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HAMILTON v. ACCU-TEK

May 2, 1996

FREDDIE HAMILTON, Administratrix of the Goods, Chattels and Credits of Njuzi Ray, deceased; Freddie Hamilton, Individually; KATINA JOHNSTONE, Administratrix of the Goods, Chattels and Credits of David Johnstone, deceased; Katina Johnstone, Individually, Plaintiffs, against ACCU-TEK, AMERICAN ARMS, INC., AMERICAN DERRINGER, A.M.T., ARMSCO DISTRIBUTING CO., d/b/a Armsco Distributor, ARMS CORPORATION OF AMERICA, ARMS TECHNOLOGY, ASTRA-UNCETA Y CIA, S.A., BERETTA FIREARMS, BERETTA U.S.A. CORP., BROWNING ARMS CO., BRYCO ARMS, CALICO INC., CASPIAN ARMS, INC., CENTURY INTERNATIONAL ARMS, INC., CHARCO, f/k/a Charter Arms Corp., COLT INDUSTRIES OPERATING CORP., COLT'S MFG. CO., INC., DAVIS INDUSTRIES, INC., EUROPEAN AMERICAN ARMORY, d/b/a E.A.A. Corp., EMCO, INC., EXCAM, INC., FREEDOM ARMS CO., FIREARMS IMPORT AND EXPORT CORP., GLOCK, INC., GRENDEL, INC., H&R 1871 INC., f/k/a/ Haskell Mfg. Inc., HARRINGTON AND RICHARDSON, INTERNATIONAL ARMAMENT CORP., d/b/a Interarms Industries, Inc., INTERNATIONAL DISTRIBUTORS, INC., JENNINGS FIREARMS, INC., K.B.I. INC., LLAMA GABILONDO Y CIA S.A., LORCIN ENGINEERING CO., MARLIN FIREARMS INC., MITCHELL ARMS INC., NAVEGAR INC., NEW ENGLAND FIREARMS INC., f/k/a Harrington and Richardson, PARA ORDNANCE MFG. INC., PHOENIX ARMS, INC., R.G. INDUSTRIES, INC., RAM-LINE CORP., REMINGTON ARMS CO., SAVAGE ARMS CORP., SEECAMP, SMITH AND WESSON, INC., STOSSEGER INDUSTRIES, STURM, RUGER AND CO., INC., S.W. DANIELS INCORPORATED, TAURUS INTERNATIONAL FIREARMS INC., THOMPSON/CENTER ARMS, U.S. REPEATING ARMS, WESSON FIREARMS CO., f/k/a Dan Wesson Arms, Defendants.


The opinion of the court was delivered by: WEINSTEIN

 Weinstein, J.:

 TABLE OF CONTENTS

 I. INTRODUCTION

 II. FACTS AND PROCEDURAL HISTORY

 
A. Pleadings
 
B. Procedural History
 
C. Facts Elicited During Discovery
 
1. Membership in Trade Associations
 
2. Lobbying Activity
 
3. Marketing and Distribution

 III. Constitutional and Statutory Limits on Plaintiffs' Claims

 
A. First Amendment
 
B. Second Amendment
 
C. Statutory and Regulatory Scheme
 
1. Preemption of State Tort Law
 
2. Effect of Statutory Scheme on Duties Under State Tort Law
 
D. Application
 
1. First Amendment
 
2. Second Amendment
 
3. Preemption
 
4. Effect of Federal Statute on State Tort Duties

 IV. Law of Product Liability

 
A. Generally
 
B. Treatment of Guns Under Product Liability
 
C. Ultrahazardous Activity

 V. Fraud

 
A. Law of Fraud
 
B. Application

 VI. Collective Liability

 
A. Applicable Law
 
B. Choice-of-Law
 
1. New York's Choice of Law Principles
 
2. Application
 
C. Law of Summary Judgment
 
D. Law Applicable to Collective Liability
 
E. Application of Law to Facts

 VII. Class Action Certification

 
A. Requirements
 
B. Application

 VIII. Conclusion

 I. INTRODUCTION

 Defendants have moved for summary judgment. Because discovery is not fully developed and plaintiffs appear to be unsure of their substantive legal theory and its factual underpinnings, much of this memorandum must be tentative and hypothetical. Nevertheless, enough has been shown and suggested by plaintiffs to make dismissal premature.

