    [House Hearing, 108 Congress]
    [From the U.S. Government Publishing Office]

                         PROTECTION OF LAWFUL COMMERCE
                                  IN ARMS ACT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                       COMMERCIAL AND ADMINISTRATIVE LAW

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                       ON

                                   H.R. 1036

                                   __________

                                 APRIL 2, 2003

                                   __________

                                 Serial No. 16

                                   __________

             Printed for the use of the Committee on the Judiciary

        Available via the World Wide Web: http://www.house.gov/judiciary

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                           COMMITTEE ON THE JUDICIARY

                F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
    HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
    HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
    LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
    ELTON GALLEGLY, California           JERROLD NADLER, New York
    BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
    STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
    WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California

    CHRIS CANNON, Utah                   SHEILA JACKSON LEE, Texas
    SPENCER BACHUS, Alabama              MAXINE WATERS, California
    JOHN N. HOSTETTLER, Indiana          MARTIN T. MEEHAN, Massachusetts
    MARK GREEN, Wisconsin                WILLIAM D. DELAHUNT, Massachusetts
    RIC KELLER, Florida                  ROBERT WEXLER, Florida
    MELISSA A. HART, Pennsylvania        TAMMY BALDWIN, Wisconsin
    JEFF FLAKE, Arizona                  ANTHONY D. WEINER, New York
    MIKE PENCE, Indiana                  ADAM B. SCHIFF, California
    J. RANDY FORBES, Virginia            LINDA T. SANCHEZ, California
    STEVE KING, Iowa
    JOHN R. CARTER, Texas
    TOM FEENEY, Florida
    MARSHA BLACKBURN, Tennessee

                 Philip G. Kiko, Chief of Staff-General Counsel
                   Perry H. Apelbaum, Minority Chief Counsel
                                     ------

               Subcommittee on Commercial and Administrative Law

                          CHRIS CANNON, Utah, Chairman

    HOWARD COBLE, North Carolina         MELVIN L. WATT, North Carolina
    JEFF FLAKE, Arizona                  JERROLD NADLER, New York
    JOHN R. CARTER, Texas                TAMMY BALDWIN, Wisconsin
    MARSHA BLACKBURN, Tennessee          WILLIAM D. DELAHUNT, Massachusetts
    STEVE CHABOT, Ohio                   ANTHONY D. WEINER, New York
    TOM FEENEY, Florida

                      Raymond V. Smietanka, Chief Counsel

                            Susan A. Jensen, Counsel

                            Diane K. Taylor, Counsel

                      James Daley, Full Committee Counsel

                       Stephanie Moore, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 APRIL 2, 2003

                               OPENING STATEMENT

                                                                       Page
    The Honorable Chris Cannon, a Representative in Congress From the
      State of Utah, and Chairman, Subcommittee on Commercial and
      Administrative Law.............................................     1
    The Honorable Melvin L. Watt, a Representative in Congress From
      the State of North Carolina, and Ranking Member, Subcommittee
      on Commercial and Administrative Law...........................     3
    The Honorable Howard Coble, a Representative in Congress From the
      State of North Carolina........................................     4
    The Honorable Steve Chabot, a Representative in Congress From the
      State of Ohio..................................................     4

                                   WITNESSES

    Mr. Carlton Chen, General Counsel, Colt Manufacturing Company,
      Inc.
      Oral Testimony.................................................     6
      Prepared Statement.............................................     7
    Mr. Walter Olson, Senior Fellow, The Manhattan Institute
      Oral Testimony.................................................    19
      Prepared Statement.............................................    20
    Mr. David Lemongello, Nutley, NJ
      Oral Testimony.................................................    33
      Prepared Statement.............................................    35
    Lawrence G. Keane, Vice President and General Counsel, National
      Shooting Sport Foundation
      Oral Testimony.................................................    36
      Prepared Statement.............................................    39

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Cover Letter from Carlton Chen to Ms. Christine Baldwin,
      Committee on the Judiciary, Subcommittee on Commercial and
      Administrative Law.............................................    61
    Letter submitted by Representative Chris Cannon, on behalf of
      Minority Members, to Carlton Chen..............................    62
    Responses to questions submitted by Representative Chris Cannon
      to Carlton Chen................................................    63
    Letter submitted by Representative Chris Cannon, on behalf of
      Minority Members, to Walter Olson..............................   158
    Responses to questions submitted by Representative Chris Cannon
      to Walter Olson................................................   159
    Letter submitted by Representative Chris Cannon, on behalf of
      Minority Members, to David Lemongello..........................   160
    Response to questions submitted by Representative Chris Cannon to
      David Lemongello...............................................   161
    Letter submitted by Representative Chris Cannon, on behalf of
      Minority Members, to Lawrence G. Keane.........................   162
    Response to questions submitted by Representative Chris Cannon to
      Lawrence G. Keane..............................................   163

                         PROTECTION OF LAWFUL COMMERCE

                                  IN ARMS ACT

                                  ----------

                            WEDNESDAY, APRIL 2, 2003

                      House of Representatives,
                             Subcommittee on Commercial
                                and Administrative Law,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 10 a.m., in Room
    2141, Rayburn House Office Building, Hon. Chris Cannon
    [Chairman of the Subcommittee] presiding.
        Mr. Cannon. Morning, ladies and gentlemen. This hearing of
    the Subcommittee on Commercial and Administrative Law will now
    come to order. We consider today H.R. 1036, the Protection of
    Lawful Commerce in Arms Act, which was introduced on February
    27 by Representative Stearns. It currently has 247 cosponsors,
    including me.
        H.R. 1036 provides that a qualified civil liability action
    cannot be brought in any State or Federal court. Qualified
    civil liability action is defined as a civil action brought
    against any person or by any person against a manufacturer or
    seller of firearms or ammunition for damages resulting from the
    criminal or unlawful misuse of such products.
        However, such term does not include an action against a
    person who transfers a firearm or ammunition knowing that it
    will be used to commit a crime of violence or drug trafficking
    crime or comparable or identical State felony law.
        It also does not include an action brought against a seller
    for negligent entrustment or negligence per se. The bill also
    includes several additional exceptions, including an exception
    for action in which a manufacturer or seller of a qualified
    product knowingly and willfully violates a State or Federal
    statute applicable to sales or marketing when such violation
    was a proximate cause of harm for which relief is sought.
        Other exceptions include actions for breach of contract or
    warranty in connection with the purchase of a firearm or
    ammunition and an exception for damages resulting directly from
    a defect in design or manufacturer of a firearm or ammunition
    when used as intended.
        The bill also makes clear that only licensed manufacturers
    and sellers are covered by the bill. Tort law rests upon a
    foundation of personal responsibility in which a product may
    not be defined as defective unless there is something wrong
    with the product rather than with the product's user.
        However, in the last several years lawsuits have been filed
    against the firearms industry on a series of liability that
    hold it liable for the actions of others who use their products
    in a criminal or unlawful manner. Such lawsuits threaten to
    separate tort law from its basis in personal responsibility and
    to force firearms manufacturers into bankruptcy, leaving
    potential plaintiffs asserting traditional claims of product
    manufacturing defects unable to recover more than pennies on
    the dollar, if that, in Federal Bankruptcy Court.
        While some of these lawsuits have been dismissed and some
    States have acted to limit them in one way or another, the fact
    remains that these lawsuits continue to be aggressively
    pursued. For example, one of the personal injury lawyers suing
    the firearms industry, John Coale, told the Washington Post,
    ``The legal fees alone are enough to bankrupt the industry.'' I
    might just point out that the tobacco litigation, the cost to
    defend those are about $600 million, about three times what the
    total profits of the firearms industry in America is.
        Dave Koppel, an Adjunct Professor at New York University
    Law School, also stated that the cities suing the firearms
    industry, ``Don't even have to win. All they have to do is keep
    suing. They will kill the industry with the cost to defend all
    the lawsuits.'' lawsuits seeking to hold the firearms industry
    responsible for the criminal and unlawful use of its products
    are the attempts to accomplish through litigation what has not
    been achieved by legislation and the democratic process. As has
    been explained by one Federal judge, ``The plaintiffs'
    attorneys simply want to eliminate handguns.''
        Under the currently unregulated tort system, personal
    injury lawyers are seeking to obtain through the courts
    stringent limits on the sale and distribution of firearms
    beyond the court's jurisdictional boundaries. Such a State
    lawsuit in a single county could destroy a national industry
    and deny citizens everywhere the right to keep and bear arms
    guaranteed by the Constitution.
        Insofar as these lawsuits have the practical effect of
    burdening interstate commerce in firearms, Congress has the
    authority to act under the commerce clause of the Constitution.
    Such lawsuits also directly implicate core Federalism
    principles articulated by the Supreme Court which has made
    clear that, ``One State's power to impose burdens on the
    interstate market is not only subordinate to the Federal power
    over interstate commerce, but it is also constrained by the
    need to respect the interests of other States.''.
        If the judicial system is allowed to eliminate the firearms
    industry based on legal theories holding manufacturers liable
    for the misuse of their products, it is also likely that
    similar liability will be applied to an infinitely long list of
    other industries whose products are statistically associated
    with misuse.
        Witness the recent litigation against the fast food
    industry. According to a recent article in the Fortune
    Magazine, ``On August 3, 2000, the parity newspaper, The Onion,
    ran a joke article under the headline, 'Hersheys ordered to pay
    obese Americans $135 billion'.'' some joke. Last summer New
    York City attorney Sam Hirsch filed a strikingly similar
    lawsuit against McDonalds. News of the lawsuit drew hoots of
    derision, but food industry executives aren't laughing or
    shouldn't be. No matter what happens with Hirsch's suit, he has
    tapped into something very big.'' And that is all a quote.
        Congress must begin to stem the slide down this slippery
    slope. It can do that by fulfilling its constitutional duty and
    exercising its authority under the commerce clause to prevent a
    few States from bankrupting the national firearms industry and
    denying all Americans their fundamental right to bear arms.
        I now yield to Mr. Watt, the Ranking Member of the
    Subcommittee, for an opening statement.
        Mr. Watt. Thank you, Mr. Chairman. I will be brief, I hope.
    I just want to make a couple of points. First of all, we didn't
    get the testimony of the witnesses until late last evening. So
    it is kind of hard for us to prepare for a hearing of this--and
    take it seriously if we start reading the witness' testimony
    and trying to think about what they are saying at 10 or 11
    o'clock at night before the hearing takes place the following
    morning at 10 o'clock. I want to----
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. Yes.
        Mr. Cannon. My understanding is that the witness was in
    trial and is apologetic, and we apologize on our side for the
    lateness of that testimony, but I don't--it was pretty much
    unavoidable. We appreciate your understanding on that.
        Mr. Watt. Yes. And I am not going to belabor that point,
    but I just--I did want to point that out, that if we are going
    to take a matter such as this as a serious hearing, we really
    need to have the statements earlier. And I will let that go.
        Second, I always wonder about the process by which things
    get done. I wondered how medical negligence ended up in the
    Subcommittee, and I wonder how this ends up in this
    Subcommittee. I guess my own personal feeling is that sometimes
    bills get sent to the Subcommittee as opposed to being dealt
    with at the full Committee, because they--it is kind of the
    minor league circuit. You send it out there and see how it
    resonates, and if it resonates and it does well, then maybe you
    make the big leagues, or maybe it is like a Broadway musical
    that you send out to one of these small cities to try out. If
    it is successful there, then it makes Broadway.
        I can only hope that this bill stays in the minor leagues
    and doesn't make it to Broadway. I think it is unnecessary and
    if it is necessary, then I guess the Chairman has prepared us
    for the prospect that it will be followed soon by additional
    legislation that prohibits suits about obesity against
    McDonalds and fast food chains and other--in many other areas.
        My sense is that if something is lawful and somebody files
    a lawsuit about it, ultimately that lawsuit is either going to
    be declared frivolous or it is going to be dismissed anyway,
    and for us to pass a bill that says that somebody is protected
    from doing something that is lawful, I think is really an
    unnecessary exercise.
        But not withstanding that, particularly for the two witness
    statements that I didn't get until this morning, I will be
    happy in waiting to hear their testimony, because I certainly
    haven't had a chance to read it. And I will be trying to keep
    an open mind as we go through this process. That is what
    hearings are for. We are here in sending up a trial balloon, I
    presume, and this is the place to do it. So I am here, and I
    will try to be attentive and open minded about it.
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. Yes.
        Mr. Cannon. I will tell you the gentleman is not one of the
    247 cosponsors of this.
        Mr. Watt. No. I am not one of the 247 cosponsors of this
    minor league bill. Right.
        Mr. Cannon. I thank the gentleman, and the gentleman's time
    is expired.
        I want to note that we have Mr. Delahunt from
    Massachusetts, Mr. Coble from South Carolina--North Carolina.
    My goodness, that is a sin. Nothing could be finer. We had Mr.
    Flake here, and I assume he will return, from Arizona. Mr.
    Carter from Texas. Mr. Chabot from Ohio.
        Do any of the Members of the panel wish to make an opening
    statement?
        Mr. Coble. Very briefly, Mr. Chairman.
        Mr. Cannon. Mr. Coble is recognized for 5 minutes.
        Mr. Coble. I won't take anywhere near 5 minutes.
        This is a very important hearing, and I don't mean to speak
    for my friend from North Carolina, but when Mr. Watt said
    that--I want the Chairman to hear this. Mr. Chairman, when Mr.
    Watt said minor leagues, I----
        Mr. Watt. I don't think the Chairman wants to hear what you
    are saying.
        Mr. Coble. I think he does. What I want to say is, I feel
    sure that my friend from North Carolina would agree with me
    that you are indeed a major league Chairman even though we may
    be in the minor leagues. But I won't make an opening statement.
    I look forward to hearing the testimony from the witnesses.
        Mr. Watt. If the gentleman would yield, I will second that
    emotion. We have got a major league Chairman. Every once in a
    while you will get a----
        Mr. Cannon. I expect some pretty good hitting from the
    bench today.
        Mr. Coble. And now my friend from Massachusetts will accuse
    me of sucking up to the Chairman.
        Mr. Delahunt. We do have a major league Chairman. Maybe
    this is a minor league bill. I don't know but----
        Mr. Coble. Then I will yield back.
        Mr. Delahunt. Okay. I will yield back then, too.
        Mr. Cannon. Mr. Delahunt, you don't have an opening
    statement, then.
        Does anyone else seek recognition?
        Mr. Chabot.
        Mr. Chabot. Mr. Chairman, representing Cincinnati, the home
    of the Cincinnati Reds, the first major league baseball team. I
    just want to tell you whether it is minor league or major
    league, I just think it is an honor to be here today, and it is
    a bill that deserves consideration. Being one of those 247
    cosponsors of the bill, we are glad you are taking it up today.
        Many of us, as the Chairman knows, we have a markup in
    International Relations Committee. We also have a war briefing
    at 10:30. So many of us will be coming in and out and our
    absence is not because of the bill is--it is just a matter of
    we are being pulled in about three or four different directions
    here this morning at the same time.
        So thank you for holding this hearing. Yield back.
        Mr. Cannon. I thank the gentleman.
        I also want to recognize Mr. Feeney, the Vice Chairman of
    this Committee from Florida. Welcome.
        In addition to what you just said, Mr. Chabot, let me add
    that we have the Energy Bill Markup in the Resources Committee,
    and so we have a number of things going on, and as witnesses
    come and go, we understand and appreciate that. Let me just
    point out that we will use the 5-minute rule here today. So for
    the Members of the panel, if I tap the gavel, it is because
    your time has run. We would appreciate it if you would not just
    stop but finish up your thought and then draw a conclusion. We
    will do the same thing for questions, and if we could move the
    hearing expeditiously, that, I think, would be quite helpful
    given other constraints on everyone's time today.
        Let me go ahead and introduce our witnesses. Our first
    witness is Mr. Carlton Chen, General Counsel of Colt
    Manufacturing Company, Inc. Mr. Chen has also been In-House
    Counsel for Olin Corporation, the Sara Lee Corporation and an
    attorney in private practice. He was a Root Tilden Scholar at
    the New York University School of Law and is an Eagle Scout.
        Our second witness is Walter Olson, who has been described
    as perhaps America's leading authority in over litigation. He
    has written several books on the subject including the Rule of
    Lawyers which was published this year.
        Mr. Olson is a senior fellow at the Manhattan Institute, a
    frequent contributor to magazines and newspapers, including the
    New York Times and the Wall Street Journal. His Web site,
    overlawyered.com, for those who might have an interest launched
    in 1999, is widely acclaimed for its regular commentary on the
    litigation explosion and the need for legal reform.
        He will speak to the political dynamics of recent lawsuits
    against the firearms industry and its impact on the separation
    of powers.
        Our next witness is David Lemongello.
        In 1985, Mr. Lemongello entered the Police Academy and then
    served as a police officer for the Orange, New Jersey Police
    Department. A few years later he was promoted to detective. On
    January 12, 2001, Mr. Lemongello was injured by a gun that
    exchanged several hands before coming into the possession of a
    criminal. He is currently an Executive Manager for Security
    Services at Estee Lauder in New York.
        Our final witness is Lawrence G. Keane. Mr. Keane is Vice
    President and General Counsel of the National Shooting Sports
    Foundation. The NSSF is the major trade association for the
    firearm and recreational shooting sports industry and has been
    named as a defendant in approximately half of the lawsuits
    filed against the firearm industry by various municipalities.
        Mr. Keane also serves on the Board of Directors of the
    Firearms Safety Education Foundation, a nonprofit 501(c)(3)
    charitable organization dedicated to educating the public about
    firearms safety issues.
        Mr. Cannon. Mr. Chen, we recognize you for 5 minutes.

              STATEMENT OF CARLTON CHEN, GENERAL COUNSEL,
                    COLT MANUFACTURING COMPANY, INC.

