April 4, 2023, Just Security
by León Castellanos-Jankiewicz
On Mar. 14, Mexico filed an appeal with the U.S. Court of Appeals for the First Circuit in its civil complaint against seven gun manufacturers and one wholesale arms distributor. Mexico is requesting the panel to reverse the decision of the U.S. District Court for the District of Massachusetts, which dismissed most of its claims on the basis of the Protection of Lawful Commerce in Arms Act (PLCAA, 15 U.S.C. §§ 7901-7903), and because the court concluded that Mexico failed to state a claim with respect to its other counts. The case, which raises important issues of transnational litigation for corporate accountability, has been discussed in Just Security here, here and here. This post reviews Mexico’s appeal, which argues that the district court erred in defining the focus of the PLCAA so broadly as to apply it extraterritorially to facts and injuries occurring abroad.
Background and Complaint
This litigation is highly relevant to Latin America and the Caribbean, a region where between 70 and 90 percent of homicides are caused by firearms. Many of these guns flow illegally from the United States, and have also been identified as drivers of both northward migration and the ongoing fentanyl crisis.
Mexico’s complaint argued that the defendant companies have aided and abetted the unlawful trafficking of an estimated half million guns into Mexico every year through their irresponsible manufacturing, marketing, and distribution practices. According to Mexico, this failure “to exercise reasonable care” amounts to negligent conduct that is arming drug cartels on its territory and constitutes the “proximate cause” of the gun violence that has claimed over 95,584 lives there since 2019 alone.
The District Court’s Dismissal and PLCAA
The district court granted the defendants’ motion to dismiss in September largely on the basis of PLCAA. That statute prohibits bringing a “qualified civil liability action” in federal or state court against gun manufacturers and distributors for harm “solely caused by the criminal or unlawful misuse of firearm products” by third parties.
Because the district court found that the conduct relevant to PLCAA’s focus occurred in the United States, it decided to apply that statute to the case, even though other relevant facts occurred abroad. Mexico, however, argued that the relevant illegal conduct—resulting in human casualties, as well as material and economic loss—occurred on its territory. On this basis, the Mexican government argued that Mexico’s domestic tort law applied to six of its claims, and that PLCAA could not apply extraterritorially to bar those counts.
Nevertheless, the district court found that no choice-of-law analysis was necessary, given that PLCAA was a “jurisdiction-stripping statute” which covered all civil actions or proceedings brought by any person against a manufacturer or seller of a firearm. Commentators have criticized the district court on this point (see here and here), because it unduly extended the statute’s geographic reach to claims under Mexican law. PLCAA prohibits civil actions for the “criminal or unlawful misuse” of firearms under U.S. federal and state law, but nothing in its text or findings states that it bars claims made under foreign law.
Mexico’s Appeal: The Application of PLCAA as “Impermissibly Extraterritorial”
On appeal, Mexico argues that the district court’s application of PLCAA to bar its claims under Mexican tort law was “impermissibly extraterritorial.” Mexico’s main contention here is that “injury from gun misuse” is the conduct relevant to PLCAA’s focus, and that this conduct occurred in Mexico. Absent any indication that PLCAA prohibits claims based on foreign law for damages occurring abroad, it follows that PLCAA could not hinder Mexico’s claims. Therefore, Mexico argues that the district court erred in applying PLCAA based on its finding that “all” of defendants’ unlawful conduct “occurred within the United States and only resulted in harm in Mexico.” On the contrary: “[t]he Complaint alleges in detail that Defendants engage in conduct in Mexico when they aid or abet trafficking guns into Mexico.”
Moreover, the broad way in which the district court construed PLCAA’s focus was tautological and led to unintended results. Specifically, Mexico takes issue with the district court’s finding that:
“the PLCAA seeks to regulate the types of claims that can be asserted against firearm manufacturers and sellers…. Indeed, the statute seeks to prohibit exactly the type of claim that is currently before this Court.”
According to Mexico, PLCAA does not “regulate the types of claims” that can be brought. Rather, PLCAA “defines which claims it precludes and protects gun manufacturers and sellers from those claims.” Reading an abstract “regulatory” function into PLCAA that Congress did not provide for, averred Mexico, “would give courts free rein” to stand in for the legislative branch “rather than ensuring that Congress, not the courts, makes those foreign-policy judgments.”
Mexico insists that it is abundantly clear that PLCAA precludes “qualified civil liability actions” resulting in injury from the “criminal and unlawful misuse” of firearms (§7902(a); §7903(5)(A)). Moreover, since the presumption against extraterritoriality holds that “absent clearly expressed congressional intent to the contrary, federal laws will be construed to have only domestic application” (RJR Nabisco, Inc. v. European Community) the “criminal or unlawful” conduct covered by PLCAA should be construed as applying to facts occurring in the United States in respect to U.S. criminal law. In support of this interpretation, Mexico cites Small v. United States, where the Supreme Court construed a federal statute criminalizing possession of a firearm in the United States by “any person…who has been convicted in any court.” Despite this broad reference, the Supreme Court concluded that the phrase “convicted in any court” did not include convictions in foreign courts. Small featured extensively in Mexico’s written pleadings, but was not addressed by the district court.
