[House Hearing, 109 Congress] [From the U.S. Government Printing 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 NINTH CONGRESS FIRST SESSION ON H.R. 800 __________ MARCH 15, 2005 __________ Serial No. 109-21 __________ Printed for the use of the Committee on the Judiciary Available via the World Wide Web: http://www.house.gov/judiciary ______ U.S. GOVERNMENT PRINTING OFFICE 20-015 WASHINGTON : 2005 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 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 DANIEL E. LUNGREN, California ZOE LOFGREN, California WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas CHRIS CANNON, Utah MAXINE WATERS, California SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida MARK GREEN, Wisconsin ANTHONY D. WEINER, New York RIC KELLER, Florida ADAM B. SCHIFF, California DARRELL ISSA, California LINDA T. SANCHEZ, California JEFF FLAKE, Arizona ADAM SMITH, Washington MIKE PENCE, Indiana CHRIS VAN HOLLEN, Maryland J. RANDY FORBES, Virginia STEVE KING, Iowa TOM FEENEY, Florida TRENT FRANKS, Arizona LOUIE GOHMERT, Texas Philip G. Kiko, Chief of Staff-Genral 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 TRENT FRANKS, Arizona WILLIAM D. DELAHUNT, Massachusetts STEVE CHABOT, Ohio ADAM SMITH, Washington MARK GREEN, Wisconsin CHRIS VAN HOLLEN, Maryland RANDY J. FORBES, Virginia JERROLD NADLER, New York LOUIE GOHMERT, Texas Raymond V. Smietanka, Chief Counsel Susan A. Jensen, Counsel James Daley, Full Committee Counsel Stephanie Moore, Minority Counsel C O N T E N T S ---------- MARCH 15, 2005 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 Steve Chabot, a Representative in Congress from the State of Ohio.................................................. 4 The Honorable Chris Van Hollen, a Representative in Congress from the State of Maryland.......................................... 6 The Honorable Howard Coble, a Representative in Congress from the State of North Carolina........................................ 7 The Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary.................................................. 8 The Honorable Louie Gohmert, a Representative in Congress from the State of Texas............................................. 8 WITNESSES Mr. Rodd C. Walton, Secretary and General Counsel, Sigarms, Inc. Oral Testimony................................................. 10 Prepared Statement............................................. 12 Mr. Dennis A. Henigan, Director, Legal Action Project, Brady Center to Prevent Gun Violence Oral Testimony................................................. 13 Prepared Statement............................................. 15 Mr. Bradley T. Beckman, Counsel, Beckman and Associates, Counsel to North American Arms Oral Testimony................................................. 25 Prepared Statement............................................. 26 Mr. Lawrence G. Keane, Senior Vice President and General Counsel, National Shooting Sports Foundation, Inc. Oral Testimony................................................. 27 Prepared Statement............................................. 29 APPENDIX Material Submitted for the Hearing Record Prepared Statement of the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law.... 55 Prepared Statement of the Honorable Cliff Stearns, a Representative in Congress from the State of Florida........... 57 H.R. 1225, the ``Terrorist Apprehension and Record Retention (TARR) Act of 2005''........................................... 59 GAO Report entitled ``GUN CONTROL AND TERRORISM: FBI Could Better Manage Firearm-Related Background Checks Involving Terrorist Watch List Records............................................. 62 The ARMS site description of FN's Five-seveN Pistol.............. 105 H.R. 1136, the ``Protect Law Enforcement Armor (PLEA) Act''...... 108 News Articles for the record offered by the Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary....... 113 Response to Post-Hearing Questions from a Minority Member to Bradley T. Beckman, Counsel, Beckman and Associates, Counsel to North American Arms............................................ 133 Article submitted by Lawrence G. Keane, Counsel, Beckman and Associates, Counsel to North American Arms..................... 138 Op-Ed Article from New York Daily News, Sunday, January 9, 2005, submitted by Lawrence G. Keane, Counsel, Beckman and Associates, Counsel to North American Arms..................... 144 Letter from Walter Olson, Senior Fellow, Manhattan Institute for Policy Research to the Honorable Chris Cannon.................. 