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Industry News: January 2002

SAR Staff by SAR Staff
August 2, 2022
in Articles, Articles by Issue, V5N4 (Jan 2002), Volume 5
Industry News: January 2002
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By Robert M. Hausman

U.S. Court of Appeals Gives Industry Huge Victory

A major victory was gained by the industry with the recent U.S. Court of Appeals for the Second Circuit’s ruling dismissing the Hamilton v. Accu-Tek case. The suit, brought by relatives of shooting victims, was the first in which a group of private individuals were allowed to proceed to trial in a claim for damages against virtually the entire firearms industry.

The plaintiffs had won a judgement in a 1999 trial in the U.S. District Court for the Eastern District of New York presided over by anti-gun activist Judge Jack B. Weinstein. The jury in that trial had delivered a verdict for the plaintiffs on the claim that defendants were negligent in the marketing and distribution of handguns. The jury decision was then appealed.

The list of defendants in the case read like a “who’s who” of the firearms industry and included such names as Glock, Inc., Sturm, Ruger and Thompson/Center. Many of the major wholesalers were also named in the action.

At the conclusion of the jury trial held in 1999, Beretta USA Corp, Taurus International Firearms and former importer American Arms were held liable for failing to exercise reasonable care to prevent their handguns from falling into the hands of criminals and minors. The manufacturers appealed to the U.S. Court while raising novel questions of New York law. The issues raised by the manufacturers’ appeal were sent to the New York Court of Appeals for resolution. The answer required reversal of the judgement and dismissal of the suit.

Gail Fox and her son Stephen, together with other relatives of shooting victims, brought the suit after Stephen was permanently disabled in a handgun shooting incident at the age of 16. The district court dismissed the plaintiffs’ product liability and fraud claims on defendants’ initial motion for summary judgement, but allowed the suit to proceed to trial on a negligent marketing theory.

At trial, plaintiffs pursued the theory that the defendant handgun manufacturers had marketed and distributed their products in a negligent fashion that directly fostered an illegal underground market in handguns, thereby furnished the arms involved in the shootings that precipitated the suit. Since only one of the handguns in question had been recovered, plaintiffs further argued that traditional common law principles of causation should be eschewed in favor of a market share theory of liability. Under this theory, defendants would be held severally liable for the resulting damages in proportion to their respective shares of the handgun market.

Following a four-week trial, the jury returned a verdict holding that 15 of the 25 defendants had failed to exercise reasonable care in the marketing and distribution of their handguns. It ultimately made an award of $3.95 million in damages for Stephen Fox and an award of $50,000 to his mother, assessed against only three defendants under a market share theory. American Arms was found liable for 0.23% liability, Beretta USA for 6.03% liability, and Taurus 6.08% liability.

The three defendant firms then appealed, challenging, among other issues, the district court’s view that defendants breached a duty to exercise reasonable care in the marketing and distribution of their handguns. Interestingly, the U.S. appeals court received a letter from the anti-gun New York Attorney General, Eliot Spitzer, in which the AG himself requested certification of the “duty of care” question to the New York appeals court. The U.S. Court of Appeals cited Spitzer’s letter in its decision to send the two questions of law to New York’s highest court for certification.

The questions were: 1) Whether the defendants owed plaintiffs a duty to exercise reasonable care in the marketing and distribution of the handguns they manufacture; and (2) Whether liability may be apportioned on a market share basis, and if so, how? Several months later, the New York Court of Appeals handed down a unanimous decision answering both questions in the negative.

Contrary to the district court’s reasoning, the court of appeals found that defendants’ relationships with their dealers and distributors did not “place the defendants in the best position to protect against the risk of harm” given the “very large” pool of potential plaintiffs and the “remote” connection between defendants, the criminal wrongdoers, and plaintiffs.

Further, given the lack of evidence of “any statistically significant relationship between particular classes of dealers and crime guns,” the court reasoned, imposition of such a general duty of care would create large, indeterminate classes of plaintiffs and defendants “whose liability might have little relationship to the benefits of controlling illegal guns.”

Finally, in response to plaintiffs’ assertion that defendants “negligently entrusted their dangerous products to irresponsible” dealers and distributors, the court highlighted the lack of evidence that defendants knew or had “reason to know their distributors were engaging in substantial sales of guns into the gun trafficking market on a consistent basis.”

On the second question regarding the “market share” issue, the New York court explained that the leading precedent applying the market share theory (involving the drug DES) had relied on three principal factors: (1) the manufacturers acted in a parallel manner to produce an identical, generically marketed product; (2) the manifestations of injury were far removed from the time of ingestion of the product; and (3) the state legislature made a clear policy decision to revive these otherwise time-barred (by the statute of limitations) claims. In the present case, by contrast, the court remarked that “guns are not identical, fungible products (as is production of the drug DES)” and defendants “marketing techniques were not uniform.”

The court concluded, “plaintiffs have not shown a set of compelling circumstances… justifying a departure from traditional common-law principles of causation” and also answered the second certified question in the negative.

In response, plaintiffs submitted a brief declaring that the court of appeals failed to answer the questions, and that even if the questions were properly answered, a remand (back to the trial court) was appropriate to permit additional discovery and a new trial.

In response, the U.S. Court of Appeals noted the New York court had concluded as a matter of New York law that “defendants…did not owe plaintiffs the duty they claim.” The U.S. court added, “That ruling is final, and we may not revisit it. Moreover, it is black letter law in New York that a plaintiff cannot recover on a negligence claim absent some duty of care owed by defendant to the plaintiff. Because there was no duty owed in this case, there can be no liability.”

