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S. Ct. Unanimously Rejects Mexico's Lawsuit Against Smith & Wesson
"A manufacturer of goods is not an accomplice to every unaffiliated retailer whom it fails to make follow the law."
From Justice Kagan's unanimous (and, I think, correct) opinion today in Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos:
The Government of Mexico brought this lawsuit against seven American gun manufacturers. As required by a federal statute, Mexico seeks to show (among other things) that the defendant companies participated in the unlawful sale or marketing of firearms. See [Protection of Lawful Commerce in Arms Act,] 15 U.S.C. §7903(5)(A)(iii). More specifically, Mexico alleges that the companies aided and abetted unlawful sales routing guns to Mexican drug cartels. The question presented is whether Mexico's complaint plausibly pleads that conduct. We conclude it does not….
[T]his Court has developed several … principles [defining aiding and abetting law]. First, aiding and abetting is most commonly "a rule of secondary liability for specific wrongful acts." It is possible for someone to aid and abet a broad category of misconduct, but then his participation must be correspondingly "pervasive, systemic, and culpable."
Second, aiding and abetting usually requires misfeasance rather than nonfeasance. Absent an "independent duty to act," a person's "failure[s]," "omissions," or "inactions"—even if in some sense blameworthy—will rarely support aiding-and-abetting liability.
And third, routine and general activity that happens on occasion to assist in a crime—in essence, "incidentally"—is unlikely to count as aiding and abetting. So, for example, an "ordinary merchant[]" does not "become liable" for all criminal "misuse[s] of [his] goods," even if he knows that in some fraction of cases misuse will occur. The merchant becomes liable only if, beyond providing the good on the open market, he takes steps to "promote" the resulting crime and "make it his own."
Two of our cases—one approving liability for aiding another's crime, the other not—illustrate how all this doctrine plays out in practice. In Direct Sales Co. v. United States (1943), we held that a mail-order pharmacy could be convicted for assisting a small-town doctor's illegal distribution of narcotics. The pharmacy, Direct Sales, sold huge amounts of morphine to Dr. John Tate: Whereas the average physician required no more than 400 quarter-grain tablets annually, Direct Sales sold Tate some 5,000 to 6,000 half-grain tablets every month. Still more, Direct Sales "actively stimulated" Tate's purchases, by giving him special discounts for his most massive orders and using "high-pressure sales methods." And it did all that against the backdrop of law enforcement warnings: The Bureau of Narcotics had informed Direct Sales that "it was being used as a source of supply" by lawbreaking doctors. All that evidence, this Court found, … showed that Direct Sales "not only kn[ew of] and acquiesce[d]" in Tate's "illicit enterprise," but "join[ed] both mind and hand with him to make its accomplishment possible."
By contrast, this Court recently ordered the dismissal of a suit against several social-media companies for aiding and abetting a terrorist attack carried out by ISIS. See Twitter v. Taamneh (2023). The plaintiffs, victims of the attack, alleged that adherents of ISIS used the companies' platforms for recruiting and fundraising. The complaint further asserted that the companies knew that was so, yet failed to identify and remove the ISIS-related accounts and content. But we held that was not enough to make the companies liable for ISIS's terrorist acts. The companies' relationship with ISIS and its supporters, we reasoned, was "the same as their relationship with their billion-plus other users: arm's length, passive, and largely indifferent." There were no allegations that the companies had given ISIS "any special treatment," or "encourag[ed], solicit[ed], or advis[ed]" the group. Instead, after providing their platforms for general use, the companies "at most allegedly stood back and watched." More was needed, we stated, for a provider of generally available goods or services to be liable for a customer's misuse of them—for example, conduct of the kind in Direct Sales. When a company merely knows that "some bad actors" are taking "advantage" of its products for criminal purposes, it does not aid and abet. And that is so even if the company could adopt measures to reduce their users' downstream crimes….
Viewed against the backdrop of that law, Mexico's complaint does not plausibly allege that the defendant manufacturers aided and abetted gun dealers' unlawful sales of firearms to Mexican traffickers. We have little doubt that, as the complaint asserts, some such sales take place—and that the manufacturers know they do. But still, Mexico has not adequately pleaded what it needs to: that the manufacturers "participate in" those sales "as in something that [they] wish[] to bring about," and "seek by [their] action to make" succeed.
