Supreme Court Hears Arguments in Smith & Wesson v. Mexico

This guest post does not necessarily represent the views of the Duke Center for Firearms Law. 

For nearly 20 years, courts across the United States have grappled with the Protection of Lawful Commerce in Arms Act (PLCAA). Congress enacted PLCAA in 2005 to mitigate the firearm industry’s liability for harms caused by post-consumer unlawful misuse of firearm products. 15 U.S.C. § 7901(a)(5). However, PLCAA does not provide the industry with an absolute defense against liability. Rather, PLCAA sets forth several broad exceptions, under which firearm manufacturers and dealers may be held civilly and criminally liable. When a firearm manufacturer defendant asserts the PLCAA defense, courts must determine whether the claims asserted constitute a “qualified civil liability action” and if so, whether they fall within one of the express PLCAA exceptions. To date, courts have reached inconsistent conclusions on the scope of the PLCAA exceptions, and the United States Supreme Court has remained on the sidelines. But a case currently before the Court may offer some clarity.

On Tuesday, March 4, 2025, the United States Supreme Court heard oral arguments in Smith & Wesson Brands v. Estados Unidos Mexicanos. The case involves a 2021 suit by the Mexican government against various U.S. gun manufacturers and a distributor for the unlawful sale of firearms to straw purchasers in the U.S. who trafficked the guns to Mexican cartels. As of the oral argument, Smith & Wesson and Interstate Arms are the only Petitioners, as the other original Defendants were dismissed for lack of jurisdiction. Mexico alleges that Defendants had knowledge of the unlawful sales and trafficking and they engaged in affirmative practices that aided and abetted the straw purchases. Specifically, Mexico alleges that defendants designed firearms that can easily be deserialized, marketed high capacity magazines, and knowingly allowed firearms to be distributed to red flag dealers. These red flag dealers sold firearms, often in bulk, to cartel traffickers, which ultimately account for 90% of crime guns found in Mexico. In 2024, the United States Court of Appeals for the First Circuit reversed a district court ruling that had granted a motion to dismiss and held that Mexico’s case survives PLCAA because the country’s allegations at least plausibly fit within the predicate exception, one of the express exceptions to the PLCAA defense. Smith and Wesson Brands (“S&W”) argues the First Circuit’s decision permits a lawsuit that Congress intended to preempt under PLCAA.

The factual allegations in this case are not inherently surprising, likely even to the firearm industry:

Years ago, Robert Ricker, then the head of an industry trade group, admitted under oath that gunmakers are aware that their distribution system "encourages and rewards illegal activity" but chose to do nothing to stop it. With American gunmakers standing at the headwaters of an "iron river" of illegal guns that flows across the world, other countries are ready to force a change.

However, that the Supreme Court granted certiorari in this particular PLCAA case before trial might be considered surprising, particularly after denying similar requests in previous and perhaps more straightforward cases. Nevertheless, this case has captured the attention of a number of different interest groups, extending far beyond the U.S. firearm industry.  Over 40 amicus briefs were filed in the case.

The Supreme Court granted certiorari on two issues. First, whether the production and sale of firearms in the U.S. amounts to “aiding and abetting” illegal firearms trafficking when a firearms manufacturer or seller knows that their products are unlawfully sold and trafficked. Second, whether Mexico alleged that the production and sale of firearms by U.S. firearm manufacturers is the proximate cause of injuries to the Mexican government from violence committed by cartels in Mexico. 

At oral argument, S&W argued that Mexico has not put forth a plausible aiding and abetting claim or pled that S&W’s actions proximately caused the harms, an element of PLCAA’s predicate exception on which Mexico relies. S&W argued that its conduct is not a proximate cause of Mexico’s harms from cartel gun violence because the chain of causation is severed by a series of “intervening independent crimes.” S&W also argued that aiding and abetting requires an affirmative action intended to further a crime and that “downstream” criminal misuse of firearms is not sufficient. Mexico disagreed, asserting that the First Circuit correctly found its claims fall within the predicate exception. Mexico argued that, under traditional proximate cause doctrine, foreseeable intervening acts do not break the chain of causation. Mexico asserted that Congress expressly carved an exception for this type of case when drafting PLCAA. This case, and the PLCAA question it raises, implicate the separation of powers, judicial activism, and economic concerns.

Justice Kavanaugh and others interrogated S&W’s argument that Mexico’s theory invites a parade of horribles across numerous industries by analogizing to beer manufacturers. S&W asserted that “if Mexico is right, then… Budweiser is liable for every accident caused by underage drinkers since it knows that teenagers will buy beer, drive drunk, and crash.” This Budweiser analogy, as framed by S&W, illustrates some economic concerns raised in the amicus briefs and evident in the legislative history surrounding PLCAA. As Justice Kavanaugh summarized, there is concern that Mexico’s “theory of aiding and abetting liability would have destructive effects on the American economy in the sense that… sellers and manufacturers of ordinary products know that they’re going to be misused by some subset of people.” Kavanaugh asked Mexico’s counsel how to rule in favor of Mexico without causing these problems, which he said were “identified with great force in the briefs.” In response, Mexico raised an alternate framing of this analogy, highlighting the important difference between lawful and unlawful conduct: “[I]f Budweiser… was alleged to have a practice, of selling bulk quantities… to liquor stores… next to high schools and it was selling more and more into those high schools, knowing that those liquor stores were regularly serving underage students, and, in fact, Bud Light designed… a new can that says Best Prom Ever and sold it right into that high school, that is the allegation[] in this case.” 

