[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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