In August 2021, the Mexican government sued American manufacturers Smith & Wesson, Ruger, Colt, and others in the US District Court of Massachusetts. Mexico claims that the defendants’ business practices led to a proliferation of guns in Mexico, thereby contributing to gun violence and causing Mexico to incur extraordinary costs for health care, law enforcement and criminal justice administration. Because of the remote connection between the gun manufacturers’ activities and Mexico’s alleged harm, the case raises important questions about scope of liability and whether companies have an obligation to those harmed by their products when victims have had no direct interaction with them. While this issue is of consequence to gun manufacturers, there are also implications on the wider debate around business and human rights cases in US courts.
Deadly gun violence perpetrated by drug cartels has been on the rise in Mexico for several decades. Although Mexico strictly limits access to guns, their neighbor to the north, the US, does not, complicating Mexico’s efforts to reduce access to firearms. The US Government Accountability Office reports that 70% of illicit guns recovered in Mexico originated in the US, and a significant proportion are smuggled across the border from the US. This is the situation that forms the basis of Mexico’s lawsuit.
In its complaint, the Mexican government argues that the defendant gun manufacturers should be liable because they knowingly design, market, distribute and sell guns in ways that lead to the arming of drug cartels, including by doing business with corrupt dealers who engage in illegal sales practices and by designing guns that are readily transferable to Mexico’s criminal market. The complaint raises several common law tort claims, including negligence, public nuisance, and defective design, and seeks equitable relief and damages for the costs that Mexico incurs when dealing with the fallout of the violence.
Mexico’s lawsuit faces formidable barriers to success, especially because of immunity granted to gun producers by the Protection of Lawful Commerce in Arms Act (PLCAA). However, even if the immunity barrier can be overcome, the link between the American gun manufacturers and the Mexican government’s alleged harm is remote, raising questions about whether liability is warranted. In US tort law, the element of proximate cause controls the scope of liability by requiring some degree of connection between the defendant’s conduct and the plaintiff’s harm. This blog argues that although past similar cases were dismissed because of a failure to adequately plead proximate cause, the legal standard applied in those cases is not appropriate for this context.
The defendants argue that the case should be dismissed in part because Mexico’s complaint does not adequately demonstrate proximately cause. In a Joint Motion to Dismiss, they state that Mexico’s case is an attempt to “impose liability over [a] spatial, temporal, and causal gulf.” They argue that the causal chain between the gun manufacturers and the cost that the government accrues when dealing with gun violence is extraordinarily attenuated, and made up of multiple links involving intervening criminal acts by third parties that break the chain of liability. They also claim that although Mexico has framed the harm as its own fiscal injury, the injuries are in fact wholly derivative of the direct victims of cartel violence.
Proximate cause is a crucial element in a number of torts, yet a clear and uniform definition remains elusive. It connects the defendant’s actions with the plaintiff’s injury, and in this way, acts as a gatekeeper to ensure that a defendant will be held liable only for harms that might have reasonably been anticipated as a result of their conduct. Among the various states, there are a number of approaches for how to form this connection. For example, some jurisdictions require a direct relation, while others require that the defendant foresee the consequences of his tortious acts.
Public policy concerns often play a role in the proximate cause analysis. The US Supreme Court has endorsed a policy driven approach that reflects “ideas of what justice demands, or of what is administratively possible and convenient.” Because these may vary depending on the overall situation, the determination of the scope of liability is ultimately a context-driven analysis.
When seeking to hold companies liable for harms arising from their business activities, proximate cause becomes central, because it demarcates the outer limits of liability. There are often several causal links between a company’s actions and the resulting harm. For example, there are several links between the gun manufacturers and the final user of the firearm, including legal distributors, straw purchasers, and smugglers who bring the guns across the border to Mexico. Then, the harm that Mexico is alleging—the cost of the consequences of gun violence—occurs only after criminals use these firearms to injure or kill people. As described in the complaint, there is a connection between the defendants’ business practice and Mexico’s alleged harm, but the question remains whether assigning liability is justified given the remote nature of this relationship.
