Are Gun Manufacturers Under Renewed Assault?

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On October 12, the Wall Street Journal Law Blog reported  “A decision last week by a New York State appellate court to reinstate a gun liability lawsuit is being held up as a landmark by the Brady Center to Prevent Gun Violence.”

The decision, Williams v. Beemiller,  is hardly a landmark but it does hold an interesting lesson about the boundaries of the protections afforded to gun makers by a relatively recent federal law.  The central issue in the case is the application of the Protection of Lawful Commerce in Arms Act (PLCAA).  The PLCAA was a response to the rash of lawsuits brought against gun manufactures started during the Clinton Administration on a variety of novel theories like negligent distribution  and negligent oversupply.

These suits claimed that manufacturers who sold guns within the detailed regulatory structure designated by the federal Gun Control Act and administered by the ATF, still should held liable in tort where their guns were used in crime.  At the time, some criticized that the aim of the suits was not to win, but to bankrupt small gun firms with legal costs and to cow larger firms into concessions, that could not be achieved through the legislative process.   A variety of people objected to the tactic, including Robert Reich who criticized the suits for short cutting the democratic process.

Many states enacted laws that prohibited their municipalities from bringing these suits.  And ultimately, Congress passed the PLCAA insulating gun makers from lawsuits where their legally sold products are subsequently used in a crime.

The Williams Case is basically that scenario and the trial court granted the defendant’s motion to dismiss.  The WSJ reports the appellate court’s reversal of this decision.  The basis for the reversal is the court’s interpretation of one of the exceptions in the PLCAA that permits the manufacturer to be sued if it knowingly violates a state or federal law applicable to the sale or marketing of firearms and the violation is the proximate cause of the harm for which relief is sought.

The underwhelming part of the Williams decision is that it is just a reversal of the trial court’s grant of defendant’s motion to dismiss.  The threshold is very low.  Indeed the court suggested that the bare allegation that defendant knowingly violated the law, even without specifying what law was violated,  could be enough to survive a motion to dismiss.

The interesting thing about Williams is that factually it is atypical.  And these unusual facts, even if Plaintiff is ultimately successful, render Williams an aberration at best.

Here is the story.  The gun manufacture Beemiller makes a  line of relatively inexpensive guns under the brand Hi Point.  Plaintiff was shot with a Hi Point pistol.  As is typical in the industry, the manufacture sold that gun  directly to a distributor.  The distributor then sold the gun to a federally licensed retail dealer named Brown located in Ohio.  Brown is alleged to have knowingly engaged in illegal straw sales to Nigel Bostic, who was prohibited from purchasing firearms. A straw purchaser (legally permitted to buy the guns) allegedly filled out the paper work and paid cash for guns selected by Bostic.  In a series of straw transactions Bostic allegedly acquired more than 80 guns with the intent of selling them illegally back in New York.  One of those guns was used in the shooting of  Daniel Williams, a high school student in Buffalo, who was mistaken for a rival gang member.

Straight forward application of the PLCAA typically would preclude a suit against the manufacturer in a case like this.  In the typical case there is an arm’s length business relationship between the gun maker, who sells to wholesale distributors, who in turn sell to retail dealers who sell to consumers in accordance with the instant background check and other requirments of the Gun Control Act.  The point of the PLCAA was that a gun maker, in compliance with all of the laws for making and selling a firearm should not be sued when the gun is used in a way that breaks the law.

The novel thing in the Williams case is the complaint alleges  the maker of Hi Point guns, sells only to a single exclusive distributor, MKS Supply.  Nothing inherently worrisome so far.  But here is thing.   MKS Supply, allegedly is controlled by a man named Brown (currently the president of  MKS supply says the Complaint).   Mr. Brown is also the federally licensed firearms dealer who allegedly sold 87 guns to the straw purchaser, including the gun that was to shoot Daniel Williams .

The PLCAA does not insulate manufacturers from suits alleging violations of state or local laws.  The complaint alleges an illegal straw sale by Brown and claims that the manufacturer was an accomplice in this sale.  The crux of the claim is the allegation of an unusually close relationship between manufacturer, wholesaler and retailer.  If proved, this is  a very different fact pattern from the set of concerns that undergird the PLCAA.  So Williams is not a landmark case.  It just presents a fact pattern at the boundaries of the protections the statute was designed to create.