 Plaintiffs are representatives of people who were shot and killed by individuals who illegally obtained handguns. They seek compensation in tort for the killings. Defendants are manufacturers of handguns. Plaintiffs also seek certification of a class action under Rule 23(c)(4)(A) on the limited question of defendants' liability for alleged joint conduct or concerted action. Certification at this stage is not warranted.

 Plaintiffs sue on a mass tort theory, analogizing handguns and their ammunition to a pathogen leading to latent injuries and the deaths of many thousands of people, much like claims associated with asbestos, agent orange, the dalkon shield, and silicone gel breast implants. See, e.g., Deborah R. Hensler, The Use of Alternative Dispute Resolution in Mass Personal Injury Litigation, 73 Tex. L. Rev. 1587, 1595-97 (1995) (describing characteristics of mass torts); cf. Note, Absolute Liability for Ammunition Manufacturers, 108 Harv. L. Rev. 1679, 1681-82 (1995) (ammunition as pathogen). They point to statistics such as these: Each year, more than 600,000 firearm crimes are reported in the United States; the number of violent attacks involving firearms increased 55% between 1987 and 1992; about 1.3 million Americans faced assailants armed with guns in 1993; among people aged 15-25, one of every four deaths were by firearm; and gun-related homicides by juvenile offenders more than doubled between 1984 and 1992. See United States Department of Justice, Bureau of Justice Statistics, Firearms and Crimes of Violence: Selected Findings From National Statistical Series 3, 11, 13 (1994); Alfred Blumstein, Youth Violence, Guns, and the Illicit Drug Industry, 86 J. Crim. L. & Criminology 10, 24-26 (1994); Lois A. Fingerhut, Centers for Disease Control and Prevention, Firearm Mortality Among Children, Youth, and Young Adults 1-34 Years of Age, Trends and Current Status: United States 1985-90 1 (1993); Crimes Involving Handguns Rose in 1993, Report Shows: Semiautomatic Use in Juvenile Crime Is Up, N.Y.Times, Jul. 10, 1995, at A10; see also Children Carrying Weapons: Why the Recent Increase: Hearings Before the Comm. on the Judiciary, 102d Cong., 2d Sess. (1992). The medical community recognizes the problem as almost a pandemic. See, e.g., Arthur L. Kellerman, Annotation: Firearm-Related Violence--What We Don't Know Is Killing Us, 84 Am. J. Pub. Health 541 (1994) ("Firearm-related deaths are a major public health problem in the United States."); Mark L. Rosenberg, National Center for Injury Prevention and Control, Presentation: Violence Prevention (1994) ("Violence is a public health problem."); Charles S. Browning, Handguns and Homicide: A Public Health Problem, 236 J.A.M.A. 2198 (1976) (epidemiology ranking handgun homicides just below lung cancer as a cause of death for persons under 65).

 Plaintiffs point to the ease with which minors and criminals are able to obtain handguns despite restrictive state and federal laws as an indication that defendants are marketing handguns in a negligent fashion. See, e.g., Joseph P. Sheley & Victoria E. Brewer, Possession and Carrying of Firearms Among Suburban Youth, 110 Pub. Health Rep. 18 (1995) (finding significant percentage of automatic or semiautomatic handgun possession); Charles M. Callahan & Frederick P. Rivara, Urban High School Youth and Handguns: A School-Based Survey, 267 J.A.M.A. 3038 (1992) (thirty-four percent of students surveyed reported easy access to handguns); United States Department of Justice, Bureau of Justice Statistics, Firearms and Crimes of Violence: Selected Findings From National Statistical Series, supra, at 11 (showing extent to which criminals purchase guns from sources other than licensed retail dealers because of effectiveness of background checks); see also James M. McKinley, Dealer Accused of Selling Guns to Criminals, N.Y.Times, Jun. 22, 1995, at B3 (noting role of licensed gun dealers in gun sales to criminals).

 By contrast, defendants point out that they are manufacturing and selling a lawful product in compliance with federal and state statutes and regulations governing the distribution of firearms. They contend that they should not be blamed for abuse of that product any more than manufacturers of cars, kitchen knives or axes are blamed when these useful and lawful instruments have been used to commit crimes.

