A U.S. appeals court on Monday revived a $10 billion lawsuit by Mexico seeking to hold American gun manufacturers responsible for facilitating the trafficking of weapons to drug cartels across the U.S.-Mexico border.
The Boston-based 1st U.S. Circuit Court of Appeals overturned a lower-court judge's decision dismissing the case on the grounds that a U.S. law barred Mexico from suing Smith & Wesson Brands (SWBI.O), Sturm, Ruger & Co (RGR.N) and others.
That law, the federal Protection of Lawful Commerce in Arms Act (PLCAA), provides the firearms industry broad protection from lawsuits over their products' misuse.
Mexico's lawyers argued the law only bars lawsuits over injuries that occur in the U.S. and does not shield the seven manufacturers and one distributor it sued from liability over the trafficking of guns to Mexican criminals.
U.S. Circuit Judge William Kayatta, writing for the three-judge panel, said that while the law can be applied to lawsuits by foreign governments, Mexico's lawsuit "plausibly alleges a type of claim that is statutorily exempt from the PLCAA's general prohibition."
He said that was because the law was only designed to protect lawful firearms-related commerce, yet Mexico had accused the companies of aiding and abetting illegal gun sales by facilitating the trafficking of firearms into the country.
Mexican Foreign Minister Alicia Barcena called the ruling "great news" in a post on the social media platform X. The country's U.S. lawyer, Steve Shadowen, called it "an important step forward in holding the gun industry accountable."
"It should now be clear that those who contribute to gun violence must face legal consequences, regardless of borders," Shadowen said in a statement.
Representatives for the gun makers did not immediately respond to requests for comment.
Mexico says over 500,000 guns are trafficked annually from the U.S. into Mexico, of which more than 68% are made by the companies it sued, which also include Beretta USA, Barrett Firearms Manufacturing, Colt's Manufacturing Co and Glock Inc.
In its August 2021 complaint, Mexico estimated that 2.2% of the nearly 40 million guns made annually in the U.S. are smuggled into Mexico, including as many as 597,000 guns made by the defendants.
Mexico said the smuggling has been a key factor in its ranking third worldwide in the number of gun-related deaths. It also claimed to suffer many other harms, including declining investment and economic activity and a need to spend more on law enforcement and public safety.
The companies deny wrongdoing. Their lawyers say Mexico's lawsuit is devoid of allegations the gun manufacturers' gun sales themselves did anything that would create an exception to PLCAA's broad protections.
