Lawsuit against USPSA

[GJM]

Link to the lawsuit from another forum. The complaint is only 20 something pages, where with exhibits it is 268 pages. While a complaint is only one side's version it doesn't appear frivolous and almost certainly cost five figures to put it together. Likely filed on day one of Nationals for maximum impact. 

 

https://www.slideshare.net/PracticalShootingIns/rutkowski-v-uspsa-et-al-2023-260739081

 

 

[RJH]

25 minutes ago, GJM said:

Link to the lawsuit from another forum. The complaint is only 20 something pages, where with exhibits it is 268 pages. While a complaint is only one side's version it doesn't appear frivolous and almost certainly cost five figures to put it together. Likely filed on day one of Nationals for maximum impact. 

 

https://www.slideshare.net/PracticalShootingIns/rutkowski-v-uspsa-et-al-2023-260739081

 

 

 

 

I will expect a Cliff's notes version within a couple of hours

 

 

But seriously, if anybody wants to read that and give us a cliffs notes version, it would be appreciated. Preferably if there's anybody here with legal experience, and the ability to simplify it for those of us that get headache from legal jargon

[Out of Ammo]

It's an interesting read for sure.

[BritinUSA]

I'm not a lawyer, but I have stayed at a Holiday Inn a few times so I think this qualifies:

 

The lawsuit alleges that Joe's suspension was void because his rights as a member were terminated following the Cameo debacle. Further it declares that the BOD had no authority under Delaware Corporate law to change the USPSA bylaws. 
 

They allege that changes to the bylaws must be voted on by the members and that they had been changed in the past without voting.

 

If corporate law prevents bylaws being changed without membership approvals,then all actions taken under the provisions of the new bylaws are null and void.

 

The exhibits contain examples of the Magazine, tax filings etc. Of particular interest is the slew of emails to and from Joe/USPSA concerning the Nationals that was scheduled for cameo.
 

What is damning to the organization is the clear inference that USPSA was encouraging members to violate/ignore CO state law.
 

This is not going to play well in court as it clearly indicates disreputable behavior by the organizarion.

 

Note: Regarding the delinquency of the org due to non-payment of taxes, just a reminder that the Director of Finances was being paid over $10,000 per month to perform his duties.

[Rob Boudrie]

The "short form" is that Joe Rutowski was suspended for online speech that USPSA determined "cross the line" and would not be tolerated by the board, and for making an inquiry to the CO AG.  (Yup, contacting LE about a legal issue was partial grounds for suspension).

"This is not going to play well in court as it clearly indicates disreputable behavior by the organizarion."

 

Funny thing - the basis of the suspension was "bringing USPSA into disrepute".   Apparently telling the truth is not a defense to this charge.

 

USPSA tried to dodge the CO mag ban issue, offered totally bogus legal opinions, and determined that rule 3.3.1 (written by myself over a decade over to cover this situation) did not apply because "some" competitors were grandfathered.   (read 3.3.1 and draw your own conclusion).
 

SVI/Infinity told USPSA it would withdraw its sponsorship of the CO match as long as USPSA continued to suborn violations of gun law since, as a federally licensed manufacturer, Infinity refuses to engage in or associate with illegal activity.   Director of Media and Events responded with "OK, Infinity is banned from all future advertising and will never be allowed to sponsor a USPSA run match".  The board chose to stand by Jake rather than intervene in this.

 

The attention brought by the issue led to the disclosure that USPSA has been sued for sexual harassment by office manager Kim Williams and a settlement paid (presumably by USPSA's insurance carrier).

There is more .... much more .... none of it good.

 

Edited September 9, 2023 by Rob Boudrie

[BritinUSA]

Thanks for the clarification, Rob. I've never understood why 3.3.1 was not used more frequently, it could certainly have been used for Cameo.
 

Though just downloading the magazines is not an option under CO law, purchasing some 15 rounds magazines would not have broken the bank for anyone either.

 

I know that some CO lawmakers were trying to get an exception to the magazine law for sportsman but once that failed to get out of committee, USPSA should have moved Nationals. Instead they doubled-down on a bad decision, and made it much worse.

 

It's hard to see how USPSA is going to defend themselves against this.

 

I'm willing to bet they will settle out of court with provisions to restore the original bylaws, cancel all the recent suspensions, and the retirement of all the defendants from the BOD.

 

Anything less than complete surrender from USPSA and this will go to trial, although nothing is certain in any court, my money is on them losing big time. Their position on Cameo alone is indefensible.

[ColoradoNick]

This is wild. Is there a court date set? If these allegations are true I don't see how USPSA in its current form survives this? Glad I just bought a five year... 

[BritinUSA]

I don't see a date yet and would not expect to see one for some time. USPSA will need to respond to the court. They will probably ask for a summary judgement to dismiss the case, or a continuance to give them more time to respond or to seek a settlement.

 

If it goes to court it may not happen until next year, depending on court availability and time to gather their defense.

 

Personally, I think a settlement is the most likely outcome. 

[RJH]

Thanks for the Cliff's notes version guys, very interesting stuff to say the least

[GJM]

2 minutes ago, ColoradoNick said:

This is wild. Is there a court date set? If these allegations are true I don't see how USPSA in its current form survives this? Glad I just bought a five year... 

Most cases settle, and only a small percentage go to trial. Not sure about in Ohio, but it is a two to three year process to get to trial in many state courts. This isn't good, but seems highly unlikely to tank the organization. 

