http://writ.findlaw.com/commentary/20050307_lytton.html
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New York City's Gun Industry Responsibility Act: Why It May Do More Harm than Good
By ANTHONY J. SEBOK AND TIMOTHY LYTTON
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Monday, Mar. 07, 2005
On March 2, New York City Council Members Eva Moskowitz and David Yassky denounced renewed efforts to enact the "Protection of Lawful Commerce in Arms Act" (PLCAA). The bill would grant federal immunity to the gun industry from civil lawsuits by municipalities and individuals. Last year, Congress rejected it.
We criticized PLCAA in an earlier column, and we still feel that the law is unnecessary and offends principles of federalism. Our view is that Congress ought not to interfere with state tort law in this area, since it has equipped judges to do a fine job of handling gun litigation.
In January of this year, New York City passed a local law - the Gun Industry Responsibility Act (GIRA). If enforced, GIRA would give the Congress grounds for trying to "reform" tort law as it relates to handguns. In this column, we will explain why we think GIRA is invalid, and why we think its passage may well do more damage than good.
We predict that GIRA will only provide tort reformers in Washington, D.C. with a specious justification for their agenda: New York City is the kind of jurisdiction that the Republicans like to point toward when they try to make the case for PLCAA, and GIRA gives Republicans good reason to point toward New York City.
The Gun Industry Responsibility Act
GIRA aims to force gun manufacturers and dealers to take responsibility for illegal trafficking of the weapons that they sell. The Act subjects manufacturers and dealers to civil liability for any injury or death caused by one of their guns if the gun was illegally transferred either by them or by a subsequent owner. The Act allows for both compensatory and punitive damages.
There are exceptions: GIRA does not apply if the shooter was a law enforcement officer, if the victim was engaged in a crime, if the illegal transfer was a theft of the weapon that was reported to law enforcement, or if the shooting was wholly unrelated to any failure on the part of the manufacturer or dealer.
In addition, the manufacturer or dealer can avoid liability under the Act by showing that for a year prior to the shooting it adhered to a specific code of conduct. This code requires the manufacturer or dealer to refuse to sell at gun shows that do not require background checks, enforce stringent record-keeping practices, limit handgun sales to one gun per month to any one customer, and refuse to do business with any businesses that do not similarly adhere to the code of conduct.
The point of GIRA is simple, and the New York City Council was not shy about expressing it: to threaten gun manufacturers and dealers outside of New York with potentially devastating liability unless they institute nationwide sales restrictions mandated by the City.
Two Key Problems with GIRA
There are two problems with GIRA. One of these has captured the attention of many of its critics and made GIRA the poster child for PLCAA: GIRA essentially exports New York City's tort law into every state in the nation. (We will have more to say, later in the column, about whether this is a valid criticism of the law.)
A second problem with GIRA -- one which apparently no one has noticed -- is that it is a tort rule created by New York City, as opposed to New York State. This raises the question of whether local municipalities can create their own tort law, independent of their state legislatures or courts.
On one hand, in practice, tort law usually is the province of state law. On rare occasions, the federal government might create its own set of tort rules to deal with a specific problem, such as the rules governing accidents on the railways or harbors.
On the other hand, however, it is not obvious why a subunit of a state could not create its own tort rules.
In fact, local governments create tort rules all the time.
For example, the doctrine of "per se" negligence stands for the proposition that a defendant who violates a safety statute or a local safety regulation may be held, for this reason, to have breached his duty to the plaintiff - without the plaintiff's having to provide any further evidence of failure to exercise reasonable care.
So, suppose New York City has a rule that forbids right turns at a red light. Yet these right turns legal in Long Island. Hasn't New York City, in effect, created a new tort rule which makes drivers who cause accidents as a result of making right turns on red liable only in New York City?
In another state, this argument might work - but not in New York State. That is because
New York State does not accept the rule that breach of a local ordinance can be the basis for per se negligence. And that point not only undermines the general argument that, in New York, local governments can make tort rules - it also undermines the validity of GIRA.
