By Ryan Godbold '26
On October 4, 2024, The Supreme Court of the United States granted certiorari in Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos, a case coming out of the First Circuit Court of Appeals that addresses applications of the Protection of Lawful Commerce in Arms Act (PLCAA) to a suit brought by the Mexican government against several prominent U.S. gun manufacturers. (1) In the suit, Mexico enumerates seven high profile U.S. gun manufacturers and one gun distributor, including Smith & Wesson, Glock, and Beretta, claiming that these companies implemented design choices, marketing decisions, and distribution methods that directly lead to an increased number of guns smuggled into Mexican cartels, causing harm to the Mexican people and government. (2)
The issue in contention is whether the Mexican government is barred from bringing the suit due to the PLCAA. Enacted on October 26, 2005, the PLCAA prohibits “civil liability actions from being brought or continued against manufacturers, distributors, dealers, or importers of firearms or ammunition for damages… resulting from the misuse of their products by others.” (3) The several U.S. gun companies, hereafter referred to as the defendants, argue yes: the PLCAA bars the type of suit the Mexican government is bringing in this case. Mexico, however, develops several arguments for why this statute does not limit their lawsuit. (4) First, Mexico argues that the PLCAA only limits lawsuits brought by U.S. parties, as congress is a U.S. entity and applying the PLCAA to a suit by a foreign party is an improper extraterritorial application of the law, as congress only had domestic concerns in mind. Second, Mexico argues that, even if the law applies to them, they fall under the “predicate exemption,” an exemption to the PLCAA which allows suits alleging “an action in which a manufacturer or seller of a qualified product knowingly violated a State or Federal statute applicable to the sale or marketing of the product, and the violation was a proximate cause of the harm for which relief is sought.” (5) Naturally, Mexico claims that the defendants knowingly made business decisions that fall under the kind enumerated in the predicate exemption. The First Circuit Court of Appeals reviewed both arguments advanced by Mexico and responded in turn.
The opinion put forth by the First Circuit Court of Appeals began by addressing Mexico’s claim that the PLCAA does not apply to them, as they are a foreign entity. The court found that argument unpersuasive, and they based this decision on two cases: Turkiye Halk Bankasi A.S. v. United States, and Pfizer Inc. v. Government of India.
In Turkiye, The U.S. Supreme Court (SCOTUS) was asked to interpret a section of U.S. Criminal Code being applied to a bank owned by the Turkish Government. In applying the code, SCOTUS simply read the “text as written” and declined to “graft an atextual limitation onto the statute’s jurisdiction,” and therefore found that the U.S. Criminal Code did apply extraterritorially to the Turkish Bank. (6) Following the rule set forth in Turkiye, the First Circuit court read the PLCAA as written and found that there was no limitation on the jurisdiction: the act barred lawsuits against U.S. firearm companies unilaterally, and never specified only barring suits from U.S. parties. (7)
Additionally, the Circuit Court used Pfizer Inc. v. Government of India to instruct its decision. In Pfizer, the issue in contention was whether the Clayton Act using the language “any person” allowed foreign parties to sue American companies for violating antitrust law in U.S District Court. In its decision, the Supreme Court ruled that because Congress’ purpose in passing the act was to “deter violators” of antitrust law and deprive said violators of “the fruits of their illegality,” it would be counterintuitive to prevent foreign parties from suing. (8) Similarly, the First Circuit Court analyzed the purpose of the PLCAA, and determined it to be insulating the U.S. gun industry, as well protecting lawful citizens' access to firearms.
With this purpose in mind, the First Circuit Court found it unlikely that Congress intended for foreign parties to be able to sue the U.S. gun industry, as it would run contrary to the purpose of the PLCAA. Using both Turkiye and Pfizer to guide their approach, the First Circuit Court shot down Mexico’s first argument that the PLCAA is being applied extraterritorially improperly. (9)
Having rejected Mexico’s extraterritoriality argument, The First Circuit Court then reviewed if the conduct Mexico alleges falls under the predicate exemption. As the name of the Protection of Lawful Commerce in Arms Act suggests, it only protects lawful acts of firearm companies, and under the predicate exemption, if a firearm company “knowingly violated a state or federal statute” and it was the “proximate cause of the harm for which relief is sought” then a lawsuit is exempt from restrictions of the PLCAA. (10) In order to meet this predicate exemption, Mexico’s argument needs to have several distinct elements: an allegation that a firearm company knowingly violated some statute, a claim that said violation caused the Mexican government harm, and an accusation that the harm was the “proximate cause” for Mexico’s suffered harm. Mexico argues that its lawsuit contains all of these elements, and therefore meets the predicate exemption, while the defendants raised three arguments for why it does not. Ultimately, the court found the defendants’ arguments to be invalid, and decided Mexico’s suit reached the threshold the predicate exemption requires. (11)