The plaintiffs had cited a number of decisions in which remand for further discovery and retrial was ordered, but the U.S. Court of Appeals found none of these relevant to the case against the gun industry. “Plaintiffs could have brought the present case on a theory of duty consistent with those precedents, but they chose not to do so. Having tried the case on the theory chosen, plaintiffs are not entitled to retry it on a new theory,” the court ruled.

Industry Reaction

“We trust this puts the final nail in the coffin of this distasteful experiment to harass legal and responsible manufacturers through unproven and convoluted legal theory,” commented Robert T. Delfay, president and ceo of the National Shooting Sports Foundation, upon hearing of the decision.

“This decision…affirmed the common sense notion that a gun maker is not in a position to be able to stop the criminal misuse of their firearms and therefore cannot be held liable for such criminal misuse,” said Jeff Reh, Beretta USA’s general counsel. “The fatal accident rate involving firearms has dropped over 50% in the last 15 years. Crime rates are going down dramatically. The allegation by plaintiffs that firearm manufacturers are negligent in the sale and distribution of their products is a canard.”

Other recent significant legal decisions in favor of firearms manufacturers include:

  • Dismissal of a suit filed by New York State Attorney General Eliot Spitzer, attempting to hold firearms manufacturers liable for the costs of gun violence.
  • A decision by the California Supreme Court that firearms manufacturers cannot be held responsible for the criminal misuse of a legally sold and non-defective product.
  • A decision by the Louisiana Supreme Court dismissing a suit against gun makers by the City of New Orleans and its mayor, Marc Morial.

Setback in New Mexico

At presstime, about half of the 30 some municipal lawsuits against the industry have been dismissed. However, anti-gun groups are continuing their legal assault. The New Mexico Court of Appeals recently ruled that Bryco Arms, a manufacturer of semi-auto pistols, and its distributor, B.L. Jennings, Inc., each have a duty of care to make the handguns they manufacture and sell safe from foreseeable misuse by minors. The decision in Smith v. Bryco Arms, reverses a March 1999 trial court decision granting summary judgement, and sets the stage for a jury trial of plaintiff’s claims.

The case involves the accidental shooting of a 14-year-old, who was injured when a friend handed him a Bryco J-22 pistol without the magazine. The friend did not check the chamber and thus thought the pistol was unloaded. In handing the pistol over he pulled the trigger, causing the round in the chamber to discharge.

In reversing the lower court’s dismissal of the case, the appeals court found plaintiffs’ claims were “well within existing New Mexico products liability and negligence law.” The court noted that patents going as far back as 1912, and a 1958 article in a National Rifle Association magazine, indicated the value of magazine-disconnect safeties. The New Mexico appeals court also rejected a common claim made by firearms makers that gun safety must be mandated by legislatures. “We do not perceive anything so unique about handguns that they cannot or should not be subject to normal tort law concepts, norms, and methods of analysis. The distinctive aspects of handguns as a type of firearm can be reasonably accommodated and accounted for under our existing law without ‘outlawing,’ or otherwise restricting handgun manufacture and sale. To the contrary, application of our tort law can be expected to enhance ownership by tending to increase the safety of handgun use,” the court said.

Bryco’s attorney, Jennie Behles of Albuquerque, said she would file a motion for rehearing as there were substantial matters of law overlooked in relation to the children’s acquisition and use of the gun. Consideration of the case should turn on whether the gun was used in the manner in which it was intended to be used, she said. Plaintiffs in the case are represented by attorneys from the Legal Action Project of the Brady Center to Prevent Gun Violence, formerly known as Handgun Control, Inc.

Sturm, Ruger Sued

In late July, the Brady Center filed suit against Sturm, Ruger & Co., the retailer of the gun involved, and other parties, over the accidental shooting of a 13-year-old by a playmate in Maryland.

In announcing the suit, Daniel Vice, a Legal Action Project attorney, said, “Sturm, Ruger knows that unintentional shootings occur regularly. Yet it has consistently refused to add common sense, feasible safety devices and warnings to its handguns. Even a $10 camera indicates how many ‘shots’ remain in it, yet a Sturm, Ruger handgun does not even reveal whether a bullet is hidden in the chamber.”

Author’s note: While two of the cases cited above (in Mexico and Maryland) involve suits over the lack of a magazine disconnect device in handgun design, conversations with attorneys representing industry firms have revealed that the anti-gun side would not be satisfied if magazine disconnect safeties were incorporated in every handgun sold. Accidental shootings would still occur no matter how many safety devices are installed on handguns, and the Brady Center would continue to file suits on other grounds. The suits are really about attempting to end handgun ownership by the civilian population.

NICS Data

The recession the firearms industry has been in during the last couple of years is reflected in data released by the Federal Bureau of Investigation, administrator of the National Instant Criminal Background Check System (NICS).

From November 1998 (when the NICS system was begun) through February 2001, just under 20 million background checks were performed on gun buyers. In 1999, the first full year of the system’s operation, some 9,138,123 checks were performed. In 2000, this figure dropped to 8,543,037.

The majority of the delays in record checks occurred during the hours of 12 noon and 6 p.m. on Tuesdays, Wednesdays and Thursdays, according to the FBI. These are apparently the peak gun buying periods.

A felony conviction is most often the reason found for the denial of the gun purchase, followed by domestic violence convictions, and drug abuse offenses. Some 168,830 persons were denied by the NICS during the 28-month period studied.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

This article first appeared in Small Arms Review V5N4 (January 2002)

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