The Longstanding New York Precedent That Suggests GIRA Is Invalid
The leading case that sets out New York's position is the 1960 ruling in Major v. Waverly & Odgen, Inc. There, New York's highest court, the Court of Appeals, rejected a plaintiff's claim that the defendant was per se negligent because he had violated a building code that was part of the Village of Mamaroneck's Executive Law.
The Court of Appeals acknowledged that failure to obey the local ordinance could be evidence of negligence. But it also held that the village could not turn a violation of the ordinance into a per se breach of New York State's tort law.
According to the Court, "if the Legislature desires to change the prevailing rules of the common law, it must do so itself and not by virtue of authority delegated to a subordinate rule-making body." (Emphasis added). Arguably, these words ought to be the death knell for GIRA.
If GIRA is supposed to be a local rule of tort liability, applicable to anyone in the country for injuries suffered in New York City, then its biggest problem is not that it extends New York law across state lines. Its biggest problem is that it is not a valid New York law.
What If GIRA Is Redescribed as a "Police Power" - Not a Tort - Law?
Perhaps GIRA's defenders can save it by classifying it under a different legal category. The argument we made above only shows that GIRA is invalid if it is supposed to create a new obligation in tort. Yet if one looks at GIRA carefully, one can see that it might be described another way.
GIRA is technically a local law which amends the Administrative Code of New York City. It adds a new section to the code: Section 10-303.2. A quick look at New York City's Administrative Code reveals that Title 10 is concerned with Public Safety and Chapter 3 concerns firearms. (In fact, the section immediately prior to the ordinance created by GIRA prohibits assault weapons in New York City and sets out criminal and civil penalties to enforce that prohibition.)
So, another way of classifying GIRA is as an exercise of New York City's police powers. This would explain, for example, the title that GIRA gives the new section which it adds to the Administrative Code: "Civil penalty; firearms dealers and manufacturers." Note that it does not say: "Civil liability for the transfer of firearms" - as it might if it were truly a tort law.
If GIRA Is A "Police Power" Law, It is Almost Certainly Unconstitutional
So suppose, then, that GIRA is not supposed to be a new tort rule; it is supposed to be a regulation governing conduct that includes a civil penalty provision. A new problem then arises, for the New York City Council has jumped out of the frying pan and into the fire.
Here's the problem: Municipal legislation which is designed to regulate conduct outside of New York State almost certainly runs afoul of the "dormant" commerce clause of the U.S. Constitution.
The Commerce Clause contained in Article I of the U.S. Constitution gives Congress the exclusive power to regulate interstate commerce. "Dormant" commerce clause doctrine holds that, as a corollary to the commerce clause, states may not regulate interstate commerce even in areas where Congress has chosen not to exercise its regulatory powers.
Among the restrictions on state regulatory power included in dormant commerce clause doctrine is a prohibition on state laws that have extraterritorial regulatory effects beyond the borders of the state. Thus, the State of New York may not enact a statute that restricts gun sales in New Jersey.
Interestingly, the dormant commerce clause has not been used to nullify the imposition of tort liability by state courts even where the liability has regulatory implications such as risk deterrence and loss spreading for activities conducted beyond the borders of the state.
For example, suppose there is a product manufactured and sold in New Jersey, but used in New York. And suppose New York's common law of product liability regulates that product. Finally, suppose that, as a result, the New Jersey manufacturers and sellers' practices are affected - for instance, manufacturers have to add a safety catch to avoid New York liability, and sellers have to make sure they sell the product with that catch in place.
Apparently, these extraterritorial affects do not run afoul of the dormant commerce clause. Or at least, no court has so held.
So Far, Dormant Commerce Clause Attacks on Gun Litigation Have Failed
Gun manufacturers and dealers have attempted to challenge gun litigation based on claims of design defect, negligent marketing, and public nuisance as violating the dormant commerce clause. But so far, they have been unsuccessful.
Even though plaintiffs have openly admitted that the purpose of the litigation is to impose nationwide reforms on the way guns are designed and marketed, courts still have not held that these lawsuits violate Congress's power exclusively to regulate interstate commerce.
