On Monday, Mexico filed its answer to the motion to dismiss in a suit against U.S. gun manufacturers and retailers, Mexico v. Smith & Wesson. The case has attracted considerable attention in the United States and internationally, and Monday’s filing was accompanied by several amicus briefs supporting Mexico’s position. Reflecting the breadth of interest in the case, amici include two sets of international law scholars, Mexican human rights advocates, two Caribbean nations, 13 U.S. States and Washington D.C., and 27 district attorneys.
The filings discuss a threshold issue that the court must soon resolve, which has been the subject of significant previous coverage on Just Security: whether the 2005 Protection of Lawful Commerce in Arms Act (“PLCAA”), which immunizes gun companies from certain suits, bars Mexico’s lawsuit. Amidst this attention, one piece of the puzzle just beginning to be argued in the filings is the potentially dispositive role that choice-of-law rules will play in answering that question.
Procedural and Substantive Immunities
This case presents the District Court of Massachusetts with a question of first impression in the First Circuit: what type of immunity does PLCAA provide? U.S. courts recognize two types of liability-limiting statutes: immunities from suit and defenses from liability. Immunities from suit are procedural, requiring the court to dismiss for lack of subject-matter jurisdiction. In suits implicating defenses from liability, courts have the power to hear the case, but a defendant may then raise such immunities as substantive defenses. Not all immunities fit into this dichotomy. For example, qualified immunity and, potentially, the Foreign Sovereign Immunities Act are both.
In its answer, Mexico argues, unsurprisingly, that that “PLCAA does not create immunity.” The Second Circuit (twice) and Ninth Circuit have previously held that PLCAA is substantive law. The First Circuit may agree. As the Second Circuit noted, the Supreme Court has instructed that statutes should only be treated as granting procedural immunities if that legislative intent is clear from the text. However, courts do not always agree on how to categorize a statute. The Ninth Circuit, for example, determined that the General Aviation Revitalization Act of 1994, a statute of repose, is a “statutory right not to stand trial,” while the Third Circuit ruled the same statute to be a “defense to liability, not immunity from suit.”
The question of whether PLCAA immunity is substantive or procedural must be answered before the court engages in choice-of-law analysis. A choice-of-law determination, such as whether Mexican or Massachusetts law applies, determines the substantive law only. The procedural law of the forum is always followed. If PLCAA is an immunity from suit (procedural law), then it will apply in Mexico v. Smith & Wesson regardless of which substantive law applies. However, if PLCAA is a defense from liability (substantive law), then it would not apply if Mexican law is followed, but would apply to relevant claims decided under the laws of the United States.
Massachusetts Choice-of-Law Analysis
If PLCAA is deemed substantive law, the court will then need to consider which jurisdiction’s law should be applied to each claim. Mexico’s original complaint and recent answer signaled that Mexico may argue that both Mexican and U.S. law could be applied for various injuries and immunities, with Mexico noting the Supreme Court’s hypothetical permission of foreign law claims in RJR Nabisco (¶ 22) and raising claims under both common law and U.S. state statutes.
As both Mexico and an amicus brief by a number of prominent professors of transnational litigation, including authors of a previous article in Just Security on the case, note, substantive law in a U.S. federal diversity jurisdiction case is determined by the choice-of-law rules of the forum state – here, Massachusetts. Massachusetts applies a “combined modern” approach to choice-of-law questions in both tort and contract law. This means that, unlike some states, Massachusetts does not merely use the law of the place of injury. Thus, while other choice-of-law analyses might lead the court more quickly to the application of Mexican law, Massachusetts’ rules could lead to a number of different outcomes.
The First Circuit recently discussed Massachusetts choice-of-law principles in Foisie v. WPI, noting that “Massachusetts courts normally settle choice-of-law disputes using a functional approach, looking to the Restatement (Second) of Conflict of Laws as one obvious source of guidance.” The court stated that Massachusetts applied the “most significant relationship” multi-factor test found in the Second Restatement. Section 145 of the Second Restatement instructs courts to apply the law of the state with the most significant relationship to the occurrence and the parties, while “taking into account” contacts with “the place where the injury occurred,” “the place where the conduct causing the injury occurred,” and “the domicil, residence, nationality, place of incorporation and place of business of the parties.”
On top of the complexity of the test, the Second Restatement requires a separate choice-of-law analysis for each issue. Thus, some issues may be litigated under Mexican law, some under Massachusetts law, and some under others (for example, count seven of Mexico’s complaint (¶¶ 542-48) asserts Connecticut law).