        Mr. Chen. Good morning. Chairman Cannon, Members of the
    Committee, Ladies and Gentlemen--my name is Carlton Chen. I am
    Vice President, General Counsel and Secretary of Colt
    Manufacturing Company and its subsidiary Colt Defense.
        Since 1836, the Colt companies, together with our
    predecessors, have been manufacturing small arms for military,
    law enforcement and commercial use. Today approximately 70
    percent of our output at our Connecticut-based plant is devoted
    to supplying the M-16 rifle, the M-4 carbine and the M-203
    grenade launcher to all of the branches of the United States
    Armed Forces.
        We also supply similar small arms to many of our law
    enforcement agencies and our allies around the world. In our
    heyday, we employed over 1600 union workers. Organized by the
    UAW today, we now employ in West Hartford less than 400 members
    of Local 376 and for both companies employ under 500 union and
    nonunion personnel. Our combined annual sales revenue is less
    than $100 million.
        Since 1998, we at Colt have been defending ourselves
    against a multitude of lawsuits brought by Government entities,
    organizations and individuals seeking to blame the firearms
    industry, including Colt, for the criminal and wrongful misuse
    of firearms in the United States. To blame Colt for the
    criminal misuse of firearms that are lawfully manufactured and
    sold is unjust. It is also threatening to our very existence.
    For a company that emerged from bankruptcy in 1994, we have
    been fighting for our lives against these lawsuits, diverting
    time, money and other of our limited resources to defend
    ourselves.
        As I walk through our plant, Colt workers stop me to ask
    how the war is going, and we post announcements about the
    successes and battles that we are fighting, but the war that
    our workers are asking or reading about is not the Iraqi war.
    It is the war we are fighting against these plaintiffs, spurred
    on by plaintiffs' trial lawyers. We and many others in the
    industry have been fighting now for 8 years, beginning with the
    Hamilton case in which the plaintiffs claim that we
    manufacturers negligently distribute our firearms.
        While the jury in that case found some of the manufacturers
    liable, the verdicts were properly reversed on appeal.
        The same plaintiff's lawyer decided to bring a similar case
    before the same trial judge. Ironically, they are beginning the
    3rd day of trial this morning in the NAACP case based on
    similar theories already rejected by the U.S. Court of Appeals.
        While we are resolved not to wear down, there is a cost to
    this war. This war is hindering companies like Colt from
    engaging in a legitimate business making a lawful product. The
    existence of these lawsuits are thwarting our ability to raise
    new capital, borrow money, establish credit, obtain insurance,
    attract new employees, retain valued employees, and invest in
    new machinery and equipment in the same manner that companies
    in other industries are able to do without these attacks
    against their industry.
        I come here today to ask you to please support H.R. 1036.
    This bill would protect legitimate businesses such as Colt that
    provide hundreds of thousands of jobs for our citizens from the
    assembler to the polisher, to the tool and die maker and from
    our cafeteria workers to the people who fill our snack vending
    machines, even our suppliers.
        If enacted, this bill would restore the rule of law and
    protect manufacturers and sellers in the firearms and
    ammunition industries who act legally from being harassed by
    frivolous lawsuits.
        With the terrorist attacks on 9/11 and now our involvement
    in the Iraqi war, Colt as a military defense contractor has
    been requested by the Department of Defense to provide DPAS
    assistance. This priority assistance of the U.S. Government
    under defense priorities and allocation means that we must give
    preference to the U.S. Government over all of our customers to
    fulfill the DOD orders for small arms and spares under the
    Defense Production Act. Unfortunately, we cannot drop our
    defense in these lawsuits while under DPAS.
        We are dutifully helping to defend our country when
    attacked and in times of war. I ask that each of you help us in
    our time of war so that we can focus on making the best small
    arms available for our men and women in uniform.
        In conclusion, without this Federal legislation, the
    survival of Colt, our firearms and ammunition industries and
    all the jobs, taxes and commerce that we contribute to the U.S.
    economy are threatened.
        Before I end, I would like to make not only my written
    testimony part of the record but also a letter that was written
    by Mr. Russ See, the President of UAW Local 376 in support of
    this bill, as well as the Colt product catalogs a part of the
    record. Thank you.
        Mr. Cannon. Thank you, Mr. Chen.
        [The prepared statement of Mr. Chen follows:]
                     Prepared Statement of Carlton S. Chen
        Chairman Cannon, Members of the Committee, my name is Carlton Chen.
    I am Vice President, General Counsel and Secretary of Colt's
    Manufacturing Company, Inc. and its subsidiary Colt Defense LLC. The
    Colt companies together with our predecessors have been manufacturing
    small arms for the military, law enforcement and commercial use since
    1836. Samuel Colt, an American industrialist who is credited with
    beginning the American Industrial Revolution, founded our firearms
    business in New Jersey and then moved it to Connecticut, which we call
    our home today.
        As some of you will remember, Colt supplied the M1911 pistol as the
    standard sidearm to all branches of the U.S. Armed Forces during World
    War I, World War II, the Korean War and the Vietnam conflict. Today,
    approximately 70% of our output at our Connecticut-based manufacturing
    facility is devoted to supplying the M16 Rifle, the M4 Carbine and the
    M203 Grenade Launcher to all of the branches of the U.S. Armed Forces.
    We also supply similar small arms to many of our law enforcement
    agencies and our allies around the world. In addition, we manufacture
    small arms for the civilian market. Many of our handguns are
    collectible and replicas.
        In our heyday, we employed over 1,600 union workers in Hartford,
    Connecticut. Organized by the UAW, today, we now employ in West
    Hartford almost 400 members of UAW Local No. 376, and, for both
    companies, employ under 500 union and non-union personnel. Our combined
    annual sales revenue is less than $100 million.
        Since 1998, we at Colt have been defending ourselves against a
    multitude of lawsuits brought by government entities, organizations and
    individuals seeking to blame the firearms industry, including Colt, for
    the criminal and wrongful misuse of firearms in the United States. To
    blame Colt for the criminal misuse of firearms that is lawfully
    manufactured and sold is unjust. It also is threatening to our very
    existence. For a company that emerged from bankruptcy in 1994, we have
    been fighting for our lives against these lawsuits, diverting time,
    money and other of our limited resources to defend ourselves.
        As I walk through our plant, Colt workers stop me to ask how the
    war is going. We post announcements about the successes in battles that
    we are fighting. But the war that our workers are asking or reading
    about is not the Iraqi War; it is the war we are fighting against these
    plaintiffs, spurred on by plaintiffs' trial lawyers.
        We and many others in the industry have been fighting now for eight
    years, beginning with the Hamilton v. Accu-tek case, in which the
    plaintiffs claimed that we manufacturers negligently distributed our
    firearms. While the jury in that case found some of the manufacturers
    liable, the verdicts were properly reversed on appeal. The same
    plaintiff's lawyer decided to bring a similar case before that same
    trial judge. Ironically, they are beginning their third day of trial
    this morning in the NAACP v. A.A. Arms, Inc. case based on similar
    theories already rejected by the U.S. Court of Appeals. While we are
    resolved not to wear down, there is a cost to this war.
        Beyond these lawsuits draining our already fragile national economy
    and littering our already over-burdened court system, this war is
    hindering companies like Colt from engaging in a legitimate business,
    making a lawful product. The existence of these lawsuits are thwarting
    our ability to raise new capital, borrow money, establish credit,
    obtain insurance, attract new employees, and retain valued employees in
    the same manner that companies in other industries are able to do
    without these attacks against their industry.
        These lawsuits are dangerous not only to us but also to
    manufacturers of lawful products in other industries. Where will it
    end? Should General Motors be liable for an aggressive driver who
    crashes into another car? If the theory of these cases is widely
    applied, it could result in the bankruptcies of countless companies and
    the displacement of American workers.
        I come here today to ask you to please support H.R. 1036. This Bill
    would protect legitimate businesses, such as Colt, that provide
    hundreds of thousands of jobs for our citizens, from the polisher to
    the tool and die maker or from our cafeteria workers to the people who
    fill our snack vending machines, even our suppliers.
        If enacted into law, this Act would preempt state and local
    government entities and other parties from bringing aggregate liability
    lawsuits against the firearms industry as a way to circumvent our
    legislatures. It also would promote interstate and foreign commerce of
    small arms. A majority of the states--in fact, over 30 states--have
    passed legislation of some type that insulate the firearms industry
    from these types of suits. However, we need and therefore are seeking
    passage of a Federal law that would afford protection to the industry
    on a national level.
        Let me emphasize that this legislation would not provide the
    sweeping immunity that many of its opponents suggest. This Bill would
    not protect gun manufacturers from liability claims. Instead, it would
    stop lawsuits against our industry that are based on the criminal
    misuse of lawfully distributed products and premised on theories such
    as public nuisance and market share liability.
        If passed, this Bill would help to set a much needed precedent that
    baseless suits like these should be stopped. If passed, it would
    prevent the usurpation of power by the judicial branch from the
    legislative branch. For it is the legislature that makes laws on how we
    should manufacture, design, and sell firearms, not the courts. If not
    stopped, these lawsuits clearly will threaten other legitimate and
    vital industries in America. This proposed Act would restore the rule
    of law and protect manufacturers and sellers in the firearms and
    ammunition industry who act legally from being harassed by frivolous
    lawsuits. However, the Bill ensures that if a seller provides a firearm
    and the seller knows or should have known that the firearm would be
    used negligently, that seller would be liable.
        With the terrorist attacks on 9/11 and now our involvement in the
    Iraqi War, Colt as a military defense contractor has been requested by
    the Department of Defense to provide DPAS assistance. This is a
    priority assistance of the U.S. Government under the Code of Federal
    Regulations Part 700, Defense Priorities and Allocation System. This
    means that we at Colt must give preference to the U.S. Government over
    all other customers in order to fulfill the Department of Defense
    orders for small arms and spares under the Defense Production Act.
    Unfortunately, we cannot drop our defense of these lawsuits while under
    DPAS.
        We are dutifully helping to defend our country when attacked and in
    times of war. I ask that each of you help us in our time of war so that
    we can focus on making the best small arms available for our men and
    women in uniform.
        In conclusion, it makes no difference that Colt or other firearm
    manufacturers make high quality firearms that enjoy excellent records
    of safety. It makes no difference that we and our industry is committed
    to continuing our efforts, individually and together with others, to
    increase awareness of the issues related to the safe handling and
    storage of firearms and the criminal acquisition of firearms. These
    sham lawsuits are being brought to exert undue pressure on our industry
    to settle or cave under the massive weight of litigation. Without this
    Federal legislation, the survival of Colt, our firearms and ammunition
    industries, and all of the jobs, taxes, and commerce that we contribute
    to the U.S. economy are threatened.

        [The material referred to follows:]

        Mr. Cannon. In fact, the record will be open for 5 days if
    any of the panel or any of the Members wish to submit
    statements for the record or other items for the record. Thank
    you. I appreciate your testimony.
        Mr. Olson.

               STATEMENT OF WALTER OLSON, SENIOR FELLOW,
                        THE MANHATTAN INSTITUTE

        Mr. Olson. Thank you, Mr. Chairman.
        As you mentioned, I recently published a book called The
    Rule of Lawyers which discusses at considerable length the
    origins and the objectives of the antigun litigation. I
    conclude the following: The gun suits are at best an assault on
    sound principles of individual responsibility, since criminals
    are the ones that we should blame for crime. At worst, they are
    a serious abuse of the legal system, as I will try to
    demonstrate in a moment.
        They show how a pressure group can employ litigation to
    attempt an end-run around our democratic process in search of
    victories in the courtroom that they have been unable to obtain
    at the ballot box.
        The idea of a litigation campaign against gun makers
    reached its greatest impetus after the 1994 national elections
    which swept out of office many Members of Congress associated
    with the cause of gun control.
        After that humiliating route, many gun control advocates
    concluded that the democratic process was not any time soon
    going to grant them the kinds of gun control they wanted. What
    was the alternative? As the lawyer who filed New York's
    Hamilton v. Accu-Tek put it, ``You don't need a legislative
    majority to file a lawsuit.''
        The result has been a coordinated campaign, highly
    coordinated and of national scope, operating recently across
    State lines and drawing on lawyers and courts in many States as
    a common enterprise.
        As another leading antigun lawyer put it, ``What you really
    want is a diversity of cases in lots of different regions, lots
    of different courts, to create the greatest threat of
    liability.''.
        The objectives of this campaign, according to the
    organizers themselves, include the following: Sweeping
    nationwide changes in the design, manufacture and distribution
    of guns, new paperwork burdens and sacrifices of privacy for
    gun owners and for gun dealers.
        What most of these measures have in common is the
    following: They have been considered and they have been
    rejected by this body and by most, if not all, State
    legislators. That is not by coincidence.
        The antigun litigation movement did not have a strong case
    under the principles that have come down to us through common
    law over hundreds of years. I think that has been demonstrated
    by the dismissal of most of the cases that we have seen so far.
        What then were they counting on? Three things, I believe.
    First they were counting on finding some judges who were
    willing to engage in judicial activism, as it is called, who
    believe that for reasons of social progress they can change the
    common law tradition and introduce new causes of action.
        Secondly, they realized that for these defendants in
    particular, the lawsuits were often going to be the company
    actions, as they are called, actions in which evev if you win,
    you get to roll the dice again as a defendant. If you lose,
    that may be it for your company. And in any litigation there is
    a high random factor by necessity. As a defendant in these gun
    cases, you may win 98 or 99 percent of them. That may not be
    good enough.
        Finally, and connected with the second point, these are not
    large companies. This is the exact opposite really of the
    tobacco litigation in which you have some of the largest and
    most sophisticated enterprises in the world being sued. The gun
    industry is mostly small and medium-sized companies, often
    family owned. As you said in your opening statement, Mr.
    Chairman, the spokesmen for the municipal gun suits told a
    newspaper, ``The legal fees alone are enough to bankrupt the
    industry.''.
        And we know that the deliberate use of cost infliction as a
    tactic in litigation has been disapproved by principles of
    legal ethics, more or less forever. It is considered a very
    serious breach of legal ethics. Yet, I think the record shows
    and numerous journalistic sources will document that more than
    a few of the lawyers filing these suits have made it a knowing
    and conscious part of their strategy to inflict legal costs on
    the defense. That is, to put it mildly, not an appropriate use
    to which the legal system should be put.
        Let me conclude with a word about federalism and the
    appropriate role of Congress. You will probably be told by some
    opponents of the bill that Congress should leave the States
    alone to work this out by going their own separate ways. But
    the objective of the antigun litigation campaign is not to let
    the States go their separate ways. It is to obtain a nationwide
    coordinated system of gun control through coordinated
    interstate litigation. Most of the States will not be left with
    any choice in the matter any more than gun owners or dealers
    will be left with any choice in the matter. Congress has the
    full power and right to act in the national interest. It should
    do so. Thank you.
        Mr. Cannon. Thank you, Mr. Olson. That was very
    enlightening.
        [The prepared statement of Mr. Olson follows:]
                     Prepared Statement of Walter K. Olson
        Good morning. My name is Walter Olson. I am a senior fellow at the
    Manhattan Institute, with which I have been associated since 1985, and
    am the author of three books on the American civil justice system. My
    most recent book, The Rule of Lawyers (St. Martin's, 2003), published
    in January, includes a chapter exploring the origins and objectives of
    the movement seeking to make makers and distributors of guns pay for
    criminals' misuse of their wares. I conclude that the gun suits are at
    best an assault on sound tenets of individual responsibility, and at
    worst a serious abuse of legal process. Even more ominously, the suits
    demonstrate how a pressure group can employ litigation to attempt an
    end run around democracy, in search of victories in court that it has
    been unable to obtain at the ballot box. Finally, I argue that strong
    Congressional action to restrict litigation of this type is not only
    consistent with a due regard for federalism and state autonomy, but is
    in fact required by it.
    Point by point:
            1.  Litigation against gunmakers today takes the form of a
            highly coordinated campaign of nationwide scope, in which a few
            very active attorneys and anti-gun groups turn up again and
            again on the plaintiff's side, and in which the allegations
            advanced in particular lawsuits are frequently crafted to
            advance a wider legal strategy against the target industry. As
            Brady Campaign attorney Dennis Henigan has put it: ``What you
            really want is a diversity of cases in lots of different
            regions, lots of different courts to create the greatest threat
            of liability.''

            2.  Organizers of this campaign intend to use litigation as
            leverage to obtain sweeping nationwide changes in the
            manufacture and distribution of guns, including the de facto
            banning of some models, compulsory changes in gun design, and
            major new paperwork burdens and privacy sacrifices for gun
            owners and dealers. Most of these changes if obtained are
            likely to be highly unwelcome to large numbers of law-abiding
            gun purchasers.

            3.  The idea of a litigation campaign against guns received its
            greatest impetus after the 1994 national elections, which swept
            from office many members of Congress identified with the cause
            of gun control. After that rout, some leading gun-control
            advocates concluded that the democratic process was not soon
            going to grant them the kinds of restrictions on gun
            distribution they sought any time soon. The alternative? As the
            lawyer who argued New York's Hamilton v. Accu-Tek put it, ``You
            don't need a legislative majority to file a lawsuit''.

            4.  Anti-gun litigators were aware that they had little case
            under the principles that had prevailed over hundreds of years
            of common law. But they knew that some courts are tempted by
            the lure of judicial activism: if persuaded that it will serve
            the cause of social progress to invent new law out of whole
            cloth, that is what they will do. In addition, when many
            different actions are pressed in many different courts, the
            random factor present in any litigation begins to play a large
            role: even if defendants can fend off 98 percent of the cases,
            somebody somewhere is likely to break through, to the ruin of a
            given defendant or the entire industry. Given the lack of a
            loser-pays principle in American courts, there is little to
            discourage the filing of such speculative, long-shot
            litigation.

            5.  As industries go, America's gun industry generally consists
            of small and modest-sized companies, often family-owned:
            firearms scholar David Kopel has written that the nation's gun
            manufacturers would not be big enough to qualify for the
            Fortune 500 even if you combined them all into one company. As
            many journalistic accounts have made clear, anti-gun litigators
            were not only aware that the expense of legal fees might grind
            down the resources of the target businesses, but actually made
            such infliction of costs a conscious strategy. ``As in the war
            against tobacco, winning in court isn't necessarily the
            objective of the lawyers,'' observed the New Yorker's Peter
            Boyer in an article on the strategy behind the gun suits.
            Defending against just twenty municipal suits, ``according to
            some estimates, could cost the gun manufacturers as much as a
            million dollars a day.'' (The lawyers soon had thirty such
            suits going.) ``The legal fees alone are enough to bankrupt the
            industry,'' boasted John Coale, a key lawyer in the municipal
            suits. Although the deliberate infliction of costs in order to
            compel settlement was once considered a gross breach of legal
            ethics, many partisans of the gun litigation appeared if
            anything to admire its use in this case. Thus the editorialists
            of the Atlanta Journal-Constitution approvingly noted that the
            suits ``have already forced some gun makers to the bargaining
            table'' because they ``can't afford lengthy courtroom
            battles''.