 The issues posed are novel. They are not easily resolved using well-established state substantive and procedural law. See Part VI.A, infra, on applicability of state law to plaintiffs' claims.

 For the reasons stated below, defendants' motions to dismiss are granted with respect to the product liability and fraud claims, but not on the questions of collective and individual liability for possible negligence in merchandising handguns in a dangerous manner. Further factual development is required. See Part VI.C, infra, on the law of summary judgment.

 II. FACTS AND PROCEDURAL HISTORY

 A. Pleadings

 Plaintiff Freddie Hamilton is the mother of Njuzi Ray and the administrator of his estate. Njuzi Ray was shot and killed on July 27, 1993. The gun was never recovered, but police investigators have determined, based on spent bullet cases found at the crime scene, that the gun used to kill Njuzi Ray was probably either a Beretta or Taurus 9 millimeter handgun.

 Katina Johnstone is the widow of David Johnstone and the administrator of his estate. David Johnstone was shot and killed with a stolen Smith & Wesson revolver. The gun was found at the crime scene and traced to Stephen Mashney, who lawfully owned the gun and who had reported it stolen after his house had been burglarized two weeks before the shooting. The shooter has been identified and convicted. Defendants in this action have traced a chain of lawful possession back to the original sale by Smith & Wesson to International Distributors, Inc. in Miami, Florida.

 Forty-nine firearm manufacturers who sell or distribute handguns in the United States are defendants. Three firearm manufacturers who were originally named as defendants have been dismissed without prejudice by agreement of the parties. Neither those who fired the handguns nor other handgun dealers or owners in the chain of possession between the manufacturer and the shooters are sued.

 Plaintiffs alleged seven causes of action in the complaint. The first four causes of action seek to hold defendants liable for negligence on the theory that defendants all market handguns in a manner that fostered the growth of a substantial underground market in handguns. The existence of this illicit gun market, it is claimed, enables youths to buy handguns easily and contributes greatly to the problem of handgun-related violence in American society. The fifth and sixth causes of action seek to hold defendants liable under theories of design defect and ultrahazardous activity. The seventh cause of action alleges that defendants defrauded federal officials to prevent more stringent regulation of handguns.

 The court has granted plaintiffs leave to amend their complaint in order to add up to twenty-eight additional plaintiffs. The exact gun and the circumstances through which the shooter came to possess it will apparently be identified with regard to the shootings of only some of the individuals whose cases will be represented.

 B. Procedural History

 Plaintiffs Hamilton and Johnstone filed this civil action in January 1995. A number of defendants moved jointly for summary judgment in April 1995. After oral argument in June, the court granted part of defendants' motion by dismissing plaintiffs' claims brought under theories of product liability. The reasons for that decision are explained in this opinion. Based on the argument, the court permitted plaintiffs to proceed with a negligence claim. The court granted plaintiffs limited discovery on mechanisms in place within the handgun industry for concerted activity on matters of mutual interest. Discovery thus far has been limited to industry-wide efforts to thwart legislation or regulation affecting the distribution of handguns.

 Upon completion of plaintiffs' discovery, defendants filed new motions for summary judgment. They argue in effect that summary judgment is warranted because no theory of individual or collective industry-wide liability can be supported by the evidence elicited or discoverable. This memorandum is addressed primarily to these most recent motions.

 In addition, plaintiffs have sought class certification under Rule 23(c)(4)(A) of the Federal Rules of Civil Procedure. Plaintiffs propose that the class consist of individuals killed through the illegal use of handguns and that it be certified only for resolution of the limited question of defendants' liability under a concerted action or joint conduct theory. They argue that the interests of judicial economy and efficiency and fairness to the litigants are best served by class certification on this point. The reason certification is inappropriate at the present stage of the litigation is also addressed below.

 Issues relating to the underlying negligence theory embodied in the first four causes of action in plaintiffs' complaint have not been subject to full discovery and have not been fully briefed. This memorandum does not, therefore, dispose of the negligence claims as part of the summary judgment motion.

 C. Facts Elicited During Discovery

 Pursuant to the discovery order, plaintiffs developed extensive factual material that focuses primarily on coordinated industry activities in opposing government efforts to impose more stringent controls on firearm ...


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