Generally, the Justices seemed cautious of––and at times expressly adverse to––the invitation to wade into the murky waters of common law proximate cause.  Justice Sotomayor, for example, feared that this would “open up a…Pandora’s box.” Instead, numerous Justices sought to avoid addressing common law tort proximate cause doctrine altogether by deciding the case on aiding and abetting grounds. For example, Justice Jackson expressed the most aversion to deciding this case as a matter of proximate cause based on common law doctrines. Jackson posited that the purpose and structure of PLCAA “makes this case about the [meaning and] scope of the predicate exception” not “an invitation to assess as a common law matter whether… we think these facts allege aiding-and-abetting liability.” Calling on separation of powers and judicial restraint principles, Justice Jackson suggested PLCAA may intend to preempt judicial activism and to protect Congress’s “prerogative to be the one to regulate the industry.” Reading the predicate exception, Justice Jackson emphasized that “the statute makes clear that we’re starting with 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.” Under Justice Jackson’s tort preemption theory, the predicate exception “makes perfect sense to the extent that there’s a violation of a state or federal statute at issue, because Congress…want[s] to be the ones to regulate.” Jackson went on to discuss her concern with judges adding their own gloss to this exception by overlaying common law tort principles. She explained that, in her view, the predicate exception should not “allow the very thing that the statute seems to preclude”—that is, judges applying tort principles to “circumvent the legislative branch.” Given her expressed aversion to applying common law tort theories here, Justice Jackson’s framing of this case seems to demand one inquiry: whether Mexico has alleged S&W “knowingly violated a state or federal statute” within the meaning of the predicate exception.

Justice Jackson’s apparent approach appears to favor S&W in this case, but Mexico argued a holding in its favor would not be inconsistent with PLCAA’s purpose and history. Justice Jackson’s theory suggests Congress enacted PLCAA to say it is not the court’s place to be “crafting remedies that amount to regulation” of the firearm industry. But importantly, as Mexico reminded the Court, “PLCAA could have been designed quite differently. It was designed this way for a reason, so that harmful actions by manufacturers and sellers breaking the law could continue to be remedied.” Mexico also highlighted the stark differences between this case and those giving rise to the enactment of PLCAA, arguing that this case does not implicate the things “that the congressmen and senators were concerned about.”  Further, Mexico suggested that “the fact that [when enacted, PLCAA was] bipartisan… points out particularly in this climate that…what was being challenged there were really unusual lawsuits that really weren’t showing up in any other part of… the economy against the manufacturers of a lawful product, selling their product lawfully, distributing their product lawfully, where no allegations were made in those prior lawsuits about unlawful behavior.” 

Justice Thomas, the first to ask questions of both sides, appeared focused on whether the violations Mexico alleges have been specifically identified and charged by the ATF. However, Mexico pointed out that if Congress wanted the ATF to be the sole arbiter of these issues, it could have barred all cases, but it did not. Mexico also recognized that “because of its resources, [the ATF] is only able to look… at about… 3-10% of licensed dealers, manufacturers and distributors,” rendering Thomas’ ATF stop-gate theory a tenuous one. 

Chief Justice Roberts and Justices Sotomayor and Gorsuch focused on the foreseeability of Mexico’s alleged harms. For example, Justice Sotomayor emphasized S&W’s alleged knowledge of the straw transactions, recognizing that it is foreseeable that a “straw purchaser is giving or selling the gun to someone who can’t possess it” and is likely to “use that gun illegally”. Justice Gorsuch asked whether S&W would deny that the complaint alleged proximate cause even if S&W knew or even intended every independent crime in the chain. Chief Justice Roberts explored if and how the percentage of guns manufactured in the U.S. that end up in Mexico affects this analysis. In contrast, Justices Kagan, Barrett and Alito appeared more focused on the factual sufficiency of Mexico’s allegations within the Twitter, Inc. v. Taamneh (2023) and Direct Sales Co. v. United States (1943) frameworks and expressed concern over the lack of specificity as to the identities of “specific red flag dealers” in Mexico’s complaint.

Overall, the Court clearly appreciated the many dimensions and potential impacts of this case, but it remains unclear whether the Supreme Court will truly seize this opportunity to provide lower courts with substantive guidance on the PLCAA exceptions. The Justices seemed cautious to ensure that the survival of Mexico’s claims under the predicate exception would not expand liability for gun manufacturers, circumvent legislative prerogative in this area, or alter any substantive law relating to proximate cause for tort liability in other industries. But the Court did not seem settled on any clear path to achieve this, and appeared more inclined to rule in favor of S&W. Regardless of the outcome, the Court’s decision is sure to impact the many ongoing efforts to hold actors within the gun industry liable for their unlawful conduct. The Supreme Court’s decision in Smith & Wesson Brands v. Estados Unidos Mexicanos is expected to come by June 2025.