An Early Preview of the Supreme Court’s PLCAA Case

On October 4, the Supreme Court granted certiorari in Smith & Wesson v. Estados Unidos Mexicanos.  The case involves claims brought by the government of Mexico against a group of U.S. gun manufacturers seeking to recover for the costs of gun violence in Mexico that the Mexican government alleges are caused by the gunmakers’ sales and distribution practices that facilitate cross-border gun trafficking.  In short, Mexico seeks to hold the gunmakers liable under U.S. tort law for contributing to gun violence in Mexico—a country that itself has very strict gun regulations. 

The major issue in the case is whether such liability would contravene the Protection of Lawful Commerce in Arms Act, or PLCAA, which broadly immunizes gun manufacturers from liability for crimes committed by a third party using their products subject to certain enumerated exceptions.  PLCAA applies to a “civil action or proceeding [] brought by any person against a manufacturer or seller of a qualified product . . . resulting from the criminal or unlawful misuse of a qualified product by the person or a third party.”  Such actions are generally prohibited, though the statute exempts certain categories of legal action from its immunity shield including:

an action in which a manufacturer or seller of a qualified product knowingly violated a State or Federal statute applicable to the sale or marketing of the product, and the violation was a proximate cause of the harm for which relief is sought.

This is known as the predicate exception, and it generally requires that a plaintiff identify an independent legal violation by the manufacturer that was a proximate cause of the harm alleged. 

The gun manufacturers’ cert petition identifies two questions presented in the case related to the scope of the predicate exception.  The first question relates to the legal violation itself.  Specifically, the question is whether the allegation that manufacturers are aware that their products are being illicitly trafficked into Mexico is sufficient to allege that the manufacturers are aiding and abetting gun trafficking—thus knowingly violating statutes that bar such trafficking and relate to the sale of firearms.  The second question relates to proximate cause: has Mexico sufficiently alleged that any such legal violations (assuming they exist) proximately cause gun violence in Mexico and the harm for which Mexico is seeking to recover in the case?

Below, the First Circuit allowed Mexico’s claims to proceed because it found that Mexico had plausibly alleged a cause of action that fit within the predicate exception.[1]  The panel determined that the predicate exception includes both alleged common law and statutory violations and that Mexico had adequately pled an underlying legal violation by “alleg[ing] that defendants have been aiding and abetting the sale of firearms by dealers in knowing violation of relevant state and federal laws.”[2]  Here, the panel emphasized Mexico’s allegation that the gunmakers supply gun dealers with their products even when they know that those specific dealers are trafficking firearms to Mexican drug cartels to meet high demand for firearms in the country.  And Mexico also alleged that gunmakers design their weapons in order to facilitate such trafficking and reap profits from this illicit trade.  Thus, the panel found, Mexico sufficiently alleged that the gunmakers had aided and abetted the violation of anti-trafficking laws by specific gun dealers, the type of “violat[ion of] a State or Federal statute applicable to the sale [] of the product” that falls within the predicate exception.[3]

Next, the panel turned to proximate cause—a requirement generally designed to ensure that there is some direct through line between the alleged wrongful conduct and the harm for which a plaintiff seeks to recover damages.  Proximate cause often reduces to whether the harm was, or should have been, foreseeable to the defendants based on their alleged misdeeds.  Here, Mexico has emphasized that gun trafficking—of which it has alleged the manufacturers are aware—directly causes the Mexican government to incur substantial costs responding to gun violence in the country.  The gunmakers, by contrast, have argued that intervening steps by the gun distributors and dealers who actually traffic firearms into Mexico and the cartels themselves break the causal chain.  To the panel below, Mexico’s alleged expenditures became foreseeable when the dealers illegally trafficked firearms into the country, and the fact that Mexico alleged that the gunmakers were aware of these sales meant that the gunmakers’ actions proximately caused the alleged damage.  The panel emphasized that “the fact that one can fashion a multi-step description of the causal chain does not mean that the injurious conduct and the injury alleged are insufficiently connected.”  It further determined that Mexico had alleged expenditures that were “not merely derivative of those borne by the direct victims of gun violence,” and the court rejected policy-based rationales for declining to find proximate cause.

