Court filing
Order Denying Transfer — In re NRA Business Expenditures Litigation (N.D. Tex.)
Filed February 4, 2021 in In re National Rifle Association Business Expenditures Litigation; one of 4 filings from this case.
Record facts
| Court | United States Judicial Panel on Multidistrict Litigation |
|---|---|
| Filed | 2021-02-04 |
Full text
UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION
IN RE: NATIONAL RIFLE ASSOCIATION
BUSINESS EXPENDITURES LITIGATION
MDL No. 2979
ORDER DENYING TRANSFER
Before the Panel:* The National Rifle Association (NRA)—plaintiff in two actions and
defendant in a third—moves under 28 U.S.C. § 1407 to centralize this litigation in the Northern
District of Texas or, alternatively, states in its reply brief that it is unopposed to centralization in
the Northern District of New York. This litigation currently consists of four actions pending in
three districts, as listed on Schedule A. Defendant in the Northern District of Texas Stinchfield
action supports the motion. All remaining responding parties oppose centralization, including (1)
the New York Attorney General, who is defendant to the Northern District of New York action;
(2) plaintiffs in the Middle District of Tennessee action; and (3) the Ackerman parties,1 who are
defendants in one Northern District of Texas action and one of which is plaintiff in another.
On the basis of the papers filed and the hearing session held,2 we are not persuaded that
centralization is necessary for the convenience of the parties and witnesses or to further the just
and efficient conduct of this litigation. The NRA argues that the actions share factual questions
regarding the NRA’s governance, policies, procedures, and spending; its fiduciary relationships;
the manner in which it has used its donations; and “efforts by various adversaries to commandeer
the NRA’s assets and the NRA’s future.” The NRA also argues that the actions flow from the
NRA’s efforts to prepare itself for the New York Attorney General’s investigation of the NRA.
There may be factual overlap among some of the actions as to particular expenditures by
the NRA and its relationship with Ackerman, but it appears to be limited and overshadowed by
the many individual questions presented by the alleged facts, claims, and parties in each action.
For example, in the Northern District of Texas Ackerman action, the NRA alleges that Ackerman’s
*
One or more Panel members who could be members of the putative class in this litigation
have renounced their participation in this class and have participated in this decision.
1
Ackerman McQueen, Inc. (Ackerman), Mercury Group, Inc., Henry Martin, Melanie
Montgomery, William Winkler, and Jesse Greenberg.
2
In light of the concerns about the spread of COVID-19 virus (coronavirus), the Panel heard
oral argument by videoconference at its hearing session of January 28, 2021. See Suppl. Notice
of Hearing Session, MDL No. 2979 (J.P.M.L. Jan. 11, 2021), ECF No. 40.
Case MDL No. 2979 Document 45 Filed 02/04/21 Page 1 of 4
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website presents a false association between itself and the NRA. The Ackerman action also will
examine the parties’ obligations under their services agreement, including the applicability of a
confidentiality provision. The other Northern District of Texas action (Stinchfield) is a
straightforward defamation action in which the NRA is not named as a party. Stinchfield centers
on a narrow issue: whether the defendant—a former NRATV host—falsely stated in an affidavit
that Ackerman made misrepresentations to the NRA about NRATV and its viewership metrics. In
the Northern District of New York action (James), the NRA alleges the New York Attorney
General’s investigation and an underlying New York state court enforcement action3 constitute
retaliation for the NRA’s political advocacy and selective enforcement of New York’s not-for-
profit law. That state court action concerns far broader allegations that the NRA is not serving the
interests of its members and advancing its charitable mission. It asserts that the NRA was not
governed properly, failed to follow state and federal laws, failed to institute an effective
compliance program, and filed false regulatory statements. Finally, plaintiffs in the Middle
District of Tennessee action (Dell’Aquila) claim the NRA fraudulently induced donations to the
organization. Dell’Aquila is the only action brought as a putative class action and, therefore, will
entail class certification proceedings not applicable to the other three actions. In these
circumstances, we are not persuaded that the purported factual overlap is sufficient to overcome
the differences in these actions, which each will involve some different discovery and pretrial
proceedings.