In 2003, for example, the Supreme Court of Indiana rejected a dormant commerce clause challenge to a public nuisance lawsuit brought by the City of Gary against the gun industry. (The case is City of Gary v. Smith & Wesson.) In so doing, the Court explained that "t is well established that a state can establish product liability standards in the absence of federal preemption of the area." And it reasoned that "there is no qualitative difference between recognition of the negligence and nuisance claims the City asserts as to handguns and [other tort-law] restrictions on any other product deemed dangerous." It thus concluded that if product liability standards did not violate the dormant commerce clause, then neither did the qualitatively identical negligence and nuisance claims.
Also in 2003, in Ileto v. Glock Inc., the U.S. Court of Appeals for the Ninth Circuit rejected a dormant commerce clause challenge to a lawsuit brought by a shooting victim against the maker of the gun. There, the Court simply held that "the state's interest in protecting the health and safety of its residents [through the imposition of tort liability] is clearly legitimate."
In January, the U.S. Supreme Court decided to decline to review this ruling.
Can Dormant Commerce Clause Challenges to GIRA Succeed?
In sum, then, both state and federal courts have rejected dormant commerce clause challenges to gun litigation. Accordingly, one might be skeptical of the chances of success for similar challenges to GIRA.
But unlike the laws at issue in these other cases, GIRA, as we have argued, cannot be considered a state tort rule. It is, instead, legislation under the City's police powers to regulate conduct - and that kind of legislation is precisely the type of government action subject to dormant commerce clause analysis.
Moreover, even if GIRA were a tort rule, the Supreme Court's 1996 decision in BMW v. Gore raises the possibility that it could still run afoul of constitutional limits on the extraterritorial effects of state regulation. In Gore, the court reversed a state court's imposition of punitive damages, in part because it was based upon legal conduct that occurred outside of the relevant state.
The Court held that "tate power may be exercised as much by a jury's application of a state rule of law in a civil lawsuit as by a statute," and it held, further, that such power may not be used to "impose sanctions . . . in order to deter conduct that is lawful in other jurisdictions." This language -- reminiscent of dormant commerce clause analysis - suggests that GIRA's outside-of-New-York-State effects may be constitutionally problematic.
GIRA, it should be noted allows for punitive damages - as did the law at issue in Gore. And while the broader implications of Gore for tort law are unclear, it forcefully underscores the principle that New York's civil law cannot have, as its primary goal or effect, the regulation of gun sales beyond its borders.
In short, GIRA, whether it is a characterized as a tort rule or an exercise of police powers, seems to be on a collision course with Gore, and thus on a collision course with the U.S. Constitution.
Why GIRA May Become a Poster Child For The "Need" for Federal Tort Reform
The concerns that we have raised about GIRA are based on considerations of federalism at two levels. First, there is New York's own federalism: New York state constitutional law does not want municipalities, in effect, making New York state tort law. Second, there is the U.S. Constitution's federalism: Federal constitutional law does not want states regulating conduct outside of state boundaries, for the Constitution says that regulation of interstate commerce is Congress's exclusive job. These legal constraints both affect what the New York City Council can do to protect itself from guns sold in other parts of the country.
Given the existence of these two constraints, laws like the PLCAA are simply unnecessary. There is no real problem for the PLCAA to solve; the real problems can be solved by existing doctrines.
The current situation, then, is deeply ironic. GIRA violates principles of federalism, and ought to be invalidated in court. But while GIRA is still on the books, it will have the symbolic effect of providing political cover for the Republican's federal tort reform agenda. And this agenda, in turn, will force New York to give up some of its tort laws that - unlike GIRA - are entirely constitutional and legal, but which protect consumers and victims of malpractice more than the White House might like.
GIRA, then, may best be described as a well-intentioned mistake: Meant to protect New York citizens, it may end up leaving them more vulnerable.
--------------------------------------------------------------------------------
Anthony J. Sebok, a FindLaw columnist, is a Professor at Brooklyn Law School. His other columns on tort issues may be found in the archive of his columns on this site. Timothy Lytton is a professor at Albany Law School. He has published articles in both English and Spanish on torts, conflict resolution, and jurisprudence, and is the editor of Suing the Gun Industry: A Battle at the Crossroads of Gun Control and Mass Torts (Michigan University Press 2005).
