US Appeals Court Revives Mexico’s $10 Billion Lawsuit Against Gun Makers

In a surprising turn of events, a U.S. appeals court has breathed new life into a $10 billion lawsuit filed by Mexico. The lawsuit aims to hold American gun manufacturers accountable for their alleged role in enabling the flow of weapons to drug cartels operating along the U.S.-Mexico border.

The Boston-based 1st U.S. Circuit Court of Appeals overturned, opens new tab 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), opens new tab, Sturm, Ruger & Co (RGR.N), opens new tab and others.

The federal Protection of Lawful Commerce in Arms Act (PLCAA) offers extensive protection to the firearms industry against lawsuits related to the misuse of their products.

Mexico’s lawyers have presented their argument, stating that the law specifically prohibits lawsuits for injuries that happen within the United States. However, they assert that this does not provide protection for the seven manufacturers and one distributor being sued, as they are held liable for the trafficking of guns to Mexican criminals.

A three-judge panel, led by U.S. Circuit Judge William Kayatta, has ruled that Mexico’s lawsuit against the United States can proceed. In their decision, the panel stated that although the law generally prohibits such lawsuits, Mexico’s claim falls under a statutory exemption.

In a statement, he explained that the law was specifically intended to safeguard lawful firearms-related commerce. However, Mexico has accused the companies of assisting in illegal gun sales by enabling the trafficking of firearms into the country.

Mexican Foreign Minister Alicia Barcena expressed her enthusiasm for the ruling, describing it as “great news” in a post on the social media platform X. Steve Shadowen, the country’s U.S. lawyer, described it as a significant development in ensuring the gun industry’s responsibility.

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“It is evident that individuals involved in gun violence will be held accountable under the law, irrespective of national boundaries,” Shadowen stated. The gun makers’ representatives did not respond to requests for comment.

According to Mexico, an estimated 500,000 firearms are smuggled from the U.S. into Mexico every year. The majority of these weapons, over 68%, are allegedly manufactured by the companies that Mexico has filed lawsuits against. These companies include Beretta USA, Barrett Firearms Manufacturing, Colt’s Manufacturing Co, and Glock Inc.

Mexico’s August 2021 complaint revealed that a significant portion of the nearly 40 million guns produced in the U.S. each year are being smuggled into Mexico. According to Mexico’s estimates, this amounts to approximately 2.2% of the total production, with the defendants alone responsible for manufacturing up to 597,000 of these smuggled firearms.

Mexico has attributed its ranking as the third highest country in the world for gun-related deaths to the prevalence of smuggling. It was reported that the company also experienced various negative impacts, such as a decrease in investment and economic activity. Additionally, there was an increased expenditure on law enforcement and public safety.

The companies have denied any wrongdoing. According to their legal representatives, the lawsuit filed by Mexico lacks any claims that the gun manufacturers’ gun sales themselves violated any exceptions to PLCAA’s broad protections.