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The New York Court of Appeals held Thursday that handgun manufacturers do not owe tort plaintiffs a duty of care, and refused to extend liability for injuries allegedly related to the negligent marketing and distribution of firearms. In a 7-0 decision, the court found the link between distribution of a legal product that is then used in an illegal manner far too tenuous — under the facts of this case — to justify an extension of liability. Significantly, the court also held that even if gun manufacturers could be held liable, a market-share theory of liability would not be warranted to apportion damages. Hamilton v. Beretta USA Corp., 36, arises from the first jury verdict in the nation to hold firearms manufacturers liable for injuries allegedly resulting from their marketing and distribution practices. It came to New York’s highest legal tribunal in the form of two questions certified by the 2nd U.S. Circuit Court of Appeals, one on the liability issue and the other on market-share apportionment. In a 23-page opinion, the state court expressed a general hesitancy to extend “liability to defendants for their failure to control the conduct of others,” and declined to make that leap in this case. “This judicial resistance to the expansion of duty grows out of practical concerns both about potentially limitless liability and about the unfairness of imposing liability for the acts of another,” Judge Richard C. Wesley wrote for the court. Lawrence S. Greenwald of Gordon, Feinblatt, Rothman, Hoffberger & Hollander in Baltimore, counsel for two of the gun manufacturers involved in the case, Beretta and American Arms, said he expects the ruling to have national impact. Greenwald said there are approximately 25 pending cases where municipalities have sued gun manufacturers and several others involving individual plaintiffs. “Although other jurisdictions are not bound by the New York state court’s decision, the New York state court is very highly regarded,” Greenwald said. “There is a very nice likelihood that the reasoning of this court — which is very much in harmony with longstanding principles in the law of torts — will be respectfully considered by other jurisdictions. We anticipate this will be an important precedent all over the country.” SUING GUN MAKERS Hamilton v. Beretta began in the U.S. District Court for the Eastern District of New York in 1995, when two plaintiffs — whose relatives were killed by handguns — sued 49 firearms manufacturers alleging negligent marketing and other claims. After U.S. District Judge Jack B. Weinstein ruled in 1996 that the plaintiffs could pursue their liability theory, five other plaintiffs were allowed to join. The essence of their claim was that manufacturers had oversaturated the market in southeastern states, knowing that the “excess” product shipped to areas with weak gun control laws would put firearms into the hands of criminals in New York. Since the particular gun involved was recovered in only one of the shootings, the plaintiffs pursued a theory of market-share liability. Eventually, seven plaintiffs went to trial against 25 gun manufacturers. After a month-long trial, a federal jury found 15 of the 25 defendants neglected to use reasonable care in the distribution of their guns, and that nine of them proximately caused the deaths of the decedents of two plaintiffs. Damages were awarded against three manufacturers and then apportioned according to their market share: Taurus International Manufacturing, 6.8 percent ($272,000); Beretta USA, 6.03 percent ($241,000); and American Arms, 0.23 percent ($9,000). An appeal by the manufacturers to the 2nd U.S. Circuit Court of Appeals led to certification of the marketing-distribution duty and market-share liability issues to New York’s highest state court. LINK TOO REMOTE While acknowledging that a duty may arise when a defendant is in a position to protect a tortfeasor or plaintiff from harm, the chain between the manufacturers and the wrongdoers and ultimately the plaintiffs is just too remote in this case, the judges in Albany said. Judge Wesley said that the plaintiffs did not establish specifically how their marketing and distribution efforts ultimately armed criminals. “General statements about an industry are not the stuff by which a common-law court fixes the duty point,” Wesley wrote. “Without a showing that specific groups of dealers play a disproportionate role in supplying the illegal gun market, the sweep of the plaintiffs’ duty theory is far wider than the danger it seeks to avert.” The court seemingly left the door at least somewhat ajar on a negligent entrustment theory where it can be proven that “the manufacturer knows or has reason to know those distributors are engaging in substantial sales of guns into the gun-trafficking market on a consistent basis.” Here, the court said, such evidence was not presented. “In essence, plaintiffs argue that the defendants had an affirmative duty to investigate and identify corrupt dealers,” Judge Wesley wrote. “This is neither feasible nor appropriate for the manufacturers.” Additionally, the court, in a footnote, may have provided a potential road map on how to pursue these claims in the future. The court observed in the footnote that federal Bureau of Alcohol, Tobacco and Firearms data for 1998 shows that a tiny proportion of licensed gun dealers — about 1.2 percent — accounted for 57 percent of the crime guns traced to dealers. While current data does not indicate whether a particular dealer’s high volume of crime gun sales is attributable to negligent conduct, the federal government is continuing to investigate. “It may well be that a core group of corrupt [dealers] will emerge at some future time. This might alter the duty equation,” Judge Wesley said. Although the decision on the duty-of-care matter arguably made it unnecessary to address market-share liability, the court decided it would be “prudent” to resolve that matter as well. MARKET-SHARE LIABILITY The court first adopted a market-share liability theory in Hymowitz v. Eli Lilly & Co., 73 NY2d 487, a 1989 landmark regarding the anti-miscarriage drug diethylstilbestrol (DES). With DES, the court said, the product was fungible and it was impossible to identify the actual manufacturer whose product caused the injury to a particular plaintiff. Therefore, market-share liability was appropriate. “Unlike DES, guns are not identical, fungible products,” the court said. “Significantly, it is often possible to identify the caliber and manufacturer of the handgun that caused injury to a particular plaintiff. Even more importantly — given the negligent marketing theory on which plaintiffs tried this case — plaintiffs have never asserted that the manufacturers’ marketing techniques were uniform.” The case was watched closely by the gun industry and plaintiffs’ lawyers, as well as Attorney General Eliot Spitzer. Spitzer, who is pursuing a first-in-the-nation suit against gun manufacturers on a public nuisance theory, filed one of seven amicus curiae in Hamilton v. Beretta. Deputy Attorney General Peter B. Pope said Thursday’s ruling should have no impact on the pending state court public nuisance action. “Although this decision is obviously bad for these plaintiffs, it does tell future private litigants how they can proceed,” Pope said. “The fact that they cracked the door open for the private plaintiffs in this most extreme situation bodes well for our action.” Marc E. Elovitz of Schulte Roth & Zabel in Manhattan, counsel for one of the plaintiffs, also said that while he was disappointed in the decision, he is encouraged by the potential for further litigation against gun manufacturers. “They are not rejecting the theory of negligence against gun manufacturers out of hand,” Elovitz said. “They are leaving the door open. They are saying on this record they don’t have enough. But in the future, in a different case, a duty may arise.” Also arguing the appeal were Timothy A. Bumann of Budd Larner Gross Rosenbaum Greenberg & Sade in Atlanta for Taurus, and Elisa Barnes of Weitz & Luxenberg in Manhattan for a plaintiff.

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