145 PROTECTION OF LAWFUL COMMERCE IN ARMS ACT ---------- TUESDAY, MARCH 15, 2005 House of Representatives, Subcommittee on Commercial and Administrative Law, Committee on the Judiciary, Washington, DC. The Subcommittee met, pursuant to notice, at 10:10 a.m., in Room 2141, Rayburn House Office Building, Hon. Chris Cannon (Chair of the Subcommittee) presiding. Mr. Cannon. Good morning, ladies and gentlemen. This hearing of the Subcommittee on Commercial and Administrative Law will now come to order to consider today H.R. 800, the ``Protection of Lawful Commerce in Arms Act,'' which was introduced on February 15 by our colleague from Florida, Mr. Stearns. It currently has 157 cosponsors, including me. H.R. 800 addresses abusive lawsuits aimed at the firearms industry. It 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 or proceeding brought by any person against a manufacturer or seller of firearms or ammunition for damages resulting from the criminal or unlawful misuse of such products. There are exceptions, however. The bill does not prohibit an action against a person who transfers a firearm or ammunition knowing that it will be used to commit a crime of violence or a drug trafficking crime or to commit an identical or a comparable State felony offense. It also does not prohibit an action brought against a seller for negligent entrustment or negligence per se. The bill also includes several additional exceptions, including one for actions 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 the harm for which relief is sought. Other exceptions under the bill include one for actions for breach of contract or warranty in connection with the purchase of a firearm or ammunition and an exception for actions for damages resulting directly from a defect in design or manufacture 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 on a foundation of personal responsibility. A product may not be defined as defective unless there is something wrong with the product rather than with the product's use. However, in the last several years, some lawsuits filed against the firearms industry would hold it liable for actions of those who use their products in a criminal or unlawful manner. Such lawsuits threaten the historic connection between tort law and personal responsibility and have forced firearms manufacturers into bankruptcy, severely curtailing the recovery available for those asserting traditional claims of product manufacturing defects. While some of these lawsuits have been dismissed and some States have acted to limit them in one way or another, they continue to be aggressively pursued. In January, the Supreme Court refused to overturn a decision by the Ninth Circuit Court of Appeals permitting such frivolous lawsuit against a gun manufacturer for a crime committed by a third party. The strategy behind these lawsuits is no secret. One of the personal injury lawyers suing the firearms industry, John Cole, told the Washington Post, quote, ``The legal fees alone are enough to bankrupt the industry.'' Professor David Capel also stated that the cities suing the firearms industry, quote, ``don't even have to win. All they have to do is keep suing. They'll kill the industry with the cost of defending all the lawsuits.'' Lawsuits seeking to hold the firearms industry responsible for criminal and unlawful use of its products by others are attempts to accomplish through litigation what has not been achieved by legislation and the democratic process. As explained by one Federal judge, quote, ``The plaintiffs' attorneys simply want to eliminate handguns.'' Taking advantage of our currently unregulated court system, the personal injury lawyers are misusing the courts to limit the sale and distribution of firearms well beyond jurisdictional boundaries. A lawsuit in a single county of a State could destroy a national industry, denying citizens everywhere the right to keep and bear arms, a right 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 as well as the Second Amendment. Such lawsuits also directly implicate core federalism principles articulated by the Supreme Court, which has made clear that, quote, ``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 the other States.'' The direction of this slippery slope is obvious. If the judicial system is allowed to eliminate the firearms industry based on legal theories holding manufacturers liable for the misuse by others of its products, surely those theories will be applied to other industries whose products are capable of being misused. Knives, for example, are intended and used for non- violent purposes. They are virtually indispensable for eating. Yet hundreds of thousands of violent crimes every year are perpetrated with knives. We have already seen multi-million-dollar lawsuits against the makers of hamburgers and steaks for causes--or for damages caused when people abuse those products and overeat. Surely the manufacturers of steak knives will be sued next when such knives are used for criminal purposes. Congress must begin to stem the slide down the slippery slope. It can do that by fulfilling its constitutional duty and exercising its authority under the Commerce Clause to prevent a few State courts from bankrupting the national firearms industry and denying all Americans their fundamental right to bear arms. We need to preserve the benefit of American-made weapons for our soldiers overseas who are so ably defending us all from terrorism. Let's not allow the American firearms industry to be bankrupted so we're left to rely on foreign countries to provide weapons for our own soldiers. I now yield to Mr. Watt, the Ranking Member of the Subcommittee, for an opening statement. Mr. Watt? Mr. Watt. Thank you, Mr. Chairman. I apologize to you and other Members of the Subcommittee for being a minute or two late. I actually was trying to get back on my schedule this morning and run for a change and that threw everything off, trying to get back on schedule. I guess I find