Before the United States Judicial Panel on Multidistrict Litigation in Re
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Case MDL No. 2979 Document 1-1 Filed 10/20/20 Page 1 of 20 BEFORE THE UNITED STATES JUDICIAL PANEL ON MULTIDISTRICT LITIGATION IN RE: NATIONAL RIFLE § ASSOCIATION BUSINESS § EXPENDITURES LITIGATION § MDL Docket No. _____________ § § ORAL ARGUMENT REQUESTED MEMORANDUM OF LAW IN SUPPORT OF THE NATIONAL RIFLE ASSOCIATION’S MOTION TO TRANSFER CASES FOR COORDINATED OR CONSOLIDATED PRE-TRIAL PROCEEDINGS PURSUANT TO 28 U.S.C. § 1407 William A. Brewer Sarah B. Rogers BREWER, ATTORNEYS & COUNSELORS 750 Lexington Avenue, 14th Floor New York, New York 10022 Telephone: (212) 489-1400 Facsimile: (212) 751-2849 ATTORNEYS FOR MOVANT THE NATIONAL RIFLE ASSOCIATION Case MDL No. 2979 Document 1-1 Filed 10/20/20 Page 2 of 20 TABLE OF CONTENTS TABLE OF CONTENTS .................................................................................................................... I TABLE OF AUTHORITIES ............................................................................................................. II INTRODUCTION ................................................................................................................................ 1 ARGUMENT ........................................................................................................................................ 7 A. THE ACTIONS INVOLVE COMMON QUESTIONS OF FACT. ............................................................. 7 B. CENTRALIZATION SERVES THE CONVENIENCE OF THE PARTIES AND WITNESSES. ..................... 12 C. CENTRALIZATION WILL PROMOTE THE JUST AND EFFICIENT CONDUCT OF THESE ACTIONS. .... 14 D. TRANSFER TO THE NORTHERN DISTRICT OF TEXAS WOULD BEST SERVE THE GOALS OF 28 U.S.C. § 1407. .................................................................................................................................. 14 CONCLUSION .................................................................................................................................. 16 Case MDL No. 2979 Document 1-1 Filed 10/20/20 Page 3 of 20 TABLE OF AUTHORITIES CASES In re Centurylink Residential Customer Billing Disputes Litig., 280 F. Supp. 2d 1383 (J.P.M.L. 2017) ........................................................................................ 8 In re Conseco Life Ins. Co. Cost of Ins. Litig., 323 F. Supp. 2d 1381 (J.P.M.L. 2004).................. 8 In re Daily Fantasy Sports Mktg. & Sales Practices Litig., 158 F. Supp. 3d 1375 (J.P.M.L. 2016) ...................................................................................... 13 In re Delphi Corp. Sec., Derivative & "Erisa” Litig., 403 F. Supp. 2d 1358 (J.P.M.L. 2005) .... 16 In re E.I. du Pont de Nemours & Co. C-8 Personal Injury Litig., 939 F. Supp. 2d 1374 (J.P.M.L. 2013) ........................................................................................ 7 In re Ford Motor Co. F-150 and Ranger Truck Fuel Economy Mktg. and Sales Pracs. Litig., 412 F. Supp. 3d 1355 (J.P.M.L. 2019) ...................................................................................... 16 In re Hard Disk Drive Suspension Assemblies Antitrust Litig., 396 F. Supp. 3d 1374 (J.P.M.L. 2019) ...................................................................................... 16 In re IDT Corp. Calling Card Terms Litig., 278 F. Supp. 2d 1381 (J.P.M.L. 2003)................ 7, 13 In re M3Power Razor System Mktg. and Sales Practices Litig., 398 F. Supp. 2d 1363 (J.P.M.L. 2005) ........................................................................................ 7 In re Merscorp. Inc. Real Estate Settlement Procedures Act (RESPA) Litig., 560 F. Supp. 2d 1371 (J.P.M.L. 2008) ........................................................................................ 7 In re Metoprolol Succinate Patent Litig., 329 F. Supp. 2d 1368 (J.P.M.L. 2004) ....................... 14 In re MI Windows & Doors, Inc., Prod. Liab. Litig., 857 F. Supp. 2d 1374 (J.P.M.L. 2012) ..... 14 In re Peruvian Rd. Litig., 380 F. Supp. 796 (J.P.M.L. 1974) ......................................................... 8 In re Plumbing Fixture Cases, 298 F. Supp. 484 (J.P.M.L. 1968) ............................................... 14 In re Radioshack Corp. “ERISA” Litig., 528 F. Supp. 2d 1348 (J.P.M.L. 2007) ........................ 14 In re Treasury Sec. Auction Antitrust Litig., 148 F. Supp. 3d 1360 (J.P.M.L. 2015) ................... 14 In re Wells Fargo Wage and Hour Emp’t Practices Litig. (No. III), 804 F. Supp. 2d 1382 (J.P.M.L. 2011) ...................................................................................... 14 In re Westinghouse Electric Corp. Uranium Con. Litig., 405 F. Supp. 316 (J.P.M.L. 1975) ...... 13 In re Zimmer NexGen Knee Implant Prods. Liab. Litig., 802 F. Supp. 2d 1374 (J.P.M.L. 2011).. 