Court green lights GLLLP whisteblower lawsuit against ZOA, refuses to expunge allegations of unlawful conduct by Mort Klein, and grants GLLLP request to take expedited discovery of Klein and two other ZOA Board Members

In a stunning rebuke to the Zionist Organization and three of its Board Members, New York Supreme Court Justice Arthur Engoron issued a ruling from the bench on February 27, 2019, denying a motion by the ZOA, its National President, Morton Klein, and two other Board Members, to dismiss the Complaint against them. Justice Engoron rejected every one of the Defendants’ arguments and stated that the case would go forward. The Defendants’ attempt to stall the lawsuit, which is based on allegations by David Drimer that the Defendants retaliated against him for blowing the whistle on secret, off-book compensation payments to Mort Klein, was rejected in its entirety. Notably, during the argument, counsel for some of the Defendants pointed out that during the years Drimer worked for the ZOA, he had received numerous raises — GLLLP managing partner Michael Gordon pointed out to Justice Engoron during the argument that Drimer was fired three business days after he submitted a whistleblower complaint to the New York State Attorney General’s Office.

The ruling is particularly important because it is the first time a New York County (Manhattan) judge has ruled that a private right of action exists under the New York Not-for-Profit Corporation Law Section 715-b. Until yesterday, only one federal court judge and two outer borough judges had weighed in on the issue. Justice Engoron’s is the first New York County Supreme Court case to rule on the issue.

Justice Engoron also granted GLLLP’s request to take expedited discovery of three senior ZOA Board members (and related document discovery) on the ground that one of them is of advanced age. Although not an ordinary turn of events, this expedited discovery will be important to secure relevant evidence.

And the Court denied the request by the Defendants to sanitize the Complaint so as to remove Drimer’s allegations of misconduct by Klein.

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