Mexico's lawsuit vs. Arizona gun dealers faces challenge during hearing in Tucson

Following a two-hour hearing Thursday, a federal judge in Tucson will consider whether a lawsuit launched by the Mexican government against five Arizona gun dealers will move forward.

U.S. District Court Judge Rosemary Marquez asked several questions during the hearing and ruled on two narrow legal questions, but she did not rule from the bench on a motion to dismiss the case, telling attorneys said she would take the matter under advisement.

Frustrated with the United States’ inability to limit gun smuggling,
the Mexican government launched two separate lawsuits in the U.S. The first one was launched against gun manufacturer as well a Boston-area
wholesaler in August 2021.

The following October, lawyers with the Tucson-based firm DeConcini McDonald Yetwin & Lacy filed a lawsuit on behalf of the Mexican government, arguing Diamondback Shooting Sports, SnG Tactical, Ammo AZ, Sprague’s Sports,
and The Hub all “systematically participate in trafficking
military-style weapons and ammunition to drug cartels in Mexico by
supplying gun traffickers.”

In their complaint, attorneys wrote the gun stores “know or should know that their reckless and unlawful business practices – including straw sales, and bulk and repeat sales of military-style weapons – supply dangerous criminals in Mexico and the U.S.”

While most gun dealers “use safe practices and, as a result, sell no crime guns” the five stores “choose to sell guns using reckless and unlawful practices, despite the foreseeability – indeed, virtual certainty – that they are thereby helping cause deadly cartel violence across the border. Defendants engage in these reckless and unlawful actions because it makes them money.”

The case is nearly inextricably linked to a similar case filled a year
earlier against gun manufacturers. While that case was dismissed by a
federal court, a January decision by the 1st Circuit Court of Appeals
revived the challenge, and created a complex legal landscape for the
case in Arizona that could head to the U.S. Supreme Court.

In the first lawsuit, the Mexican government said weapons
made by U.S. companies move through “operación hormiga,” or an “ant
operation,” as people purchase
small numbers of firearms through straw purchases in gun store —
including stores in Tucson and Phoenix — and smuggle the weapons into
Mexico.

During the first two four months of fiscal 2024—which began on Oct.
1, 2023—CBP officers intercepted 345 firearms, along with nearly
154,000 rounds, along with hundreds of gun magazine and parts. Along the
U.S.-Canada border, CBP officials intercepted 78 weapons, while the
lion’s share were attempts to smuggle weapons into Mexico.

In Arizona, CBP officials intercepted 48 handguns and 23 rifles and more than 59,000 rounds, according to agency figures.

Mexican officials said companies, including Smith & Wesson and Strum, Ruger & Co., earn
nearly $170 million in annual sales by illegally selling their weapons
to corrupt dealers in the U.S. Further, the Mexican government argued
Colt Manufacturing tailors three .38 caliber pistols for the Mexican
market, including the “Emiliano Zapata 1911” which includes the phrase
“It is better to die standing than live on your knees” often attributed
to the eponymous Mexican revolutionary.

As the Mexican government
noted, a Colt .38-caliber pistol was used to murder the well-known
investigative journalist Miroslava Breach Velducea in 2017.

Sales a ‘drop in the bucket’

During the hearing in Tucson, the attorneys for the stores challenged Mexico’s lawsuit, arguing the country lacked standing to file the suit, and that it was invalidated by the Protection of Lawful Commerce in Arms Act—a law passed in 2005, which shields firearm manufacturers from civil lawsuits if crimes were committed with their products.

The courts “do not exist to make a political point or provide an avenue for a party’s frustration,” said attorney John Malsch.

He argued Mexico’s claims against the five federally licensed dealers are not “fairly traceable to the harm and the relief being sought could never redress that harm” because there are three other parties involved who help move firearms from dealers in the U.S. to the cartels in Mexico. “Straw purchasers, traffickers and people who committee crimes, are independently making their own cognitive decision to break the law. If any one of these three classes decided to do the right right, we’re not here.”

However, Marquez—an appointee of President Barack Obama—noted that in the other case the gun stores are two steps closer from the links that bring guns to Mexico than gun makers. Malsch told Marquez while gun makers may advertise to Mexican cartels, the stores don’t have a choice in the naming of weapons or advertising. 

He also rejected Mexico’s argument that some gun sales, including multiple purchases of semi-automatic rifles and pistols could not be a red flag. He noted firearms dealers inform the Bureau of Alcohol, Tobacco, and Firearms and state officials when someone buys multiple weapons.