it interesting that the first hearing that we are having this year allows me to quote a famous Republican former President. ``Here we go again.'' Here you go. Another year of trying to close the courthouse doors to innocent victims of preventable violence of any kind. Another year of radically altering and undermining our system of States' rights, which so many on this Committee have given so much and so much energy to saying that they support. Another year of trying to confer sweeping immunity to a single industry, the gun industry, in this case. Here we go again. Here we go again. I'd have to say, Mr. Chairman, that last year's debate on this bill didn't reveal to me any reason why individuals harmed by guns that were recklessly placed in the stream of commerce should not be allowed to seek a remedy from those responsible, including those whose negligent conduct--negligent conduct-- resulted in dangerous weapons landing in the hands of criminals. Nor was I convinced that there exists a national crisis that requires Federal intervention in this matter. States are and have been perfectly capable, through both their courts and legislatures, of developing tort principles and addressing gun policy at a local level. Finally, I didn't find anything in last year's testimony or any of the things that I have found out about this bill that would suggest to me why it would be necessary to single out for unprecedented protection the entire gun industry, even as the number of deaths and injuries from gun violence and accidental shootings has escalated. Under this bill, on one within the gun industry bears any responsibility, no duty of care for the misuse of dangerous weapons. When the industry acts responsibly, there should be no liability. I agree with that wholeheartedly. But when elements within the industry act without regard to the safety of our citizens, those harmed by such indifference or recklessness should be afforded a remedy. I don't know what happened to the concept of personal responsibility, corporate responsibility, our whole theory of negligence in this country. Our whole theory of tort law in this country is based on negligence, and I have no idea why one industry should be exempt from those theories that we have developed for so long. They are all about personal responsibility. That's what our whole negligence system is about. If any of our witnesses can today address these very basic and fundamental concerns about this bill, I'm still looking for enlightenment about it. But I believe that unless and until these three core issues are adequately addressed and substantiated, the Federal court, the Federal Government, has no jurisdiction for barring State courts from providing appropriate relief to victims of negligent conduct. We are off and running again. Here we go again, Mr. Chairman. I yield back. Can I just add one thing, Mr. Chairman? I want to put in the record some information here that is just astonishing to me. This is from the Smith and Wesson SEC filing,\1\ and I'm quoting this. ``In the 9-month period ended January 31, 2005, we incurred $4,535 in defense costs net of amounts receivable from insurance carriers relative to product liability and municipal litigation. For the 9 months ended January 31, 2005, we spent $4,150,000 on advertising.'' Put that into this calculus. Thank you, Mr. Chairman. --------------------------------------------------------------------------- \1\ The information referred to was not available to include in this hearing. --------------------------------------------------------------------------- Mr. Cannon. Without objection, that'll be included in the record. Would the gentleman yield to a question? How much did they spend on their insurance premiums, do you know? Does the filing reveal that? Mr. Watt. I have no idea, but probably no more than any other inherently dangerous product maker would be spending on their insurance. There are some risks of business. You have insurance on your automobile, probably a lot more than most people sitting around because people think that you are more vulnerable, you drive more, you expose yourself to more risks, you're more valuable, you're more important, and I suspect your insurance premiums are higher than most of the people sitting in this audience. Mr. Cannon. I drive very carefully, so I keep my premiums down. I don't think these guys control who sues them. We'd like to welcome Adam Smith from Washington, Steve Chabot from Ohio, Mr. Van Hollen from Maryland, and Mr. Coble from North Carolina. Does anyone other than Mr. Smith want to make an opening statement? Oh, and we've got the gentleman, Mr. Franks, from Arizona. Would anyone like to make an opening statement of any sort? Mr. Chabot. Mr. Chairman, if I could, just very briefly. Mr. Cannon. Let me, if you don't mind, I'm going to ask Mr. Smith to go first and then we'll come back to you. Mr. Chabot. Sure. Mr. Cannon. Would anyone else like to make a--Mr. Coble? Okay. Mr. Smith. It's more of a question just for the witnesses so that as they're testifying, they can hopefully address it, and we've sort of gotten this from the two opening statements. The big question for me is exactly what liability is left. I mean, the basic notion that if you sell a gun in a perfectly legal way