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In Blow to NRA, Judge Rules N.Y. Lawsuit Can Proceed

State's attorney general filed suit seeking NRA's dissolution

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The National Rifle Association suffered a setback on Thursday as a state supreme court justice ruled against the organization's motions to dismiss, delay, or transfer a lawsuit seeking the group's dissolution.

The lawsuit, brought by New York attorney general Letitia James, aims to dissolve the group—a nonprofit organization incorporated under New York law—because it allegedly defrauded donors.

The NRA was hoping to convince the judge to dismiss the trial or move the venue from gun-skeptical Manhattan to more friendly political territory in Albany.

The ruling comes six days after the Second Amendment organization filed for bankruptcy and announced its plan to reincorporate in Texas. New York state supreme court justice Joel M. Cohen ruled that while the NRA filed for bankruptcy, it wasn't "the exclusive province of the bankruptcy court" to decide the case. The bankruptcy court could still weigh in on the case. In many instances, bankruptcy proceedings put lawsuits on hold.

The Second Amendment group has been locked in a legal battle with the New York attorney general that began in August when James filed a lawsuit alleging the NRA misused charitable donations intended for firearms training and safety education and diverted them toward the benefit of executives.

James's lawsuit capped a summer filled with media reports on the NRA's exorbitant spending. Among the allegations was that the organization looked into using $6.5 million in members' money to buy a house for CEO Wayne LaPierre and $54 million for outside legal counsel to represent the group in a lawsuit against their former long-time PR firm, Ackerman McQueen.

James is using her authority to police nonprofit organizations incorporated in the state of New York to justify the lawsuit. The NRA's reincorporation in Texas could prevent any attempt to dissolve the Second Amendment group since it may no longer be within James's jurisdiction.

The NRA has denied any wrongdoing and argues that James is motivated by political animosity toward the organization. In an October 2018 interview with Ebony, James said, "The NRA holds [itself] out as a charitable organization, but in fact, [it] really [is] a terrorist organization."

The NRA filed a countersuit in August alleging that James's motivation was politics, not the well-being of NRA donors. "James boasted that she would strike foul blows against the NRA and pound the NRA into submission. She vowed that she would use the NYAG's investigative and enforcement powers for the precise purpose of stanching political speech," the lawsuit said.

An attorney for James told the judge that the trial could begin early next year.