Brewer News Release - Chrysler Faces Conspiracy and Breach of Contract Claims by Texas Dealership Owner
Dallas, Texas…July 19, 2021 – Brewer, Attorneys & Counselors announced that its client Richard C. Poe II, a fourth generation retail automobile dealer from Texas, filed a federal lawsuit in Michigan against FCA US LLC, formerly known as Chrysler Group LLC (“Chrysler”), accusing the automotive company of joining a conspiracy to damage Poe and unlawfully profiting from doing so.
Poe is from El Paso, Texas, and owns an interest in the oldest Chrysler dealership in Texas through Poe Management, Inc. (“PMI”). Filed on July 19, 2021, in the U.S. District Court for the Eastern District of Michigan, the lawsuit alleges “a betrayal of that historic business relationship between the Poe family and Chrysler” in which Chrysler joined a conspiracy seeking to prevent Poe from controlling the two Chrysler automotive dealerships. Poe’s great grandfather A.B. Poe opened what is now the oldest Chrysler dealership in Texas in 1928.
PMI is the general partner of the two Limited Partnership plaintiffs that own the Poe family dealerships in El Paso: Dick Poe Motors, L.P., a Texas limited partnership that owns the Dick Poe Chrysler/Jeep dealership, and Dick Poe Dodge, L.P., a Texas limited partnership that owns the Dick Poe Dodge/Ram dealership.
The lawsuit alleges that Chrysler joined the conspiracy against Poe by disregarding his legal rights, acting to limit his access to information, allowing a change in management without following proper procedures, and benefitting from the underlying conspiracy. The suit seeks millions in damages.
“As the rightful owner of these longtime Chrysler automotive dealerships, Richard Poe II believes Chrysler’s betrayal cost him millions in damages,” says William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to Poe. “Our client believes Chrysler helped effect an improper change of control of the dealerships, so it could benefit from the sale of lucrative ‘reinsurance’ products that were previously underwritten by companies owned by Poe.”
The lawsuit alleges that Anthony E. Bock, a certified public accountant who worked for Poe’s father Dick Poe, abused his fiduciary relationship and joined a conspiracy with the intent to remove Poe from control over the dealerships in order to enrich the corporation. The lawsuit alleges that the others involved in the conspiracy were Karen G. Castro, the former office manager for Dick Poe, Paul O. Sergent, a lawyer who represented the Poes for several years; and Gery A. Reckelbus, a dealership manager.
According to the complaint, 10 days before his death in May 2015, Dick Poe caused an illegal share issuance from PMI that resulted in Richard Poe II becoming a minority shareholder. The lawsuit alleges that within days of Dick Poe’s death, Bock and Castro were named co-independent executors of Dick Poe’s estate in a will that was prepared by Sergent. Bock and Castro subsequently appointed themselves directors of PMI. They then moved to remove Richard Poe II from control over PMI and “unlawfully obtained” Chrysler’s approval of Reckelbus as the “dealer principal” for the dealerships in question.
The lawsuit asserts that Chrysler worked with the conspirators and aided them with their tortious acts by refusing to respond to correspondence from Richard Poe II or his attorneys, refusing to meet with Richard Poe II, and refusing to send notices to Richard Poe II as required by law and by contractual agreements, among other actions.
“Chrysler repeatedly failed and refused to communicate with Richard; failed, on multiple occasions, to respond to voice mails and written communications from Richard and his attorneys; and repeatedly obfuscated its internal decision process and reasons (if any) for denying Richard his rightful place as the successor of the historic, nearly 100-year-old family business,” the complaint alleges.
The lawsuit alleges seven causes of action: a breach of implied covenant of good faith and fair dealing, breach of contract, tortious interference with dealership sales and service agreements, tortious interference with prospective business relationships, fraudulent concealment and fraud by non-disclosure, conversion, and civil conspiracy.
The lawsuit states, “Chrysler chose not to communicate with Richard and answer his questions. Instead, Chrysler cut Richard out of the loop and began engaging in other tortious conduct with the Relevant Non-Party conspirators.” The lawsuit alleges that with the change of control effected by Chrysler, the conspirators stopped purchasing vehicle protection products that were underwritten by Richard Poe II. Instead, defendants funneled those sales to Chrysler.
