Mexico’s Lawsuit against U.S. Gun Makers Opens a New Front in the War Against Firearm Industry Immunity

In 2021, the Government of Mexico filed a lawsuit against U.S. firearm manufacturers demanding $10 billion in damages for the industry’s role in facilitating illegal cross-border gun trafficking and seeking injunctive relief to change the way gun makers do business. Mexico’s lawsuit had to confront the industry’s notorious federal immunity shield—the Protection of Lawful Commerce in Arms Act (PLCAA)—which Congress passed in 2005, granting firearm manufacturers and sellers immunity from civil lawsuits arising out of the criminal misuse of weapons. To overcome this immunity shield, Mexico offered two arguments.

First, Mexico argued that PLCAA did not apply to lawsuits brought by foreign entities arising out of criminal misuse of weapons abroad. Both the district court and the First Circuit rejected this argument. Second, Mexico argued that, even if PLCAA applies to lawsuits filed by foreign entities, it nevertheless does not apply to Mexico’s claims. The court of appeals accepted this second theory, which deploys a novel strategy for piercing PLCAA immunity.

PLCAA’s Predicate Exception

Although PLCAA immunity is sweeping, it is not absolute. For example, immunity does not extend to manufacturers who “knowingly violated a State or Federal statute applicable to the sale or marketing of the [firearm].” This limitation on immunity has been called PLCAA’s “predicate exception” because it is predicated on the violation of another statute. As the First Circuit (and other courts) have held, once a court determines that the predicate exception applies to a lawsuit, PLCAA immunity no longer bars any claims in the case—including claims that would otherwise be preempted by PLCAA if it did apply and even claims that are not based on the predicate statute. Until the Mexico case, most litigation involving the predicate exception has focused on the issue of what types of statutes can serve as predicate statutes under this exception. In addressing this issue, courts have issued conflicting interpretations of what it means for a statute to be “applicable” to the sale or marketing of a firearm.

One might think that, just as “edible” means capable of being eaten, “applicable” means capable of being applied. Two state supreme courts have adopted this interpretation. One of them, the Connecticut Supreme Court, held in the Sandy Hook Elementary lawsuit that marketing weapons in a way that increases the risk of criminal misuse constitutes a violation of the state’s unfair trade practices law, which the court held is “applicable” to the sale and marketing of firearms. The Sandy Hook case eventually ended in a bankruptcy settlement in which the plaintiffs received $73 million. The settlement has inspired similar claims around the country in Uvalde, Texas, Highland Park, Illinois, and other places stricken by mass shootings. In a case initially filed in 1999 and still pending, the Indiana Supreme Court allowed a lawsuitby the City of Gary against handgun makers to proceed on the theory that the state’s public nuisance law qualifies as a statute “applicable” to the sale or marketing of a firearm for the purposes of PLCAA’s predicate exception. That case is currently in discovery.

However, the Second and Ninth Circuits have rejected this broad interpretation of “applicable.” They reason that, just as one would not include the law of gravity in a list of laws applicable to the game of basketball, generic unfair trade practices statutes and nuisance laws are not applicable to the sale and marketing of firearms. Both courts rejected lawsuits against gun makers predicated on the violation of generic public nuisance laws.

In response to these decisions, New York and California, along with six other states, recently amended their public nuisance statutes to specifically mention firearms. These new laws deem it an actionable public nuisance for any business to sell or market a firearm without “reasonable controls” to prevent the risk of illegal misuse of the weapon. The National Shooting Sports Foundation, the trade association for the gun industry, has filed multiple lawsuits seeking to enjoin enforcement of these statutes, arguing that the statutes are an impermissible end-run around PLCAA’s immunity shield. Plaintiffs in New York have already filed lawsuits against gun manufacturers arguing that violation of New York’s firearms nuisance statute triggers the predicate exception, even under the Second Circuit’s narrow reading of the term “applicable.”

A Third Way

Mexico’s lawsuit invokes PLCAA’s predicate exception in a way that avoids these debates over whether generic statutes are “applicable” to the sale and marketing of firearms or whether state firearms nuisance statutes are preempted by federal immunity. Mexico alleges that U.S. gun makers are engaged in “affirmative and deliberate efforts to create and maintain an illegal market for their weapons in Mexico.” According to Mexico, manufacturers deliberately design their weapons to be attractive to criminals by including features such as easy conversion to fully automatic fire, compatibility with high-capacity magazines, and removable serial numbers. Their marketing promises buyers a tactical military experience for civilians. And they distribute their products to dealers whom they know are engaging in illegal straw sales, unlicensed sales at gun shows and online, and off-book sales disguised as inventory theft. As the First Circuit explained by way of analogy:

Notionally, imagine a dealer, a distributor, and a manufacturer standing abreast of one another at the border. The manufacturer hands the distributor ten guns, the distributor hands them to the dealer, and the dealer then hands them to a group of ten customers, among whom there are eight well-known agents of the cartel acting as straw purchasers. Rather than refusing to fill an order for ten more guns by that dealer, the manufacturer tweaks its advertisements to better appeal to the cartel, supplies them more guns, and so on over and over again. We think it clear that by passing along guns knowing that the purchasers include unlawful buyers, and making design and marketing decisions targeted towards those exact individuals, the manufacturer is aiding and abetting illegal sales. And this scenario, in substance, is fairly analogous to what Mexico alleges.

In short, illegal cross-border traffic of firearms is not a bug but a feature of the industry’s business model.

By relying on the violation of federal laws governing firearm sales—laws that are specifically listed in PLCAA as examples of predicate statutes—Mexico’s lawsuit avoids the issue of whether the statutory violations it alleges are based on statutes “applicable” to the sale or marketing of a firearm. It also steers clear of questions about whether state firearms laws are preempted by PLCAA.

Next Steps

The case has been remanded to the district court for trial, and Mexico now faces the challenge of producing evidence to back its allegations. The defendants have asked the district court judge to put the case on hold while they pursue review in the U.S. Supreme Court. Whether the Supreme Court agrees to take the case at this stage, and whether the district court is willing to suspend proceedings in the meantime remain to be seen.