A Smith & Wesson FAQ

A gun deal with many losers.


Q: So they pressured Smith & Wesson into accepting gun control in the form of a lawsuit settlement. We should be glad, right?

A: Sure, unless you're in the gun business or think you might need to defend yourself with a gun someday. Or unless you're someone who cares about the Constitution and the abuse of the legal system.

Q: You sound upset.

A: We all should be. Even if you don't care about the freedom and rule-of-law stuff, this deal could actually raise the number of people hurt because of gun malfunctions.

Q: That can't be. Seasoned firearms experts like Secretary of Housing and Urban Development Andrew Cuomo assure us that the next generation of "smart guns" won't let the wrong person fire them, because they'll have little computers inside.

A: Probably technology like that will be worth a look at some point down the road. But very few handgun buyers are willing to be beta volunteers during the debugging period. Think of the many glitches and crashes you get with ordinary software that runs on a dry desktop and gets upgraded every year or two. Think how often your supermarket's checkout scanner fails to read a product code, forcing the cashier to swipe the item three or four times or punch the code in manually. Then think about miniaturizing those technologies into a product expected to last for decades amid dust, humidity, and temperature extremes.

Legitimate users may have more to worry about here than criminals do. If you're planning to use a handgun in a crime, you may be willing to fiddle with the controls until you get past the tiny "try again" error readout. If you're keeping it for emergency defensive use, this kind of General Protection Fault could be fatal.

Q: If that happened to me, do you think some trial lawyer would be willing to help my survivors sue the gun maker?

A: Probably. Ironic, isn't it? We're debating whether an industry should begin marketing a risky new technology before it's clear how and whether it will work. There's a paper trail of doubts from engineers who think the technology won't be reliable and that innocent people will get hurt, and at this point we lack even prototypes, let alone mass testing. Normally the trial lawyers yell for punitive damages if a company rushes that kind of new technology to market. Instead gun makers now face legal assault if they don't.

Q: Maybe we could try out smart gun technology for a while with sportsmen who don't expect to need their guns on an emergency basis.

A: Cuomo & Co. aren't planning to leave you that option. Their S&W deal contemplates withdrawing standard gun designs from the market after enough makers sign on. It's like the way all car buyers were forced to buy airbags, except that by comparison airbags were a proven and innocuous technology. By the way, police forces will be allowed exemptions so they can go on buying the old designs, since they need their guns to work reliably.

Q: Wasn't there anyone at the negotiating table to speak up for civilian consumers?

A: You're kidding, right? Brokering a deal like this through lawsuits lets you exclude whole categories of pesky participants from the settlement room. The S&W deal provides that buyers won't be able to get guns unless they've completed certified safety classes–which is pointless harassment from the standpoint of veterans who don't need a refresher, and downright menacing to women trying to buy their first gun to protect themselves from a stalker or a violent husband.

Q: Who else was kept out of the settlement room?

A: Dealers. The S&W pact commits the company to sell only through dealers who've agreed to a long list of controls on their own activities, including putting their employees through approved training courses, removing from their stock various perfectly lawful weapons that the Clinton administration dislikes, and not selling at gun shows unless everyone else there likewise submits to various controls that go beyond federal law. In addition, because of a clause giving regulators access to any and all dealer documents they deem necessary to determine compliance, many dealership records will wind up in regulators' hands without the need for a warrant.

Q: Wouldn't it be easier for a dealer to drop the S&W line?

A: The Clinton administration was counting on S&W's status as the number one gun maker. Having absorbed that variety of antitrust analysis that describes a manufacturer as "controlling" a certain market share, the president's men thought helpless buyers would have no place to go. They figured they could leverage S&W's market share through what amounts to a tying arrangement: If dealers and gun shows wanted to stock the dominant manufacturer's line, they'd have to agree to stop promoting disfavored, competitive product lines.

Q: Wait a minute. Isn't that kind of like what Microsoft did to Netscape?

A: Yep. Tying arrangements aimed at excluding competitive products from the market are bad, bad, bad when dominant companies attempt them on their own. But very similar arrangements are to be applauded when companies do them in collusion with state attorneys general and cabinet secretaries.

Q: How did the tying arrangement work?

A: It was an instant flop. Rather than allow someone else's legal needs to dictate their business practices and inventory, many dealers resolved to drop the S&W product line. Instead of the race to settle that the gun suit organizers expected, they got a race to break ties with the (former) market leader. Aside from the dealers who jumped ship, some organizers of shooting matches have told S&W that it is no longer welcome, and other gun companies stopped coordinating their legal defense efforts with S&W, which meant it had to find a new law firm.

Q: What happened then? Did the anti-gun side admit it had miscalculated?

A: You're not going to believe this part. Several of the most combative state attorneys general, including Connecticut's Richard Blumenthal and New York's Eliot Spitzer, announced that they were going to sue the gun industry for not cooperating with S&W. On antitrust grounds, no less. This may be the first antitrust action in history aimed at smaller companies that refused to enter into tying arrangements with the dominant manufacturer in their market. It's a purely political move, meant to punish the still-free portions of the gun industry for their determination to remain free.