“Our client aims to hold Chrysler accountable for its alleged role in this scheme, and to also shine a bright light on the company’s business dealings with dealership owners across the country,” Brewer says.
New York Law Journal: Judge's Ruling Allows NRA's First Amendment Claims to Proceed
On March 15, 2021, the New York Law Journal reported that a ruling by U.S. District Judge Thomas McAvoy of the Northern District of New York allows the NRA's First Amendment claims against New York state officials to move forward with discovery.
The lawsuit argues that New York state officials violated the NRA's First Amendment rights to express its political views.
“This important decision reaffirms that all public officials, even Gov. Cuomo and Maria Vullo, the former superintendent of the New York State Department of Financial Services, are accountable under the First Amendment,” said William Brewer, counsel to the NRA. “It will allow the NRA to pursue discovery and bring important evidence to light—to expose the communications and coordinated efforts of New York officials and others to harm the NRA and impinge its Constitutional freedoms. The message is clear: the NRA will stand up to those who unlawfully interfere with its Second Amendment advocacy.”
The article reports that Judge McAvoy denied qualified immunity to former New York Department of Financial Services (DFS) superintendent Maria Vullo, noting that "a question of material fact exists" as to whether Vullo "explicitly threatened" an insurer with DFS enforcement unless it broke ties with the NRA.
The Hill Reports on NRA Countersuit Against New York Attorney General Letitia James
On February 24, 2021, The Hill reported that firm client, the National Rifle Association of America (NRA), filed a counter lawsuit against New York Attorney General Letitia James accusing her of "weaponizing" her power against the group.
Filed in the New York Supreme Court, the legal filing states, “James’s threatened, and actual, regulatory and civil reprisals are a blatant and malicious retaliation campaign against the NRA and its constituents based on her disagreement with the content of their speech. This wrongful conduct threatens to destroy the NRA and chill the speech of the NRA, its members, and other constituents, including like-minded groups and their members.”
William Brewer, counsel to the NRA, told The Hill in a statement that the group believes "the NYAG’s actions are retaliatory and reflect ‘selective use’ of regulatory oversight against the Association in violation of constitutional rights."
"The NRA will continue to confront the NYAG’s weaponization of power – to the benefit of the Association, its millions of members, and all who believe in constitutional freedom," Brewer said.
The New York Times Reports the NRA Intends to Reincorporate in Texas
On January 15, 2021, The New York Times reported that the National Rifle Association of America (NRA) plans to reincorporate in Texas and has filed for bankruptcy protection.
According to the report, the NRA is seeking to "circumvent New York's legal jurisdiction" after New York Attorney General Letitia James filed a lawsuit in August 2020 seeking to dissolve the Association.
“Under this plan, the Association wisely seeks protection from New York officials who it believes have illegally weaponized their powers against the NRA and its members,” William A. Brewer III, the NRA’s lead outside attorney, told the Times.
The article notes that NRA CEO and EVP Wayne LaPierre says the plan "represents a pathway to opportunity, growth and progress."
“Obviously, an important part of this plan is ‘dumping New York,’” LaPierre added. “The NRA is pursuing reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and will join us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.”
Texas Governor Greg Abbott hailed the NRA news, tweeting: “Welcome to Texas – a state that safeguards the Second Amendment.”
Additional information about the NRA's plan to reincorporate in Texas can be found at www.nraforward.org.
Read more from The Times here.
Washington Post: Republican Attorneys General Back NRA in Fight Against New York Effort to Dissolve Gun Rights Group
On December 22, 2020, The Washington Post reported that 16 attorneys general filed an amicus brief in support of a lawsuit by the National Rifle Association of America (NRA) against New York Attorney General (NYAG) Letitia James.
“The New York Attorney General cannot be allowed to wield the power of her office to discriminate against the NRA simply because she does not like its members’ political views, advocacy or defense of a constitutional right,” the GOP attorneys general said in the brief, which was led by Arkansas Attorney General Leslie Rutledge.
In August, Brewer client, the NRA, filed a lawsuit that alleges that the NYAG weaponized her regulatory and legal powers to harm a political adversary. The lawsuit notes that James vowed to "target the NRA" and "investigate the legitimacy of the NRA as a charitable organization" while on the campaign trail in July 2018 – before taking office and without any evidence of compliance failures.