and basically have no negligence in how you go through that process, then you should not then be liable if someone misuses it is something that I support. I think it is different, frankly, than what went on with the tobacco industry when they sold a product and misled the public for a good many years about the dangers. There's no misleading about the dangers of a firearm. As Mr. Watt himself said, it's fairly apparent how dangerous it is, so the person who's buying it knows that. But in the debate over this issue, I have heard so much conflicting information on what liability remains, you know, what negligence can be demonstrated by the person. Certainly, if they sell to someone who shouldn't have bought a firearm, someone who is disqualified through the law because they are a felon, mentally incompetent, or below the age of 18 or the normal categories, they should be liable. But there's one specific case that arose not far from my district, the sniper case out here. The gun that was used in those crimes was actually purchased in my district, or actually, I should say, actually came from a store in my district. It is still unclear how that got to be in the person's possession because the gun shop has no records. They have records that they had the guns and then, oops, they're gone. They have no records of how it actually got to be in somebody else's hands or even out of their store, for that matter. To my mind, that is at least enough of a case of negligence that you go to court. I mean, you'd have to hear from the jury and so forth. I do not want to exclude that company from liability when they had some number of guns that just went unaccountably missing. That is negligence, to my mind, depending on the facts. It's at least a case for the jury, let's put it that way. And if I could just get some kind of correct answer--I suspect that I'll get about five different contradictory answers--as to whether or not this bill would exempt people like that from liability when there was some clear evidence of negligence, and you can imagine a variety of other different negligent circumstances where it at least should be a question for the jury whether or not this negligence rose to the level of liability. I certainly agree with the Chairman's sentiment that if you sell a legal product without negligence, even if it's dangerous, it's like an automobile is a good analogy, if you use it poorly and get in the accident, it shouldn't be the liability of the manufacturer unless there was some negligence. But I'm just trying to figure out what the limits are. So if you could address that issue as you testify, that would be very helpful to me. Mr. Cannon. Thank you. The gentleman yields back. Mr. Chabot, you are recognized for 5 minutes. Mr. Chabot. Thank you, Mr. Chairman. I won't take the 5 minutes. I'll be very brief. I just want to first of all commend you for holding this important hearing today and to reiterate my support for this really much-needed piece of liability reform legislation. I want to commend Mr. Stearns for offering it. It's really critical for a number of reasons. It'll protect really people's Second Amendment rights. You know, we give lip service to it all the time, but this is one thing, I think, when we can really stand up for the citizens' Second Amendment rights, and the firearms industry, I think, has been targeted. And even if you ultimately prevail in the lawsuit, the resources that you have to use up and the time, the attorneys' fees, court costs, all the rest, can be quite sigsnificant and it can drag on really interminably. And we also have--I think it's an example of some of the activist courts, too, in these cases. We have a judiciary which too often is rewriting the law and legislating from the bench, and I think this is an example where the activist courts have gotten too involved. As I mentioned before, even if you win as a defendant in one of these cases, you can lose. And you'll have a city which is essentially using what they might consider to be unlimited resources, but when you consider many of the cities right now which are in real financial straits, they'll get involved in one of these lawsuits and it just drags on and on and on, so you're utilizing the resources which could much better be used to fill potholes and do other things which the cities really ought to be about. Instead, they're suing an industry which I think has really been under assault for a number of years now. If citizens are going to be able to actually exercise their Second Amendment rights, they're going to have to be able to purchase these weapons and purchase firearms. When you have the assault that's been on a number of these companies for some time now, it really does infringe upon those Second Amendment rights. So I want to commend you for having this hearing, and again, strongly urge my colleagues to support this much-needed legislation. I yield back. Mr. Cannon. Thank you. Mr. Van Hollen, did you want to take 5 minutes? Mr. Van Hollen. Thank you. Mr. Cannon. The gentleman is recognized for 5 minutes. Mr. Van Hollen. I thank you, Mr. Chairman, and I won't take the whole 5 minutes. I will be brief. It's a coincidence that the two new Members, at least on the Democratic side of the Committee here, are two Members who were