Hints from Parker Drilling for the Sandy Hook Litigation?

Earlier this week, the Supreme Court unanimously decided a sleepy statutory interpretation question concerning the Outer Continental Shelf Lands Act. That case, however, may contain clues about how the Court could approach the interpretive question involved in the Sandy Hook litigation over the Protection for Lawful Commerce in Arms Act (PLCAA).

In Parker Drilling the Court had to determine when the Outer Continental Shelf Lands Act commanded use of state laws as federal law; according to the statute, that was only “[t]o the extent that [state laws] are applicable and not inconsistent with” other federal law. The debate turned, in large part, on how to define “applicable.” PLCAA uses similar language to exempt certain state law causes of action from its ban on suits against the firearms industry: those in which a gun manufacturer or seller “knowingly violated a State or Federal statute applicable to the sale or marketing of the product.” The debate over this phrase—the so-called “predicate exception”—has also largely turned on the meaning of the term “applicable.” Specifically, the debate in PLCAA litigation is whether “applicable” means any law that could be applied to the sale or marketing of a gun (such as Connecticut’s general unfair trade practices law) or whether it only includes those laws that by their terms apply to gun sales or gun marketing (such as rules about age restrictions on gun sales or marketing restrictions on gun ads).

So what, if anything, can we glean from Parker Drilling?

There, the Court first noted a circuit split in how to read the relevant phrase. The Fifth Circuit adopted a narrow reading, holding that “state law only applies to the extent it is necessary ‘to fill a significant void or gap’ in federal law.” The Ninth Circuit, on the other hand, “held that state law is ‘applicable’ under the OCSLA whenever it ‘pertains to the subject matter at hand.’”

The Court observed that the question was a close and difficult one that could not be resolved by the words themselves.

In short, the two terms standing alone do not resolve the question before us. Particularly given their indeterminacy in isolation, the terms should be read together and interpreted in light of the entire statute.

But in the end, it sided with the Fifth Circuit’s narrow reading. Given the statutory scheme, the Court concluded that the phrase “applicable and not inconsistent” means that the statute only incorporates state law as federal law when other federal law does not address the relevant issue. “Put another way, to the extent federal law applies to a particular issue, state law is inapplicable.” Because an irrelevant law would never apply, it rejected the Ninth Circuit’s reading as too broad.

As well as the place of the phrase in the “overall statutory scheme,” the Court supported its reading with three additional arguments: (1) a contrary reading would “deprive[] much of the statute of any import,” (2) the Court’s reading accords with the rationale for the statute and  its historical development, and (3) the Court’s precedent supports the adopted interpretation.

These are all types of arguments that might reappear in litigation over PLCAA if the Court thinks the plain text doesn’t resolve the dispute at the threshold. The Court might ask if a broad reading would sap PLCAA of “any import” or which reading comports with the rationale for and history of the law. If the Supreme Court thinks it has jurisdiction over the appeal, and grants the upcoming petition, we may just see another debate about the term “applicable” return to the Court.

PLCAA, Sandy Hook, and Appealability

The Connecticut Supreme Court recently allowed a suit arising from the Sandy Hook shooting to proceed against Remington. In doing so, it rejected Remington’s argument that the Protection for Lawful Commerce in Arms Act (PLCAA) bars the suit. Remington plans to seek U.S. Supreme Court review. But can it seek that review now?

Under PLCAA, gun manufacturers, distributors, and retailers are immune from liability for criminal or unlawful misuse of a gun, with one exception pertinent to this case. Pursuant to the so-called “predicate exception,” gunmakers and sellers can still be liable for violating a state or federal law “applicable to the sale or marketing of the product.” The crux of the Connecticut ruling is that one of the plaintiffs’ narrow legal theories fits within the predicate exception: that Remington marketed and advertised its AR-15 style rifles to be used “to carry out offensive, military style combat missions against [buyers’] perceived enemies.” Because “Connecticut law does not permit advertisements that promote or encourage violent, criminal behavior,” those allegations suffice to bring the claim within the predicate exception.

But the Connecticut Supreme Court’s ruling is interlocutory. Because it held that PLCAA did not bar the suit, the Court reversed the trial court’s dismissal of the case against Remington and remanded for further proceedings. Typically, the U.S. Supreme Court will only review “[f]inal judgments or decrees rendered by the highest court of a State in which a decision could be had.” As the Supreme Court has explained that rule: “To be reviewable by this Court, a state-court judgment must be final in two senses: it must be subject to no further review or correction in any other state tribunal; it must also be final as an effective determination of the litigation and not of merely interlocutory or intermediate steps therein. It must be the final word of a final court.”

Despite this broad language, the Court has carved out several exceptions to the final-judgment rule. One exception is for those cases in which (1) “the federal issue has been finally decided in the state courts with further proceedings pending in which the party seeking review here might prevail on the merits on nonfederal grounds,” (2) “reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action,” and (3) “a refusal immediately to review the state court decision might seriously erode federal policy.”

In the upcoming cert petition and opposition, expect the parties to debate the applicability of the exceptions to the final-judgment rule and whether the Connecticut Supreme Court’s opinion would “erode federal policy.”