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New York City's Gun Industry Responsibility Act: Why It May Do More Harm than Good
By ANTHONY J. SEBOK AND TIMOTHY LYTTON
----
Monday, Mar. 07, 2005
On March 2, New York City Council Members Eva Moskowitz and David Yassky denounced renewed efforts to enact the "Protection of Lawful Commerce in Arms Act" (PLCAA). The bill would grant federal immunity to the gun industry from civil lawsuits by municipalities and individuals. Last year, Congress rejected it.
We criticized PLCAA in an earlier column, and we still feel that the law is unnecessary and offends principles of federalism. Our view is that Congress ought not to interfere with state tort law in this area, since it has equipped judges to do a fine job of handling gun litigation.
In January of this year, New York City passed a local law - the Gun Industry Responsibility Act (GIRA). If enforced, GIRA would give the Congress grounds for trying to "reform" tort law as it relates to handguns. In this column, we will explain why we think GIRA is invalid, and why we think its passage may well do more damage than good.
We predict that GIRA will only provide tort reformers in Washington, D.C. with a specious justification for their agenda: New York City is the kind of jurisdiction that the Republicans like to point toward when they try to make the case for PLCAA, and GIRA gives Republicans good reason to point toward New York City.
The Gun Industry Responsibility Act
GIRA aims to force gun manufacturers and dealers to take responsibility for illegal trafficking of the weapons that they sell. The Act subjects manufacturers and dealers to civil liability for any injury or death caused by one of their guns if the gun was illegally transferred either by them or by a subsequent owner. The Act allows for both compensatory and punitive damages.
There are exceptions: GIRA does not apply if the shooter was a law enforcement officer, if the victim was engaged in a crime, if the illegal transfer was a theft of the weapon that was reported to law enforcement, or if the shooting was wholly unrelated to any failure on the part of the manufacturer or dealer.
In addition, the manufacturer or dealer can avoid liability under the Act by showing that for a year prior to the shooting it adhered to a specific code of conduct. This code requires the manufacturer or dealer to refuse to sell at gun shows that do not require background checks, enforce stringent record-keeping practices, limit handgun sales to one gun per month to any one customer, and refuse to do business with any businesses that do not similarly adhere to the code of conduct.
The point of GIRA is simple, and the New York City Council was not shy about expressing it: to threaten gun manufacturers and dealers outside of New York with potentially devastating liability unless they institute nationwide sales restrictions mandated by the City.
Two Key Problems with GIRA
There are two problems with GIRA. One of these has captured the attention of many of its critics and made GIRA the poster child for PLCAA: GIRA essentially exports New York City's tort law into every state in the nation. (We will have more to say, later in the column, about whether this is a valid criticism of the law.)
A second problem with GIRA -- one which apparently no one has noticed -- is that it is a tort rule created by New York City, as opposed to New York State. This raises the question of whether local municipalities can create their own tort law, independent of their state legislatures or courts.
On one hand, in practice, tort law usually is the province of state law. On rare occasions, the federal government might create its own set of tort rules to deal with a specific problem, such as the rules governing accidents on the railways or harbors.
On the other hand, however, it is not obvious why a subunit of a state could not create its own tort rules.
In fact, local governments create tort rules all the time.
For example, the doctrine of "per se" negligence stands for the proposition that a defendant who violates a safety statute or a local safety regulation may be held, for this reason, to have breached his duty to the plaintiff - without the plaintiff's having to provide any further evidence of failure to exercise reasonable care.
So, suppose New York City has a rule that forbids right turns at a red light. Yet these right turns legal in Long Island. Hasn't New York City, in effect, created a new tort rule which makes drivers who cause accidents as a result of making right turns on red liable only in New York City?
In another state, this argument might work - but not in New York State. That is because
New York State does not accept the rule that breach of a local ordinance can be the basis for per se negligence. And that point not only undermines the general argument that, in New York, local governments can make tort rules - it also undermines the validity of GIRA.