Given the multi-faceted nature of this analysis, on which the court would almost certainly invite further briefing before deciding, it would be premature to assess at this stage which laws are most likely to apply. Both Mexico’s answer and the transnational litigation professors’ amicus brief state that the default rule in Massachusetts is to apply the law of the place of injury unless a different jurisdiction has a more significant relationship to the issue. Both argue that the United States does not have a more compelling interest than Mexico. And a court certainly may reach that decision. But given the analysis above, the expected defendants’ argument that U.S. law applies, and the fact that Mexico has raised some claims under U.S. state statutes, a court may conclude that the laws of the United States applied to at least some issues raised in Mexico’s complaint – bringing it back, once again, to an analysis of PLCAA immunity.
Could Any Claims Governed by U.S. Substantive Law Survive PLCAA?
As William S. Dodge and Ingrid Wuerth have previously written in Just Security, if PLCAA is U.S substantive law, then it would appear not to bar claims governed by the substantive law of Mexico. The question before the court, then, would be whether PLCAA leaves room for any claims governed by the substantive laws of the United States.
One way certain of Mexico’s claims might survive, as León Castellanos-Jankiewicz previously noted, is if a court determines that they fall under a PLCAA exception.
Another possibility is that a court could allow all or nearly all of Mexico’s claims to proceed by holding that PLCAA does not apply extraterritorially – which Dodge and Wuerth analyzed via analogy to the Racketeer Influenced and Corrupt Organizations Act. In this situation, PLCAA would be barred from applying due to the presumption against extraterritoriality, a U.S. judicial doctrine under which courts assume that statutes do not apply extraterritorially absent express congressional authorization. As outlined in detail in the aforementioned Just Security articles, the presumption involves a two-step test. At step one, the court determines whether Congress intended a federal statute to apply extraterritorially. If there is clear intent of extraterritorial scope, the test can end here. If the scope is not explicitly extraterritorial, including when it is explicitly domestic, then the test continues to step two. Here, the court determines what the “focus” of the statute is, and then considers whether the conduct relevant to the focus occurred domestically. As Dodge has noted, although courts usually take the steps in this order, a court may also exercise its discretion to begin at step two, as the Supreme Court did in in WesternGeco v. ION Geophysical.
The presumption has never been applied to PLCAA. The statute is doubtful to be found extraterritorial at step one. Dodge and Wuerth lay out how a court could conclude that the scope of the statute is domestic. And although the definitions section (15 U.S.C. § 7903) does consistently refer to “interstate or foreign commerce,” suggesting at a glance an extraterritorial intention, the Supreme Court has repeatedly stated that such “boilerplate language” does not defeat the presumption against extraterritoriality. In either case, the court would continue to part two of the test.
At step two, the court must first determine PLCAA’s “focus. Once the “focus” is found, the court will decide if conduct related to this focus actually occurred in the United States. The Second and Ninth Circuits have previously discussed PLCAA’s “purpose,” although not its “focus” for application of presumption. Both circuits found that the statute is meant to protect gun manufacturers from liability when engaged in legal commerce. Mexico’s complaint describes PLCAA as “protect[ing] gun companies from some liability,” although the complaint alleges that it only applies to liability for conduct by third parties in the United States. In WesternGeco, the Supreme Court clarified that a statute’s focus may also be “the parties and interests it seeks to protect or vindicate.” The focus may then be the domestic gun companies themselves, which could lead to PLCAA being applied.
Alternatively, Congress described PLCAA’s purposes as “[t]o prohibit causes of action” against manufacturers and others for harms committed illegally by third parties with firearms and ammunition. For the purposes of the presumption, Congress’ findings and purposes section may then establish the focus as the claims themselves, invoking the statute because the claims are being brought in a U.S. court, under American substantive law. However, as Castellanos-Jankiewicz noted, the focus may be on other domestic conduct, such as the Second Amendment rights of U.S. citizens, or illegal actions committed with firearms in the United States. If so, PLCAA might not apply, even when U.S. substantive laws are used, for injuries in Mexico.
The degree of international attention this case is attracting, even drawing the nations of Antigua & Barbuda and Belize to submit an amicus brief, demonstrates that the way U.S. courts answer choice-of-law questions in this case will have global repercussions. If a U.S. court has the power to hear the issues presented in this case, it may allow other nations afflicted by American guns to pursue similar strategies; but if not, it could wall them off from access to U.S. courts. Implicit in the international attention this case is receiving is a related, normative question: if the harms from the United States can cross borders, should the courts’ powers to remedy those harms cross borders too?