            6.  The sums of money being demanded in the municipal gun
            litigation are more than enough to drive every major gunmaker
            into bankruptcy many times over--a prospect that would
            presumably entail serious disruptions in interstate commerce as
            well as in the assured supply of new guns to such purchasers as
            the U.S. military. However, many supporters of the municipal
            litigation have indicated that it is not actually intended to
            be tried to a final conclusion; the idea is instead to settle
            it as part of a ``deal'' in which the gun industry agrees to
            abide by various (unlegislated) gun controls. But such a
            settlement prospect poses distinctive dangers of its own. To
            begin with, other affected parties (including gun purchasers
            and dealers) will not be present in the settlement room, and
            their interests are likely to go unrepresented. Moreover,
            defendants can be arm-twisted in such a settlement into
            agreeing to adopt measures that go beyond what any court would
            have ordered, and it will subsequently be argued that gun
            purchasers, dealers and other ``outsiders'' lack standing to
            challenge the terms of a settlement, no matter how detrimental
            it may be to their interests, perhaps including the exercise of
            Constitutionally recognized liberties.

            7.  The gun suits are probably the boldest effort presently
            underway to employ liability litigation to usurp Congress's
            Constitutionally specified role in lawmaking. Thus The American
            Lawyer reported that one of the municipal suits' prime movers,
            the late Wendell Gauthier, recruited trial lawyer colleagues
            into the action because it ``fit with Gauthier's notion of the
            plaintiffs bar as a de facto fourth branch of government, one
            that achieved regulation through litigation where legislation
            failed.'' Remarkably, many of Gauthier's colleagues are equally
            outspoken. Attorney John Coale, spokesman for the municipal
            suits, has argued that ``What has happened is that the
            legislatures . . . have failed,'' and: ``Congress is not doing
            its job [and] lawyers are taking up the slack.'' ``The failure
            of Congress to address social problems in any meaningful way
            had left a void,'' said Daniel Abel of Florida's Levin
            Papantonio, active in both the gun and tobacco rounds. ``Why
            was it important for trial lawyers to become this new arm of
            government''? asked Michael Papantonio of the same firm.
            ``Because the new arm takes the place of an arm that's not
            working anymore.'' These quotes reveal an astounding contempt
            for the democratic process and for the lawmakers of this body.

            8.  By design and by necessity, the antigun litigation campaign
            is interstate in its anticipated effects. Its suits in state
            courts demand damages from out-of-state defendants on a scale
            certain to impair the workings of interstate commerce, as well
            as the assessment of punitive damages against gun-industry
            actors based on their nationwide (as opposed to intrastate)
            courses of conduct. Indeed, gun lawsuits have repeatedly
            asserted a right to apply the law of one state or jurisdiction
            (such as New York) to gun sales which took place in other
            jurisdictions (such as South Carolina and Virginia), on the
            grounds that the firearms in question were later smuggled or
            otherwise taken into the state in which the lawsuit is going
            forward. The intended and expected effect is to identify
            isolated state courts that are amenable to the advocates'
            arguments, and then project the power of those courts so as to
            restrict gun freedoms in all 50 states, including states that
            would prefer to preserve for their citizens relatively liberal
            access to the means of self-defense. It is important that
            proponents of the gun-suit campaign not be allowed to hide
            behind the skirts of federalism. They are not, in fact,
            defending states' ``right to govern themselves'', but instead
            attempting to use litigation in the courts of some states to
            govern the citizens of other states.
        As you are aware, H.R. 1036, the Protection of Lawful Commerce in
    Arms Act, would ``prohibit civil liability actions from being brought
    or continued against manufacturers, distributors, dealers, or importers
    of firearms or ammunition for damages resulting from the misuse of
    their products by others.'' In view of the history thus far of the gun
    litigation, I can only say: it's about time.
        Thank you very much.

                                   ATTACHMENT

        Mr. Cannon. Mr. Lemongello, before you begin, before we set
    the clock, I am just going to inform that we are going to have
    a vote called in about 10:45. It is the intention of the Chair
    to go an extra 10 minutes into that vote and hopefully wrap
    this hearing up by that time. So if--plan accordingly on
    questions, and then, Mr. Lemongello, you are recognized for 5
    minutes.

               STATEMENT OF DAVID LEMONGELLO, NUTLEY, NJ

        Mr. Lemongello. First, I would like to thank Chairman
    Cannon, Representative Watt and the rest of the Committee for
    allowing me to testify here today.
        I would also like to introduce Mike McGuire who is with me
    today. Mike's brother, Ken McGuire, was a police officer who
    was shot along with me in January 2001. Mike is a sheriff's
    deputy in Essex County, NJ.
        I would also like to introduce my counsel, Dennis Henigan.
    Mr. Henigan is with me because I have a pending lawsuit, and it
    may be necessary for him to address questions about the
    lawsuit.
        Good morning. My name is David Lemongello. I used to be a
    police detective for the City of Orange in New Jersey. I
    graduated from the Academy with the dream that I would help
    protect people and do all I can to stop crime, but that dream
    was cut short 2 years ago by a criminal who should never have
    had a gun and a gun dealer who was all too happy to profit from
    supplying guns to the criminal market.
        On January 12, 2001, I was shot three times by a violent
    criminal. My fellow officer, Ken McGuire, was shot two times in
    the same incident. Our careers and livelihoods were abruptly
    cut short that horrific night. I am here because I am outraged
    that Congress is considering passing a bill that would protect
    the irresponsible dealer and would deny me my legal rights as
    an American.
        On January 12, 2001, Ken McGuire and I were police officers
    with the Orange Police Department, New Jersey. I was on a
    stakeout when I saw a suspect who matched the description of
    someone who had been doing several armed robberies at a gas
    station. I got out of my car to stop him, and I was immediately
    shot. The man who shot me was Shuntez Everett, who was wanted
    for attempted murder. Because Mr. Everett had been previously
    convicted of weapons-related charges, he could never have
    legally purchased a handgun.
        Because of the injuries I suffered from that shooting, I
    will never be a police officer again. Months after January 12,
    2001, Ken and I received some disturbing news. The gun used to
    shoot me reached the criminal's hands because of an
    irresponsible gun dealer. The gun used in the shooting was one
    of 12 guns purchased by two individuals on a single day from
    Will Jewelry & Loan, a gun dealership in West Virginia. One of
    the individuals was a felon, Mr. James Gray. He used a woman
    with a clean record to purchase all 12 guns at once with cold
    cash. Don't you think if a man and a woman come into your gun
    shop with thousands of dollars and a man starts pointing out
    guns that he wants and then has a woman purchase them, it
    should be an automatic red flag that something isn't right?
    Where did the gun dealer think those guns were headed besides
    the streets?
        Even more disturbing was that the gun dealer knew this was
    a dirty deal. After he sold all 12 guns to these individuals
    and took their cash, he called the ATF because he felt
    something wasn't right. If that was the case, why didn't he
    call the ATF before he took their money and sold the 12 guns?
    Because those who sold this gun did not act responsibly, Ken
    and I filed suit against them.
        These gun sellers did not even follow the sales guidelines
    recommended by the gun industry's own trade association, the
    National Shooting Sports Foundation. The NSSF says that gun
    dealers should ask customers who may be straw purchasers a
    number of questions, and if the dealer has any doubt about the
    sale, he should not sell the gun. The manufacturer of this gun,
    Sturm, Ruger, is a member of NSSF, yet it does nothing to make
    sure that its dealers are even aware of these guidelines.
        Had this gun dealer followed the NSSF guidelines, the gun
    used to shoot me would never have been on the streets in
    criminal hands. The next disturbing news I heard was that some
    people in Congress wanted to take away my right to present my
    case in court and wanted to give that irresponsible gun dealer
    special protection from the legal rules that apply to all other
    businesses in this country.
        Other businesses have to use responsible care, reasonable
    care and may be liable for the consequences if they don't.
    Those who sell lethal weapons that are highly valued by
    criminals should have at least the same duty to use reasonable
    care as businesses who sell BB guns or any other product.
        Our case is not frivolous. Far from it. The West Virginia
    gun dealer and the manufacturer of the gun, Sturm, Ruger,
    recently asked a judge in West Virginia to dismiss our case.
    She heard the gun seller's legal arguments and rejected every
    single one of them. This judge, Judge Irene Berger of Kanawha
    County, applied the general rules of West Virginia law to allow
    our case to proceed. By establishing a different set of rules
    applicable only to the gun industry, H.R. 1036 would override
    her decision and deny us our day in court.
        As a police officer, a former police officer, I understand
    all too well the importance of enforcing criminal law against
    gun dealers, gun traffickers and criminals who use guns. I do
    not need to be lectured by the gun lobby about the importance
    of enforcing the laws on the books, but that is not enough. For
    one, the damage is usually already done when the criminal law
    steps in. Gun sellers have to be more responsible when they
    sell guns to prevent guns from getting into criminal's hands
    before they do their damage. What happened to Ken and me is an
    example of what could happen when gun sellers are
    irresponsible.
        Right now, a gun dealer sees only potential profit when
    someone comes in and wants to buy 12 or even 112 guns. The
    dealer should also recognize that there are costs to engaging
    in such sales, and people like Ken McGuire and I bear the cost
    for the rest of our lives.
        That is why lawsuits like ours are important. Gun dealers
    need to be held accountable. If it weren't for our strength and
    will to live, we both would have died that horrific night,
    January 12, 2001. We are both very lucky to be here today.
    Kenny is the youngest of 12 brothers and sisters. As for me, I
    was newly married 2 months prior to January 12, 2001. I can't
    even imagine what our family has gone through. The physical and
    mental scars are something Kenny and I have to deal with every
    minute of every day, and the damage that was done is
    irreversible.
        Ken and I are not asking for the law that says we are
    entitled to compensation for our injuries. We are not asking
    for the law that says we must win our case, and we do not claim
    that gun seller and gun manufacturers should be found liable
    simply because they sold guns that were used in a crime. All we
    ask is for our day in court so we can prove to the judge and
    jury that these gun sellers acted irresponsibly and that they
    should be accountable under the principles of law that apply to
    everyone. This is our right as Americans, and on behalf of Ken
    and myself and other victims of gun violence, I ask that you do
    not take that right away. Thank you.
        Mr. Cannon. Thank you, Mr. Lemongello. We appreciate the
    horrific experience you have been through and appreciate you
    being here to share that with us.
        [The prepared statement of Mr. Lemongello follows:]
                     Prepared Statement of David Lemongello
        Good morning, my name is Dave Lemongello. I used to be a police
    detective for the city of Orange, New Jersey. I graduated from the
    academy with the dream that I would help protect people and do all I
    could to stop crime. But that dream was cut short two years ago by a
    criminal who should never have had a gun, and a gun dealer who was all
    too happy to profit from supplying guns to the criminal gun market. On
    January 12, 2001, I was shot three times by a violent criminal. My
    fellow officer Ken McGuire was shot two times in the same incident. Our
    careers and livelihood were abruptly cut short that horrific night. I
    am here because I am outraged that Congress is considering passing a
    bill that would protect that irresponsible dealer and would deny me my
    legal rights as an American.
        On January 12, 2001, Ken McGuire and I were police officers with
    the Orange Police Department in New Jersey. I was on a stakeout when I
    saw a suspect who matched the description of someone who had been doing
    several armed robberies at a gas station. I got out of my car to stop
    him, and was immediately shot. The man who shot me was Shuntez Everett,
    who was wanted for attempted murder. Because Everett had been
    previously convicted of weapons-related charges, he could not have
    legally purchased a handgun.
        Because of the injuries I suffered from that shooting, I will never
    be a police officer again.
        Months after January 12, 2001, Ken and I received some disturbing
    news. The gun used to shoot me reached the criminal's hands because of
    an irresponsible gun dealer. The gun used in the shooting was one of
    twelve guns purchased by two individuals on a single day from Will
    Jewelry & Loan, a gun dealership in West Virginia. One of the
    individuals was a felon, Mr. James Gray. He used a woman with a clean
    record to purchase all twelve guns at once with cold cash. Don't you
    think if a man and woman comes into your gun shop with thousands of
    dollars and the man starts pointing out guns that he wants and then has
    the woman purchase them, it should be an automatic red flag that
    something isn't right? Where did the gun dealer think those guns were
    headed besides the streets? Even more disturbing was that the gun
    dealer knew this was a dirty deal. After he sold all twelve guns to
    these individuals and took their cash, he called the ATF because he
    felt something wasn't right. If that was the case, why didn't he call
    ATF before he took their money and sold the twelve guns?
        Because those who sold this gun did not act responsibly, Ken and I
    filed suit against them. These gun sellers did not even follow the
    sales guidelines recommended by the gun industry's own trade
    association--the National Shooting Sports Foundation. The NSSF says
    that gun dealers should ask customers who may be straw purchasers a
    number of questions, and if the dealer has any doubt about the sale, he
    should not sell the gun. The manufacturer of this gun, Sturm, Ruger, is
    a member of NSSF, yet it does nothing to make sure that its dealers are
    even aware of these guidelines. Had this gun dealer followed the NSSF
    guidelines, the gun used to shoot me would never have been on the
    streets, in criminal hands.
        The next disturbing news I heard was that some people in Congress
    wanted to take away my right to present my case in court, and wanted to
    give that irresponsible gun dealer special protection from the legal
    rules that apply to all other businesses in this country. Other
    businesses have to use reasonable care and may be liable for the
    consequences if they don't. Those who sell lethal weapons that are
    highly valued by criminals should have at least the same duty to use
    reasonable care as businesses who sell BB guns, or any other product.
        Our case is not frivolous--far from it. The West Virginia gun
    dealer and the manufacturer of the gun, Sturm Ruger, recently asked a
    judge in West Virginia to dismiss our case. She heard the gun sellers'
    legal arguments and rejected every single one of them. This judge,
    Judge Irene Berger of Kanawha County, applied the general rules of West
    Virginia law to allow our case to proceed. By establishing a different
    set of rules--applicable only to the gun industry--H.R. 1036 would
    override her decision and deny us our day in court.
        As a police officer--a former police officer--I understand all too
    well the importance of enforcing the criminal laws against gun dealers,
    gun traffickers, and criminals who use guns. I do not need to be
    lectured by the gun lobby about the importance of enforcing the laws on
    the books. But that is not enough. For one, the damage is usually
    already done when the criminal law steps in. Gun sellers have to be
    more responsible when they sell guns to prevent guns from getting into
    criminals' hands, before they do their damage. What happened to Ken and
    me is an example of what happens when gun sellers are irresponsible.
    Right now, a gun dealer sees only potential profit when someone comes
    in and wants to buy twelve--or one hundred and twelve--guns. The dealer
    should also recognize that there are costs to engaging in such sales,
    and people like Ken McGuire and I bear those costs the rest of our
    lives. That is why lawsuits like ours are important. Gun dealers need
    to be held accountable.
        If it weren't for our strength and will to live, we both would have
    died that horrific night on January 12, 2001. We are both very lucky to
    be here today. Kenny is the youngest of twelve brothers and sisters. As
    for me, I was newly married two months prior to January 12, 2001. I
    can't even imagine what our families have gone through. The physical
    and mental scars are something Ken and I have to deal with every minute
    of every day. And the damage that was done is irreversible.
        Ken and I are not asking for a law that says we are entitled to
    compensation for our injuries. We are not asking for a law that says we
    must win our case. And we do not claim that gun sellers and gun
    manufacturers should be found liable simply because they sold a gun
    that was used in crime. All we ask for is our day in court, so we can
    prove to a judge and jury that these gun sellers acted irresponsibly
    and that they should be accountable under the principles of law that
    apply to everyone. This is our right as Americans. On behalf of Ken,
    myself and other victims of gun violence, I ask that you not take that
    right away. Thank you.

        Mr. Cannon. Mr. Keane, you are now recognized for 5
    minutes.