The issue of proximate cause has been raised in similar cases. In the early 2000s, a spate of lawsuits was filed against gun manufacturers by American municipal governments. Although these cases largely ceased with the passage of PLCAA, the failure to sufficiently plead proximate cause led to the dismissal of a number them. For example, the court in Philadelphia v. Beretta concluded that there was no direct relation between the costs that the city incurred as a result of gun violence, and the gun companies’ conduct, based on an assessment of six factors, including, inter alia, whether there was a causal connection between the defendant’s conduct and the harm, whether the defendant had a specific intent to harm the plaintiff, and considerations about the scope of a complex trial. Some courts also noted that a finding of proximate cause was precluded because the harm was more directly attributable to the intervening acts of a third party.
On first glance, the precedent from similar cases tolls a disappointing death knell for the prospects of Mexico’s case. But did these cases get it wrong, especially in light of the context-specific nature of tort law?
Because an assessment of proximate cause is guided by context-specific factors, including policy considerations, what would constitute proximate cause in one situation might not in another. Close attention must be paid to circumstances when relying on precedent, because the underlying policy implications of limiting the scope of liability may differ greatly.
Although proximate cause developed primarily in common law negligence, the requirement also applies to other common law torts as well as statutory claims, and is “fine-tuned to fit contextually with the relevant cause of action.” Particularly in the context of statutes, courts tailor the proximate cause standard to the text and purpose of the statute, and the type of harm it was designed to protect against. For example, the Ninth Circuit Court of Appeals noted that in the context of the Anti-Terrorism Act, Congress’s choice of the phrase “by reason of” means that mere foreseeability is not enough and a direct relationship is required to establish proximate cause. Or, in Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, the court deliberately noted the context-specific nature of its holding, stating that “[a]fter discussing at length proximate cause principles likely incorporated by Congress into the Sherman Act in 1890, the Supreme Court outlined a number of factors to consider in the flexible antitrust standing analysis.”
A review of the defendants’ Joint Motion to Dismiss reveals that the defendants’ argument overwhelmingly relies on cases dealing arising out of federal statutes with narrow subject-matter scopes, such as the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Fair Housing Act. Importantly, further examination of these precedents reveals that the approaches adopted in these cases were explicitly intended for their respective contexts and claims arising from those statutes. Nonetheless, some courts adjudicating common law claims in gun manufacturer cases have relied on this case law without taking into account that it was not necessarily a reflection of the applicable common law. For example, in Philadelphia v. Beretta, the six-factor test applied by the court was derived from Alleghany General Hospital v. Philip Morris. The court in Alleghany was clear that this test was developed specifically for the context of antitrust and RICO, and cited to cases, including Steamfitters, which also deliberately applied this standard to a narrow set of statutory claims.
Nonetheless, the Beretta court applied the six-factor test without regard to the context-specific creation of the standard. Yet a brief review reveals how context-specific it is. For example, civil actions brought under RICO require that damages be directly caused by criminal activities addressed by the the statute, and thus explaining the specific intent requirement. Also, antitrust cases often involve complicated apportionment of damages among plaintiffs, while cases such as Mexico’s has only one plaintiff. Finally, although tort common law generally precludes recovery for plaintiffs whose harm flows merely from the misfortunes of a third party, in the context of fraud or racketeering claims this notion takes on a much more salient role; if all people who are indirectly affected by the consequences of fraud or racketeering perpetrated against someone else could sue the wrongdoer, this would open up litigious floodgates, especially if the direct victim’s injury has wide ripple-effects.
At least one court has noted the unsuitability of applying antitrust law in cases against gun manufacturers. In James v. Arms Tech, the judge disagreed with the analysis taken by other courts—which it called an “antitrust analysis”—and argued that instead, contemporary tort doctrine should apply. He noted the differing purposes of these respective areas of law, especially that the objective of common tort law is “that wronged persons should be compensated for their injuries and that those responsible for the wrong should bear the cost of their tortious conduct.”