7 STATUTES 28 U.S.C. § 1407 .................................................................................................................... passim RULES Judicial Panel on Multidistrict Litigation Rule 6.2 ......................................................................... 1 OTHER AUTHORITIES Barbara J. Rothstein & Catherine R. Borden, Managing Multidistrict Litigation in Products Liability Cases: A Pocket Guide for Transferee Judges, Federal Judicial Center (2011) .......... 5 Manual for Complex Litigation (Fourth) (2010) .................................................................... 14, 15 ii Case MDL No. 2979 Document 1-1 Filed 10/20/20 Page 4 of 20 Pursuant to 28 U.S.C.§ 1407 and Judicial Panel on Multidistrict Litigation (“JPML” or the “Panel”) Rule 6.2, The National Rifle Association (“NRA” or the “Association”) respectfully moves the Panel for an order transferring the currently-filed cases listed in the attached schedule of actions (collectively, the “Actions”), as well as any cases subsequently filed involving similar facts or claims (“tag-along cases”) to the Northern District of Texas for coordinated pre-trial proceedings, or alternatively, to any other court with the capacity to facilitate their expeditious resolution. INTRODUCTION The presently-filed Actions are four cases currently pending in four different district courts concerning the finances and governance of the NRA, a New York-domiciled not-for-profit corporation. The Actions center on alleged abuses by NRA fiduciaries, and encompass lawsuits by the NRA designed to redress these abuses, along with a pretextual, unconstitutional gambit by New York State officials to sue derivatively regarding the same transactions. Because the Actions make overlapping and contradictory factual claims regarding the same parties, events and relationships, the risk of inconsistent adjudications is high, and voluminous duplicative discovery is a certainty. The parties to the Actions—and other, related actions that are likely to be removed to federal court—have already acknowledged that the cases involve common questions of fact, and that litigating them piecemeal in different fora would be inefficient.1 Accordingly, the NRA seeks transfer and consolidation. 1 See e.g., Nat’l Rifle Ass’n of Am. v. James, Civ. No. 1:20-cv-00889 (N.D.N.Y.), Dkt. No. 8 (letter from NYAG to the Court) at 3 (“Finally, given the pending Charities Bureau Action addressing the NRA’s alleged violations of New York’s statutory scheme for the oversight of not-for-profit entities, it is respectfully submitted that abstention is appropriate here.”); Nat’l Rifle Ass’n of Am. v. North, Index No. 903843-20 (Sup. Ct. Albany Cnty.), Dkt. No. 48 (order granting motion for stay), at 6 (“In his answer . North denies engaging in misconduct and alleges that the NRA is retaliating against him for reporting potential financial wrongdoing and inadequate governance to Case MDL No. 2979 Document 1-1 Filed 10/20/20 Page 5 of 20 In mid-2017, the NRA learned that high-ranking New York State Democratic officials intended to weaponize the state government’s regulatory powers against it in order to weaken it as a political force before the 2020 election. One intended cudgel was the New York State Office of the Attorney General (the “NYAG”), which had broad supervisory authority over not-for-profits that are domiciled in New York, like the NRA. New York’s former Attorney General, Eric Schneiderman, was apparently so troubled by this campaign that he warned the NRA about it. Schneiderman advised that the NRA should get its affairs in order, because the NYAG would eventually be forced to investigate its operations and finances. Despite believing it was operating in compliance with New York law, the NRA undertook an internal review of its controls, compliance and governance—to inform its strategy in anticipated litigation, and to fortify itself against the attacks Schneiderman warned were coming. The NRA’s efforts ultimately led it to determine that its largest vendor, advertising agency Ackerman McQueen (“Ackerman”), was systematically overcharging the NRA and falsifying invoices, as well as misrepresenting the benefits of a significant amount of the services it provided. For example, Ackerman provided misleading, inflated viewership metrics for NRATV, the digital media platform it pitched, produced and scripted, where costs were skyrocketing and programming inexplicably wandered far afield from the NRA’s mission of defending the Second Amendment. Ackerman also engaged in a practice of pass-through block billing that obscured the purpose and other NRA officials and directors . [and] “begins by referencing the Attorney General’s . complaint in the Dissolution Case”), 9 (“North argues that a stay of this action during the pendency of the Dissolution