      STATEMENT OF LAWRENCE G. KEANE, VICE PRESIDENT AND GENERAL
           COUNSEL OF THE NATIONAL SHOOTING SPORT FOUNDATION

        Mr. Keane. Chairman Cannon, distinguished Members of the
    Subcommittee, my name is Lawrence Keane. I am the Vice
    President and General Counsel of the National Shooting Sports
    Foundation.
        The NSSF appreciates the opportunity to appear before the
    Committee this morning to offer testimony in support of H.R.
    1036, the common sense legal reform that will restore integrity
    and fairness to our Nation's judicial system.
        We call upon Congress to follow the lead of over 30 States
    that have already enacted similar legislation to stop reckless
    lawsuits that seek to destroy and bankrupt a responsible
    American industry by blaming firearms manufacturers for the
    actions of criminals. Formed in 1961, the NSSF is the trade
    association for the firearms and recreational shooting sports
    industry.
        We are proud of our industry's cooperative relationship
    with law enforcement, as exemplified by the joint NSSF-ATF
    partnership program called Don't Lie for the Other Guy that
    assists ATF in educating federally licensed firearms dealers on
    how to detect and deter illegal straw purchasers of firearms.
        Beginning in 1998, a group of approximately 40 urban
    politicians aligned with contingency fee trial lawyers and
    antigun activists have flooded our Nation's courts with
    lawsuits filed against law-abiding federally licensed firearms
    manufacturers, wholesale distributors and retailers.
        The plaintiffs do not allege that members of the industry
    have broken any of our Nation's over 20,000 firearm laws.
    Instead they allege that the sale of a legal product in
    accordance with an extensive regulatory system somehow causes
    crime and the industry is subverting the law to funnel firearms
    to the so-called criminal market. These allegations are highly
    offensive and patently false.
        This well-funded, coordinated onslaught of reckless
    lawsuits against members of our industry continues unabated.
    Recently the cities of New York, Jersey City and Camden, New
    Jersey were permitted to attempt to prove their despicable
    allegation that the industry knowingly and willingly sells guns
    to criminals. Several cases are currently pending at the trial
    court level.
        In addition, several more cases are currently at various
    stages of appeal and could be returned to the trial court for
    costly and time-consuming discovery. Just one $100 million
    dollar verdict will bankrupt virtually the entire industry.
        Just this Monday, the NAACP's lawsuit against members of
    the industry began in Brooklyn Federal Court before Judge
    Weinstein, who tried the Hamilton case and is well known in
    legal circuits as an activist jurist. Courts have recognized
    that these suits against the industry are an improper attempt
    to use litigation to regulate the industry, thereby
    circumventing the democratic and constitutionally prescribed
    legislative process, usurping the role of Congress and the
    State legislatures.
        At his opening on Monday, Dennis Hayes, the General Counsel
    of the NAACP, said he was asking, ``to usher in an equitable
    code of conduct and would change the way business is done and
    that the case was about asking a Federal court,'' not Congress,
    to, ``step in and regulate, the firearms industry.''
        In upholding the dismissal of a similar suit, a Florida
    appellate court said that, ``Miami-Dade County's request to the
    trial court to use injunctive powers to declare the business
    methods create a public nuisance is in an attempt to regulate
    the firearms and ammunition industry through the medium of the
    judiciary and that the judiciary is not empowered to enact
    regulatory schemes in the guise of injunctive relief. The power
    to regulate belongs not to the judicial branch of Government
    but to the legislative branch.''
        Winning on the merits is not necessary in order for these
    politicians and antigun activists to impose through litigation
    a gun control agenda rejected repeatedly by Congress and not
    supported by the American public.
        At the time he filed his suit, Chicago Mayor Daly said,
    ``We are going to hit them where it hurts, in their bank
    accounts.''
        Andrew Cuomo, then HUD Secretary, threatened firearms
    manufacturers with, ``Death by a thousand cuts.''
        NAACP President Mfume said his lawsuit was an effort to
    ``break the backs of industry members.''
        Antigun plaintiffs can implement their gun control policies
    through the entire Nation if the coercive effect resulting from
    the staggering financial cost to defend these baseless suits
    forces industry members into a Hobson's choice of either
    capitulation or bankruptcy. Companies have gone out of business
    vindicating themselves against baseless lawsuits. Just ask Dow
    Corning.
        The collective industry cost to defend these ill-conceived
    politically motivated suits has been truly staggering. I
    believe a conservative estimate for the total industry-wide
    cost of defense to date now exceeds $100 million, a staggering
    sum for a small industry like ours, that, taken together, would
    not equal a Fortune 500 company. The cost of litigation is
    borne almost exclusively by the companies, because insurance
    carriers have denied coverage.
        Plaintiffs have carefully drafted their complaints to take
    them outside of liability insurance coverage in order to apply
    maximum financial pressure on the defendant manufacturers.
        Firearms industry members now confront skyrocketing
    premiums. These lawsuits threaten the very existence of
    manufacturers that produce the tools our military and law
    enforcement agencies use every day to protect the American
    public, and our freedoms both here and abroad.
        If these companies are driven out of business, from whom
    will our military and law enforcement purchase their firearms?
    The legislation today is as important for what it does not do
    as what it does do.
        It does not, as antigun interest groups have falsely
    alleged, close the courthouse doors to those that have been
    injured by firearms that have been illegally sold, supplied to
    one likely to use the firearm in a manner involving an
    unreasonable risk of injury or defectively designed or
    manufactured products.
        The bill expressly provides that injured parties are still
    able to assert well-recognized tort claims against
    manufacturers and sellers of firearms. The loudest voices
    arrayed in opposition to this legislation are the same antigun
    interest groups that are orchestrating and financing the
    litigation assault to regulate the firearms industry in ways
    Congress has rejected.
        Let me conclude my remarks where I began them. Over 30
    States have already enacted similar laws to stop these junk
    lawsuits designed to destroy the industry and to achieve gun
    control regulation through litigation.
        Within the week, West Virginia Governor, Bob Wise, signed
    legislation to prevent such suits. The time has come for
    Congress to enact common sense legal reform to restore
    integrity and fairness to our judicial system, protect American
    jobs and industry and prevent an unconstitutional attempt to
    circumvent Congress and the State legislators.
        The National Shooting Sports Foundation urges Congress to
    pass this legislation.
        Mr. Cannon. Thank you, Mr. Keane.
        [The prepared statement of Mr. Keane follows:]
                    Prepared Statement of Lawrence G. Keane
        Chairman Cannon and distinguished members of the Subcommittee, my
    name is Lawrence G. Keane. I am the vice president and general counsel
    of the National Shooting Sports Foundation, Inc. (``NSSF''). The
    National Shootings Sports Foundation appreciates the opportunity to
    appear before the Subcommittee this morning to offer testimony in
    support of the ``Protection of Lawful Commerce in Arms Act.'' (H.R.
    1036). We strongly support this important piece of common sense legal
    reform because it will restore integrity and fairness to our nation's
    judicial system. We call upon Congress to follow the lead of over
    thirty states that have already enacted similar legislation to stop
    reckless lawsuits that seek to destroy and bankrupt a responsible
    American industry by blaming firearm manufactures for the actions of
    criminals. Nothing less is at stake than the future of one of America's
    oldest, most important industries and the loss of thousands of American
    jobs that are vital to the wealth of our economy.
        Formed in 1961, the NSSF, with approximately 2,600 members, is the
    trade association for the firearms and recreational shooting sports
    industry. We are proud of our industry's cooperative relationship with
    law enforcement, as exemplified by the joint NSSF--Bureau of Alcohol,
    Tobacco, Firearms and Explosives (ATF) partnership program called
    ``Dont' Lie for the Other Guy'' that assists ATF in educating federally
    licensed firearms dealers on how to detect and deter illegal straw
    purchases of firearms. The American Society of Association Executives
    recently named the ``Don't Lie'' program to its Advance America Honor
    Roll. NSSF's commitment to promoting the safe and responsible use of
    firearms is typified by our federally funded Project ChildSafe and
    Project HomeSafe programs in which NSSF, in partnership with state and
    local governments, has provided millions of firearm safety education
    kits including a free firearm locking device to the public throughout
    the United States.
        Beginning in 1998, a group of approximately forty urban
    politicians, aligned with contingency-fee trial lawyers and anti-gun
    activists, have flooded our nation's courts with lawsuits filed against
    law-abiding federally licensed firearms manufacturers, wholesale
    distributors and retailers. These suits seek to destroy and bankrupt a
    responsible American industry by blaming firearm manufactures for the
    actions of criminals. The plaintiffs in these cases do not allege that
    member of the firearms industry have broken any of our nation's over
    20,000 firearm laws. Instead, they allege that the sale of a legal
    product in accordance with an extensive regulatory system somehow
    causes crime and that the industry is subverting the law to funnel
    firearms to the so-called ``criminal market.'' These allegations are
    both highly offensive and patently false.
        Despite some success in the courts, this well-funded, coordinated
    onslaught of reckless lawsuits against members of our industry
    continues unabated. Recently, the cities of Newark, Jersey City and
    Camden, New Jersey were permitted to attempt to prove their despicable
    allegation that the firearms industry knowingly and willingly sells
    guns to criminals. Several more cases are currently at various stages
    of appeal and could be returned to trial courts for costly and time-
    consuming discovery.
        Just this Monday the trial of the National Associations for the
    Advancement of Colored People (NAACP) lawsuit against over 80 members
    of the firearms industry began in a Brooklyn federal court before Judge
    Jack B. Weinstein, well known in legal circles as an activist jurist.
    As other courts have recognized, these suits against the firearms
    industry are an improper attempt to use litigation to regulate the
    design, manufacturer, marketing, distribution and sale of firearms,
    thereby circumventing the democratic and constitutionally prescribed
    legislative process and usurping the role of Congress and the state
    legislatures. For proof of this, you need look no farther than Monday's
    opening statement by Dennis Hayes, the NAACP's general counsel. He said
    the NAACP was, ``asking that the court usher in an equitable code of
    conduct that changes the way business is done,'' and that the case was
    about asking a federal court ``to step in and regulate'' the firearms
    industry.
        In upholding the dismissal of similar suit by Miami-Dade County a
    Florida appellate court wrote, ``The County's request that the trial
    court use its injunctive powers to mandate redesign of firearms and
    declare that the [firearms manufacturers'] business methods create a
    public nuisance, is an attempt to regulate firearms and ammunition
    through the medium of the judiciary. . . . The judiciary is not
    empowered to `enact' regulatory measures in the guise of injunctive
    relief. The power to legislate belongs not to the judicial branch of
    government but to the legislative branch.''
        Winning on the merits is not necessary in order for these
    politicians and antigun activists to impose through litigation a gun
    control agenda repeatedly rejected by Congress and not supported by the
    American public. At the time he filed his suit, Chicago Mayor Richard
    Dailey said, ``We're going to hit them where it hurts--in their bank
    accounts . . .'' Andrew Cuomo, then Housing and Urban Development
    Secretary, threatened firearms manufacturers with ``death by a thousand
    cuts.'' NAACP president Kweisi Mfume said its lawsuit was ``an effort
    to break the backs'' of industry members. These antigun plaintiffs can
    implement their gun control policies throughout the entire nation if
    the coercive effect resulting from the staggering financial cost to
    defend these baseless suits forces industry members into a Hobson's
    choice of either capitulation or bankruptcy. Companies have gone
    bankrupt vindicating themselves against baseless lawsuits.
        The collective, industry-wide cost to defend these ill-conceived,
    politically motivated suits has been truly staggering. Exact figures
    are unavailable because the defendants are competitors and each
    considers its defense costs to be confidential business information.
    However, based on discussions with insurance industry executives,
    manufacturers' corporate counsel, reading cost estimates in various
    publications and NSSF's own experience as a defendant in these cases, I
    believe a conservative estimate for the total, industry-wide cost of
    defense to date now exceeds $100 million dollars. This is a huge sum of
    money for a small industry like ours. The firearms industry taken
    together would not equal a Fortune 100 company. The cost of litigation
    is borne almost exclusively by the companies themselves. With few
    exceptions, insurance carriers have denied coverage. Because of these
    lawsuits, firearms industry members now confront skyrocketing premium
    increases when renewing their insurance policies. In addition,
    insurance policies now universally excluded coverage for these types of
    suits. This has resulted in large, across-the-board, price increases
    for consumers. In addition, in these trying economic times, taxpayers
    of the cities that have chosen to pursue the utterly discredited notion
    that manufacturers are responsible for the acts of criminals are forced
    to shoulder their city's cost of pursuing such a lawsuit, money that
    could have been better spent on things like hiring more police
    officers.