In November, NYAG James filed a motion to dismiss the lawsuit. On December 21, 2020, the NRA filed a memorandum of law in opposition to the motion to dismiss.
"In this filing, the NRA confronts the efforts of the New York Attorney General to avoid legal scrutiny for the obvious abuse of the powers of her office,” said William A. Brewer III, partner at Brewer, Attorneys & Counselors and counsel to the NRA. "The NRA believes James' open hostility toward the Association and its law-abiding members is unconscionable. Courts have repeatedly held that the underlying chilling effects of conduct like James’ require judicial scrutiny."
New York Law Journal: NRA Seeks to Move New York Attorney General's Lawsuit Out of New York
On November 13, 2020, the New York Law Journal reported that the NRA is "battling in court on two fronts to move a high-profile lawsuit brought by New York Attorney General Letitia James" out of New York City.
The report states that the NRA, which is represented by Brewer, has asked the U.S. Judicial Panel on Multidistrict Litigation (MDL) to "send four federal lawsuits focused on its financial troubles to a courtroom in North Texas."
The NYLJ reports that William A. Brewer III, counsel to the NRA, acknowledged that the request to move, among others, the lawsuit filed by James, is "a bit unusual." However, he contends that without an MDL, depositions in the various cases will be a "nightmare" for the NRA.
“This is not typical, but I don’t think it’s a stretch either,” Brewer said of his motion.
“We’re trying to make sure we get everything in the right forum,” he said. “We don’t have any concern with the venues for trial. It’s rather that the cases should be coordinated given the significant overlap in pretrial activities, so that the documents, the depositions and pretrial activities are available in all those cases.”
The National Law Journal Reports NRA's Claims Against Winston & Strawn Can Proceed
On October 23, 2020, The National Law Journal reported that Brewer, Attorneys & Counselors’ client, the NRA, can move forward with part of its lawsuit against Winston & Strawn.
According to the report, "Judge Robert Rigsby, of the District of Columbia Superior Court, said the NRA had 'sufficiently stated' a claim against Winston & Strawn for unjust enrichment, after an email allegedly revealed a Winston partner’s undisclosed ties to a neutral in an arbitration."
The lawsuit, filed July 29, 2020, in the Superior Court of the District of Columbia, alleges that in a recent arbitration, the NRA discovered on the eve of the final hearing that the arbitrator, Judge Richard Neville, was conducting a secret email discussion group – participated in by a senior partner of opposing counsel, Winston – where lurid white nationalist propaganda was shared and promoted. The communications revealed that Judge Neville shared a close, undisclosed relationship with Winston Partner Terry Grimm, according to the NRA. The NRA brought the action to recover amounts expended during the corrupted arbitration proceeding, and to uncover facts about the extent of the bias that tainted the proceeding.
“We appreciate the prompt attention of the court—and look forward to bringing the facts regarding Winston & Strawn’s undisclosed relationship with Judge Neville into full public view,” William A. Brewer III, partner at Brewer and counsel to the NRA, said in a statement. “This is a disturbing record. There should be no place in the legal profession that tolerates such racist communications—or which turns a blind eye to the principles that govern the sanctity of the arbitration process.”
ACLU Backs Brewer Client NRA After New York AG's Action
August 26, 2020 – The American Civil Liberties Union (ACLU) is backing Brewer, Attorneys & Counselors client the National Rifle Association (NRA) as New York Attorney General (NYAG) Letitia James attempts to dissolve the organization.
ACLU National Legal Director David Cole wrote a commentary published in The Wall Street Journal titled, “The NRA Has a Right to Exist: New York Attorney General Letitia James’ attempt to dissolve the 150-year-old organization is unconstitutional government overreach."
Cole writes that, “Our democracy is premised on the right of association. The First Amendment protects not only the right to speak, but also to band together with others to advance one’s views. Making or resisting change in a democracy requires collective action, and a healthy democracy therefore demands a robust ‘civil society.’ The right to associate can’t survive if officials can shut down organizations with which they disagree.”
Cole points out that the NRA’s lengthy history includes “a range of lawful and properly tax-exempt pursuits” – including teaching gun safety, educating the public and lobbying for gun rights laws.
He also observed that two years ago, the ACLU supported the NRA’s lawsuit against New York Governor Andrew Cuomo charging that he had violated the group’s First Amendment rights. Read more.