To begin with, … [t]he complaint does not pinpoint, as most aiding-and-abetting claims do, any specific criminal transactions that the defendants (allegedly) assisted. It does not say, for example, that a given manufacturer aided a given firearms dealer, at a particular time and place, in selling guns to a given Mexican trafficker not legally permitted to buy them under a specified statute. Instead, the complaint levels a more general accusation: that all the manufacturers assist some number of unidentified rogue gun dealers in making a host of firearms sales in violation of various legal bars. The systemic nature of that charge is not necessarily fatal. But as noted earlier, it cannot help but heighten Mexico's burden. To survive, the charge must be backed by plausible allegations of "pervasive, systemic, and culpable assistance."
Mexico's lead claim—that the manufacturers elect to sell guns to, among others, known rogue dealers—fails to clear that bar, for a package of reasons. For one thing, it is far from clear that such behavior, without more, could ever count as aiding and abetting under our precedents…. Mexico's complaint asserts nothing similar [to what happened in Direct Sales]. To the contrary, the complaint repeatedly states that the manufacturers treat rogue dealers just the same as they do law-abiding ones—selling to everyone, and on equivalent terms. So the complaint, even if taken at face value, would stretch the bounds of our caselaw.
And in any event, we cannot take the allegation here at face value, because Mexico has not said enough to make it plausible. In asserting that the manufacturers intentionally supply guns to bad-apple dealers, Mexico never confronts that the manufacturers do not directly supply any dealers, bad-apple or otherwise. They instead sell firearms to middlemen distributors, whom Mexico has never claimed lack independence. Given that industry structure, Mexico's complaint must offer some reason to believe that the manufacturers attend to the conduct of individual gun dealers, two levels down. But it does not so much as address that issue.
And even assuming the manufacturers know everything the distributors know, the complaint still would not adequately support the charge that they have identified the bad-apple dealers. Mexico does not itself name those dealers, though they are the ostensible principals in the illegal transactions claimed. Nor does Mexico provide grounds for thinking that anyone up the supply chain—whether manufacturer or distributor—often acquires that information. Indeed, the complaint points out that government agencies only sporadically provide upstream companies with information tracing Mexican crime guns to certain dealers. So Mexico's allegation on this score is all speculation; even on a motion to dismiss, it is not enough….
Mexico's complaint alleges that some, though unidentified, dealers often engage in illegal transactions with Mexican traffickers. So too, the complaint alleges that the manufacturers know that much to be true—that among the whole class of dealers, there are some who routinely violate the law. And finally the complaint alleges, with sufficient plausibility, that the manufacturers could do more than they do to figure out who those rogue dealers are, and then to cut off their supply of guns. But that is to say little more than the plaintiffs said in Twitter….
[Likewise,] a failure [of] {manufacturers [to] impose constraints on their distribution chains to reduce the possibility of unlawful conduct} is, again, what Twitter called "passive nonfeasance"—a "failure to stop" independent retailers downstream from making unlawful sales. Such "omissions" and "inactions," especially in an already highly regulated industry, are rarely the stuff of aidingand-abetting liability…. A manufacturer of goods is not an accomplice to every unaffiliated retailer whom it fails to make follow the law.
Finally, Mexico's allegations about the manufacturers' "design and marketing decisions" add nothing of consequence. As noted above, Mexico here focuses on the manufacturers' production of "military style" assault weapons, among which it includes AR–15 rifles, AK–47 rifles, and .50 caliber sniper rifles. But those products are both widely legal and bought by many ordinary consumers. (The AR–15 is the most popular rifle in the country.) The manufacturers cannot be charged with assisting in criminal acts just because Mexican cartel members like those guns too.
The same is true of firearms with Spanish-language names or graphics alluding to Mexican history. Those guns may be "coveted by the cartels," as Mexico alleges; but they also may appeal, as the manufacturers rejoin, to "millions of law-abiding Hispanic Americans."
That leaves only the allegation that the manufacturers have not attempted to make guns with nondefaceable serial numbers. But the failure to improve gun design in that way (which federal law does not require) cannot in the end show that the manufacturers have "join[ed] both mind and hand" with lawbreakers in the way needed to aid and abet.
