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Litigation Highlight: New York Officials Alleged Ghost Gun Manufacturers Created a Public Nuisance – Now the Settlements Have Started

By on November 23, 2022 Categories: , ,

On June 29, only six days after the Supreme Court struck down a New York law requiring gun owners to show a special need to carry concealed handguns in public, New York officials filed two civil lawsuits against manufacturers of so-called “ghost guns.” The first lawsuit was filed by the state attorney general, Letitia James, and the other was filed by New York City. These were the first suits brought under the state’s recently-enacted public nuisance law that classifies the unlawful or improper marketing or sale of firearms as a public nuisance.

New York State lawmakers passed the public nuisance law at issue roughly a year before the lawsuits were filed. The law requires all firearms manufacturers to establish “reasonable controls” to prevent their guns from being used, marketed, or sold illegally in New York. A manufacturer’s conduct is deemed a nuisance if it fails to institute such reasonable controls and, in turn, endangers the public. The law permits the New York attorney general and municipal governments to bring civil suits against “gun industry members” for failing to institute or utilize reasonable controls. The law also empowers individuals to seek damages if they were proximately harmed as a result of a firearm manufacturer’s marketing or sales tactics.

The measure is the first of its kind in the nation to specifically classify the illegal or reckless marketing or sale of firearms as a public nuisance. Though the federal Protection of Lawful Commerce in Arms Act (PLCAA) protects gun manufacturers and firearms dealers from liability when crimes are carried out with their products, it contains a number of exceptions. The New York law utilizes one of these exceptions: manufacturers may still be sued under a state or federal law that specifically regulates the sale or marketing of products, including laws like New York’s new statute that are written specifically to fit within that exception to PLCAA.  A federal court upheld New York’s law in May against arguments that it was preempted by PLCAA, finding that “Congress clearly intended to allow state statutes which regulate the firearms industry.”  On the other hand, courts have previously held that general nuisance statutes are barred by PLCAA because they do not regulate the sale and marketing of firearms specifically.

In the two lawsuits, New York City and New York’s attorney general allege that the defendant-companies violated the state’s public nuisance law by failing to establish and utilize reasonable controls when marketing and selling tens of thousands of illegal “ghost gun” parts to New Yorkers over the last five years. The term “ghost gun” generally refers to any weapon parts kit, frame, low receiver, or fully assembled firearm that lacks a serial number placed by a licensed manufacturer. The recently modified federal regulatory definition of a firearm includes not only fully-assembled, operable guns, but also the dissembled, core components of guns, known as the frame or receiver, and any weapon-parts kit that can be readily converted into an operable firearm. The ATF’s “frame or receiver” rule has been challenged in court by both gun-rights groups and gun-violence-prevention organizations.

According to the two lawsuits, the ten defendant-companies virtually sell and market disassembled frames or low receivers without federally-mandated serial numbers. Serial numbers enable law enforcement to trace firearms recovered at crime scenes to their purchasers; therefore, the plaintiffs claim the unserialized frames are attractive to criminals seeking to evade detection by law enforcement. Further, plaintiffs allege that these online sales were conducted without the background checks legally mandated for all gun sales in New York, which make the ghost gun parts even more attractive and accessible to individuals barred by law from acquiring firearms. Thus, by marketing and selling these products in a way that both appeals to and permits otherwise-barred individuals from purchasing firearms, the complaints allege the companies failed to establish and utilize reasonable controls in their sale and marketing of unfinished frames and receivers and deliberately endangered the public in violation of the state’s public nuisance law.  

Both lawsuits present a myriad of statistical evidence purporting to show how this lack of reasonable controls has directly contributed to an increase in crime in New York City and state. For example, Arm or Ally, one of the defendant ghost gun manufacturers, allegedly shipped at least 511 packages, which are believed to have included illegal frames and receivers, to purchasers located in New York state between January 3, 2021 and June 7, 2022. Some of these guns, the complaints allege, were subsequently used in crimes in New York. For example, the City’s complaint states that the number of ghost guns seized in connection with New York Police Department arrests has increased at a rapid pace over the last three years (with 175 ghost guns seized so far in 2022). Investigators from the New York City Sheriff’s Office and Office of the Attorney General also conducted undercover online purchases of unserialized frames from each of the defendant manufacturers. According to the complaints, the companies did not perform background checks on these undercover investigators, nor did they require proof of a valid state or city gun license. Some of these orders were delivered in just two business days.

