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New York City has hit a dead end in its attempt to hold gun manufacturers liable for the flow of illegal arms into New York. The 2nd U.S. Circuit Court of Appeals on Wednesday dismissed the city’s suit, upholding an act of Congress that insulated Smith & Wesson and other gun makers from liability while holding that New York’s public nuisance law does not fit into an exception in the act. Judges Roger Miner, Jose Cabranes and Robert Katzmann upheld Eastern District Judge Jack Weinstein’s finding that the Protection of Lawful Commerce in Arms Act was constitutional. But the panel split on whether the city’s public nuisance law created an exception in this case, City of New York v. Beretta U.S.A. Corp., 05-6942. Miner and Cabranes found it did not, and Katzmann dissented, saying the question is one for the New York Court of Appeals. The Protection of Lawful Commerce in Arms Act, or PLCAA, became federal law just weeks before Weinstein was scheduled to begin trial in the case in 2005. The act, 15 U.S.C. Sections 7901-03, mandates dismissal of a “qualified civil liability” action brought against a manufacturer or seller for any damages or injunctive or declaratory relief “resulting from the criminal or unlawful misuse” of a firearm by a person or a third party. The gun makers moved immediately to dismiss, and the city responded by citing the exception in Section 7903(5)(A)(iii), which states that a suit may proceed where it is alleged that a “manufacturer or seller [of firearms transported in interstate or foreign commerce] knowingly violated a State or Federal statute applicable to the sale or marketing of [firearms] and the violation was the proximate cause of the harm for which relief is sought.” The statute here was New York Penal Law Section 240.45, Criminal Nuisance in the Second Degree. The firearms suppliers argued the exception in the law was intended to apply only to statutes that specifically address the making and selling of guns and the nuisance law failed because it was a law of general applicability. Weinstein upheld the Protection of Lawful Commerce in Arms Act but ruled in the city’s favor on its main argument, saying the “plain meaning” of the nuisance law brought it within the exception to the act. The essence of the complaint was that the suppliers failed to monitor: gun shows where non-licensed sellers sold weapons; private or “kitchen table” sellers who are not required to conduct background checks or keep records required of Federal Firearms Licensees; “straw purchases” by qualified handgun purchasers for those who are not qualified; multiple sales of guns; intentional illegal trafficking by corrupt licensees; theft from licensees with poor security or false reports of theft; and, in general the oversupply of guns to markets in jurisdictions that have lax gun regulations. The city sought injunctive relief to force suppliers to change their ways. At oral arguments in September, Corporation Counsel Michael Cardozo urged the circuit to let the case go to trial. Miner and Cabranes first found Wednesday that the Protection of Lawful Commerce in Arms Act was a valid exercise of congressional power under the Commerce Clause. The panel then rejected the city’s claim that Congress violated the principle of separation of powers because it passed the legislation to deal first and foremost with the suit pending before Weinstein. Writing for the majority, Miner said the circuit “agreed with the government that the act permissibly sets forth a new rule that is applicable both to pending actions and to future actions. “Because the PLCAA does not merely direct the outcome of cases, but changes the applicable law, it does not violate the doctrine of separation of powers,” he said. PUBLIC NUISANCE LAW Miner said the lack of an explicit reference to firearms in the public nuisance statute was not fatal to the city’s case, but the majority concluded that the intent of Congress was that “applicable to” in the act meant “statutes that clearly can be said to regulate the firearms industry.” The panel concluded, “We think Congress clearly intended to protect from vicarious liability members of the firearms industry who engage in the ‘lawful design, manufacture, marketing, distribution, importation, or sale’ of firearms.” In dissent, Katzmann said the majority created an ambiguity in the law where one did not exist, that it broke from the circuit’s “longstanding practice of avoiding difficult constitutional questions when possible,” and it construed the statute in a way that “leads to absurd results.” The majority, he said, substituted its “preferences for the words Congress actually selected,” because if Congress had wanted to modify the words “applicable to” it could have added the words “only” or “solely” or “primarily.” Katzmann said the majority missed the point when it said the public nuisance law had yet to be applied to the firearms industry. “Unlike, say, a fruit, which is edible long before someone has eaten it, or gasoline, which is flammable even before someone has ignited it, the majority finds that a state law is not applicable until a state court actually applies it,” he said. For that reason, Katzmann said he would have certified the question of the applicability of the nuisance law to the New York Court of Appeals. Lawrence G. Keane, who helped coordinate litigation strategy in the case for the National Shooting Sports Foundation, a firearms trade association, said yesterday’s ruling is “very gratifying” to members of the firearms industry. “In passing the Protection of Lawful Commerce in Arms Act, Congress understood that frivolous lawsuits like New York City’s defied common sense and represented a clear abuse of the judicial system that threatened to bankrupt a responsible and law-abiding industry,” said Keane. In a statement Wednesday, Mayor Michael R. Bloomberg vowed to “continue our fight against illegal guns full bore, in the courtrooms, on the streets, and in the Congress.” Bloomberg and Cardozo emphasized in their statements that their efforts against the flow of guns into the city continues, including a 2006 suit against gun dealers in Georgia, Ohio, Pennsylvania, South Carolina and Virginia the city claims knowingly or negligently sold firearms to straw buyers. That suit, City of New York v. A-1 Jewelry & Pawn Inc., 06-cv-2233, is also before Weinstein. There were 27 gun dealers sued by the city – 15 in the A-1 case and 12 in City of New York v. Bob Moates Sports Shop, 06-cv-6504. Of the 15 in the A-1 case, 11 have settled, one has defaulted, two have been dismissed and the remaining case is going to trial in May. Of the 12 in the Moates case, nine have settled, one has defaulted and two are going to trial in September. “It is very important to recognize that the city has adopted a new legal strategy that moves beyond this long-pending case, and that this is not affected by today’s decision,” Cardozo said. Cardozo said he was weighing whether to apply for a rehearing by the full circuit or appeal to the U.S. Supreme Court. This article originally appeared in the New York Law Journal , a publication of ALM.

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