June 2, 2022 – The attack on the firearms industry in New York continues with the issuance of a decision dismissing the industry’s lawsuit challenging New York’s recent public nuisance statute, enacted with the express purpose of attempting to bypass the Protection of Lawful Commerce in Arms Act (“PLCAA”).  On July 6, 2021, New York enacted General Business Law §§ 989-a-e, to create a new statute to satisfy the predicate exception to the PLCAA.  Section 898-a-e provides:
1. No gun industry member, by conduct either unlawful in itself or unreasonable under all the circumstances shall knowingly or recklessly create, maintain or contribute to a condition in New York state that endangers the safety or health of the public through the sale, manufacturing, importing or marketing of a qualified product.
2. All gun industry members who manufacture, market, import or offer for wholesale or retail sale any qualified product in New York state shall establish and utilize reasonable controls and procedures to prevent its qualified products from being possessed, used, marketed or sold unlawfully in New York state.
Section 898-a-e deems any violation of either of the above provisions to be a public nuisance, and provides a private right of action.  Section 898-a-e was expressly intended to preempt the PLCAA and restore the ability to sue the firearms industry for damages arising from the criminal or unlawful misuse of firearms by third parties based on public nuisance theories.  The National Shooting Sports Foundation, Inc. and fourteen members of the firearms and ammunition industry filed a lawsuit against the New York State Attorney General arguing that Section 898-a-e is unconstitutional because it is preempted by federal law (the PLCAA) and violates the dormant commerce clause by attempting to regulate conduct that occurs in other states.  Plaintiffs filed a motion for a preliminary injunction barring enforcement of Section 898-a-e on the basis that it is unconstitutional, and New York filed a motion to dismiss.
In a decision issued on May 25, 2022, Judge D’Agostino of the U.S. District Court for the Northern District of New York dismissed plaintiffs’ lawsuit.  She concluded that the PLCAA does not preempt Section 898-a-e because it provides an exception for actions in which a manufacturer or dealer knowingly violates a state or federal statute applicable to the sale or marketing of firearms.  She concluded that Section 898-a-e is a proper predicate statute because it:

establishes liability exclusively on gun industry members for certain actions—such as the failure to institute “screening, security, inventory and other business practices to prevent thefts of qualified products as well as sales of qualified products to straw purchasers, traffickers, persons prohibited from possessing firearms under state or federal law, or persons at risk of injuring themselves or others,” § 898-a(1) …

Judge D’Agostino further concluded that “a state statute establishing liability for improper sale or marketing of firearms” is not contrary to the purposes of the PLCAA and that there is no indication that in passing the PLCAA “Congress intended to preempt state statutes which expressly regulate firearms.”  She also held that Section 898-a-e does not violate the dormant commerce clause because it applies equally to members of the firearms industry in all states.

Section 898-a-e is a blatant attempt by New York State to override the decision by Congress that the firearms industry needs to be protected from politically motivated lawsuits seeking to hold it liable for the criminal or unlawful misuse of firearms by third parties.  It seeks to regulate the conduct of members of the firearms industry in other states and should clearly be declared unconstitutional.  If allowed to stand, it is likely to invite copycat legislation in other states, and could result in different states enacting laws requiring members of the firearms industry to engage in conflicting practices.  Plaintiffs will therefore be appealing the dismissal of their lawsuit to the U.S. Court of Appeals for the Second Circuit.  The notice of appeal will be filed by June 24, 2022.

Renzulli Law Firm has been on the forefront of utilizing the PLCAA to protect the firearms industry from lawsuits seeking to blame it for the criminal actions of third parties, and represents several of the individual plaintiffs in the lawsuit challenging the constitutionality of Section 898-a-e.  We will continue to monitor and report on this lawsuit, including the appeal, as well as the attack on the industry. If you have any questions concerning this case, Section 898-a-e, the PLCAA, or the attack on the industry in New York please contact John F. Renzulli or Christopher Renzulli.