, and we will continue to amplify our compliance record in the pivotal next phase of these proceedings. To the extent there were control violations, they were acted upon immediately by the NRA Board beginning in summer 2018.”
Of particular importance, the six-person jury found that of 10 related-party transactions of which the NRA was accused, the NRA Audit Committee was found to have properly reviewed and ratified 8 of them. However, the six-person jury found that many of the business arrangements in which the NRA entered were appropriate and did not qualify as improper related party transactions. However, the six-person jury rendered a verdict that found the NRA failed to properly administer the organization and its assets, and that it violated whistleblower protections of New York Nonprofit Law.
With respect to other individual defendants, the jury found Mr. LaPierre and Mr. Phillips violated their statutory obligations to discharge the duties of their position in good faith and with care. The jury found the monetary harm suffered by the NRA for each individual was $5.4 million and $2 million, respectively. (Defendant Powell reached a settlement with the NYAG prior to the start of the jury proceedings.)
The jury decision paves the way for the second phase of the proceedings – a bench trial before Justice Joel M. Cohen where the judge is expected to rule on any final remedies against defendants.
In the final analysis, individual defendants could face financial awards payable to the NRA. No money damages will be awarded against the Association.
The NRA’s case focused on its compliance efforts and the organization’s commitment to good governance following summer 2018 whistleblower complaints and the substantial evidence that it was the victim of fraud by a number of its vendors. When the NRA Board was alerted to these facts, it led an investigation into spending allegations and determined that certain individuals participated in transactions that ran afoul of NRA policies and procedures. Trial testimony confirmed the NRA Board was unaware of the arrangements in question.
In furtherance of its governance reforms, the NRA terminated a string of vendors, including Ackerman McQueen/Mercury Group, Associated Television, International, Under Wild Skies, and a travel consultancy. It cancelled consulting arrangements with certain NRA board members, adopted a new whistleblower policy in 2020, and recently hired a new compliance manager.
“A parade of NRA witnesses and independent experts established that the NRA was the victim of actions that were pursued in secrecy and not in the interests of the Association – by former vendors and fiduciaries,” says NRA counsel William A. Brewer III. “In any event, the NYAG’s case focused on the past and the NRA lives in the present. It was the NRA that ultimately established the record being pursued by the NYAG. Our client looks forward to phase two of these proceedings – emboldened by its record of good governance.”
Although it was not a matter before the jury, the NRA effectively demonstrated that the NYAG’s lawsuit was motivated by political animus. As a candidate for NYAG in summer 2018, Letitia James called the NRA a “terrorist organization” and “criminal enterprise.” She vowed to pursue the NRA if elected, and quickly did so upon taking office in 2019.
Other New York Actions: Defending Free Speech
Against the backdrop of the NYAG trial, the NRA is preparing for another case involving New York government officials. On March 18, 2024, the U.S. Supreme Court will hear arguments in the NRA’s First Amendment case against former financial regulator Maria T. Vullo.
In a May 2018 lawsuit, the NRA alleged that Vullo, at the behest of former New York Governor Andrew Cuomo, took aim at the NRA and conspired to use the regulatory power of the New York Department of Financial Services (DFS) to “financially blacklist” the NRA – coercing banks and insurers to cut ties with the Association to suppress its pro-Second Amendment speech. The NRA argues that Vullo’s actions as DFS superintendent were meant to silence the NRA – using “guidance letters,” backroom threats, and other measures to cause financial institutions to “drop” the Association.
The NRA's First Amendment claims withstood multiple motions to dismiss. But in 2022, after Vullo appealed the trial court’s ruling, the Second Circuit struck down the NRA’s claims.
On February 7, 2023, the NRA petitioned the U.S. Supreme Court, seeking review of the Second Circuit decision. On November 3, 2023, the Court granted review on the following question: Does the First Amendment allow a government regulator to threaten regulated entities with adverse regulatory actions if they do business with a controversial speaker, as a consequence of (a) the government’s own hostility to the speaker’s viewpoint or (b) a perceived “general backlash” against the speaker’s advocacy?
Since that time, more than 190 individuals and organizations have filed 22 amicus briefs in support of the NRA’s legal position. If successful, the NRA ultimately aims to prove Vullo, Cuomo and others conspired with James to penalize the NRA for its protected speech. Such developments could help the Association resurrect First Amendment claims against James, as well as unseal materials from an earlier discovery phase of the case.
“The NRA is eager to break the seal on facts surrounding an unprecedented weaponization of power against the NRA and its speech,” says Brewer. “There is little question former and current public officials were conspiring with Everytown and others to financially damage and politically suppress the NRA. Their actions harmed democracy and the rule of law – and letting relevant facts and documents remain secret does, too.”