Though these two lawsuits mark the first use of New York’s newly-enacted public nuisance law to combat the illegal or improper marketing or sale of ghost guns, the City’s early efforts have been successful. New York City has reached settlements with four of the five online firearms distributor defendants named in its case. Rainer Arms, LLC (based in North Auburn, Washington), Rock Slide USA (based in Broadway, North Carolina), Salvo Technologies (based in Largo, Florida), and Arm or Ally (based in Kansas City, Missouri) agreed to stop selling and delivering gun components used to assemble ghost guns to New York City residents.

In their respective settlement agreements, Salvo and Arm or Ally also agreed to provide all “identifying information” for the purchasers of their ghost gun parts. Identifying information includes the name, email address, phone number, shipping addresses, and IP (internet protocol) address associated with each purchase. Though New York City agreed it would not publicize nor publicly disclose such identifying information, it is permitted to make the information available to any City agency, including the New York City Police Department, under the agreements.

Though it is unclear exactly why New York City included these provisions, it is possible that the City will use the information to determine whether the manufacturers made large shipments to distributors in the city, and then pursue legal action against those distributors. Similarly, the City might use the information to aid law enforcement in identifying and arresting individuals who purchased the manufacturers’ component parts despite being prohibited by law from possessing weapons (due to a prior felony conviction, for example).

On November 4, the fifth and final defendant in New York City’s suit—Indie Guns—filed its answer to the City’s complaint. In its answer, Indie Guns denies that its sells unfinished frames directly to individual customers in New York City. Indie Guns argues that, even if it sells such frames, the City’s complaint fails to demonstrate that the sales proximately caused the alleged harm because there are no concrete allegations linking the conduct of Indie Guns to the specific crimes referenced in the City’s complaint. The state’s claims against the other five ghost gun retailers also remain unsettled.

Recent legal battles between state and local governments and pharmaceutical companies over the opioid crisis may provide insight into how these remaining claims, and future legal battles between municipalities and ghost gun manufacturers, will unfold. In 2014, state and local governments sued manufacturers and distributors of opioids, including Johnson & Johnson and retail pharmacies, arguing that they created a public nuisance by improperly marketing and selling opioids. Specifically, the governments argued that these companies created a public nuisance by exaggerating the benefits of opioids while downplaying their known risks, including addictiveness, in their marketing and sales practices. These assertions are similar to New York’s claims that selling and marketing ghost guns and component parts without conducting required background checks or verifying buyer permits endangers the public by facilitating access to firearms by violent or unqualified individuals.  

However, in the opioid context, several courts found that the government plaintiffs had failed to sufficiently connect the discrete actions of pharmaceutical companies to a deliberate effort to endanger public health, especially when opioids were legitimately prescribed by doctors. For example, in November 2021, judges in California and Oklahoma ruled that, even if the pharmaceutical companies marketed opioids in a false or misleading way, the plaintiffs failed to show that such improper marketing increased the volume of illegitimate, or illegally prescribed, opioids. In the view of these courts, adverse downstream consequences from medically appropriate prescriptions could not constitute an actionable public nuisance.   

Though the two lawsuits seeking to combat ghost guns bear many similarities to these opioid lawsuits, New York’s remaining ghost gun claims may be more successful if they make it to trial. First, New York law explicitly prohibits the sale, marketing, and distribution of ghost guns and component parts (whereas opioids were generally distributed and prescribed to patients legally). Further, because New York’s new public nuisance law expressly classifies the unreasonable sale and marketing of ghost guns as a public nuisance, the claims are on more solid footing. Finally, while apportioning responsibility in the opioid cases proved difficult because opioids pass through many entities before reaching a patient, ghost gun component parts are often sold directly to consumers online.

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