Fire Sale

How the gun industry bought itself immunity from the rule of law.

We’re used to spotting lawlessness and corruption around the world and at home: in Iraq, or Saudi Arabia, or large no-bid contracts to Halliburton out of Washington. The cure for such ills is usually some version of the rule of law and probably its most basic principle—that the rules apply to everyone, including the richest, the most powerful, and the most connected.

But corruption and lawlessness are not limited to human rights violations or greedy hands in large tills. In the past two weeks, Congress and the president have exempted one industry from the most basic legal rules that apply to all other industries and individuals: They have enacted unprecedented legislation giving the gun industry immunity from lawsuits based on federal or state laws to which everyone else is subject. In so doing, Congress and the president have violated the most fundamental tenets of constitutional separation of powers, in which government fashions rules of general application, avoids singling out powerful friends to be above the law, and leaves the outcome of pending lawsuits to the courts.

If a manufacturer or dealer in another industry—or if you or I—create, for example, a public nuisance that interferes with public health or safety, we’re subject to a lawsuit by local authorities to stop that nuisance and recover the costs of cleaning it up. The law recognizes the obvious when it imposes liability for spreading a dangerous substance or device in a way that knowingly places it in the hands of people who will use it to harm others. You, I, and manufacturers and dealers in other industries cannot do that without subjecting ourselves to civil lawsuits. But from now on, gun manufacturers and dealers may do it with impunity. Even if, as alleged in pending lawsuits targeted for retroactive dismissal by the immunity act, they knowingly facilitate the notoriously easy access criminals and youths have to new, inexpensive handguns.

Long-standing law in most every state, for instance, holds a bar liable for harm caused by a drunk patron in some circumstances, depending on the knowledge and conduct of the bar. The harm can include the drunk patron criminally causing a car crash, or urinating on the lawn of a neighbor. The liability turns on the conduct of the bar’s owner or agents, even though the ultimate vehicle of the harm is the drunk patron.

If this new gun legislation withstands review in the courts, the gun industry is no longer subject to such traditional legal principles. In other words, Congress and the president have given the gun industry—and only the gun industry—immunity from the rule of law.

To see this clearly, one has to see through a few gun-industry smokescreens that tend to hide the true meaning and enormity of the immunity act. This legislation is not, as the industry depicts it, about tort reform or insurance law or manufacturer liability, and it does not generally address liability involving the conduct of others. Nor is it about frivolous lawsuits, which are in any event quickly dismissed and, if they are sufficiently baseless, can result in the payment of the opposing side’s costs and counsel fees by the party filing frivolously.

One industry has simply been exempted from rules that apply to everybody else.

Is there some basis for treating only one industry completely differently? The reasons offered for singling out those who produce and distribute a product designed to kill don’t hold much buckshot either. These lawsuits don’t affect in any way the right to own a gun, and thus do not implicate the Second Amendment. They deal only with whether the manufacturers and dealers in this industry can be held liable like any other industry or individual.

The industry also pleads poverty: Gun makers say they don’t have the deep pockets of the tobacco industry. No one does. But that’s not the point. If they cause harm in circumstances other industries or individuals would have to pay for, there’s no reason they should be immunized simply because they cannot afford to pay. More urgently, the legislation means victims of gun-industry misconduct—unlike victims of misconduct by any other industry or individual—have to bear the full brunt of their injuries or deaths themselves. The victim of the D.C. snipers who recently recovered $2 million from a dealer whose negligence allowed 17-year-old Lee Malvo to obtain an assault rifle would be out of luck.

Leading backers of the immunity legislation in the House and Senate irresponsibly claimed that the very narrow exceptions in the sweeping immunity legislation—which do not include simple negligence or public nuisance—might have nevertheless allowed this suit. Yet they ultimately refused to adopt specific amendments that would have clearly kept this kind of case out of the broad immunity granted the industry.

The unspoken context for this legislation—unspoken mostly because Democrats are afraid of the issue—is a sizable liability the industry was about to face. The gun-industry immunity act was a direct response to lawsuits filed in the last several years by more than 30 cities—including all the major cities in the country—one state attorney general (Eliot Spitzer of New York), and individuals harmed by gun violence connected, like the Malvo assault rifle case, to misconduct by gun makers, distributors, or dealers. These lawsuits are based, unlike previous litigation the industry faced, on conduct that facilitates easy access by criminals and youths to new handguns. The suits primarily used a traditional public-nuisance approach based on the theory that some (not all) within the industry are knowingly supplying and marketing handguns through distribution outlets—such as particular distributors and dealers and gun shows—that provide youths and criminals that easy access. A recent comprehensive study by the federal Bureau of Alcohol, Tobacco, and Firearms concluded that 57 percent of guns used in crimes were sold by only 1 percent of the dealers.

If the cities and individual plaintiffs had been afforded the opportunity to prove these allegations in court, the industry would have been in trouble—as well it should be for such reckless conduct. On average, 50 people are killed by handguns each day, and three or four times that number are seriously injured daily. These lawsuits claim—and the testimony of high-level industry insiders confirms—that the industry has been knowingly supplying handguns through distribution channels that feed the criminal and youth market.

The largest share of the handgun market, by far, is purchases by law-abiding people for self-defense, so it’s worth wondering why the manufacturers would knowingly feed the crime and youth market when it amounts to a small share of their business. The depths to which people sink for personal gain, and the rationalizations sometimes offered, never cease to amaze, but more is at stake here than immediately meets the eye. The large self-defense market is driven by fear. Anything that increases fear—the school shootings at Columbine, the 2000 millennium computer scare, 9/11—increases the demand for handguns. The steady source for the fear that drives the handgun market is crime, particularly crimes committed with guns.  

About half of the city suits not prohibited by state statutes (before the national legislation was signed, the industry had already gotten many state legislatures to exempt them from the usual state rules) have already surmounted motions to dismiss because they’re not frivolous. The city gun suits, and some of the suits by individuals harmed, have fared much better than the state tobacco suits. New York City’s suit would have gone to trial in late November.

The congressional sponsors of the legislation, the gun industry and the NRA, acknowledge that the immunity legislation was simply a reaction to these pending suits, and the immunity act specifically provides for dismissal of all of them. In other words, they went and asked a favor from Congress: Enact a law to make these troubling lawsuits go away. And Congress obliged.

All of this raises a constitutional issue that vitally concerned the framers. Before the Constitution was adopted, legislatures regularly intervened in pending lawsuits—indeed parties to lawsuits regularly raced right to the state assemblies to get legislation resolving pending or anticipated lawsuits in their favor.

Thomas Jefferson complained that this practice was becoming “habitual.” James Madison rightly called it “legislative usurpation … [that] must lead to tyranny.” The Federalist Papers railed against it. And partly in response, the Constitution establishes separation of powers: Legislatures make laws of general application, executives enforce the laws, and courts decide cases between parties based on the law.

So, here we have a suspension of the rule of law for one industry, enacted by Congress and signed by the president to federally limit traditionally state-determined rules of tort liability: a law that intervenes in and decides the outcome of pending lawsuits. Other industries will surely recognize the utility of such legislation and will seek similar treatment when they are sued. Doubtless they will make some steep campaign donations to get it. And why not, since the rule of law appears to be suddenly up for sale?