        Mr. Cannon. The Chair notes that we have been joined by
    several other Members.
        First of all, the Ranking Member of the full Committee, Mr.
    Conyers from Michigan, Mr. Scott from Virginia is also with us
    and Mrs. Blackburn from Tennessee. I think we have now gotten
    everyone.
        Does the gentleman from North Carolina seek recognition?
    For questioning?
        Mr. Coble. I do indeed.
        Mr. Cannon. The gentleman is recognized for 5 minutes.
        Mr. Coble. Thank you, Mr. Chairman. I will be brief.
        Thank you, gentlemen, for being with us. We have the 5-
    minute rule against us, so let me move along quickly. Let me
    address this to the industry reps. Describe in detail, if you
    will, the type of safety initiatives the industry has engaged
    on its own, A, and, B, are these safety initiatives mandatory,
    or has the industry voluntarily implemented them? Anybody, any
    of the reps.
        Mr. Keane. I will address that question.
        The National Shooting Sports Foundation was formed in 1961.
    Throughout its history it has promoted the safe and responsible
    use and handling of firearms.
        It has a number of programs and has distributed thousands
    of pieces of safety literature voluntarily throughout the
    United States. It has a program that is now funded by the
    Federal Government called Project ChildSafe in which we
    distribute firearm safety education kits, including a free
    locking device. Throughout the United States we have
    distributed millions of those safety kits.
        Mr. Coble. And manufacturers are actively involved in this?
        Mr. Keane. The manufacturers such as Colt are members of
    the National Shooting Sports Foundation and support the
    programs and initiatives. That is on the safety side.
        In cooperation with law enforcement, as I indicated in my
    remarks, we are very proud of our cooperation with law
    enforcement, and it is exemplified and typified by our
    voluntary joint cooperative program with the ATF called Don't
    Lie for the Other Guy in which we distribute--we have
    distributed tens of thousands of these kits to dealers all
    throughout the United States that help to educate these retail
    dealers on how to identify and deter straw purchases of
    firearms. It includes countercards, placards and videos. All of
    that is at our expense. All of that is totally voluntary, and
    we----
        Mr. Coble. Thank you, Mr. Keane. I appreciate the answer.
        Some of the litigation suggests that the industry itself
    should be required to monitor dealers and perform I guess
    basically what would be law enforcement. Anybody want to
    respond to that about the dealers--I mean, about the
    manufacturers monitoring the sales that would appear to be
    onerous, but what say you about that?
        Mr. Keane. I think it is an impractical suggestion. It
    amounts to asking a brewery to stand at the counter and monitor
    the sales of alcohol beverages to consumers or for a car
    manufacturer to stand at a dealership and----
        Mr. Coble. I hate to keep cutting you off, but the clock is
    running on me. What kind of initiatives, if any, has the
    industry undertaken to stop or curtail illegal gun sales? From
    any of the other two reps. Mr. Olson, or Mr. Keane if you--Mr.
    Keane, if you want to respond.
        Mr. Keane. I would point again to another program that we
    have, a cooperative effort with ATF called the Partnership for
    Progress Seminars in which we hold, voluntarily hold, seminars
    throughout the United States in which ATF and the industry
    invites dealers to come for continuing education programs. ATF
    speaks at our trade show every year on issues such as straw
    purchasing and the theft of firearms, inventory control issues
    and things along those lines to prevent firearms from falling
    into the hands of criminals and being used in tragic
    situations.
        Mr. Coble. Thank you, sir.
        Mr. Lemongello, in your case, Mr. Lemongello, as you
    pointed out, the dealer belatedly contacted ATF. I guess it is
    our contention he should have done that before he did it. But
    at least he did do it after the fact, unfortunately, perhaps.
    But do you----
        Mr. Lemongello. After he took the money.
        Mr. Coble. Do you know, Mr. Lemongello, whether or not the
    ATF subsequently conducted an investigation against the dealer,
    and if so, were there allegations that the dealer had engaged
    in an illegal sale? Do you know one way or the other about
    that?
        Mr. Lemongello. I don't think there was any investigation
    toward the gun dealer, no. I don't think there was.
        Mr. Coble. Okay. I was just curious to know if in fact
    there was evidence of wrongdoing there.
        Well, that is very unfortunate about you and your partner,
    Mr. Lemongello, but----
        Mr. Lemongello. Let me just add that one of the 12 that
    was--the one that ultimately I was involved with, that wasn't
    the only one that was taken off the street in my small city
    that I worked in. There was one other from that 12, that batch
    of 12 that was bought from that store, that ended up being
    taken off the street months prior to that from Kenny McGuire,
    who took it off the street and was ultimately shot with me that
    day. So it was 2 of the 12 that were ultimately found in the
    small city in Jersey.
        Mr. Coble. Thank you, sir. Mr. Chairman, I hope you will
    note that I beat the red light and I yield back.
        Mr. Cannon. I will also note that the gentleman is one of
    the few that regularly beats the red light, and I appreciate
    that. Thank you.
        Mr. Watt, would you like to be recognized? The gentleman is
    recognized for 5 minutes.
        Mr. Watt. Thank you, Mr. Chairman. I will try to beat the
    red light too, because I know we are against time constraints
    here.
        I just want to make one comment to Mr. Keane. After hearing
    your testimony, I am glad I didn't get it last--in time to read
    it, because I would just say I am extremely offended by the
    notion that you would try to make us a party to--in a
    rhetorical way even to a dispute between the NRA and the NAACP.
    It just--I am offended by it. So--and I will just go on from
    there.
        Mr. Chen, I am holding in my hand a recall notice from Colt
    where you recalled a gun that was susceptible to accidental
    discharge if improperly carried with a round in the chamber and
    dropped or otherwise carelessly handled. And then further down
    in the notice, you say, if you own one of these pistols, please
    notify Colt in writing, but do not return the pistol at this
    time. You will be given further details and instructions as to
    when and how to ship your firearm to Colt.
        Now, assuming somebody accidentally dropped this gun after
    you gave them the notice and told them not to return it to you,
    as I read the provisions of this bill, that would not be used
    as intended. So you would be exempt from liability even for
    that kind of negligent design, as I read the bill. Is that what
    you intend?
        Mr. Chen. That is not my understanding. My understanding is
    that this so-called sweeping immunity that the certain
    proponents against this bill would have you believe is
    absolutely untrue.
        Mr. Watt. Well, I can read, Mr. Chen. My thinking says an
    action--you are exempted unless there is an action for physical
    injuries or property damage resulting directly from a defect in
    design or manufacture of the product when used as intended.
        Now, I don't know anybody who walks around dropping a gun
    accidentally in using it as intended. So the wording of this
    bill as it now is worded would exempt Colt, even after you
    notified somebody and told them that there was a defect and
    told them not to send the gun back to you.
        Mr. Chen. That is not true, sir. The----
        Mr. Watt. Are you saying I can't read?
        Mr. Chen. No. I think you are mistaken.
        Mr. Cannon. Would the gentleman yield?
        Mr. Watt. It is just subject to interpretation, and I am
    sure you are going to say you didn't intend that. I am sure the
    Chairman is going to say he didn't intend it, but if you are
    going to do this, at least clean the bill up and get to the
    things that you are talking about. And certainly don't get to
    the seller and dealer who is responsible in the way that
    resulted in the shooting of police officers like the one that
    we have here testifying today.
        With that, Mr. Chairman, I will yield to you, if you want
    me to yield, but I am prepared to yield back my time if--in the
    interest of getting other----
        Mr. Cannon. The gentleman yielded back.
        Mr. Watt. I will yield to you if you want me to yield to
    you.
        Mr. Cannon. That is fine.
        Mr. Watt. Okay. I will yield back then.
        Mr. Cannon. Mr. Carter, do you seek recognition?
        Mr. Feeney? Mrs. Blackburn?
        Mr. Cannon. Thank you. Mr. Delahunt. The gentleman is
    recognized for 5 minutes.
        Mr. Delahunt. I thank the Chair. Your testimony, Mr.
    Lemongello, I thought was rather powerful. I guess I would ask
    Mr. Keane, given what you heard and accepting the facts as
    recited by Mr. Lemongello, you wouldn't want to deny him a
    right of access to the courts, would you?
        Mr. Keane. Well, I don't know that I would accept all of
    the representation of what the facts are.
        Mr. Delahunt. I understand, but let's----
        Mr. Keane. My understanding is that not only did the
    dealer--you have asked the question. If I would be permitted to
    answer it.
        Mr. Delahunt. Here is what I am saying. Okay? This is how
    it works here. I ask the questions and you give the answers.
    All right?
        Mr. Keane. I will be happy to answer the question.
        Mr. Delahunt. We understand that. Accept the facts as
    recited by Mr. Lemongello. Now, if you accept those facts, the
    question that I am posing is, would you deny him an opportunity
    to prove his case in a court of law?
        Mr. Keane. If there is evidence that the dealer had in any
    way violated any of the laws, he would be----
        Mr. Delahunt. Any of the laws could mean----
        Mr. Keane. You have asked the question. Could I be
    permitted to----
        Mr. Cannon. Pardon me. Let me remind the panel that the
    gentleman on the dais controls the time and has the right to
    stop a question or--we will add a couple seconds to your----
        Mr. Delahunt. I thank the Chair, and go ahead, Mr.----
        Mr. Keane. And I appreciate your interest in this
    legislation and your obvious enthusiasm. If the dealer----
        Mr. Delahunt. I am getting more enthused as you speak, by
    the way.
        Mr. Keane. If the dealer violated any laws, this bill does
    not protect or provide any immunity from litigation against
    that dealer. If the dealer complied with the law and it was a
    lawful sale and they have done nothing illegal, then they are
    not responsible for the actions----
        Mr. Delahunt. I guess what I am saying is under the course
    of common law, the precedent that is established over the
    history of American jurisprudence, if Mr. Lemongello could
    prove negligence, a wanton and willful misconduct or gross
    negligence or some sort of liability theory, absent statutory
    language, you wouldn't want to deny him access to court, would
    you?
        Mr. Keane. He is not denied access to court, and in fact if
    a dealer knowingly----
        Mr. Delahunt. Okay. Then you have clarified for me your
    position. Okay. That is all I am asking.
        Now, I guess it was maybe Mr. Chen could--I just want to
    get my hands around the dimensions of the problem here. What,
    in the aggregate, is the dollar amount of verdicts that have
    been returned in these kind of cases?
        Mr. Chen. Against?
        Mr. Delahunt. Against----
        Mr. Chen. Against Colt?
        Mr. Delahunt. Well, no, not against Colt. Against dealers.
    I mean, I presume that--maybe Mr. Keane you can answer that
    question.
        Mr. Keane. Well, I am not sure what your definition of
    these cases is. The cases that Hamilton----
        Mr. Delahunt. Cases that would be prohibited under the
    aegis of the statute.
        Mr. Keane. In the Hamilton case the verdict was for $4
    million----
        Mr. Delahunt. Do you have an aggregate figure?
        Mr. Keane. That is the only verdict of this--well, in the
    similar case against the distributor in Florida, the verdict
    was for----
        Mr. Delahunt. Do you have an aggregate number?
        Mr. Keane. I do not have an aggregate number.
        [11 a.m.]
        Mr. Delahunt. Okay. I would hope that the representatives
    of the industry would provide to the panel the aggregate number
    in terms of jury verdicts or verdicts that have been rendered
    in these kind of cases, cases that would be prohibited under
    statute. We want to know what the dimension and magnitude of
    the problem is.
        Mr. Cannon. Will the gentleman yield?
        Mr. Delahunt. I yield.
        Mr. Cannon. You can either take that as a question, Mr.
    Keane, to provide information back, or you are welcome to
    submit questions that we will ask of the panel in writing so
    that they will be included in the Record.
        Mr. Delahunt. I thank the Chair. What we are trying to do
    here is define what the problem is and the magnitude of the
    problem.
        Now, I heard the figure 100 million. I don't know where
    that came from. Was that you, Mr. Chen?
        Mr. Chen. That is $100 million in annual sales revenue.
    Less than 100 million between our two companies at Colt.
        Mr. Delahunt. That was just sales. But was there something
    about the cost of litigation amounting to $100 million.
        Mr. Keane. It is my best estimate that the cost----
        Mr. Delahunt. What do you base that estimate on, Mr. Keane?
        Mr. Keane. I base that on conversations with gentlemen like
    Mr. Chen, conversations with insurance representatives and our
    own experiences, and reading cost estimates in various
    insurance publications.
        Mr. Delahunt. Well, could you give us that in writing,
    then?
        Mr. Keane. I can't give that to you, because I'm sure Mr.
    Chen would agree, those dollar figures for each company is
    confidential business information.
        Mr. Delahunt. Well, then what I would respectfully suggest
    is for you to pull the number of $100 million without having
    any empirical data is a best guess by Mr. Keane, and I think
    that is what we should accept in terms of the cost of the
    problems. Again, I am trying to define the problem to the
    industry. And I am hearing $100 million. And if I did not ask
    you the questions, Mr. Keane, we would be sitting here
    accepting them. And it appears to me that there is very little
    basis in reality for that $100 million figure. With that I
    yield back.
        Mr. Cannon. The time of the gentleman has expired.
        Mr. Feeney. Mr. Chairman?
        Mr. Cannon. Mr. Feeney is recognized for 5 minutes.
        Mr. Feeney. If I may, as we have not been called yet, I
    will take the Chairman up on his offer and I appreciate the
    panelists being here.
        Mr. Olson, there was a suggestion that American
    jurisprudence is being implicated by this bill. Is it the
    history of the first, say, 200 years of the United States that
    manufacturers and sellers of arms are basically held to some
    standard of strict liability or accountability for anything
    that some subsequent purchaser does with those arms?
        Mr. Olson. The answer is no. That was the not the rule. The
    courts would have never entertained litigation of that sort.
    And it is generally true, although the litigation that we are
    talking about today rests on many different theories, but those
    theories tend to have in common, they are either completely
    novel or have historical roots that are more like 10 years old,
    than 200 years old.
        Mr. Feeney. Given the activist and evolving judicial
    jurisprudence in this area, I would to ask a historical
    question. The colonies adopted the Constitution only based upon
    the Bill of Rights, which include the second amendment. And
    could it have been that the Founders and the people who
    ratified the Constitution based only on the attachment of the
    Bill of Rights, could have wanted to preserve the theoretical
    right to bear arms while allowing judicial activism to
    effectively eliminate the production and the sale of what the
    Founders insisted be part of our individual rights?
        Mr. Olson. I think the drafters of the second amendment and
    its parallel amendments in State constitutions would be
    spinning in their graves with the speed of jet turbines if they
    knew that the development of jurisprudence would have brought
    things to that sort of pass. There is a dispute, as we know, on
    whether or not the individual rights theory of the second
    amendment is good law. Certainly, if you believe that there is
    any individual right whatsoever conveyed by the second
    amendment, we have an answer to the Ranking minority Member's
    question of ``why guns''? It is because the Constitution does
    not mention the right to eat cheeseburgers and does mention as
    a very important individual right the right to bear arms.
        Mr. Feeney. And with respect to the other nine amendments,
    can you give me any examples where those amendments' general
    thrust is toward collective rather than individual rights?
        Mr. Olson. I think you make a very good point there. And
    while on the topic of other amendments, there is a parallel
    with the first amendment and the freedom of speech. In order to
    protect speakers from chilling effects, the Supreme Court has
    given us New York Times vs. Sullivan, which curtails State tort
    litigation in order to make sure that one State cannot haul in
    a national newspaper under overly light grounds and bankrupt
    that newspaper by a jury verdict. Tort jurisprudence is not
    allowed completely free reign when it comes up against
    constitutional values, like speech or potentially the Second
    Amendment.
        Mr. Feeney. Finally, Mr. Olson, you have not advocated that
    manufacturers or sellers of weapons who are negligent in their
    own right be defended by congressional legislation, have you?
        Mr. Olson. This law, in some respects, actually does not go
    as far as, I think, Congress would be justified in going. As I
    understand it, this law does not try to wipe out all the
    different grounds for suing manufacturers and dealers, but to
    target the ones that are considered the most abusive, and I
    think it is quite justified in doing that.
        Mr. Feeney. Thank you, I yield back the balance of my time.
        Mr. Cannon. I am impressed. If I have been keeping track
    correctly, three times we have had the time yielded back before
    we had the light turn red. Thank you, Mr. Feeney. Would you
    like to yield some time, Mr. Feeney, or would you like 5
    minutes, Mr. Carter? I think we will go to the other side first
    then. Thank you.
        Mr. Watt, did you seek recognition? What is your name
    again? Mr. Scott? What a day. Two handsomest guys in Congress.
    Mr. Scott, did you seek recognition?
        Mr. Scott. I will take Mr. Watt's time.
        Mr. Cannon. The gentleman is recognized for 5 minutes.
        Mr. Scott. Thank you. In the finding, Mr. Keane, on the
    finding number one, citizens have a right protected by the
    second amendment to the United States Constitution to keep and
    bear arms, I notice it says ``citizens'' and not ``a citizen.''
    there is no individual right in the Constitution to bear arms,
    is there?
        Mr. Keane. I would wholeheartedly disagree with you.
        Mr. Scott. Could you name a Supreme Court case that has
    found an individual right to bear arms in the Constitution?
        Mr. Keane. There is no Supreme Court decision on that
    point. There is a----
        Mr. Scott. Thank you. Are there Supreme Court cases that
    rules to contrary?
        Mr. Keane. Not to my knowledge. But there is writing by the
    Supreme Court in dicta recognizing an individual right, yes.
        Mr. Scott. On final judgment?
        Mr. Keane. I said in dicta. There is writings by the
    Supreme Court recognizing individual right, and I would be
    happy to provide that.
        Mr. Scott. Let me get it straight. Can you name a case
    where the court ruled an individual right to bear arms? Can you
    name a case?
        Mr. Keane. As I have indicated, I don't believe the Supreme
    Court has ever definitively ruled on that issue; however, there
    is dicta in Supreme Court decisions recognizing an individual
    right. I would be happy to provide the cases that the court
    discusses it in dicta.
        Mr. Scott. But you cannot name----
        Mr. Keane. As I sit here now, no. I cannot.
        Mr. Scott. The president of the NRA was asked the same
    question, and he could not come up with a case either last time
    we had a hearing on gun control.
        Can somebody give me a kind of case that can win today that
    will not be able to win under this bill? You have exempted
    intention and criminal acts in transferring. You have exempted
    breach of contract. You have exempted defect in design when
    used as intended. What kind of case can be brought today that
    cannot be brought under this bill?
        Mr. Lemongello. That would be mine, sir.
        Mr. Scott. And how can you win today and can't win under
    the bill? What part of the bill kills your case?
        Mr. Lemongello. I would like to address that to my lawyer
    to answer that question.
        Mr. Cannon. The Chair is willing to have the gentleman step
    forward and answer the question if he would like. If you would
    announce your name for the record.
        Mr. Henigan. Thank you, Mr. Chairman. My name is Dennis
    Henigan, and I am an attorney with the Brady Center to Prevent
    Gun Violence, and very honored to represent Detective
    Lemongello and Detective McGuire in their lawsuit against this
    gun seller and gun manufacturer.
        Their lawsuit is an excellent illustration of the kind of
    case that is highly meritorious, and yet would be barred by
    this bill, because it involves clearly negligent conduct by a
    gun seller. But there have been, as Detective Lemongello said,
    no criminal charges brought against that gun seller, no finding
    that that gun seller violated any statute, and yet it was
    clearly irresponsible conduct.
        Most negligence cases that are brought in courts do not
    involve illegal conduct. They involve irresponsible conduct.
    And yet this statute would not only require that the contact be
    illegal, but that it would be willfully illegal, which is
    extremely difficult to prove. So it is an excellent example of
    the kind of case brought by an individual who was victimized by
    gun industry irresponsibility that would be barred--unfairly in
    our judgment--by this legislation.
        And I might add, a judge in West Virginia has already held
    that under the generally applicable principles of West Virginia
    law, this is a valid case and should go forward toward trial.
    This bill, if it passed into law, would override that judge's
    decision in the service of preferential treatment for a single
    industry.
        Mr. Scott. Do you do products liability cases?
        Mr. Henigan. Yes, I do, Congressman.
        Mr. Scott. Defect in design is exempted when used as
    intended. Does ``when used as intended'' change the product
    liability standard?
        Mr. Henigan. Quite radically, Congressman Scott. Actually
    there are many cases involving many kinds of dangerous products
    in which manufacturers of those products are held strictly
    liable in product liability because they failed to install a
    feasible safety feature that would reduce the risk of injury
    from unintended use of a product. For example, automobiles.
    Most automobile accidents are caused by some kind of unintended
    use of the car. Not intended at all by the manufacturer.
    Sometimes it is illegal use of the car. Speeding for example.
    And yet our jurisprudence would hold those manufacturers of
    automobiles to a responsibility to make cars crashworthy. We do
    not let them off the hook because the use is unintended.
        Mr. Scott. Thank you, Mr. Chairman.
        Mr. Cannon. You are welcome to stay at the table if you
    wish. And now the Chair recognizes the gentleman from Texas for
    5 minutes, Mr. Carter.
        Mr. Carter. Mr. Chen, a question was asked earlier, and I
    don't understand the answer. Maybe you can help me. As I
    understand this bill, this is designed--it is defined by the
    term ``unlawful activity.'' and it is to prevent someone from
    suing for the unlawful use of a firearm. The exemption that has
    been talked about is used as intended, the intentional use of a
    firearm, and that term could be a term that could be submitted
    to a jury to find out if really you intend to use a gun by
    dropping it is an intended use of a gun. So that would not
    necessarily exempt you from manufacturer's liability. Would it?
    Is that the way you read this?
        Mr. Chen. That is not the way that I read it. The fact of
    the matter is that we as a manufacturer would be liable, under
    traditional product liability theory, meaning that if the gun
    were defectively designed or manufactured, or there was a
    failure to warn, we would still be on the hook. This bill would
    not make that case immune from the plaintiffs pursuing their
    rights against the seller.
        Mr. Carter. A jury could common sensically say just setting
    a gun on a shelf is using it as intended. Accidentally dropping
    the gun on the floor is using it as intended?
        Mr. Chen. That is correct. That is correct. But what Mr.
    Lemongello is arguing is that here is a situation where the
    manufacturer should be liable for the misuse of that firearm.
    There are many links of the chain between the manufacturer and
    the person who pulled the trigger, the one who was responsible
    for causing the injury to Mr. Lemongello. What we are saying is
    that if there is no causation, the manufacturer, for that
    matter, the entire industry, should not be responsible.
        In the NAACP case here that we are talking about, or had
    talked about earlier, the plaintiff's attorney is trying to
    find the entire industry liable, even though the incident did
    not even involve their brand of firearm. This is almost like a
    speeding car--somebody drives a speeding car recklessly and
    crashes into somebody and kills them, and that speeding car
    were a Chrysler, it is like the plaintiff's lawyer saying well,
    GM and Ford and everybody else should be a codefendant as well.
    This is what we are trying to stop, these type of abusive
    practices.
        Mr. Carter. It strictly goes to the intended use. I tried a
    case where a man sharpened a toothbrush in a jail cell and
    threatened a jailer with it and got 20 years in prison for
    threatening a jailer with that sharpened toothbrush. And a jury
    found that toothbrush was a deadly weapon. That jury finding is
    established law and has been appealed and held up.
        So would we have to worry about looking at the liability of
    the toothbrush industry? Sometime you have to look at the
    intended use of the product. That is what you are arguing?
        Mr. Chen. Yes, sir.
        Mr. Watt. Will the gentleman yield before he yields back?
        Mr. Carter. Yes.
        Mr. Watt. I just wanted to direct the gentleman's attention
    to the language at the top of page 8 of this bill that deals
    not only with manufacturers, but deals with sellers. And that
    is where Mr. Lemongello--Detective Lemongello is directing
    here. He is not bringing any action against the whole industry.
    He is talking about this seller. And this bill is so broad that
    it would eliminate that kind of action against the seller,
    whether or not the manufacturer was add as a defendant or not.
    So you just need to look at the language.
        Mr. Carter. Will you yield back?
        Mr. Watt. Yes.
        Mr. Carter. It was my understanding from the testimony that
    we heard, no one has sought any remedies or sought to find that
    this seller had illegally sold these weapons or sold in
    violation of the rules. According to what the testimony was
    from Mr. Lemongello, nobody has pursued that route. If it has
    not been pursued, then the lawsuit was going to be valid under
    this law.
        Mr. Watt. Will the gentleman yield? It hadn't been pursued
    criminally, but the question is whether Mr. Lemongello is going
    to be able to pursue it civilly without some criminal pursuit
    of this.
        Mr. Carter. I understand that, but there is a route to get
    to the civil lawsuit. If it was an illegal sale of a weapon,
    then the illegality sets aside the terms of this Act that we
    are passing here and allows him to go to court based upon the
    illegal activity.
        Mr. Feeney. Will the gentleman from Texas yield?
        Mr. Carter. I yield.
        Mr. Feeney. On the same page 8----
        Mr. Cannon. The gentleman's time has expired. Mr. Delahunt
    is asking for unanimous consent that we extend the time by 2
    minutes. Objection not being heard, the gentleman is recognized