involved, by coincidence, in the sniper shooting, because while the guns that were used in the sniper shooting may have been sold in Mr. Smith's district, they were used and with the result that many people were killed in the district I represent. I have attended over the last couple of years a number of memorial services for the victims. A number of memorials have been placed in public places in my Congressional district and other places around the Washington area in memory of the victims of those shootings. And I really have many of the same issues Mr. Smith asked about, although as I read the legislation, it's pretty clear that that case would not have been able to go forward, a case that was settled, a case where there was some payment of damages, I believe in the range of $2 million by the owners of the store and some monies paid by the manufacturer. If you look back in the record of this debate in the Senate, there was an effort in the Senate after the House passed the bill to attach an amendment that would have made it clear that under the circumstances of the sales of the guns used in the Sniper shooting that it could have gone forward. I think that those of us who have looked at the facts of that case believe that it was a situation where there was clearly reckless negligence, negligence on behalf of the gun store. And I, in reading this and having read the legal opinions of a number of law firms in town, I think it's quite clear that if this legislation passes in its current form, those victims would not have an opportunity to obtain justice and redress through the courts in this country and they would have had the courthouse door shut on them. It's ironic that this piece of legislation was actually being debated by the House of Representatives about the time the sniper shootings occurred and it was withdrawn at that time because people understood that the public wouldn't stand for a Congress passing a piece of legislation that took away the rights of the victims. And here we are a couple of years later when people think memories have faded and there is again, regrettably, in my view, a piece of legislation which I think is quite clear would shut the doors of justice to those victims. Thank you, Mr. Chairman. Mr. Cannon. Thank you, and Mr. Coble, did you want to--the gentleman is recognized for 5 minutes. Mr. Coble. Mr. Chairman, I will not take the 5 minutes. I thank you for recognizing me. But not unlike my friend from North Carolina, the Ranking Member, I want to apologize for my arrival and to furthermore, Mr. Chairman, apologize for my abrupt departure because I have an aviation hearing going on as we speak here. I just want to state for the record, Mr. Chairman, that if a manufacturer--strike that. It is my belief that if a manufacturer develops a lawful product and lawfully markets it absence negligence, I think that manufacturer should be held harmless. If, on the other hand, there is negligent conduct involved, then I think that manufacturer should have to answer to it. I don't mean to overly simplify it, but that's my position, Mr. Chairman, and I yield back. Mr. Cannon. I thank the gentleman for yielding back. This may be a moment in history. We've had four people speak and not go over the time. In fact, all of them were significantly under the time. Mr. Watt. Except the Chairman, of course. [Laughter.] Mr. Cannon. Oh, I didn't keep track. [Laughter.] The way I read the clock, it was okay. [Laughter.] But I only said four. I think you were under, too, which would make it five. Mr. Watt. I was under. Mr. Coble. Mr. Chairman, would you yield to me just a second? Mr. Cannon. I would certainly yield. Mr. Coble. I think you and the Ranking Member probably have wider latitude than the rest of us on your opening statements. Mr. Cannon. I thank the gentleman. The Committee is pleased to have the Ranking Member of the full Committee, Mr. Conyers of Michigan, with us. Did you want to make a statement, Mr. Conyers? Mr. Conyers. If I could, and I thank you very much---- Mr. Cannon. The gentleman is recognized for 5 minutes. Mr. Conyers. --Mr. Chairman. Last week, the GAO issued a report which concluded that the FBI could better manage its gun buying records when matching them against lists of suspected terrorists. In particular, the GAO determined that information sharing procedures needed to be considerably improved in order to help Federal counterterrorism officials better track suspected terrorists who attempt to purchase firearms. Nor are we here to discuss the two assault weapons used in unrelated multiple shootings in February. One shooting involved a Tyler, Texas person and the other took place in Los Angeles, with assault rifles in both cases. The fact that both shootings occurred on the same day made the two stories even more newsworthy, but obviously, not deserving, unfortunately, of a Congressional response. Neither have we seen fit to respond to the requests from law enforcement officials to take appropriate Congressional action in response to recent introduction of the Five-Seven handgun, dubbed by some as the ``copkiller'' gun because it is easily concealable and can penetrate bulletproof vests of law enforcement officers. The Director of the International Brotherhood of Police Officers described