Supreme Court Casts Doubt on Mexico’s Suit Against Gunmakers (2)

The US Supreme Court signaled it’s likely to toss out a Mexican government lawsuit that accuses gunmakers including Smith & Wesson Brands Inc. of helping to funnel firearms to the country’s violent drug cartels.

Hearing arguments in Washington Tuesday, justices from across the ideological spectrum suggested they will strengthen the industry’s liability shield by reading a 2005 federal law as barring Mexico’s suit.

Justice Ketanji Brown Jackson, one of the court’s liberals, said the 2005 law was in part “about Congress protecting its own prerogative to be the one to regulate this industry.” She said the Mexico lawsuit risked “running up against the very concerns that motivated this statute to begin with.”

The argument comes at a fraught time for US-Mexico relations. President Donald Trump’s administration last month designated several cartels as terrorist organizations. His 25% tariffs on Mexican goods took effect Tuesday, and Mexican President Claudia Sheinbaum plans to announce counter-measures Sunday.

The 2005 Protection of Lawful Commerce in Arms Act generally shields the industry from suits by gun-violence victims and their families but allows cases if companies knowingly violate the law in a way that causes injury. Mexico says its case qualifies for that exception because the gunmakers intentionally trade with cartel suppliers.

Mexico says the value of guns trafficked into the country from the US each year surpasses $250 million.

Economic Impact

Justice Samuel Alito told the lawyer representing Mexico that “there are Americans who think that Mexican government officials are contributing to a lot of illegal conduct here.”

He accused Mexico of seeking a “one-way street” in which that country can sue in US courts but would seek dismissal if it was sued by an American state.

Justice Brett Kavanaugh said the Mexican government’s arguments could have repercussions across the US economy.

“Lots of sellers and manufacturers of ordinary products know that they’re going to be misused by some subset of people,” he said, calling the issue a “real concern” for him.

Mexico’s lawyer, Catherine Stetson, said the lawsuit “details that petitioners deliberately supply the illegal Mexican market by selling guns through the small number of dealers that they know sell a large number of crime guns and who repeatedly sell in bulk to the cartel traffickers.”

But Justice Elena Kagan questioned whether those allegations were specific enough.

“What you don’t have is particular dealers, right?” Kagan asked. “There are lots of dealers, and you’re just saying they know that some of them do. But which some of them?”

Congressional Purpose

The gunmakers say they can’t be held liable under the 2005 law for simply selling their products legally. They also contend they are so far removed from Mexico’s injuries that their actions can’t be the legally required “proximate cause.”

“Congress’ entire purpose was to prohibit lawsuits just like this one,” argued the industry’s lawyer, Noel Francisco.

The Boston-based 1st US Circuit Court of Appeals said Mexico could press ahead with its allegations that the companies aided and abetted unlawful gun sales. Mexico filed the lawsuit in federal district court in Massachusetts.

Gunmaker Sturm Ruger & Co. is also a defendant. The trial judge in the case has separately ruled that six of the companies — all but Smith & Wesson and wholesaler Witmer Public Safety Group Inc. — lack enough of a connection to Massachusetts for the case to go forward against them there.

The case, which the court will decide by July, is Smith & Wesson Brands v. Estados Unidos Mexicanos, 23-1141.

(Updates with comments from Kavanaugh, Kagan starting in eighth paragraph.)

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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