No Labels Sued by Durst Family Members Claiming Breach of Contract

Two members of the powerful Durst real estate family in New York have sued the centrist group No Labels, accusing it of pulling a “bait and switch” by seeking donations for a bipartisan governing group and then moving to fund a third-party presidential candidacy.

The breach of contract and “unjust enrichment” suit was filed in New York State Supreme Court on Tuesday by the chairman and president of the Durst Organization, Douglas and Jonathan Durst, who are cousins. It seeks damages and reimbursements after the Dursts donated $145,000 years ago, when No Labels was founded on the promise of finding governing solutions.

The suit is an escalation of complaints that have trailed the group for much of the last few years, and it suggests that No Labels has morphed into something other than its original mission ahead of the 2024 election.

“This case seeks to hold No Labels accountable for the consequences of its misguided actions that have left its original benefactors like the Dursts feeling bewildered, betrayed and outraged,” the suit says.

“No Labels has shifted seismically from its original mission, and its donors, like the Dursts, who believed in the mission and financially supported it, should not have to stand idly by,” the suit contends, adding that had “No Labels ever given any indication that it might pursue such a gambit, the Dursts never would have funded the organization.”

“That is because, in a presidential election, anyone who votes for a third-party candidate votes on neither side,” the suit says. “Indeed, no third-party candidate has ever won a presidential election or even come close to doing so.”

Randy Mastro, a lawyer at King & Spalding who is representing the Dursts, said they had “agreed to fund No Labels because it committed to promote bipartisanship and bridge the political divide.”

He continued: “They never imagined at the time that No Labels would pivot to becoming the organization behind a quixotic third-party candidacy that could skew the most consequential presidential election of our lifetime. The Dursts believe they were sold a bill of goods, and they want no part of it.”

A spokeswoman for No Labels did not immediately respond to a request for comment.

For months, No Labels, which does not disclose its donors, has been working on ballot access in a number of states for a potential third-party candidate. In the two-party system, no third-party or independent candidate has ever been a serious threat to win the presidential election, although some, like the businessman Ross Perot in the 1990s, have been credited with helping tilt the election in one direction or another.

The work of No Labels to pursue a possible third-party ticket has alarmed Democrats for more than a year. They worry such a move would siphon votes away from President Biden in what is shaping up as a rematch between him and former President Donald J. Trump. Mr. Trump’s 2016 bid is widely perceived as having been aided by the presence of the Green Party nominee, Jill Stein, on the ballot in a handful of states.

Officials with No Labels have repeatedly suggested their efforts are conditional on whom the nominees are. But with less than 10 months until Election Day, anger at the group from people who do not want to see the likely Republican nominee become president has grown.

The suit relies on personal interactions that the Dursts, who are not registered Democrats, had with the group, such as with fund-raising solicitors, and on public reporting about No Labels’s activities. It says that No Labels worked against Mr. Biden’s Build Back Better legislation, and points out that in 2021, on its official Twitter account, the group criticized the work of the House select committee investigating the Jan. 6, 2021, attack on the Capitol by a pro-Trump mob as becoming “a partisan exercise.”

“A third-party ticket option will only discourage bipartisan reform because it will take votes away from one of the major political candidates, giving an advantage to the other candidate,” the suit says.

The complaint repeatedly suggests that the point of No Labels’s efforts to have another presidential candidate option in 2024 if there is a Biden-Trump matchup is to tilt the field toward the political right. The filing notes that William Galston, a founder of the group, left last year over concerns about the effort to recruit a presidential candidate.

It also notes that Representative Mark Pocan, Democrat of Wisconsin, also worked with the group in the past but publicly urged people not to be “duped” by it.

And the filing suggests that one of the group’s top officials, Nancy Jacobson, has been part of the bait and switch that the Dursts claim.

“Whether it is a breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel or unjust enrichment, it is wrong, and No Labels must now be held accountable for it,” the suit claims.