And [our] conclusion … well accords with PLCAA's core purpose. Recall that Congress enacted the statute to halt a flurry of lawsuits attempting to make gun manufacturers pay for the downstream harms resulting from misuse of their products. In a "findings" and "purposes" section, Congress explained that PLCAA was meant to stop those suits—to prevent manufacturers (and sellers) from being held "liable for the harm caused by those who criminally or unlawfully misuse firearm[s]."
Mexico's suit closely resembles the ones Congress had in mind: It seeks to recover from American firearms manufacturers for the downstream damage Mexican cartel members wreak with their guns. Of course, the law Congress wrote includes the predicate exception, which allows some suits falling within PLCAA's general ban to proceed. But that exception, if Mexico's suit fell within it, would swallow most of the rule. We doubt Congress intended to draft such a capacious way out of PLCAA, and in fact it did not. The predicate exception allows for accomplice liability only when a plaintiff makes a plausible allegation that a gun manufacturer "participate[d] in" a firearms violation "as in something that [it] wishe[d] to bring about" and sought to make succeed. Because Mexico's complaint fails to do so, the defendant manufacturers retain their PLCAA-granted immunity.
The case focused on an aiding-and-abetting theory because under the PLCAA plaintiffs can't prevail merely on a showing of negligence on manufacturers' part (not that the Court had occasion to consider whether there was such negligence).
Justice Thomas concurred, adding a different (though tentative) theory:
[PLCAA's predicate] exception allows otherwise-prohibited suits against gun manufacturers to go forward if, among other requirements, the manufacturer has "knowingly violated a State or Federal statute applicable to the sale or marketing of the product." … It seems to me that the PLCAA at least arguably requires not only a plausible allegation that a defendant has committed a predicate violation, but also an earlier finding of guilt or liability in an adjudication regarding the "violation." Allowing plaintiffs to proffer mere allegations of a predicate violation would force many defendants in PLCAA litigation to litigate their criminal guilt in a civil proceeding, without the full panoply of protections that we otherwise afford to criminal defendants. And, these defendants might even include ones who were cleared in an earlier proceeding, such as through a noncharging decision or a not-guilty or not-liable verdict. Such collateral adjudication would be at best highly unusual, and would likely raise serious constitutional questions that would counsel in favor of a narrower interpretation. Particularly given the PLCAA's aim of protecting gun manufacturers from litigation, this issue warrants careful consideration.
Justice Jackson concurred, reasoning:
PLCAA was Congress's response to a flood of civil lawsuits that sought to hold the firearms industry responsible for downstream lawbreaking by third parties. Activists had deployed litigation in an effort to compel firearms manufacturers and associated entities to adopt safety measures and practices that exceeded what state or federal statutes required. Congress expressed concern that these lawsuits "attempt[ed] to use the judicial branch to circumvent the Legislative branch." PLCAA embodies Congress's express rejection of such efforts—stymying those who, as Congress put it, sought "to accomplish through litigation that which they have been unable to achieve by legislation." Put differently, PLCAA reflects Congress's view that the democratic process, not litigation, should set the terms of gun control.
Viewed in light of this objective, Congress's inclusion of the predicate exception makes perfect sense. The exception allows lawsuits to proceed—despite PLCAA's general grant of immunity—if the complaint alleges that a gun manufacturer or seller "knowingly violated a State or Federal statute applicable to the sale or marketing of the product, and the violation was a proximate cause of the harm for which relief is sought." …
All that Mexico alleges here is that firearms-industry-wide practices—though lawful on their own—facilitated dealers' unspecified downstream violations…. Mexico merely faults the industry writ large for engaging in practices that legislatures and voters have declined to prohibit.
It is for these reasons that I view Mexico's allegations as insufficient to satisfy PLCAA's predicate exception, regardless of whether the business practices described might suffice to establish aiding-and-abetting or other forms of vicarious liability in distinct statutory or common-law contexts. Devoid of nonconclusory allegations about particular statutory violations, Mexico's lawsuit seeks to turn the courts into common-law regulators.
But Congress passed PLCAA to preserve the primacy of the political branches—both state and federal—in deciding which duties to impose on the firearms industry. Construing PLCAA's predicate exception to authorize lawsuits like the one Mexico filed here would distort that basic design.
Noel Francisco argued on behalf of Smith & Wesson.