The differences in these actions also extend to their procedural postures. The two Northern
District of Texas actions are less complex and, therefore, likely to resolve sooner without the added
burden of additional parties and proceedings. Discovery currently is set to close in Stinchfield this
month and, as to the claims against the Ackerman parties in Ackerman, this June. Trials in both
actions are set for 2021—Stinchfield in May and Ackerman in September. In contrast, while
discovery was set to close in Dell’Aquila in August 2021, trial in that action was not scheduled
until approximately one year later. The NRA’s recent Chapter 11 bankruptcy filing is likely to
further impact the disparities in progression among these cases. The Middle District of Tennessee
has stayed and administratively closed Dell’Aquila and the Northern District of Texas has closed
the counterclaims against the NRA in Ackerman pursuant to 11 U.S.C. § 362.
We have held that where, as here, “only a minimal number of actions are involved, the
proponent of centralization bears a heavier burden to demonstrate that centralization is
appropriate.” In re Hyundai & Kia GDI Engine Mktg., Sales Practices, & Prods. Liab. Litig., 412
F. Supp. 3d 1341, 1343 (J.P.M.L. 2019). And parties should attempt informal means of
coordination “before resorting to Panel intervention.” In re Gap, Inc., COVID-19 Lease Payment
Litig., __ F. Supp. 3d __, 2020 WL 5884789, at *2 (J.P.M.L. Oct. 2, 2020). There are just four
actions pending in three districts, and proponents have not demonstrated any attempt at informal
coordination or transfer via other means before seeking Section 1407 centralization. The NRA
claims there exist “other, related actions that are likely to be removed to federal court.” But it
appears the New York state court enforcement action will remain in state court, as that court
recently denied defendants’ motion to dismiss on forum non conveniens grounds. The Panel has
3 See People v. Nat’l Rifle Ass’n of Am., et al., Index No. 451625/2020 (Sup. Ct. N.Y. Cnty.).
Case MDL No. 2979 Document 45 Filed 02/04/21 Page 2 of 4
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been “disinclined to take into account the mere possibility of future filings in [its] centralization
calculus.” In re Lipitor (Atorvastatin Calcium) Mktg., Sales Practices & Prods. Liab. Litig., 959
F. Supp. 2d 1375, 1376 (J.P.M.L. 2013). The NRA and the Ackerman parties each are represented
by common counsel in all actions in which they are parties, and the Stinchfield defendant is
represented by counsel affiliated with the NRA’s counsel. This “should facilitate informal
coordination of this relatively small number of actions.” In re Covidien Hernia Mesh Prod. Liab.
Litig., MDL No. 2953, 2020 WL 4670694, at *2 (J.P.M.L. Aug. 7, 2020).
IT IS THEREFORE ORDERED that the motion for centralization of these actions is
denied.
PANEL ON MULTIDISTRICT LITIGATION
Karen K. Caldwell
Chair
Catherine D. Perry
Nathaniel M. Gorton
Matthew F. Kennelly
David C. Norton
Roger T. Benitez
Dale A. Kimball
Case MDL No. 2979 Document 45 Filed 02/04/21 Page 3 of 4
IN RE: NATIONAL RIFLE ASSOCIATION
BUSINESS EXPENDITURES LITIGATION
MDL No. 2979
SCHEDULE A
Northern District of New York
NATIONAL RIFLE ASSOCIATION OF AMERICA v. JAMES, C.A. No. 1:20-00889
Middle District of Tennessee
DELL’AQUILA v. LAPIERRE, ET AL., C.A. No. 3:19-00679
Northern District of Texas
NATIONAL RIFLE ASSOCIATION OF AMERICA v. ACKERMAN MCQUEEN,
INC., ET AL., C.A. No. 3:19-02074
ACKERMAN MCQUEEN, INC. v. STINCHFIELD, C.A. No. 3:19-03016
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