On March 25, 2024, a U.S. District Court in Arizona denied the motion to dismiss by five gun dealers. It ruled that the Government of Mexico could continue its lawsuit to hold the gun dealers liable for allegedly facilitating gun trafficking from the U.S. into Mexico and causing substantial gun violence in Mexico.
Mexico brought the complaint on October 10, 2022. On February 22, 2024, U.S. District Court Judge Rosemary Márquez held that Mexico could proceed with its claims of negligence, negligent entrustment, gross negligence, unjust enrichment, and demand for punitive damages. The court dismissed the public nuisance, RICO and consumer fraud claims.
In Mexico v Diamondback Shooting Sports, et al, Judge Márquez ruled that the Protection of Lawful Commerce and Arms Act (PLCCA) does not prohibit the lawsuit, seeking to make the dealers accountable.
Judge Márquez ruled that PLCCA and its immunity can apply to crimes committed outside of the U.S. However, she observed that several exceptions apply to the immunity. In particular, she noted that one exception is suits “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.”
According to Judge, Mexico alleges that the gun dealers aided and abetted the buyers who make false statements on the federal form required when a licensed dealer sells a gun. The statement requires identifying information on the buyer and an affidavit that the buyer is eligible to have a firearm. Mexico alleges a link between the actions of the gun dealers and the harm allegedly suffered in Mexico.
The opinion observes that Mexico argues it can show that weapons seized in Mexico can be traced to the dealers who are being sued.
The opinion rejects the claims by the dealers that the Second Amendment of the U.S. Constitution protects their sales. The opinion also rejects the arguments by the dealers that a state law specifically designed to shield gun manufacturers, distributors, dealers and importers of firearms from lawsuits protects their activities. The opinion reasons that the law “is intended to protect from liability businesses engaged in the lawful, rather than the unlawful, sale of firearms.”
The fact that Mexico can present its case for punitive damages means that the potential liability at risk for the gun dealers is enormous.
The Government of Mexico also won its appeal on January 22 when the U.S. Court of Appeals for the First Circuit, holding that Mexico’s lawsuit against several gun manufacturers can proceed.[1]
The April issue of the IELR will have additional discussion and analysis of the decision.
[1]Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. et al, U.S. Court of Appeals for the First Circuit, No. 22-1823, Memorandum Opinion, Jan. 22, 2024. See also Bruce Zagaris, 1st Circuit Overturns District Court to Allow Mexico’s Lawsuit against U.S. Gunmakers, 40 Int’l Enforcement L. Rep. 48 (Feb. 2024).