    for 2 minutes. And Mr. Carter it is your time.
        Mr. Carter. I yield.
        Mr. Feeney. I thank my colleagues, and all of my
    colleagues. Actually the subprovision, the second exclusion
    from the effects of this bill deals with any action brought
    against a seller for negligent entrustment or negligence per
    se. The sellers are still going to be held accountable for
    negligence per se at a minimum if this bill is passed. And I
    think Mr. Lemongello will get his day in court. He may or may
    not have a more difficult burden because the strict liability
    theories are presumably tossed out if this bill takes effect.
        Mr. Cannon. Will the gentleman from Texas yield?
        Mr. Carter. I yield.
        Mr. Cannon. I, perhaps Mr. Lemongello or Mr. Henigan, your
    counsel, you could clarify for us. Are you suing the industry?
    How many manufacturers in the industry? And are you claiming
    negligent entrustment or the violation of any State or Federal
    laws?
        Mr. Henigan. I would be happy to clarify that, Mr.
    Chairman. This lawsuit is against a single gun seller, a gun
    dealer, and a single gun manufacturer who failed to establish
    minimum requirements for its dealers that are even consonant
    with what Mr. Keane's organization recommends. So it is one
    seller and one dealer.
        Mr. Cannon. Are the facts that you just stated, is that
    essentially the context for a negligent entrustment claim?
        Mr. Henigan. Let me explain why the negligent entrustment
    exception, as defined by this statute--because that is the
    important thing--what this statute defines as negligent
    entrustment would not apply to Mr. Lemongello's lawsuit. It
    would not apply because it requires the direct sale of a gun to
    the person who then misuses the gun. Whereas, in fact, this was
    a sale to a straw buyer for a gun trafficker. Neither of those
    people fired the gun. Then it went into the hands of the
    criminal who did fire the gun.So negligent entrustment does not
    help this case. This is a case of simple negligence.
        Secondly, the doctrine of negligence per se does not even
    apply under West Virginia law. There is specific case law in
    West Virginia that that doctrine does not each apply under West
    Virginia law. So neither of those exceptions would help this
    case.
        Mr. Cannon. Are you alleging any violation of Federal or
    State law on the part of the defendants in your lawsuit?
        Mr. Henigan. No, we are not, your Honor. It is like most
    negligence cases, it does not allege a violation of a statute,
    it alleges irresponsibility. And that is the special preference
    that is given the gun industry, one of them, in this statute.
    Because this statute seems to require not only a violation of
    the law to bring a negligence case, but a willful violation.
    That even is beyond what is required in many criminal cases,
    Mr. Chairman.
        Mr. Cannon. Not to argue, but the question is going back to
    the purchase. In other words, you have to have a link back to
    the seller or the manufacturer and we do have a long history of
    law there. But I see that the gentleman's time has expired. I
    yield back my time. The gentleman's time having expired, Mr.
    Conyers, do you seek recognition?
        Mr. Conyers. I guess I will take 5 minutes.
        Mr. Cannon. The Chair recognizes the distinguished Ranking
    Member of the full Committee, Mr. Conyers, for 5 minutes.
        Mr. Conyers. Thank you, sir. Mr. Chairman, before I begin
    my time, is there any contemplation of a second round of
    questions?
        Mr. Cannon. Many of the Members who are here have other
    commitments, including me with the Resources Committee in an
    area where I am one of the few people who have expertise, and
    so I am not, at this point, contemplating a second round.
        Mr. Conyers. Well, could you leave someone else to try to
    carry on as acting Chair in your stead if you left?
        Mr. Cannon. That is possible. May I just poll the panel.
    How many people would like another round of questioning?
        Mr. Conyers. I might. I don't know where this questioning
    is going to go.
        Mr. Cannon. Anybody else on the minority? Anybody on the
    majority side like a second round? Mr. Ranking Member, I am
    anxious that you have as much time as you need, and at the end
    of your 5 minutes, if you feel like you need more, we would
    certainly entertain a unanimous consent request.
        Mr. Conyers. That is very generous. I thank you for that.
        Mr. Cannon. The gentleman is recognized for 5 minutes.
        Mr. Conyers. Thank you, sir. I wanted to begin by welcoming
    Chuck Cunningham from the NRA. Good to see you again, Chuck. I
    hope you will stop by my office and talk to me a little bit
    this time. I am trying to look at this thing as fairly as I
    can.
        I wanted to ask, C-SPAN is here. Who is the other cameraman
    here? Who are you, sir? You can answer.
        The Cameraman. Impact Imaging.
        Mr. Conyers. And who brought you here?
        The Cameraman. I was called on the phone.
        Mr. Conyers. By whom?
        The Cameraman. Impact Imaging.
        Mr. Conyers. And who are they working for?
        The Cameraman. I have no idea.
        Mr. Cannon. Does anyone in the audience know who hired----
        Mr. Conyers. Wait a minute. Thanks for your help, Mr.
    Chairman.
        Mr. Cannon. I just want the gentleman to know that on both
    sides we care about these issues.
        Mr. Conyers. I know. I noticed. Chuck, you did not have
    anything to do with him coming here did you? Chuck Cunningham?
        Mr. Cunningham. Yes, sir?
        Mr. Conyers. Did NRA--did you have anything to do with them
    coming here?
        Mr. Cunningham. Nope.
        Mr. Conyers. Just asking, guys. No harm intended.
        I want to welcome Mr. Walter Olson of the Manhattan
    Institute. But you are located in D.C.; right?
        Mr. Olson. No, in Manhattan. There may be a Washington
    office of it, but I am in Manhattan.
        Mr. Conyers. Your office is in New York?
        Mr. Olson. New York.
        Mr. Conyers. You do not have to answer this if you do not
    want to, but are you a person of libertarian persuasion?
        Mr. Olson. I am often accused of that.
        Mr. Conyers. Yes, but is it true?
        Mr. Olson. I think it is pretty true, yes.
        Mr. Conyers. It is? Okay. Some of my best friends are
    libertarians.
        Mr. Olson. It is pretty true. Yes.
        Mr. Conyers. Just asking. Just setting a foundation for a
    few questions. Okay. Now that we have got all of this cleared
    up. Mysterious cameraman, witness accused of libertarianism,
    which it turns out is true, nobody knows where the camera came
    from.
        Okay, now I turn to my good friend, Mr. Chen, who I have
    previously had delivered to him the Consumer Federation of
    America one-pager. And I hope you have had a chance to look at
    it. There are only three questions there. Could you go through
    these with me, Mr. Chen, to point out where you agree and where
    you may take issue with the Consumer Federation of America on
    this subject matter?
        Mr. Chen. Most certainly.
        Mr. Conyers. All right. Go ahead.
        Mr. Chen. Well, the first point is proposed legislation
    would block suits filed by individual consumers seeking to hold
    the gun industry accountable for irresponsible manufacturing or
    selling of guns.
        That certainly would not be true. You know, we
    manufacturers would still be responsible for, as I said before,
    negligent design or manufacture of guns or failure to warn or
    other product liability cases or violation of warranty law or
    under contract. So that is not true.
        Federal immunity would also give manufacturers and sellers
    special protection from the law. I don't know of what special
    protection they are talking about. They do mention about Mr.
    Lemongello's case. What we are trying to do here is to provide
    a preemption from the types of suits that would put an entire
    industry at task where there is a failure of causation, there
    is a lack of causation in order to prove one of the members of
    our industry to be liable in the traditional tort sense.
        When I went to NYU Law School, I never learned about these
    types of cases where you can bring an entire industry to court
    and then try to seek market share liability.
        Third is in the absence of Federal health and safety
    regulation our civil justice system is the only way to make the
    gun industry accountable when its negligent conduct harms
    consumers.
        Our company----
        Mr. Watt. I ask unanimous consent for an additional 5
    minutes for Mr. Conyers.
        Mr. Cannon. Hearing no objection, so ordered.
        Mr. Watt. Will the gentleman yield?
        Mr. Conyers. Yes, sir.
        Mr. Watt. Because I wanted to go back to the first point:
    The proposed legislation would block suits filed by individual
    consumers. Under that point, the point is made that law
    enforcement officials are prosecuting the alleged Washington,
    DC area snipers for their crimes. The families who lost
    relatives in the attacks have also filed a civil lawsuit to
    ensure that those responsible for arming the snipers are held
    accountable. I am wondering--and includes the Bulls Eye
    Shooters Supply, the gun store that claims it lost the assault
    rifle used by the alleged snipers along with many other guns in
    recent years.
        I am wondering whether Mr. Chen has any reaction to that
    while you are at it. I yield back to the gentleman. I just did
    not want to gloss over that one point just by looking at the
    bold print.
        Mr. Chen. Congressman Watt, my response to that is really
    two words: proximate cause. That is one of the elements that
    you have to prove. If there was a link between the shooter and
    Bulls Eye Shooters Supply, that would be proximate cause that
    would implicate this particular retailer. Then this proposed
    legislation, as I understand it, would not exclude those types
    of suits from being brought.
        Mr. Watt. I yield back to the gentleman.
        Mr. Conyers. I yield to the gentleman from Massachusetts.
        Mr. Delahunt. Yes, I thank the Ranking Member for yielding.
    I have to disagree, Mr. Chen, with your interpretation, because
    my reading of the statute--and I appreciate your using the
    common law terms like proximate cause. I think those are
    principles I would hope that you would agree, and I am sure you
    learned them at NYU, that they are embedded in our
    jurisprudence, and that we do not want to abrogate these
    principles that have really guided our rule of law, are the
    basis for our rule of law.
        But having said that, I understand, Mr. Chairman, there is
    a markup tomorrow on this particular proposal?
        Mr. Cannon. The gentleman is correct.
        Mr. Delahunt. You know, we are really rushing this fast.
    And I understand, there is a sense of urgency. But I did pose a
    question, I think, to Mr. Keane in terms of getting my data, in
    terms of defining what the problem is. I did not realize Mr.
    Cunningham out there was with the NRA, but if they could
    provide us that information, so that at least we could have a
    reasonable intelligent markup, it would help to define what the
    magnitude is. Mr. Keane, you look like you want to say
    something.
        Mr. Keane. The piece of information you were asking for was
    some sort of documentation of the total industry wide cost of
    defending this litigation. As I indicated, there is no place
    where that information is collected and you are accurate, that
    is my best educated guess.
        Mr. Delahunt. If you could give me the aggregate and I am
    sure it is available somewhere, maybe Mr. Cunningham has it in
    terms of jury verdicts that have been returned.
        Mr. Keane. I don't know what the aggregate is. I know what
    the Hamilton verdict was $4 million.
        Mr. Delahunt. Let me ask about the Hamilton verdict.
        Mr. Watt. Will the gentleman yield?
        Mr. Conyers. Yes, I yield.
        Mr. Watt. I appreciate it. There is some suggestion that
    there is a proximate cause between the markup of this bill
    tomorrow and the pending NRA convention 2 weeks later.
        Mr. Delahunt. I respect that proximate cause.
        Mr. Watt. I wanted the gentleman to be aware of that.
        Mr. Cannon. If the gentleman would yield, proximity in time
    is not necessarily proximity in cause, without denying any
    proximity in cause.
        Mr. Delahunt. The Hamilton case, was that $4 million
    actually paid?
        Mr. Keane. It was never paid because the case was reversed
    by a unanimous court of appeals ruling in New York.
        Mr. Delahunt. Mr. Keane, please, that is disingenuous to
    say in front of this Committee there was a $4 million verdict,
    when, in fact, the case was overturned. With that, I yield back
    to Mr. Conyers the remaining time.
        Mr. Conyers. Well, Mr. Chen, you were saying? You were
    saying--you were going through these three items and you were
    on the third item.
        Mr. Cannon. If you would like to go through the third item.
    There are three our four items, Mr. Conyers?
        Mr. Conyers. Three.
        Mr. Cannon. If you would like to go through the remaining
    items, that would be fine and then time will expire.
        Mr. Chen. Thank you. Just to repeat it: In the absence of
    Federal health and safety regulation, our civil justice system
    is the only way to make the gun industry accountable when its
    negligent conduct harms consumers.
        We have at Colt a very excellent record of safety regarding
    our products. We have our ISO 9000 first class gun line that
    has been recognized, in fact, by the U.S. military as part of
    the quality certification program. We have rigorous procedures
    that we follow in order to make the highest quality, most
    reliable, reasonably safe product that we possibly can do.
    Indeed we have been making these firearms for, well, almost 2
    centuries.
        And so we are constantly improving our processes. And to
    the extent that any of our firearms are defective, well, we
    will have to answer to that in the marketplace and also in the
    courtroom. And this bill will not make us immune from
    addressing defective products of Colt.
        Mr. Conyers. So, you do not agree with any of the three
    points that the Consumer Federation of America have made about
    this legislation?
        Mr. Chen. That is correct.
        Mr. Cannon. The gentleman's time has expired.
        Mr. Conyers. Just a moment, Mr. Chairman. Can I seek an
    additional 1 minute?
        Mr. Cannon. Certainly, without objection, so ordered.
        Mr. Conyers. All right. I thank you for your generosity.
    Could you read for me at page 9, parenthesis 5 in the bill.
        Mr. Chen. I'm sorry; I do not have the bill.
        Mr. Conyers. We can get a copy for you.
        Mr. Cannon. Do we have a copy moving down to the witness?
    Does this gentleman have a copy of the bill, Mr. Conyers?
        Mr. Conyers. I don't know if he does or not. He is looking.
    He is looking very carefully.
        Mr. Cannon. While the bill is going down, let me point out
    that I have not yet taken my 5 minutes and would like to do it,
    so if we could move this expeditiously, but whatever time you
    need to answer this, Mr. Conyers.
        Mr. Conyers. All right.
        Mr. Cannon. Would you repeat for the witness?
        Mr. Conyers. Page 9, top of the page, parenthesis 5.
        Mr. Chen. And in the context of this subparagraph, this
    would----
        Mr. Conyers. You can just read that. You do not have to
    explain anything.
        Mr. Chen. An action for physical injuries or property
    damage resulting directly from a defect in design or
    manufacture of the product when used as intended.
        Mr. Conyers. All right. Now, ``when used as intended'' is
    the phrase that is pretty interesting, isn't it? Does this
    block product liability type cases? Or could it be interpreted
    to do so?
        Mr. Chen. You mean focusing on ``when used as intended''?
    Those four words?
        Mr. Conyers. No, let's take the whole thing, 5. Paren 5,
    what you just read. Come on, you have gone to New York
    University, a top ranked law school. This is elementary.
        Mr. Chen. If I put a gun in my mouth and I pull the trigger
    and it was loaded and it killed me, that is not using a gun as
    intended, sir.
        Mr. Cannon. The gentleman's time has expired.
        Mr. Conyers. Just a moment, he did not----
        Mr. Cannon. We have explored the issue, Mr. Conyers, to
    some length.
        Mr. Conyers. You explored it, Mr. Chairman. Could I get an
    additional minute, sir? I hate to inconvenience the Chair. This
    will be my last 1 minute.
        Mr. Cannon. I can't imagine the gentleman actually
    inconveniencing me. I do have a problem. I have some questions
    I would like to ask, and I have a Resources Committee markup on
    a bill dealing with technical issues dealing with coal leasing,
    which I am the only Member that really has much experience. So
    I would like to get over there.
        Mr. Conyers. The last 1 minute. If you feel I do not
    deserve it, you can deny me, Mr. Chairman.
        Mr. Cannon. I am trying to work through the actual timing.
    I could turn the Chair over to someone else if it is going to
    be more than 1 minute. If it is truly 1 minute. Hearing no
    objection, the gentleman is recognized for another minute.
        Mr. Conyers. I thank you again for your generosity. Does--
    could 5 be interpreted as blocking product liability type
    cases? Mr. Chen?
        Mr. Chen. No, not in my mind. When you say ``when used as
    intended,'' you have to refer to the safety and instruction
    manual, okay? And there are a lot of basic safety rules that
    one must follow. There is a responsibility when you have a
    firearm and it is very important that you follow the
    instructions, and you be certified and you be trained and you
    be a responsible user of that firearm. And then when you are
    finished with using that firearm, you safeguard so that it
    cannot get into the hands of others.
        Mr. Conyers. What the heck do you think 5 means then, if it
    does not block product liability?
        Mr. Chen. No, I think it does block--I do not think it
    blocks product liability in the traditional sense.
        Mr. Conyers. Are you sure of that?
        Mr. Chen. Yes, I am, sir.
        Mr. Cannon. The gentleman's time has expired. The Chair
    recognizes himself for 5 minutes.
        Mr. Feeney. Mr. Chairman? If I might?
        Mr. Cannon. The Chair recognizes himself for 5 minutes and
    yields time to the gentleman from Florida.
        Mr. Feeney. I am very grateful to the Chair. Mr.
    Lemongello's counsel, is your name--can you state your name
    again?
        Mr. Henigan. Yes, Dennis Henigan.
        Mr. Feeney. Mr. Henigan, did you give an interview with
    Peter Boyer to the New Yorker Magazine on May 17, 1999?
    Roughly?
        Mr. Henigan. I believe that is when the magazine was
    published, Congressman, but yes, I was interviewed by Mr.
    Boyer.
        Mr. Feeney. Is it your position that George Washington and
    the Founding Fathers had some sort of pathological mental
    disease?
        Mr. Henigan. No it is not, nor did I ever say anything like
    that to Mr. Boyer, nor does he claim that I said anything like
    that.
        Mr. Feeney. You were quoted as saying, and I am quoting you
    from that article, I believe: It is important to steer the
    argument about guns away from the problematic area of criminal
    use with its inconvenient focus on criminals--and you continued
    that, in quotes--guns should be thought of as pathogens and gun
    ownership, perhaps, as a disease.
        Is that a misquote?
        Mr. Henigan. Congressman, I think if you will look at that
    more carefully, there are not quote marks around that. What the
    author of the article was doing is he was giving his
    interpretation of what he thought was the public health
    approach to gun violence. I don't think that is a fair
    characterization of the public health approach to gun violence
    at all, but I did not say that. He does not actually quote me
    as saying that. He is characterizing a particular point of view
    with which I do not endorse.
        Mr. Cannon. Reclaiming my time, does the gentleman have
    further questions?
        Mr. Feeney. No. Do you believe that gun manufacturers
    should be held strictly liable for the use of their products?
        Mr. Henigan. Not simply for use of their product. They
    should be held strictly liable if their products are defective
    in design or manufacture. They should be held liable in
    negligence if they act irresponsibly.
        And in that connection, Mr. Chairman, there was a point
    made earlier, there was some questioning about the case brought
    by the D.C. area sniper victims. I am also counsel in that case
    and there was an assertion made that there was no--there could
    be no showing of, quote, proximate cause in that case. There
    could be no showing of a link between Bulls Eye Shooter supply
    and the sniper shooting. But in point in fact, Mr. Chairman,
    the link is quite strong because that very rifle that was
    confiscated from the sniper suspects was in the inventory of
    Bulls Eye Shooter Supply barely 2 months before it started to
    be used in the sniper shootings.
        One of the snipers was in that gun shop at one point. We
    know that. And, in fact, that gun dealer cannot account for the
    disappearance of that gun, did not report it missing or stolen
    until after it was confiscated from the snipers.
        So it is a strong case of negligence. There has been no
    criminal action brought against that dealer and it is a strong
    causal link between that dealer's conduct and the shooting that
    victimized those sniper victims.
        Mr. Cannon. Thank you, Mr. Henigan. I might point out this
    is not a jury for the purposes of trying that case. We
    appreciate your clarification on the article and the quote, and
    that information.
        Now, I just have a couple of things I would like to do.
    One, I would like to read a quote from the City of Boston which
    has already dismissed its lawsuit against the firearms industry
    stating that during the litigation, the city has learned that
    members of the firearm industry have a long-standing commitment
    to reducing firearm accidents and reducing criminal misuse of
    firearms and stating the city and the industry have now
    concluded that their common goals can best be achieved through
    mutual cooperation and communication, rather than litigation,
    which has been expensive to both industry and taxpayers, time
    consuming, and distracting at a time of national crisis.
        Mr. Chen, you talked a little bit very early in your first
    presentation about what the effect of these lawsuits is. It
    seems to me that among other things, these lawsuits and the
    costs of lawsuits and the cost of defending the lawsuits is
    going to have a chilling effect on the industry's ability to
    invest in new technologies to make firearms safer. Is that not
    true?
        Mr. Chen. Well, that is very true. In fact, it is ironic
    that Colt was one of the companies that is looking at smart gun
    technology, and we had spent millions of dollars in trying to
    develop a product that might be usable by law enforcement. But
    we were stymied by all of this gun litigation and as a result,
    all of our money is being diverted to defend ourselves in these
    lawsuits. And we have had to slow down in our smart gun
    technology.
        Mr. Cannon. Thank you. Let me point out, I think that the
    whole panel here agrees that we need to do things to make guns
    safer. And we recognize that is a complicated process and it is
    going to take some significant technological improvements
    before we get to a point where an officer loses his gun and is
    injured with it, before that safety element can take place.
        We appreciate the industry's work on that and hope you will
    continue and hope you have the resources to do that.
        Mr. Olson, you talked about the antigun forces who decided
    that the democratic process doesn't work, and so they are
    taking these issues to the judiciary. What some have recently
    called the imperial judiciary. We are trying to change the law
    on product liability. Are there other things that Congress can
    do to help reign in the imperial judiciary or those two, or two
    judges around the country who can transform the law by taking
    the interpretation thereof into their own hands?
        Mr. Olson. I think the controversy we have been talking
    about this morning is deeply symbolic, including to a lot of
    people do not feel a direct stake in the gun debate, who do not
    believe in an individual right or the second amendment. I
    notice that the National Association of Manufacturers, as part
    of its commitment to a common sense legal system has endorsed
    preemption, at least at the State level. This case is the most
    flagrant as far as an end run around Congress' own rulings.
    This is the case that has produced the wildest statements by
    lawyers involved on the plaintiff's side such as John Cole:
    What has happened is the legislatures have failed. Congress is
    not doing its job. Lawyers are taking up the slack. So says
    Cole.
        Wendell Gautier, who organized the municipal suits,
    Gautier's notion is that the plaintiff's bar is a de facto
    fourth branch of Government. That is the American Lawyer
    describing it.
        There is a flagrantness about what they are trying to do in
    this case, which has implications for all the other ways in
    which people might try to avoid the authority of this body,
    Congress.
        Mr. Cannon. It is flagrant and the amazing thing is how
    obvious these people are in how they are taking their case.
        Mr. Keane, is there anything you would like to add before
    we close this hearing?
        Mr. Keane. To Mr. Delahunt's point as to the size of
    verdicts, the problem here is twofold. One, a single multi-
    hundred million dollar verdict against the industry will
    destroy it and bankrupt it, and that is exactly what Mr.
    Henigan is pursuing in these cases. Mr. Henigan, by the way,
    represented the City of Boston, whose statement you just read.
        Secondly, as Mr. Olson pointed out, is that these cases
    that seek injunctive relief, like the current NAACP trial
    before Judge Weinstein, seek to circumvent the legislative
    branch by having one judge issue injunctive orders that would
    apply throughout the United States. And in fact, this
    legislation protects the right of individual States to decide
    how--what the law should be with respect to how firearms are
    sold in their States, not one unelected judge sitting in a
    courtroom in Brooklyn.
        Mr. Henigan. Mr. Chairman?
        Mr. Cannon. Actually, I was going to say something very
    nice about you, Mr. Henigan.
        Mr. Henigan. Do not let me interrupt you.
        Mr. Cannon. We appreciate the rational process involved
    here and your work with the city of Boston. I want to thank the
    panel for its patience in this regard, and for the Members of
    the Committee who have spent a great deal of time here today on
    this issue. Let me just remind the panel Members, the Members
    of the Committee, if they have any questions, we are happy to
    get those to the panel. We will leave the record open for 5
    days.
        Mr. Watt. Could I ask the Chairman a question?
        Mr. Cannon. Certainly.
        Mr. Watt. Just about the bill. I am looking at the top of
    page 8, and this seems to block suits for damages. I am
    wondering whether the bill even deals with the injunctive
    situation that Mr. Keane keeps referring to with the NAACP. As
    I understand, the NAACP is not even seeking damages; they are
    seeking an injunction. And I am wondering whether you intend
    the bill to relate to that, because it does not seem to. And
    maybe you want to look at that between now and tomorrow. Maybe
    you will broaden the bill. I don't know.
        Mr. Cannon. I suspect not, and I think the gentleman has
    probably made a correction on the record that is worthwhile.
    Anything else?
        Mr. Watt. That is all.
        Mr. Cannon. Pardon me. I actually have to go. And so we
    will draw the hearing to a close. And I wanted to thank
    everyone for their help and would ask the panel members to
    respond to any questions fairly quickly so that we can get them
    in the record. And this hearing is adjourned.
        Mr. Conyers. Mr. Chairman before you adjourn, is there some
    reason that we can put on the record for why the hearing is
    today and the markup is tomorrow?
        Mr. Cannon. The hearing is actually adjourned, but I think
    we can keep the record open for a moment just to say that I am
    not sure why we are moving it so quickly. We are happy to have
    the hearing and do our Committee work. And the full Committee
    will take it up tomorrow, and that is probably a question for
    the full Committee. If nothing further, the hearing is actually
    adjourned at this point.]
        [Whereupon, at 11:50 a.m., the Subcommittee was adjourned.]
                                A P P E N D I X