this new weapon as an assault weapon that fits your pocket. And so in the minds of any, any one of the aforementioned public policy problems should take precedent over the one before us today because they pose grave risk to human life. And so the bill that purports to protect our court system, even though it's not--if or when a frivolous lawsuit is brought before---- Well, I'll return my time, Mr. Chairman. But I think this is an incredibly important issue that is before your Subcommittee and I thank you for the opportunity to discuss it with you. Mr. Cannon. I thank the gentleman, and I'm now astounded that we've had, with possibly the exception of me, although I didn't look at the clock, everyone spoke for less than 5 minutes and that will allow us to get on--we are joined by the gentleman from Texas, Mr. Gohmert. Did you want to speak, Mr. Gohmert? Mr. Gohmert. If I might. Mr. Cannon. The gentleman is recognized for 5 minutes---- Mr. Gohmert. Thank you. Mr. Cannon. --recognizing the trend that we have in place, Mr. Gohmert. Mr. Gohmert. Thank you, Mr. Chairman. I very much appreciate that and I appreciate the individuals here and their testimony. It was mentioned about the shooting in Tyler, Texas. That happened right outside the courthouse where I worked for a decade and knew and loved so many of the people there. The weapon used by the individual regarding a domestic situation was used outside the courthouse and it was a semi-automatic weapon. It was not an automatic weapon. It should be noted that when we toss around the term ``assault weapon'' that any weapon could be an assault weapon, just like any knife, whether steak knife or 11-inch butcher knife, could be an assault knife. Every weapon, no matter what it is, could be an assault weapon. Congress did respond, at least this one did, immediately, within a day or two went to the floor of the House and gave a very moving, heartfelt, at least, tribute to Mark Wilson, who was the man that had the concealed carry permit who immediately put himself in danger by drawing a weapon he was lawfully allowed to have and firing at the individual, the murderer, and at least drawing his attention away from the others, and, I believe, saving the life of many other people there. And because Texas has a concealed carry permit and the actions of Mark Wilson and the prompt response by law enforcement after Mark, we did not have another Luby's like we had years before where nobody had a weapon when a crazy nut came in and started shooting wildly. Here, we had somebody and we had a citizenry and a law enforcement that were armed. They protected the public to minimize the damage that occurred there, and I thank God for Mark Wilson and law enforcement and for the laws that made that possible. Thank you. Mr. Cannon. That was only about two-and-a-half minutes, Mr. Gohmert. I am pleased. There has got to be some kind of record for this. I mean, this is an amazing thing. I would remind the Committee that, generally speaking, we want to get to witnesses more early, and so as we read our statements, we work with, the Ranking Member and me, to get issues in and we are going to try in future hearings to avoid these kinds of--or opening statements. But, of course, as the panel and others will recognize, these are very important issues. They are held very dearly by everyone here and so we recognize that it may be a slightly different case. We now turn to our panel of witnesses. Our first witness is Rodd Walton. Mr. Walton is the Secretary and General Counsel of Sigarms, Inc. He's also a major in the United States Army Reserve, Judge Advocate General Corps. Mr. Walton joined the military right out of high school in 1984 and he has been in the military for 21 years--hard to believe at your age. He recently came off a one-and-a-half-year tour of duty in the war on terror. In the American Bar Association, Mr. Walton serves as Chair of the Business and Commercial Law Committee--good. In the National Bar Association, Mr. Walton serves as Secretary of the Small Business Law Section. Our second witness is Dennis Henigan, the Legal Director of the Brady Center to Prevent Gun Violence in Washington, D.C., and the Director of its Legal Action Project. The Legal Action Project is a national public interest law program which provides pro bono legal representation to victims of gun violence and lawsuits against the gun industry. In addition to representing individual victims of violence, the Legal Action Project also has represented over two dozen municipalities in lawsuits seeking to recover the public costs of gun violence. Our third witness is Bradley T. Beckman of Beckman and Associates in Philadelphia. For roughly a dozen years, Mr. Beckman has been National Counsel for North American Arms in lawsuits brought by various municipalities. North American Arms is a Utah-based manufacturer of high-quality personal protection firearms that has been in business for over 30 years. Welcome from Utah. Our fourth and final witness is Lawrence G. Keane. Mr. Keane is the Senior Vice President and General Counsel of the National Shooting Sports Foundation, Inc., the firearm industry's trade association. He's responsible for all of NSSF's legal, Government relations, and risk management functions. Mr. Keane also served