The Longstanding New York Precedent That Suggests GIRA Is Invalid
The leading case that sets out New York's position is the 1960 ruling in Major v. Waverly & Odgen, Inc. There, New York's highest court, the Court of Appeals, rejected a plaintiff's claim that the defendant was per se negligent because he had violated a building code that was part of the Village of Mamaroneck's Executive Law.
The Court of Appeals acknowledged that failure to obey the local ordinance could be evidence of negligence. But it also held that the village could not turn a violation of the ordinance into a per se breach of New York State's tort law.
According to the Court, "if the Legislature desires to change the prevailing rules of the common law, it must do so itself and not by virtue of authority delegated to a subordinate rule-making body." (Emphasis added). Arguably, these words ought to be the death knell for GIRA.
If GIRA is supposed to be a local rule of tort liability, applicable to anyone in the country for injuries suffered in New York City, then its biggest problem is not that it extends New York law across state lines. Its biggest problem is that it is not a valid New York law.
What If GIRA Is Redescribed as a "Police Power" - Not a Tort - Law?
Perhaps GIRA's defenders can save it by classifying it under a different legal category. The argument we made above only shows that GIRA is invalid if it is supposed to create a new obligation in tort. Yet if one looks at GIRA carefully, one can see that it might be described another way.
GIRA is technically a local law which amends the Administrative Code of New York City. It adds a new section to the code: Section 10-303.2. A quick look at New York City's Administrative Code reveals that Title 10 is concerned with Public Safety and Chapter 3 concerns firearms. (In fact, the section immediately prior to the ordinance created by GIRA prohibits assault weapons in New York City and sets out criminal and civil penalties to enforce that prohibition.)
So, another way of classifying GIRA is as an exercise of New York City's police powers. This would explain, for example, the title that GIRA gives the new section which it adds to the Administrative Code: "Civil penalty; firearms dealers and manufacturers." Note that it does not say: "Civil liability for the transfer of firearms" - as it might if it were truly a tort law.
If GIRA Is A "Police Power" Law, It is Almost Certainly Unconstitutional
So suppose, then, that GIRA is not supposed to be a new tort rule; it is supposed to be a regulation governing conduct that includes a civil penalty provision. A new problem then arises, for the New York City Council has jumped out of the frying pan and into the fire.
Here's the problem: Municipal legislation which is designed to regulate conduct outside of New York State almost certainly runs afoul of the "dormant" commerce clause of the U.S. Constitution.
The Commerce Clause contained in Article I of the U.S. Constitution gives Congress the exclusive power to regulate interstate commerce. "Dormant" commerce clause doctrine holds that, as a corollary to the commerce clause, states may not regulate interstate commerce even in areas where Congress has chosen not to exercise its regulatory powers.
Among the restrictions on state regulatory power included in dormant commerce clause doctrine is a prohibition on state laws that have extraterritorial regulatory effects beyond the borders of the state. Thus, the State of New York may not enact a statute that restricts gun sales in New Jersey.
Interestingly, the dormant commerce clause has not been used to nullify the imposition of tort liability by state courts even where the liability has regulatory implications such as risk deterrence and loss spreading for activities conducted beyond the borders of the state.
For example, suppose there is a product manufactured and sold in New Jersey, but used in New York. And suppose New York's common law of product liability regulates that product. Finally, suppose that, as a result, the New Jersey manufacturers and sellers' practices are affected - for instance, manufacturers have to add a safety catch to avoid New York liability, and sellers have to make sure they sell the product with that catch in place.
Apparently, these extraterritorial affects do not run afoul of the dormant commerce clause. Or at least, no court has so held.
So Far, Dormant Commerce Clause Attacks on Gun Litigation Have Failed
Gun manufacturers and dealers have attempted to challenge gun litigation based on claims of design defect, negligent marketing, and public nuisance as violating the dormant commerce clause. But so far, they have been unsuccessful.