                                  ----------

                   Material Submitted for the Hearing Record

                                  ATTACHMENT 1

                                List of Lawsuits

     1.  Camden County Board of Chosen Freeholders v. Beretta U.S.A. Corp.,
    et al., 123 F. Supp. 2d 245 (D.N.J. 2000) (plaintiff's claims
    dismissed); dismissal affirmed by U.S. Circuit Court of Appeals at 273
    F. 3d 536 (3d Cir. 2001).

     2.  City of Philadelphia, et al. v. Beretta U.S.A. Corp., et al., 126
    F. Supp. 2d 882 (E.D. Pa. 2000) ( plaintiff's claims dismissed);
    dismissal affirmed by U.S. Circuit Court of Appeals at 277 F.3d 415 (3d
    Cir. 2002).

     3.  Mayor Joseph P. Ganim, et al. v. Smith & Wesson Corp., et al.,
    Civil Action No. CV-990361279, Superior Court, Judicial District of
    Fairfield at Bridgeport (plaintiffs' claims dismissed); dismissal
    affirmed by Connecticut Supreme Court on October 1, 2001 at 780 A.2d 98
    (Conn. 2001).

     4.  The City of Atlanta v. Smith & Wesson Corp., et al., Civil Action
    No. 99VS0149217J, State Court of Fulton County, State of Georgia;
    Georgia intermediate appellate court dismissed plaintiff's claims on
    February 13, 2002 at 560 S.E.2d 525 (Ga. App. 2002). The City did not
    appeal.

     5.  Alex Penelas, et al. v. Arms Technology, Inc., et al., Case No.
    99-01941, Circuit Court, Eleventh Judicial Circuit, Miami-Dade County,
    Florida (plaintiffs' claims dismissed); dismissal affirmed at 778 So.2d
    1042 (Fla. App.). The Florida Supreme Court denied further review on
    October 24, 2001 at 799 So.2d 218 (Fla. 2001).

     6.  Mayor Marc H. Morial, et al. v. Smith & Wesson Corp., et al.,
    Civil Action No. 98-18578, Civil District Court, Parish of Orleans; on
    April 3, 2001, the Louisiana Supreme Court at 785 So.2d 1 (La. 2001)
    held that the City's suit was barred. The U.S. Supreme Court, on
    October 9, 2001, denied the City's petition for a writ of certiorari.
    ___U.S.___, 122 S.Ct. 346 (2001).

     7.  People of the State of New York, et al. v. Sturm, Ruger & Company,
    Inc., et al., Case No. 402586/2000, New York State Supreme Court,
    County of New York (plaintiffs' claims dismissed); plaintiffs appealed
    to the Supreme Court of the State of New York, Appellate Division:
    First Department, Index No. 402586-2000. Appellate oral argument was
    May 10, 2002.

     8.  The City of New York, et al. v. Arms Technology, Inc., et al.,
    Case No. CV 00 3641, United States District Court, Eastern District of
    New York (case stayed).

     9.  The City of Boston, et al. v. Smith & Wesson Corp., et al., Civil
    Action No. 99-2590C, Commonwealth of Massachusetts, Suffolk County
    Superior Court; (plaintiffs abandoned their claims after taking many
    depositions and reviewing hundreds of thousands of pages of documents
    produced by defendants, as they ``learned that members of the firearm
    industry have a longstanding commitment to reducing firearm accidents
    and to reducing criminal misuse of firearms.'') Attachment to
    ``Plaintiffs', the City of Boston and the Boston Public Health
    Commission, Unopposed Motion to Dismiss Pursuant to Mass. R. Civ. P.
    41(a)'' filed in City of Boston v. Smith & Wesson Corp., No. 99-02590-C
    (Suffolk County Sup. Ct. March 27, 2002).

    10.  Mayor James H. Sills, Jr., et al. v. Smith & Wesson Corp., et al.,
    CA No. 99C-09-283FSS, Superior Court, State of Delaware, New Castle
    County (plaintiffs' claims dismissed and city chose not to appeal).

    11.  City of Gary, Indiana, by its Mayor, Scott L. King, v. Smith &
    Wesson Corp., et al., Cause No. 45D029908CT 0355, Lake Superior Court,
    Civil Division, East Chicago, Indiana (plaintiffs' claims dismissed);
    plaintiffs appealed to Indiana Court of Appeals, Appeal No. 45A03-0105-
    CY-155 (affirmed dismissal of claims). Plaintiffs are seeking to appeal
    to Indiana Supreme Court.

    12.  City of Chicago, et al. v. Beretta U.S.A. Corp., et al., No.
    98CH015596, Circuit Court of Cook County, Illinois, County Department,
    Chancery Division (plaintiffs' claims dismissed); appealed by City to
    intermediate appellate court, City of Chicago, et al. v. Beretta U.S.A.
    Corp., et al., No. 00-3541, Appellate Court of Illinois, First Judicial
    District (dismissal of plaintiff's claims overturned); appealed by
    defendants to Illinois Supreme Court, City of Chicago, et al. v.
    Beretta U.S.A. Corp., et al, No. 95253, in the Supreme Court of the
    State of Illinois (appeal pending).

    13.  Dennis W. Archer, Mayor of the City of Detroit, et al. v. Arms
    Technology, Inc., et al., Case No. 99-912658, State of Michigan,
    Circuit Court, County of Wayne (partial dismissal of plaintiffs'
    claims); defendants appealed to intermediate appellate court, Edward H.
    McNamara, et al. and Dennis W. Archer v. Arms Technology, Inc., et al.,
    COA Case No. 227669, State of Michigan, Court of Appeals (appeal
    pending).

    14.  Edward H. McNamara, Wayne County Executive, et al. v. Arms
    Technology, Inc., et al., Case No. 99-912662, State of Michigan,
    Circuit Court, County of Wayne (partial dismissal of plaintiffs'
    claims); defendants appealed to intermediate appellate court, Edward H.
    McNamara, et al. and Dennis W. Archer v. Arms Technology, Inc., et al.,
    COA Case No. 227669, State of Michigan, Court of Appeals (appeal
    pending).

    15.  District of Columbia, et al. v. Beretta U.S.A. Corp., et al., Case
    No. 00CA000428, Superior Court, District of Columbia, Civil Division
    (plaintiffs' claims dismissed on December 16, 2002, 2002 WL 31811717;
    plaintiffs have given notice of appeal).

    16.  James Foster-el, et al. v. Beretta U.S.A. Corp., et al., Case No.
    0004700-00, Superior Court, District of Columbia, Civil Division
    (plaintiffs' claims dismissed on December 16, 2002, 2002 WL 31811717;
    plaintiffs have given notice of appeal).

    17.  Patrick H. Mahoney, et al. v. Beretta U.S.A. Corp., et al., Case
    No. 00-005064, Superior Court, District of Columbia, Civil Division
    (plaintiffs' claims dismissed on December 16, 2002, 2002 WL 31811717;
    plaintiffs have given notice of appeal).

    18.  Bryant Lawson v. Beretta U.S.A. Corp., et al., Case No. 00-
    0000428, Superior Court, District of Columbia, Civil Division
    (plaintiff's claims dismissed on December 16, 2002, 2002 WL 31811717;
    plaintiff has given notice of appeal).

    19.  Laura Wallace et al., v. Beretta U.S.A Corp., et al., Case No. 01-
    001111, Superior Court, District of Columbia, Civil Division
    (plaintiffs' claims dismissed on December 16, 2002; 2002 WL 31811717;
    plaintiffs have given notice of appeal).

    20.  City of Cincinnati v. Beretta U.S.A. Corp., et al., Case No.
    A9902369, Court of Common Pleas, Hamilton County, Ohio, Civil Division
    (plaintiffs' claims dismissed on October 7, 1999); plaintiff appealed
    to intermediate appellate court, City of Cincinnati v. Beretta U.S.A.
    Corp., et al., Appeal No. C-99-729, First District Court of Appeals,
    Hamilton County, Ohio (affirmed dismissal of plaintiff's claims);
    plaintiffs appealed to Ohio Supreme Court, City of Cincinnati v.
    Beretta U.S.A. Corp., et al., Case No. 00-1705, Supreme Court of Ohio
    (9/22/00) (reversed dismissal and remanded case to trial court).
    Plaintiff City Council recently voted to dismiss lawsuit and its
    lawyers will file a motion to dismiss soon.

    21.  Mayor Michael R. White and The City of Cleveland v. Hi-Point
    Firearms, et al., No. 1:99V1134, U.S. District Court, N.D. Ohio
    (defendants' motion to dismiss denied); no appeal taken.

    22.  Mayor Sharpe James and The City of Newark, New Jersey v. Arcadia
    Machine & Tool, et al., Civil Action No. L-6059-99, Superior Court of
    New Jersey, Law Division: Essex County (denied, in part, defendants'
    motion to dismiss); defendants appealed to Appellate Division, Case No.
    A-3098-01T3; (on March 11, 2003, appellate court affirmed trial court
    ruling).

    23.  City of Jersey City v. Smith & Wesson Corp., et al., Case No.
    L2567-02, Superior Court of New Jersey, Hudson County (case filed April
    17, 2002).

    24.  City of Camden v. Beretta U.S.A. Corp., et al., Civil Action No.
    L-451099, Superior Court of New Jersey, Law Division: Camden County
    (case stayed until recently).

    25.  City of St. Louis, Missouri v. Henry J. Cernicek, et al., Cause
    No. 992-01209, Circuit Court, City of St. Louis, Missouri, 22nd
    Judicial Circuit (defendants' motion to dismiss argued on February 28,
    2003).

    26.  National Association for the Advancement of Colored People v. A.A.
    Arms, Inc., et al., CA No. CV-99-3999, United States District Court,
    Eastern District of New York (currently in trial).

    27.  City of Los Angeles, City of Compton, City of Inglewood, and City
    of West Hollywood v. Arcadia Machine & Tool, et al., Case No. BC
    210894, Superior Court, State of California; subsequently docketed as
    Firearms Cases, Judicial Council Coordination Proceeding, No. 4095,
    Superior Court, State of California, County of San Diego (defendants'
    motion for summary judgment granted March 7, 2003).

    28.  County of Los Angeles v. Arcadia Machine & Tool, et al., Case No.
    BC 214794, Superior Court, State of California, subsequently docketed
    as Firearms Cases, Judicial Council Coordination Proceeding, No. 4095,
    Superior Court, State of California, County of San Diego (defendants'
    motion for summary judgment granted March 7, 2003).

    29.  City of San Francisco, City of Berkeley, City of Sacramento, City
    of San Mateo, and County of Alameda v. Arcadia Machine & Tool, et al.,
    Case No. 303753, Superior Court, State of California, subsequently
    docketed as Firearms Cases, Judicial Council Coordination Proceeding,
    No. 4095, Superior Court, State of California, County of San Diego
    (defendants' motion for summary judgment granted March 7, 2003).

    30.  William L. Campbell v. Village of Dobbs Ferry, et al., Civil
    Action No. 97 CV 7351, United States District Court (S.D.N.Y.)(Colt's
    motion to dismiss granted).

    31.  Stephen Young v. Bryco Arms, et al.; No. 98L6684, Circuit Court,
    Cook County, Illinois (Colt dismissed on December 21, 2001, but some
    manufacturers not dismissed); consolidated for appeal with Anthony
    Ceriale v. Smith & Wesson Corp., et al.; and Obriela Smith v. Navegar,
    et al., and appealed to 1st Appellate Division. Presently consolidated
    on appeal to Illinois Supreme Court as Nos. 93678, 93685 and 93728.

    32.  Anthony Ceriale v. Smith & Wesson Corp., et al., No. 99L5628,
    Circuit Court, Cook County, Illinois (Colt dismissed on December 21,
    2001, but some manufacturers not dismissed); consolidated for appeal
    with Stephen Young v. Bryco Arms, et al. and Obriela Smith v. Navegar,
    et al., and appealed to 1st Appellate Division. Presently consolidated
    on appeal to Illinois Supreme Court as Nos. 93678, 93685 and 93728.

    33.  Obriela Smith v. Navegar, et al., No. 98L13465, Circuit Court,
    Cook County, Illinois (Colt dismissed on December 21, 2001, but some
    manufacturers not dismissed); consolidated for appeal with Stephen
    Young v. Bryco Arms, et al. and Anthony Ceriale v. Smith & Wesson, et
    al., and appealed to 1st Appellate Division. Presently consolidated on
    appeal to Illinois Supreme Court as Nos. 93678, 93685 and 93728.

    34.  Thomas Johnson, Sr. v. Beemiller Inc., et al, Civil Action No. CV
    03 0066, United States District Court (E.D.N.Y.)(lawsuit recently
    filed).

    35.  Iris Prosper v. Accu-Tek, et al., Civil Action No. CV 97 2730,
    United States District Court (E.D.N.Y)(Colt's dismissed).

    36.  Gladys Gerena, et al. v. Accu-Tek et al., Civil Action No. CV 97
    3935, United States District Court (E.D.N.Y)(Colt's dismissed).