[ColoradoNick]

Just now, GJM said:

Most cases settle, and only a small percentage go to trial. Not sure about in Ohio, but it is a two to three year process to get to trial in many state courts. This isn't good, but seems highly unlikely to tank the organization. 

That's what I figured. Hopefully the settlement includes a new BOD or it's just another reason for membership/match fees to increase 

[BritinUSA]

Just now, GJM said:

This isn't good, but seems highly unlikely to tank the organization. 

Likely correct; However, I expect that this will impact revenue/membership moving forward. 
 

There is also the issue of the org's 501(c)(3) status if the corporate standing is delinquent. There may be significant tax issues.
 

If the IRS gets wind of this then the org may be liable for additional tax payments for the past five years. That could also have a significant impact on the finances, which are not in a good place anyway.

[GJM]

Most rational parties would rather settle than have a third party decide an outcome for them. Filing a lawsuit is often just another tool in getting settlement leverage. 
 

You would expect USPSA to want to settle to avoid legal costs and distraction for the organization. The plaintiff will have to decide what they need to settle. 

 

however, if I was a board member, on a personal level, I would be very concerned about the allegation that I was trying to skirt a state firearm law. 

[Rob Boudrie]

1 hour ago, BritinUSA said:

I'm willing to bet they will settle out of court

There is one small problem with that.     Out of court settlements generally have two requirements imposed by the paying party:

1. - Terms are confidential
2. - No admission of wrongdoing on the part of the paying party

I do not expect Joe Rutowski to acquiesce to either of these terms.

Edited September 9, 2023 by Rob Boudrie

[Rob Boudrie]

44 minutes ago, GJM said:

You would expect USPSA to want to settle to avoid legal costs and distraction for the organization. The plaintiff will have to decide what they need to settle. 

If the defense is provided by general or D&O insurance, it is the insurance company that makes the decision to accept a settlement offer or go to trial.  I know that applies to $$, but don't know if the insurer can compel USPSA to admit wrongdoing to settle without a confidentiality clause.

[BritinUSA]

6 minutes ago, Rob Boudrie said:

There is one small problem with that.     Out of court settlements generally have two requirements imposed by the paying party:

1. - Terms are confidential
2. - No admission of wrongdoing on the part of the paying party

I do not expect Joe Rutowski to acquiesce to either of these terms.

Fair comment.

[pjb45]

Once again the Board has demonstrated malfeasance in office.

Add to the latest DROI encounter at Nationals.  

 

Thanks Rob for the clarifications and to ltdmstr for their insight and righteous conclusions.

[cheby]

8 minutes ago, Rob Boudrie said:

There is one small problem with that.     Out of court settlements generally have two requirements imposed by the paying party:

1. - Terms are confidential
2. - No admission of wrongdoing on the part of the paying party

I do not expect Joe Rutowski to acquiesce to either of these terms.

Yes, it does not look like Joe Rutowski is doing it for money 

[BritinUSA]

47 minutes ago, GJM said:

..however, if I was a board member, on a personal level, I would be very concerned about the allegation that I was trying to skirt a state firearm law. 

It's not just trying to skirt the law, they were telling members it was okay to do so because the sheriff would not pursue the issue. 

[cheby]

2 minutes ago, pjb45 said:

Once again the Board has demonstrated malfeasance in office.

Add to the latest DROI encounter at Nationals.  

 

Thanks Rob for the clarifications and to ltdmstr for their insight and righteous conclusions.

What is the latest DROI “encounter”?

[BritinUSA]

Just now, cheby said:

Yes, it does not look like Joe Rutowski is doing it for money 

Not sure I agree with that assessment. While he is seeking damages over $25,000 and legal fees, I would not call that amount excessive. The primary complaint is over his suspension from the organization. He wants to compete, that seems to be the driver.

[Rob Boudrie]

5 hours ago, BritinUSA said:

Thanks for the clarification, Rob. I've never understood why 3.3.1 was not used more frequently, it could certainly have been used for Cameo

The big reason is DNROI declared it a stupid rule that should be removed from the rulebook.

The USPSA president ruled that it did not apply because "some" competitors could bring high caps.

 

USPSA long ago concluded that if people could legally buy high mags on the secondary market, it did not trigger 3.3.1. 

 

The CO exemption only applies to magazines personally owned and possessed before the CO ban was passed.    The USPSA logic quickly because "how would they ever prove it" rather than "is it or is it not illegal according to the law?".

 

Quote

While he is seeking damages over $25,000

The amount has to reach a certain threshold, otherwise the case is heard by a lower level court.  This is why "In excess of $25,000" is used rather than a specific amount.

Edited September 9, 2023 by Rob Boudrie

[BritinUSA]

1 minute ago, cheby said:

What is the latest DROI “encounter”?

Link to Instagram story: link

 

Please start another thread if you want to discuss this incident, let's keep this one on the case.

[pjb45]

1 minute ago, cheby said:

What is the latest DROI “encounter”?

Instagram; practical shooting insights

I make no claim to the accuracy only cited the post.

[Neomet]

A couple of things. 

1. Confidentially is only a requirement sometimes.

2. One of the demands is for injunctive relief reinstating membership. Insurance companies can throw money at claims but have no power to force their insured to comply with injunctive demands. I don't think money will make this go away.

3. Ugh.