NRA v. Ackerman, Texas

NRA’s Amended Complaint

October 25, 2019

Filing Summary

This filing contains the NRA’s amended complaint, which names defendants Ackerman McQueen, Mercury-Group, Henry Martin, William Winkler, Melanie Montgomery, and Jesse Greenberg.  While the initial complaint focused narrowly on copyright issues pertaining to Ackerman’s use of NRA materials on its website, the amended complaint alleges a bevy of allegations against Ackerman and the individual defendants.  The NRA asserts eight causes of action and captions them as follows: (1) Latham Act False Association Claims, (2) Copyright Infringement, (3) Conversion, (4) Fraud, (5) Breach of Fiduciary Duty, (6) Conspiracy, (7) Breach of Fiduciary Duty of Loyalty, and (8) Breach of Contract.

Key Points

  • The preliminary statement summarizes the lawsuit saying Ackerman “exploited decades of trust and confidence in order to siphon assets from the NRA, lining the agency’s pockets at expense of its client and in violation of the law.”  Additionally, the complaint alleges Ackerman “went to outrageous lengths to conceal and sustain its fraud, deploying scorched-earth tactics against anyone who dared to scrutinize its conduct.” (p.2) 
  • The NRA says, of its own flagship communication channel, “NRATV’s messaging strayed from the Second Amendment to themes which some NRA leaders found distasteful and racist.” (p.3).  Moreover, the complaint says “NRATV often became viewed as a dystopian cultural rant that deterred membership growth….” (para. 39)
  • The NRA claims that after NRATV was “shut down in June 2019, no one missed it; no a single sponsor or viewer even called, confirming what at least some NRA executives suspected—the site had limited visibility and was failing [to] accomplish any of its goals.” (p.3) 
  • The complaint claims that “underlying receipts and other support for [Ackerman’s] expenses were not transmitted to the NRA alongside [Ackerman’s] invoices” and that this was “to ensure that [Ackerman’s] work pertaining to matters such as donor development, strategic planning, and legal items remained confidential.”  There is no explanation as to how hotel, meal, and travel invoices would raise such confidentiality concerns.  (para. 18-19)
  • In attempting to rebut allegations about clothing and travel expenses routed through Ackerman, the NRA confirms the receipt of wardrobe by LaPierre, writing “subject to billing procedures [Ackerman] set up, LaPierre over a fifteen year period incurred wardrobe and related expenses for countless television appearances, filming commercials, and other outward-facing brand development activities.”  The complaint adds that Ackerman “should not have incurred (let alone sought reimbursement for) any expense which it believed inappropriate.” (para. 20)
  • The complaint alleges Ackerman CEO Angus McQueen, in pitching the development of NRATV said “the NRA needs to find new ways to make money” and that the digital platform concept presented “a good opportunity to generate revenue.” (para. 25-26)
  • The NRA makes a series of allegations that Ackerman misled the NRA about the viewership of NRATV. (para. 31-34). 
  • “By 2017, the annual budget for NRATV grew to over $20 million annually….” (para. 38).  The filing also notes that the NRA paid Ackerman, in total, $40 million in 2017. (para. 14)
  • The complaint seems to link the retirement of “the NRA’s now-former Treasurer and CFO” and as “the leadership ranks shifted, multiple employees began voicing recommendations regarding opportunities for improvement at the NRA.” (para. 48)
  • With respect to Oliver North, the NRA’s complaint states, as a matter of fact, that “as Col. North prepared to assume the presidency of the NRA, he separately discussed a potential engagement by [Ackerman] as the host of an NRA TV documentary series.” (para. 59).  In other filings, Ackerman disputes this contention and claims that NRA Executive Vice President Wayne LaPierre “negotiated the terms of the [Oliver] North contract directly with Lt. Col. North and a detailed term sheet was sent to [Ackerman] for completion of the formal agreement.” This is of potential import since the NRA’s bylaws prohibit payment of an NRA Board President by the NRA and this could be viewed as a way of skirting that requirement by having a vendor pay the board president (with the NRA ultimately reimbursing the expense). 
  • The NRA details the alleged “extortion” attempt by its Board President Oliver North. The complaint claims North told Wayne LaPierre, on the eve of the 2019 NRA Convention, that Ackerman planned to disseminate a letter that would be “bad” for LaPierre, including “a laundry list of allegations” relating to wardrobe, travel, and entertainment expenses paid for by Ackerman (and then invoiced back to the NRA), in addition to revelations concerning “sexual harassment accusations against an NRA staff member.” The complaint alleges that North said the information would not be publicized if LaPierre agreed to resign and withdraw the NRA’s lawsuit against Ackerman.  North allegedly offered, if LaPierre would agree to the deal, that LaPierre could secure an “excellent retirement” from Ackerman. (para. 71-74)