on the Board of Directors of the Firearms Safety Education Foundation, Inc., a nonprofit 501(c)(3) charitable organization dedicated to educating the public about firearms safety issues. Without objection, all Members will have 5 days within which to submit additional material for the record. Now, it is the practice of the Committee to swear in all witnesses appearing before it. If you would please stand and raise your right hand. Do you swear that the testimony that you are about to give, that you will tell the truth, the whole truth, and nothing but the truth, so help you, God? Mr. Walton. I do. Mr. Henigan. I do. Mr. Beckman. I do. Mr. Keane. I do. Mr. Cannon. The record will note that the witnesses all answered in the affirmative. Please be seated. Now, Mr. Walton, we would like to hear from you for 5 minutes. I don't want to interrupt. We don't want to stop anybody's train of thought, but I'll tap my pencil on the podium here when you get at 5 minutes just so you're aware. There's a little timer in front of you that it's green for 4 minutes, turns yellow for 1 minute, and then turns red at the end of the 5 minutes. You don't have to stop at that red light, but just be aware that we'd like to wind down, and then we'll have plenty of time for questions. Thank you. Mr. Walton? TESTIMONY OF RODD C. WALTON, SECRETARY AND GENERAL COUNSEL, SIGARMS, INC. Mr. Walton. Mr. Chair, thank you for having me here, and keeping with your time limit and the spirit of the meeting and being timely, I'll do my best. Chairman Cannon, Members of the Committee, my name is Rodd Walton. I'm Secretary and General Counsel of Sigarms and its affiliates and subsidiaries in the United States. I am here today to ask you to support H.R. 800. Since 1853, Sigarms and related companies, together with our predecessors, have been manufacturing small arms for military, law enforcement, and commercial use. Switzerland's Federal Ministry of Defense challenged a Swiss wagon factory to make a rifle for the Swiss army. Accepting the challenge, and after receiving the contract, the wagon company changed its name to Swiss Industrial Company--I'm not going to try to speak it in German, but it's currently world known as Sigarms. SIG brought our firearms industry to Virginia in 1985 and then moved to New Hampshire, where we call home today. The foundation and thrust of Sigarms' business has been and will continue to be support of military and law enforcement customers worldwide. The list of Sigarms' customers in the United States reads like a Who's Who of law enforcement. Sigarms pistols are carried by the Department of Homeland Security, the U.S. Coast Guard, the Federal Air Marshals, the U.S. Secret Service, State police agencies from Delaware, Massachusetts, Michigan, New Jersey, Virginia, as well as the Texas Department of Safety and the Texas Rangers, just to name a few. And, SIG Sauer pistols are carried by many in combat, most notably the U.S. Navy Seals. Today, about 65 percent of the output of the New Hampshire-based manufacturing facility is devoted to supplying firearms and training to military and law enforcement. Since 1988--excuse me, '98, we at Sigarms have been defending ourselves against a multitude of lawsuits brought by Government entities and organizations and individuals seeking to blame the firearms industry, including SIG, for criminal and wrongful misuse of firearms in the United States. To blame Sigarms for the criminal misuse of firearms that are lawfully manufactured and sold is unjust. It is also threatening to our very existence. We have been fighting for our very survival against these lawsuits, diverting time, money, and other of our limited resources to defend ourselves. As I walk through the plant, employees stop to ask me, ``How's the war going?'' The war that the employees are asking about is not the Iraqi war. It's the war we are fighting against plaintiffs filing junk and frivolous lawsuits against the firearms industry, spurred on by plaintiffs' trial attorneys. Sigarms and many others in the industry have been fighting for 10 years now, beginning with Hamilton v. Accu-Tek, in which the plaintiffs claimed that we manufacturers negligently distributed firearms. While the jury found the case--some of the manufacturers to be liable, the verdicts were properly reversed on appeal. The same plaintiffs' lawyers decided to bring a similar case before the same trial judge. They brought the NAACP case based on similar theories that had already been 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 overburdened court system, this war is hindering companies like Sigarms from engaging in legitimate business, making lawful products. The existence of these lawsuits thwarts 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 of other industries are able to do without these attacks. These lawsuits are dangerous, and not only to us as manufacturers of lawful products in other industries. Where will this end? Should General Motors be liable for an aggressive driver who crashes into another car? If the theory of these cases are widely applied, it could result in the bankruptcy of countless companies and the displacement of innumerable amount of American workers. I come here today to ask you to support H.R. 800. This bill would protect