Citing the district court’s assertion that PLCAA is a “jurisdiction-stripping statute,” Mexico observes that no other court has held this before. In any event, the presumption against extraterritoriality also applies to “strictly jurisdictional” statutes per Kiobel. Moreover, according to Mexico, the district court’s finding that PLCAA was “jurisdiction-stripping” did not engage with cases finding that PLCAA “does not deprive courts of subject-matter jurisdiction” (City of New York v. Mickalis Pawn Shop, LLC (2nd Cir. 2011); Ileto v. Glock, Inc. (9th Cir. 2009)).
Furthermore, two of the government’s claims based on state statutes fall within PLCAA’s so-called “predicate” exception, which allows claims against manufacturers for knowingly violating a federal or state statute “applicable to the sale or marketing” of a firearm or ammo. The violation complained of must also be “a proximate cause of the harm for which relief is sought.” As noted here, however, state and federal courts disagree on the scope of this exception.
PLCAA’s Substantive Scope
An amicus brief filed on behalf of professors of transnational litigation argues the PLCAA does not bar claims by foreign governments under foreign law regardless of how the extraterritoriality question is resolved. They note that PLCAA covers only claims based on the “criminal or unlawful” misuse of firearms and argue that criminal or unlawful refers only to federal and state law. They point to several other federal statutes that expressly mention foreign law as evidence that “Congress knows how to refer to foreign law when it wants to do so.”
The professors also argue that PLCAA’s reference to claims brought by “any person” does not include claims by foreign governments. They note that the Supreme Court has held that the word “any person” is not necessarily sufficient to include foreign persons and that, in other statutes, Congress has expressly identified foreign government when it wishes to include them. The brief points out that Congress’s codified findings identify the suits with which PLCAA is concerned, specifically those “commenced or contemplated by the Federal Government, States, municipalities, and private interest groups and others” that are “based on theories without foundation in hundreds of years of the common law … and do not represent a bona fide expansion of the common law.”
In sum, the professors argue, whether PLCAA applies extraterritorially or not, it simply does not cover claims by foreign governments (as opposed to U.S. governments) based on Mexican civil law (as opposed to common law).
Comity and Choice of Law
Mexico also states that international comity “keeps U.S. courts reciprocally open to foreign sovereigns’ claims” and that the United States “has honored this international principle for more than 230 years.” The defendant companies argued that “[u]nder basic principles of international comity, a foreign sovereign cannot use foreign law to regulate the operations of U.S. companies within the United States.” According to another amicus brief filed on behalf of Professors Thomas Kadner Graziano and Alex Mills, this argument misconstrues the legal character of “comity”, which has been defined by the U.S. Supreme Court in Hilton v. Guyot as “neither a matter of absolute obligation, on the one hand, nor of mere courtesy and goodwill, upon the other.” According to these scholars:
“comity does not prohibit foreign law from applying to U.S. companies, but rather provides a justification for U.S. courts to apply foreign law (including to U.S. companies) in cases connected to foreign states. Choice of law rules give concrete effect to comity, consistent with broader principles of public international law.”
These scholars conclude that “Mexico argues consistent with international law that Mexican law applies to its claims in tort, based on the harm suffered in and to Mexico; it does not seek to ‘use foreign law to regulate the operations of U.S. companies.’” This aligns with the Supreme Court’s decision in RJR Nabisco, Inc. v. European Community, which Mexico also invokes: “[A] court will ordinarily ‘apply foreign law to determine the tortfeasor’s liability’ to ‘a plaintiff injured in a foreign country.’” Mexico further reiterates, as it did in its original complaint, that Massachusetts’s approach to choice of law prescribes “a presumption in favour of the place of injury,” that is, Mexico.
Mexico’s arguments on appeal maintaining that the district court’s interpretation of PLCAA was “impermissibly extraterritorial” suggest that the First Circuit might address this question directly. More broadly, Mexico’s litigation is part of wider efforts to hold irresponsible members of the U.S. gun industry accountable for transborder damage caused with their products on its territory. In separate proceedings, Mexico has filed a complaint in Arizona against five gun dealers on its own behalf and on behalf of its citizens alleging complicity in gun trafficking. It has also requested an advisory opinion from the Inter-American Court of Human Rights asking the Court to outline the obligations of states and corporations in respect to the production, distribution and sale of guns and their impact on human rights, including access to justice. These initiatives gesture towards an innovative approach to stem gun trafficking which might translate into lifesaving decisions and reform.
León Castellanos-Jankiewicz (@leoncastjan) is Researcher at the Asser Institute for International and European Law in The Hague, and currently supervises the International Law Clinic on Access to Justice for Gun Violence at the University of Amsterdam.
IMAGE: Bullet holes in a wall with the flag of Mexico. (Getty Images)