The New York Supreme Court issued a decision on Tuesday upholding the dismissal of a lawsuit against the Zionist Organization of America unanimously.
The suit, which two former ZOA board members filed in August 2024, accused the nonprofit’s national president, Morton Klein, of acting in his own financial and personal interests and alleged that four board members “directly and indirectly aided and abetted Klein’s misconduct and fraud.”
A state Supreme Court justice dismissed the complaint in May 2025. The appellate panel affirmed that ruling, finding the claims barred by the “business judgment rule,” which shields decisions made by corporate boards in good faith and in furtherance of organizational purposes.
It noted that, after the plaintiffs demanded an investigation in 2024, the board formed a committee to review the claims and later re-elected Klein. The court said the complaint contained “insufficient allegations” to question the independence or good faith of the board.
Liz Berney, director of research and special projects at ZOA and an attorney for the organization, told JNS that the organization is “pleased that the Supreme Court and the appellate court properly dismissed this baseless case outright.”
She said that both court rulings “recognized that ZOA’s independent board of directors acted in good faith and exercised honest judgment, in furtherance of ZOA’s lawful purposes, when the ZOA board supported and re-elected Morton Klein.”
“The lawsuit contained no particularized allegations indicating that the board’s actions and determinations were dishonest or not in good faith,” Berney told JNS.
She added that “further confirming the baselessness of the lawsuit, the ZOA board appointed an independent committee including ZOA’s national treasurer that carefully examined the lawsuit’s allegations and combed through years of financial records, which resulted in the independent committee’s determination that there was no wrongdoing by Mr. Klein or anyone else.”