In addition to the business reasons for dropping S&W products, there was a huge amount of anger at the company within the industry for its perceived betrayal. The droves of consumers who were vowing never to buy another gun from "Clinton & Wesson" probably also encouraged dealers to dissociate themselves from the company.

Q: That seems kind of hard on poor old S&W, doesn't it? It was just trying to save its skin, not endorse gun control in principle.

A: In practice, the deal–which specifies that it can be enforced against S&W both as a contract and as a court settlement–does seem to align the company, against its will or not, with hard-line anti-gun sentiment. For example, S&W agrees to work "to support legislative efforts to reduce firearm misuse." It's not hard to guess what the signatories on the other side intend by such language, and it's sobering to think that in the future S&W might be held in violation of a court order (and also in breach of a contract) should it honestly and publicly say that some anti-gun legislative scheme is a bad idea. There are also widespread suspicions that "educational" aspects of the settlement, such as the establishment of a manufacturer-funded "education trust fund" and the provision of mandatory training and safety leaflets for customers, will become channels for the dissemination of anti-gun propaganda, paid for at one remove by buyers of S&W guns.

These suspicions are intensified by the pact's establishment of an Oversight Commission with which S&W "pledges to cooperate fully" and which will be empowered to oversee the agreement's implementation. The five members of the commission will be selected as follows: one by gun makers; one by the federal Bureau of Alcohol, Tobacco, and Firearms; two by city and county parties; and one by state parties. This commission will thus start out with a 4-to-1 majority favoring gun control, which will at best shift to a 3-to-2 majority in favor of gun control even if a libertarian president and Congress get elected tomorrow and name P.J. O'Rourke as the new head of the BATF.

The Oversight Commission's three-member working majority will not be selected by, or reflect the views of, a cross-section of American voters, but only those of the lawsuit "parties," which consist of various big cities and a few liberal states. Remarkably, cities such as Miami and Bridgeport, whose suits have already been thrown out as meritless by state judges, do get important voices in the new ruling junta that will enforce rules for gun buying nationwide. Yet the rest of the country is consigned to, at best, a permanently outvoted minority role.

Q: It sounds as if you're about to go off on an "end run around democracy" tear again.

A: It shouldn't be left to libertarians to voice qualms about the way major lawmaking proposals that had been brought up and specifically rejected in Congress and many state legislatures can be rammed through by force of litigation. But it seems most commentators' reaction to the agreement simply hinged on whether they liked its substantive content or not; if you're for gun control, it seems, you're for it no matter how it is achieved.

Legislation-by-lawsuit allows another end run around constitutional review. We saw this first in the tobacco round, where the settlement included curbs on advertising that would have been unconstitutional if they had been imposed directly by lawmakers (or courts, for that matter). When it's done through a lawsuit settlement, not only are the rights deemed waived, but interested third parties, such as magazines that might have a stake in the right to advertise, lack "standing" to challenge the deal. Now we see the same sort of thing in the gun round. Had the Cuomo-Spitzer-Blumenthal package of gun controls been enacted through legislation, Second Amendment advocates might have hoped to get courts to strike down parts of it, such as the restrictions on taking possession of handguns. But doing it through a lawsuit settlement may insulate such provisions from constitutional review.

The gun suits are also a textbook example of the gross abuse of litigation in a system that lacks any semblance of a loser-pays principle. Yale law professor Peter Schuck told The New York Times that he "doubts [Smith & Wesson] would have lost a court case" had matters reached trial. Indeed, several municipal gun suits had been thrown out already. Yet these often-wealthy cities faced no risk at all of having to compensate the far smaller, often family-owned gun companies with whom they'd picked a fight. Several gun makers have gone bankrupt since the legal onslaught began, and even Smith & Wesson's continued ability to function was in doubt.

Until quite recently in legal history, the use of litigation costs as a weapon to pry concessions from an opponent was considered unethical. Now they're boasting about it. Cuomo warned gun makers that unless they cooperated they'd suffer "death by a thousand cuts." "If you don't sign," said Spitzer at a press conference, referring to holdout Glock, "your bankruptcy lawyers will be knocking at your door." Who says there are no Ayn Rand villains in real life?

And with all that, Smith & Wesson has not bought and cannot buy peace. Initial reports portrayed Cuomo as vainly imagining that he could "deliver" the settlement signatures of the 30 mayors who have sued so far, most of whom have hired outside trial lawyers. Shortly after, this theme was quietly dropped as it became apparent that up to half the cities weren't taking the deal. Josh Horwitz, executive director for the Educational Fund to End Handgun Violence, which represents some of the cities, explained that the cities were not dropping their suits in part because the deal "does not contain any monetary damages." Observes gun scholar David Kopel, "In the long term, S&W has increased the chances that it, along with every other handgun manufacturer, will be destroyed."