During a three-year period, Bull's Eye Shooter Supply in Tacoma, Washington, somehow lost track of 238 guns. One of them, a Bushmaster XM-15 rifle, ended up in the hands of John Lee Malvo and John Allen Muhammad, who used it in the D.C.-area sniper shootings of 2002.
In September, Bull's Eye agreed to pay the relatives of eight sniper victims $2 million to settle a lawsuit that accused the dealer of failing to take security precautions that might have prevented Malvo from shoplifting the $1,600 murder weapon. The gun's manufacturer, Bushmaster Firearms of Windham, Maine, kicked in an additional $550,000. The plaintiffs argued that Bushmaster should have stopped doing business with Bull's Eye after federal audits revealed the store's lackadaisical approach to inventory control.
This was the first time a manufacturer had agreed to pay anything in a lawsuit alleging negligent distribution, the theory at the center of various government-backed lawsuits against the gun industry. Bushmaster, citing rising legal fees and depleted insurance coverage, said the settlement was purely a financial decision and would not affect the way it does business. The company had argued that it was not its place as a manufacturer to second-guess the federal government, which continued to license Bull's Eye despite the disappearing guns.
Michael I. Krauss, a law professor at George Mason University who has written extensively about gun litigation, says the settlement, while "advantageous for the defending party," is "very disadvantageous for future defendants." But he adds that "the facts really are unique, with allegations that [Bushmaster] knew the product was being stolen, not merely that it was being misused. Therefore the foot in the punitive-damages door is a rather small one."