    37.  Janice Sweeting v. A.A.Arms, et al., Civil Action No. CV 99 1461,
    United States District Court (E.D.N.Y)(Colt's dismissed).

    38.  Monalisa Harris v. Accu-Tek, et al., Civil Action No. CV 98 5026,
    United States District Court (E.D.N.Y)(Colt's dismissed).

                                  ATTACHMENT 2

       Order and Fifth Amended and Restated Joint Plan of Reorganization

                                 ATTACHMENT 3A

               Colt All-American Double Action 9mm Pistol Recall

                                 ATTACHMENT 3B

                            Colt Light Rifle Recall

             Responses to Post-Hearing Questions From Walter Olson
    1. You testified that the United States Supreme Court in New York Times
    v. Sullivan curtailed state tort litigation to ensure that the First
    Amendment rights of national newspapers were not undermined by jury
    verdicts based upon common law theories contrary to that right. Is
    there a comparable Supreme Court case limiting suits against the gun
    industry on constitutional grounds?

        No, the Court has not to my knowledge ruled on the issue.

    2. You testified that, as you understood the bill, it is not designed
    to eliminate all suits against the industry only those that are most
    abusive. Please identify in the bill what types of abusive suits would
    be eliminated and which legitimate suits would be preserved. In
    responding to this question, please use natural language and do not
    merely recite the legislative language.

        H.R. 1036 (as of the time of my testimony) would curtail
    fundamentally abusive lawsuits such as: suits seeking to blame gun
    manufacturers for criminals' misuse of their products; suits seeking to
    blame gun dealers for crimes even though they have neither broken the
    law nor engaged in negligent entrustment; and suits which attempt an
    end run around Congressional will by inviting judges or juries to ban
    gun designs valued by many legitimate gun buyers and that legislatures
    have not seen fit to ban.
        H.R. 1036 would not prevent plaintiffs from suing gunmakers and
    dealers on a wide variety of conventional and familiar grounds of
    liability law. For example, manufacturers could still be sued on
    grounds that a gun was defective in its manufacture (i.e., not
    delivered in intended form), or did not live up to a warranty or
    contractual term of sale, and even on defective-design claims by third
    parties where a gun has caused injury although not used in a criminal
    or criminally negligent way (examples: guns alleged to ``fire when
    dropped'' or to fire very inaccurately). Dealers could be sued not only
    in cases where a violation of federal or state law has led directly to
    injury, but also on claims that they have negligently entrusted a
    firearm to an inappropriate buyer. Both manufacturers and dealers would
    remain open to suits seeking injunctive (noncash) relief.

           Responses to Post-Hearing Questions From David Lemongello
        Dear Chairman Cannon, Ranking Member Conyers, and fellow Members of
    the Judiciary Committee:
        I am writing to respond to the questions you asked of me in your
    April 10 letter.

    1. There was testimony at the hearing that suggested that your lawsuit
    would not be adversely affected by H.R. 1036. Under which exemption in
    H.R. 1036 would your case be allowed to proceed?

        As you can imagine, if H.R. 1036 becomes law, a court will have to
    determine whether my case would be allowed to proceed. Under the
    analysis of the bill that I have seen, it seems likely that my case
    would not be allowed to proceed if H.R. 1036 becomes law, and that no
    exemption would save it. If Congress is sincerely interested in
    preserving my right to seek justice in the courts, I would hope that
    they do so clearly.

    2. Will manufacturers, sellers or dealers who engage in grossly
    irresponsible conduct, if that conduct is not also illegal under some
    state or federal statute, be liable for damages under H.R. 1036?

        No. In many cases, including my own, grossly irresponsible gun
    dealers and manufacturers will not be liable for the damages caused by
    their irresponsible conduct under H.R. 1036. In my case, it was clearly
    irresponsible--negligent--for the gun dealer to sell 12 guns to a straw
    purchasing team. It was also irresponsible--negligent--for the
    manufacturer to supply its guns to the dealer without requiring that it
    use any reasonable sale practices. The manufacturer did not even
    require or recommend that the dealer use the sales guidelines that the
    manufacturer's own trade association has put out. The judge in my case
    has already ruled that under West Virginia law the dealer and the
    manufacturer may be liable in negligence and public nuisance for my
    injuries. But under H.R. 1036, those rules of negligence and public
    nuisance would no longer apply to gun dealers, manufacturers and trade
    associations.

           Responses to Post-Hearing Questions From Lawrence G. Keane
    1. Should a federally licensed firearms dealer who has been trained or
    educated through the ``Don't Lie for the Other Guy'' program on how to
    detect and deter illegal straw purchasers of firearms be liable for
    damages if they act contrary to that training? Would H.R. 1036 permit a
    lawsuit against a dealer who acts contrary to the education provided
    under this program if the weapon is ultimately used by a third party to
    injure someone?

        The joint cooperative ATF/NSSF educational program, ``Don't Lie for
    the Other Guy,'' is designed and intended to assist ATF in its efforts
    to help educate federally licensed firearms dealers on how to detect
    and deter the illegal straw purchase of a firearm. To date NSSF, in
    partnership with ATF, has distributed approximately 23,000 ``Don't Lie
    for the Other Guy'' dealer kits throughout the United States. ATF has
    advised NSSF that inspectors carry ``Don't Lie for the Other Guy''
    dealer kits in their vehicles and distribute them when they visit
    dealers. NSSF is proud of the fact that the ``Don't Lie for the Other
    Guy'' program is a partner in the U.S. Department of Justice's
    ``Project Safe Neighborhoods.'' NSSF applauds Attorney General
    Ashcroft's announcement made during the national ``Project Safe
    Neighborhoods'' conference that the Justice Department would have a
    renewed focus on the prosecution of illegal straw purchasers. NSSF in
    partnership with ATF is working to expand the important ``Don't Lie for
    the Other Guy'' message to reach a wider public audience through
    televised public service announcements.
        Unfortunately, the question as posed is a factually incomplete
    hypothetical. The question appears to focus on the narrow issue of
    whether a dealer did or did not follow all of ATF's many suggestions
    and recommendations contained in the ``Don't Lie for the Other Guy''
    program materials. As ATF itself acknowledges on the video component of
    the ``Don't Lie for the Other Guy'' dealer kit, it is not always easy
    for a dealer to determine or know whether a transaction is legitimate
    or whether it is an illegal straw purchase. The mere fact that a sale
    turns out after the fact to have been a straw purchase should not give
    rise to liability against the dealer, nor the manufacturer or
    distributor. What is clear, however, is that H.R. 1036 does not prevent
    a suit against a dealer who knowingly and willfully sells a firearm to
    a straw purchaser or violates any law in transferring a firearm. See
    H.R. 1036, Section 5(A)(i) and (iii).

    2. Former police officer, David Lemongello, testified that he was
    injured by a weapon that was purchased in a suspicious sale and later
    used by another criminal to shoot him. Should a seller be insulated
    from liability in a situation such as this? Will a seller be insulated
    from liability under H.R. 1036 if a weapon purchased in a suspicious
    sale is transferred to another person who then inflicts injury upon
    another?

        As ATF itself acknowledges on the video component of the ``Don't
    Lie for the Other Guy'' dealer kit, it is not always easy for a dealer
    to determine or know whether a transaction is a legitimate or whether
    it is an illegal straw purchase. The mere fact that a sale turns out
    after the fact to have been a straw purchase should not give rise to
    liability against the dealer, nor the manufacturer or distributor. What
    is clear, however, is that H.R. 1036 does not prevent a suit against a
    dealer who knowingly and willfully sells a firearm to a straw purchaser
    or violates any law in transferring a firearm. See H.R. 1036, Section
    5(A)(i) and (iii). The facts and circumstances surrounding a given
    transaction establish whether the dealer knowing and willingly
    transferred a firearm to an illegal straw purchaser or in violation of
    the law and thus whether a suit against that dealer is proper under
    H.R. 1036.
        The facts and circumstances surrounding the transfer of the firearm
    involved in former police officer Lemongello's case are more involved
    than the Subcommittee is aware. Upon information and belief, the straw
    purchaser used by the multiply convicted felon to illegally purchase
    the firearm in question was a known customer of the store. Before
    making the sale, a store employee did inquire of the straw purchaser as
    to reason for the purchase. Later that day or early the next morning
    the store's management voluntarily alerted ATF of the transaction. The
    dealer subsequently voluntarily cooperated with ATF in an undercover
    sting operation that resulted in the successful apprehension of the
    convicted felon who was illegally trafficking firearms into New Jersey.
    The dealer permitted ATF to install surveillance equipment in the store
    and permitted an undercover ATF agent to pose as a store employee. The
    ``straw purchaser'' also cooperated with law enforcement in exchange
    for leniency in the subsequent criminal prosecution against her. The
    convicted felon pled guilty in federal court and was sentenced to 15
    years incarceration. As part of his plea agreement the defendant signed
    a cooperation agreement with the United States requiring him to
    disclose any information he had concerning the involvement of others.
    As former police officer Lemongello testified, the dealer was not
    prosecuted. It is also worth noting that former police officer
    Lemongello has also sued Sturm, Ruger and Co., Inc., even though the
    firearm transferred by the dealer was a used firearm.

    3. You testified that a conservative estimate for the total industry-
    wide cost of defending lawsuits is approximately $100 million. On what
    do you base that figure? You further indicate that the cost of
    litigation is absorbed almost exclusively by the gun industry because
    insurance carriers have denied coverage. On what do you base that
    assertion? Please provide any documentary support for both of these
    claims.

        See written and oral testimony. The legal bills of individual
    companies are privileged and confidential business information not
    shared with competitors. Glock Inc.'s former general counsel Paul
    Jannuzzo publicly estimated that the litigation expense would cost his
    company alone $15 million dollars a year. I also base my estimate on
    conversations with insurance professionals, including brokers,
    underwriters and claims managers, who have been involved in dealing
    with insurance for the firearms industry for many years. I also base my
    estimate on my own experience as a practicing attorney having
    represented firearms manufacturers in litigation matters.

    4. You also testified that the premiums within the firearms industry
    have skyrocketed. Please provide any data you have reflecting a surge
    in insurance premiums for the gun industry. In addition, please provide
    any information that establishes a nexus between the rate of premiums
    and the risk or cost of litigation.

        See written and oral testimony. Industry members have also informed
    me that in addition to dramatic and skyrocketing premium increases they
    have experienced substantial increases in their deductibles and in
    self-insured retentions (SIR). Moreover, the scope of coverage has been
    restricted, in addition to blanket exclusions for the types of suits
    that would be stopped by this legislation. Many insurance carriers have
    abandoned the market and no longer will write liability policies for
    firearms companies, such as CNA Re and Chubb among others. Other
    carriers will renew existing firearms company clients but will not
    write policy for new clients. I also base my opinion on court decisions
    in insurance coverage cases denying coverage; and conversations with
    insurance coverage counsel, insurance professionals, including brokers,
    underwriters and claims managers, who have been involved in writing
    insurance for and managing claims involving firearms industry
    companies.

    5. You testified that over thirty states have enacted similar
    legislation to prevent frivolous suits against the gun industry. Please
    identify each state statute on which you rely and explain how it is
    similar to H.R. 1036. Don't these statutes mostly preclude suit by
    municipalities and other governmental subdivisions, absent consent or
    approval from the State, without interfering with traditional tort
    liability actions brought by individuals and organizations?

        See attached chart. The statutes speak for themselves. What they
    all have in common is that they are designed to stop junk lawsuits that
    improperly attempt to blame manufacturers and product sellers for the
    criminal misuse of their legally sold, non-defective products. Many but
    not all of these suits have been filed by municipalities. An example of
    such a reckless lawsuits not brought by a municipal plaintiff is the
    NAACP lawsuit currently on trial in the United States District Court
    for the Eastern District of New York before Senior District Court Judge
    Jack B. Weinstein (NAACP v. Acusport Corp., et al. 99 Civ. 3999, Civ.
    7037).

        Neither H.R. 1036 nor any of these many state statutes interfere
    with traditional tort liability actions brought by individuals and
    organizations. All that H.R. 1036 and these state statutes do is stop
    junk lawsuits that are not based on traditional and well-recognized
    tort law claims, regardless of whether the plaintiff is a state, a
    municipality, an interest group or a citizen. As the judge said in
    dismissing the District of Columbia's junk suit seeking to blame
    members of the firearms industry for the acts of criminals, ``Based
    upon . . . relevant case law and bedrock legal principles, this Court
    concludes that the arguments of the defendants are compelling as to the
    entry of judgment in their favor. The plaintiffs' myriad claims herein
    are burdened with many layers of legal deficiencies.'' District of
    Columbia v. Beretta U.S.A. Corp., et al., Civil Action 0428-00, slip
    op. at 4 (D.C. Super. Ct. 2002).

    6. You identified several programs such as ``Don't Lie for the Other
    Guy,'' and the ATF Partnership for Progress Seminars as indicative of
    the voluntary efforts by the industry to prevent or curtail illegal gun
    sales. How does your organization monitor and measure the success of
    these programs?

        The joint cooperative ATF/NSSF educational program, ``Don't Lie for
    the Other Guy,'' is designed and intended to assist ATF in its efforts
    to help educate federally licensed firearms dealers on how to detect
    and deter the illegal straw purchase of a firearm. To date NSSF, in
    partnership with ATF, has distributed approximately 23,000 ``Don't Lie
    for the Other Guy'' dealer kits throughout the United States. ATF has
    advised NSSF that inspectors carry ``Don't Lie for the Other Guy''
    dealer kits in their vehicles and distribute them when they visit
    dealers. NSSF is proud of the fact that the ``Don't Lie for the Other
    Guy'' program is a partner in the U.S. Department of Justice's
    ``Project Safe Neighborhoods.'' NSSF applauds Attorney General
    Ashcroft's announcement made during the national ``Project Safe
    Neighborhoods'' conference that the Justice Department would have a
    renewed focus on the prosecution of illegal straw purchasers. NSSF in
    partnership with ATF is working to expand the important ``Don't Lie for
    the Other Guy'' message to reach a wider public audience through
    televised public service announcements.
        ``Partnership for Progress'' is a joint NSSF/ATF seminar program
    put on throughout the United States by NSSF and ATF staff to provide
    continuing education and training for dealers on a variety of topics,
    such as preventing the theft of firearms, inventory and detecting and
    deterring the illegal straw purchase of firearms.
        ATF also attends NSSF's annual trade show, the SHOT Show, and is
    provided booth space to meet and speak with dealers attending the show.
    Since the earliest days of the SHOT Show ATF has put on seminars for
    dealers on a wide variety of topics. In addition to the ATF seminars,
    NSSF conducts its own seminars for dealers on various topics. NSSF also
    conducts ``SHOT Show University'' and ``Retailer University"
        Like all trade associations, membership in the NSSF is voluntary.
    Participation in any of its educational programs is also voluntary. ATF
    has repeatedly thanked NSSF and industry for its voluntary cooperation
    in these various programs. We look forward to working in partnership
    with ATF to expand the reach of our ``Don't Lie for the Other Guy''
    program through televised public service announcements. ATF has
    informed NSSF that it believes these programs are valuable and
    worthwhile. Therefore, NSSF will continue them as long as ATF believes
    they are worthwhile.

    7. Please provide examples of Supreme Court dicta in which an
    individual right to bear arms is recognized.

        In the Dred Scott decision the Supreme Court conceded that if freed
    African-Americans were recognized as citizens they would be entitled to
    ``keep and bear arms'' and that Congress could ``not deny the people
    the right to keep and bear arms . . .'' Dred Scott v. Sandford, 60 U.S.
    393, 19 How. 393, 15 L. Ed. 691 (1856). The Supreme Court also
    recognized that the Second Amendment provides an individual right in
    United States v. Cruikshank, 92 U.S. 542, 551, 23 L. Ed. 588 (1875).
    See also Presser v. Illinois, 116 U.S. 252, 265, 6 S. Ct. 580, 29 L.
    Ed. 615 (1886); Miller v. Texas, 153 U.S. 535, 538, 14 S. Ct. 874, 38
    L. Ed. 812 (1984).
        In a 1990 Fourth Amendment case the Supreme Court had occasion to
    discuss the Second Amendment in the context of other fundamental
    rights. The Court said:

                    ``The People'' seems to have been a term of art
                    employed in selected parts of the Constitution . . .
                    The Second Amendment protects ``the right of the people
                    to keep and bear Arms,'' and the Ninth and Tenth
                    Amendments provide that certain rights and powers are
                    retained by and reserved to ``the people.'' See also
                    U.S. Const., Amdt. 1 (``Congress shall make no law . .
                    . abridging . . . the right of the people peaceably to
                    assemble''); Art. I, Sec. 2, cl. 1 (``The House of
                    Representatives shall be composed of Members chosen
                    every second year by the People of the Several
                    States'') (emphasis added). While this textual exegesis
                    is by no means conclusive, it suggests that ``the
                    people'' protected by the Fourth Amendment, and by the
                    First and Second Amendments, and to whom rights and
                    powers are reserved in the Ninth and Tenth Amendments,
                    refers to a class of persons who are part of a national
                    community or who have otherwise developed sufficient
                    connection with this country to be considered part of
                    the community.''

        United States v. Verdugo-Urquidez, 494 U.S. 259, 265, 110 S. Ct.
    1056, 1060-61, 108 L. Ed. 2d 222, 232-33 (1990). See also Planned
    Parenthood of Southeastern Pennsylvania v. Casey, 505 U.S. 833 841, 112
    S. Ct. 2791, 120 L. Ed. 2d 674 (1992) (The Constitution guarantees
    ``freedom of speech, press, and religion; the right to keep and bear
    arms . . .'').
        Justice Clarence Thomas wrote in a concurring opinion, ``Marshaling
    an impressive array of historical evidence, a growing body of scholarly
    commentary indicates that the `right to keep and bear arms' is, as the
    Amendment's text suggests, a personal right,'' Printz v. United States,
    521 U.S. 898, 938, 117 S. Ct. 2365, 138 L. Ed. 2d 914 (1997) (Thomas,
    J. concurring). The right to bear arms was discussed as a personal
    right by Justice John Paul Stevens in a dissenting opinion in Spencer
    v. Kemna, 523 U.S. 1, 118 S. Ct. 978, 140 L. Ed. 2d 43 (1998) (Stevens,
    J. dissenting) (Continuing injury caused by a criminal conviction ``may
    result in tangible harm such as . . . loss of the right to vote or to
    bear arms . . .'').

    8. [Repeat of Question 7.]

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