Even though plaintiffs have openly admitted that the purpose of the litigation is to impose nationwide reforms on the way guns are designed and marketed, courts still have not held that these lawsuits violate Congress's power exclusively to regulate interstate commerce.
In 2003, for example, the Supreme Court of Indiana rejected a dormant commerce clause challenge to a public nuisance lawsuit brought by the City of Gary against the gun industry. (The case is City of Gary v. Smith & Wesson.) In so doing, the Court explained that "t is well established that a state can establish product liability standards in the absence of federal preemption of the area." And it reasoned that "there is no qualitative difference between recognition of the negligence and nuisance claims the City asserts as to handguns and [other tort-law] restrictions on any other product deemed dangerous." It thus concluded that if product liability standards did not violate the dormant commerce clause, then neither did the qualitatively identical negligence and nuisance claims.
Also in 2003, in Ileto v. Glock Inc., the U.S. Court of Appeals for the Ninth Circuit rejected a dormant commerce clause challenge to a lawsuit brought by a shooting victim against the maker of the gun. There, the Court simply held that "the state's interest in protecting the health and safety of its residents [through the imposition of tort liability] is clearly legitimate."
In January, the U.S. Supreme Court decided to decline to review this ruling.
Can Dormant Commerce Clause Challenges to GIRA Succeed?
In sum, then, both state and federal courts have rejected dormant commerce clause challenges to gun litigation. Accordingly, one might be skeptical of the chances of success for similar challenges to GIRA.
But unlike the laws at issue in these other cases, GIRA, as we have argued, cannot be considered a state tort rule. It is, instead, legislation under the City's police powers to regulate conduct - and that kind of legislation is precisely the type of government action subject to dormant commerce clause analysis.
Moreover, even if GIRA were a tort rule, the Supreme Court's 1996 decision in BMW v. Gore raises the possibility that it could still run afoul of constitutional limits on the extraterritorial effects of state regulation. In Gore, the court reversed a state court's imposition of punitive damages, in part because it was based upon legal conduct that occurred outside of the relevant state.
The Court held that "
GIRA, it should be noted allows for punitive damages - as did the law at issue in Gore. And while the broader implications of Gore for tort law are unclear, it forcefully underscores the principle that New York's civil law cannot have, as its primary goal or effect, the regulation of gun sales beyond its borders.
In short, GIRA, whether it is a characterized as a tort rule or an exercise of police powers, seems to be on a collision course with Gore, and thus on a collision course with the U.S. Constitution.
Why GIRA May Become a Poster Child For The "Need" for Federal Tort Reform
The concerns that we have raised about GIRA are based on considerations of federalism at two levels. First, there is New York's own federalism: New York state constitutional law does not want municipalities, in effect, making New York state tort law. Second, there is the U.S. Constitution's federalism: Federal constitutional law does not want states regulating conduct outside of state boundaries, for the Constitution says that regulation of interstate commerce is Congress's exclusive job. These legal constraints both affect what the New York City Council can do to protect itself from guns sold in other parts of the country.
Given the existence of these two constraints, laws like the PLCAA are simply unnecessary. There is no real problem for the PLCAA to solve; the real problems can be solved by existing doctrines.
The current situation, then, is deeply ironic. GIRA violates principles of federalism, and ought to be invalidated in court. But while GIRA is still on the books, it will have the symbolic effect of providing political cover for the Republican's federal tort reform agenda. And this agenda, in turn, will force New York to give up some of its tort laws that - unlike GIRA - are entirely constitutional and legal, but which protect consumers and victims of malpractice more than the White House might like.
GIRA, then, may best be described as a well-intentioned mistake: Meant to protect New York citizens, it may end up leaving them more vulnerable.
--------------------------------------------------------------------------------
Anthony J. Sebok, a FindLaw columnist, is a Professor at Brooklyn Law School. His other columns on tort issues may be found in the archive of his columns on this site. Timothy Lytton is a professor at Albany Law School. He has published articles in both English and Spanish on torts, conflict resolution, and jurisprudence, and is the editor of Suing the Gun Industry: A Battle at the Crossroads of Gun Control and Mass Torts (Michigan University Press 2005).
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