“It can’t be a red flag just to sell a firearm that’s legal in the U.S.,” Malsch said. “It’s legal to sell more than one gun at a time. That isn’t an indicator of trafficking.”

Malsch noted the five stores were responsible for just a few firearms recovered following cartel-led violence. 

While Mexico’s attorneys argued the stores were in the “top 10” of stores that sold guns traced from Mexico to the U.S., Malsch said the companies were not the “only sources of firearms” in Arizona, arguing there are 1,500 dealers in Arizona, and nearly10,000 in border states. And guns could be purchased at flea markets, gun shows, and through private transactions, he said. 

The stores he’s defending sold just 47 firearms recovered in Mexico, a “drop in the bucket.”

“I don’t see how 47 firearms recovered from these five defendants positively reduce firearms and cartel violence in Mexico,” he said. “If these dealers closed their doors today, if would not change the dynamic in Mexico, whatsoever.”

Stores have ‘opportunity and obligation to stop’ straw purchases

Jon Lowy, an attorney for Mexico, argued the case against gun manufacturers like Smith & Wesson is “a little different” from his case, but the decision from the court of appeals “makes this case stronger and easier.” 

“As your honor pointed out, there are fewer steps between defendant’s misconduct and the injury,” he said, adding there “overwhelming support holding that firearms dealers can be liable under federal law.”

He said gun traces show buying patterns and there are “indicators” of gun trafficking, including repeated purchases of the same weapon. 

“Any reasonable person would think, ‘Why do you need 10 assault weapons and a sniper rifle?'” Certain buying patterns can indicate someone is trafficking weapons, Lowy argued. 

A gun store can observe a person in the store, and they have the “opportunity and obligation” to stop straw purchases. In their filings, the attorneys showed the 1st Circuit Court said Mexico “adequately alleges that defendants have been aiding and abetting the sale of firearms by dealers in knowing violation of relevant state and federal laws.”

Further, the appellate court ruled that while “one can fashion a multi-step description of the causal chain this does not mean that the injurious conduct and the injury alleged are insufficiently connected.”

He also argued against the idea the PLCAA creates immunity for the gun dealers.

Marquez asked if the convictions of straw purchasers show the system is working, but Lowy disagreed arguing that while some people are arrested, they are often arrested after they trafficking multiple weapons and this “doesn’t solve the problem.”

Lowy said Mexico’s is asking for injunctive relief, money, as well as federal monitors to review gun purchases at the stores. He told Marquez New York City installed monitors at some gun stores following a lawsuit and studies showed a “tremendous” drop in the flow of guns in the city.

Steve Shadowen noted there were dozens of federal indictments of straw purchases linked to gun stores in Arizona, “it makes our head spin, how could someone go forward with that transaction?”

Last week, a former college student was sentenced to 21 months in prison for buying at least 15 weapons—including AK-47-style weapons and a .50-caliber sniper rifle—for a former State Department driver who smuggled weapon into Mexico. He was paid $1,000 for each purchase, and over a few months, he bought multiple weapons and thousands of rounds of ammunition.

Shadowen argued while only a few dozen guns were recovered in Mexico studies showed that for every weapon recovered there are 18 to 45 weapons trafficked. 

“By that math, the number per year isn’t 47,” he said. “It’s between 846 and 2,115.” The argument that a few guns do not contribute to Mexico’s violence was flawed, he argued.

“Imagine how you react your honor, if you went down to the border and these defendants were standing there with 2,000 guns ready to hand them over,” he said. “How would any one react if we said we cannot enjoin them because it’s only 2,000 guns and there already are thousands of guns in Mexico?”

The five stores “facilitate the trafficking of high-power weapons to our country,” said Mexico’s Foreign Affairs Ministry, in a statement on Thursday. “The Government of Mexico emphasized that, although companies consider that the number of weapons trafficked that are attributable to their sales is marginal, they cause death and pain in our country.” 

“Therefore, it is irrelevant if it is a matter of many or few weapons that arrive illegally in our territory as a result of neglected commercial practices. Mexico insisted on the importance of ending arms trafficking and the need for the companies that sell them to contribute to this end, conducting their activities responsibly and carefully.”

Marquez asked if she should wait to see if the Supreme Court agrees
to hear the case from Massachusetts. Malsch, the defense’s attorney said she should wait for the Supreme Court to consider the case, likely to happen in the next six months. Lowy disagreed and said the case should move
forward because Mexico is “suffering a tremendous public safety problem
from the pipeline of guns flowing across border to the hands of the
cartels.”