It’s fair to say that Smith & Wesson is a somewhat unique case in that it involves a foreign government with very strict domestic gun laws seeking to recover from the U.S. firearms industry for illegally-trafficked guns.  I think it is also reasonable to believe that the Supreme Court is likely to reverse the First Circuit and toss Mexico’s lawsuit—that’s a prediction derived in part from the Court’s choice to grant cert the first place (which suggests that at least four justices are skeptical of the First Circuit decision), and in part by the expectation that a 6-3 split along ideological lines seems likely here given the subject matter and the presence of atmospheric Second Amendment arguments.[4]  However, it’s worth asking whether the Smith & Wesson case—the Supreme Court’s first ever opportunity to interpret and weigh in on PLCAA and tort liability for gunmakers—could have broader consequences.

Especially in recent years, a number of states have passed firearm industry nuisance statutes written specifically to fit within PLCAA’s predicate exception and authorize lawsuits against gunmakers in certain circumstances.  For example, New York’s law states that gun industry members are prohibited from “knowingly or recklessly creat[ing], maintain[ing] or contribut[ing] to a condition in New York state that endangers the safety or health of the public through the sale, manufacturing, importing or marketing of a qualified product” and that industry members “shall establish and utilize reasonable controls and procedures to prevent [] qualified products from being possessed, used, marketed or sold unlawfully in New York state.”  Any violations of the statute are deemed to be a public nuisance that authorizes a lawsuit by either the state attorney general or by private parties impacted by the gunmakers’ conduct.  New Jersey and other states have passed similar statutes, which are designed to provide a blueprint for PLCAA predicate-exception litigation by creating a statutory cause of action (thus avoiding any uncertainty about whether a common-law cause of action qualifies for the exception) and explicitly deeming conduct that violates the statute to be a violation of a state statute “applicable to the sale or marketing of” firearms (thus avoiding uncertainty over whether the violation of a general state public nuisance or unfair trade practices statute that doesn’t specifically apply to firearms can qualify under the predicate exception).[5] 

Reversing the First Circuit as to the violation aspect of the predicate exception would likely be more consequential than reversing the First Circuit as to proximate cause.  If the Supreme Court holds that Mexico failed to allege the type of violation contemplated in the predicate exception, that could narrow the scope of predicate-exception litigation substantially to instances where the gun manufacturer itself engages in illegal conduct (rather than aiding and abetting downstream illegal conduct).  And such a decision would have major consequences for domestic PLCAA litigation because the new wave of state public-nuisance statutes often specifically contemplate that a gunmaker’s distribution practices can give rise to liability even after the point of sale.  New Jersey’s law, for example, covers knowingly or recklessly contributing to a public nuisance through distribution practices.  A decision that broadly limits the extent to which gunmakers can be liable for distribution practices even when the improper practices are actually performed by a middleman (such as a gun dealer who traffics guns into Mexico), even when the gunmaker knows about those practices, would thus substantially pare back the scope of permissible liability under state public-nuisance statutes as well. 

Another avenue by which the Court could reverse is to focus on the unique causal chain in the case that includes cross-border gun trafficking and harm caused by foreign cartels with American-manufactured firearms.  This route seems less likely to broadly unsettle things at the state level, as it’s at least possible for the Court to write an opinion that emphasizes how unique the facts of this case are.  In most domestic litigation, there simply will not be the same number of intervening actions because the harm caused will be closer to home.  That said, it will be important to watch whether the Court seems receptive to the gunmakers’ argument that Mexico’s damages are merely derivative of the harm suffered by individual people harmed by gun violence in the country.  That line of argument would presumably hamstring efforts by state attorneys general to pursue predicate-exception litigation against gunmakers based on harm to the public.  And, if the Court takes a very narrow view of proximate cause in the case, it could effectively immunize gunmakers even in situations where it is alleged that they have sold to dealers who evade the background check system or otherwise provide firearms to prohibited persons (because the illegal acts of those dealers might be superseding causes of any harm).