Like many other states’ common law, proximate cause in Massachusetts turns on whether the harm was a reasonably foreseeable result of the negligent conduct. The specific kind of harm or the precise victim need not be foreseen. Moreover, the chain of proximate cause may be broken by intervening acts of a third party only if those intervening acts were not reasonably foreseeable. Given the well-established pattern of American guns being smuggled into Mexico to be used in crime, if gun manufacturers sell their products to distributors that they know deal with smugglers who supply Mexican cartels, then it is reasonably foreseeable that these firearms will be used to perpetrate crimes. While a firm finding of proximate cause depends on what the evidence in this case proves, the cases should not be dismissed at this stage on the basis of a failure to sufficiently plead proximate cause.
Given the cross-border nature of the case, it merits mention that the proximate cause analysis is “geoambiguous”; the causal chain is not broken just because the plaintiff and defendants stand in different jurisdictions. Instead, concerns about extraterritoriality are handled through procedural mechanisms rather than the substantive tort law. Therefore, extraterritorial dimensions in a case do not generally impact the proximate cause analysis.
The proximate analysis does not end with foreseeability, and policy considerations also come into play, especially “policy concerns about open-ended liability for remote effects.” Policy reasons are often invoked to narrow the scope of liability, for example the context of antitrust cases, in which “proximate cause is employed … as a limiting principle intended to stymie a flood of [civil RICO] litigation, reserving recovery for those who have been directly affected by a defendant’s wrongdoing.”
The question that now remains is: are there any special policy considerations that would justify limiting the scope of tort liability of gun manufacturers?
Mexico strives to frame its injuries as non-derivative, but some of their alleged losses arise only because direct victims were injured. When a plaintiff is physically impacted by gun violence, such as through bodily injury or the death of a loved one, there are few good reason to limit their opportunity to recover if their harm was the reasonably foreseeable outcome of certain business decisions taken by the gun companies. However, if the plaintiff’s allegations center on fiscal harms derived from the injuries suffered by others, then perhaps the answer is not as clear. Indeed, courts have generally been reluctant to extend proximate cause to allow a plaintiff to recover when there is a more obvious and direct injured party.
Another policy consideration is whether, by allowing foreign parties to bring claims, the floodgates will open to foreign litigation against American companies. However, procedural doctrines such as forum non conveniens, which allows courts to dismiss a case if a better-suited forum exists, provide sufficient safeguards.
Finally, a core goal of tort liability is deterrence. In recent decades, there is an emerging awareness about how decision in the boardroom can affect the livelihoods and lives of people far removed, and companies should be incentivized to make business decisions in line with broad social welfare and human rights.
An Additional Comment on Gun Manufacturers’ Duty of Care
Even if an argument can be made that gun manufacturers’ business activities constitute a proximate cause of the cost of gun violence, questions surrounding the scope of liability are not entirely laid to rest. Whether gun manufacturers owed a duty of care to the plaintiffs is also central to establishing negligence liability. Some courts have held that there exists no common law duty for gun manufacturers to protect people against the unlawful use of their products. However, in the changing landscape of business and human rights, perhaps such a duty is indeed emerging. Twenty years ago, US courts paid little attention to the notion of social corporate responsibility, but in recent decades new norms have emerged, which demand that companies consider the wider human rights costs of their practices and respond accordingly. Although instruments such as the UN Guiding Principle on Business and Human Rights do not create binding obligations to be enforced in US courts, they do suggest that the societal expectations of reasonable corporate conduct are changing. Tort law is inherently a reflection of societal standards, and therefore should change alongside. In fact, such arguments have already been made in Californian and Canadian courts. When serious human rights violations are implicated, such as in Mexico where rampant gun violence takes thousands of lives every year, the finding of a duty of care—at least to direct victims—would be in line with contemporary expectations of the standard of care companies should apply in their business dealings.
The scope of tort liability is an important issue in business and human rights cases, and applying the proper standard for the context ensures that the law does what it was intended to do, which is to compensate victims who have been wrongfully harmed by the negligent acts of others. Ultimately, when companies contribute to harms, especially of a violent or widespread nature, a generous approach to proximate cause is warranted.