The first argument the defendants forwarded is that Mexico’s claims are not for violations of statutes. They argued this on the basis that Mexico’s claim did not have a private right of action to sue under a statute. The First Circuit Court did not disagree and instead reasoned that the private right of action does not have to come from the statute a plaintiff is alleging was broken; it can instead come from a common law claim as long as the claim alleges known violations of statutes. The court reached this conclusion by following a rule set forth in Russello v United States. In Russello, the Supreme Court held that “where Congress includes particular language in one section of a statute but omits it in another… it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” (12) Applying this rule to the PLCAA, the First Circuit Court found that in the act, many exceptions exempt the PLCAA “for” specific causes of action, but in the predicate exemption, Congress exempted the statute for cases “in which” a company knowingly violated a law. The use of the phrase “in which” as opposed to “for” illustrates a difference between how the knowing violation of a law must be incorporated into the argument. Given this difference, the court found that Mexico’s argument finds a right of action through the common law doctrine of Negligence per se, and therefore rejected the defendants first argument. (13)
The next argument raised by the defendants is that Mexico did not adequately allege a known violation of a statute; however, Mexico did. Mexico alleged that the defendants knowingly violated a federal law by aiding and abetting dealers in known violation of federal law. As defined in Twitter v. Taamneh, aiding and abetting is “participation in another’s wrongdoing that is both significant and culpable enough to justify attributing wrongdoing to the aider and abettor.” (14) Mexico used this definition and argued that the defendants know which dealers they sell to are selling in large quantities to straw purchasers, a person who buys something on behalf of a criminal entity; they know that the guns are designed to easily be converted to fully automatic weapons; they know that the serial numbers are easy to remove, and Mexico claims that they did all this despite warnings from the federal government. Considering the nature of all the alleged misconduct, the Circuit Court held that Mexico did allege violations of several statutes. (15)
Finally, the defendants argued that the actions they took which Mexico claims caused harm, are too attenuated, or far removed, to be the proximate cause, which is defined as an event sufficiently related to an injury. The defendants listed out eight steps that happened in between the cause Mexico cites and the harm Mexico suffered. The court acknowledged these steps and explained that proximate cause is not about the amount of steps, but rather the foreseeability of an action, as established in Paroline v. United States. (16) The court explained that despite the amount of steps the defendant took, it is reasonable to foresee that their actions will result in guns ending up in Mexico. (17) Having struck down all of the defendant’s arguments, the Circuit Court rendered a decision in favor of Mexico that no, the PLCAA does not bar Mexico from suing American firearm companies.
With the Circuit Court advancing a decision in favor of Mexico in January and SCOTUS granting a writ of certiorari in October, this case begs the question of which side the Supreme Court will grant judgment in favor of. Naturally, the question is inherently speculative, and it will be impossible to know until the decision is published; however, after detailed review of the issues in contention, the arguments made, and the sources of law used, the case hinges on the Supreme Court’s interpretation of the language of the PLCAA. It is clear that Mexico’s argument of improper extraterritoriality is weak, so to not be barred from suing, the suit must fall under the predicate exemption. However, the statutory violation that Mexico is alleging does not afford them the private right of action to sue, meaning their entire case relies on whether SCOTUS interprets the difference in language between “for” and “in which” to be intentional, allowing the right of action to come from a common law claim, as the Circuit Court did. (18) It is no secret that the current Supreme Court is protective of the Second Amendment, and therefore likely to render a decision in favor of the American firearm companies. In the case they do, it is likely going to be built upon the semantics of the PLCAA. Regardless of the decision made, Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos will undoubtedly shape the landscape of future judicial decisions regarding extraterritoriality and understanding congressional intent. Endnotes
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Ibid.
Protection of Lawful Commerce in Arms Act., 119 Stat. 2095, 109 Cong. Ch. 92 (October 26, 2005) https://www.congress.gov/bill/109th-congress/senate-bill/397/text
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Protection of Lawful Commerce in Arms Act., 119 Stat. 2095, 109 Cong. Ch. 92 (October 26, 2005) https://www.congress.gov/bill/109th-congress/senate-bill/397/text
Turkiye Halk Bankasi A.S. v. United States, 21-1450 (S. Ct. April 19, 2023) https://www.supremecourt.gov/opinions/22pdf/21-1450_5468.pdf
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Pfizer Inc. v. Government of India, 76-749 (S. Ct. January 11, 1978) https://www.loc.gov/item/usrep434308/
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Protection of Lawful Commerce in Arms Act., 119 Stat. 2095, 109 Cong. Ch. 92 (October 26, 2005) https://www.congress.gov/bill/109th-congress/senate-bill/397/text
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Russello v. United States, 82-742 (S. Ct. November 1, 1983) https://www.loc.gov/item/usrep464016/
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Twitter v. Taamneh, 21-1496 (S. Ct. May 18, 2023) https://www.supremecourt.gov/opinions/22pdf/21-1496_d18f.pdf
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Paroline v. United States, 12-8561 (S. Ct. April 23, 2014) https://supreme.justia.com/cases/federal/us/572/12-8561/case.pdf
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc. 22-1823 (1st Cir. 2024) https://law.justia.com/cases/federal/appellate-courts/ca1/22-1823/22-1823-2024-01-26.html
Ibid.
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