legitimate businesses, such as Sigarms, that provide hundreds of thousands of jobs for our citizens-- assemblers, polishers, tool and die makers, cafeteria workers, and people who fill our snack vending machines. If enacted into law, this Act would preempt State and local government entities and other parties from bringing aggregate lawsuits against the firearms industry as a way to circumvent our legislatures. It would promote interstate and foreign commerce of small arms. A majority of the States--in fact, over 30--have passed legislation of some type that insulate the firearms industry from these types of lawsuits. However, we need and are seeking passage of Federal law that would afford protection to the industry on a national level. I think my time is about up, so I will yield to the chair. Thank you, sir. Mr. Cannon. Thank you very much. [The prepared statement of Mr. Walton follows:] Prepared Statement of Rodd C. Walton Chairman Cannon, Members of the Committee, my name is Rodd Walton. I am Secretary and General Counsel of SIGARMS, Inc. and its affiliates and subsidiaries in the United States. I am here today to ask you to support H.R. 800. Since 1853, SIGARMS related companies, together with our predecessors, have been manufacturing small arms for military, law enforcement and commercial use. Switzerland's Federal Ministry of Defense challenged a Swiss wagon factory to make a rifle for the Swiss Army. Accepting the challenge and after receiving the contract the wagon company changed its name to the Swiss Industrial Company-- Schweizerische Industrie-Gesellschaft known worldwide as SIG. SIG brought our firearms business to Virginia in 1985 and then moved it to New Hampshire, where we call our home today. The foundation and thrust of SIGARMS business has been and will continue to be support military and law enforcement customers worldwide. The list of SIGARMS customers in the United States reads like a Who's Who of law enforcement. SIG SAUER pistols are carried by the Department of Homeland Security, The U.S. Coast Guard, The Federal Air Marshalls, The U.S. Secret Service, state police agencies from Delaware, Massachusetts, Michigan, New Jersey, Virginia as well as the Texas Department of Public Safety and the Texas Rangers just to name a few. And SIG SAUER pistols are carried by many in combat and most notably by the U.S. Navy SEALs. Today, approximately 65% of the output at the New Hampshire-based manufacturing facility is devoted to supplying firearms and training to military and law enforcement. Since 1998, we at SIGARMS have been defending ourselves against a multitude of lawsuits brought by government entities, organizations and individuals seeking to blame the firearms industry, including SIGARMS, for the criminal and wrongful misuse of firearms in the United States. To blame SIGARMS for the criminal misuse of firearms that are lawfully manufactured and sold is unjust. It also is threatening to our very existence. We have been fighting for our very survival against these lawsuits, diverting time, money and other of our limited resources to defend ourselves. As I walk through our plant, employees stop to ask me how the war is going. The war that our employees are asking about is not the Iraqi War; it is the war we are fighting against plaintiffs filing junk and frivolous lawsuits against the firearms industry, spurred on by plaintiffs' trial lawyers. SIGARMS and many others in the industry have been fighting for ten years now, 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. They brought the NAACP v. A.A. Arms, Inc. case based on similar theories that had already been 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 SIGARMS from engaging in a legitimate business, making a lawful product. The existence of these lawsuits thwarts 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 innumerable amount of American workers. I come here today to ask you to support H.R. 800. This Bill would protect legitimate businesses, such as SIGARMS, that provide hundreds of thousands of jobs for our citizens, assemblers, polishers, tool and die makers, cafeteria workers and the people who fill our snack vending machines. 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 are seeking passage of 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 frivolous and junk 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 Bill if enacted 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 and junk 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. 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 firearms available for our men and women in uniform and law enforcement. In conclusion, it makes no difference that SIGARMS or other firearm manufacturers make high quality firearms that enjoy excellent records of safety. It makes no difference that we and our industry are 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. In makes no difference that the firearms industry is one of the most patriotic and staunchly pro-law and order industries in the corporate landscape. These frivolous and junk 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 SIGARMS, our firearms and ammunition industries, and all of the jobs, taxes, and commerce that we contribute to the U.S. economy are threatened. Mr. Cannon. Mr. Henigan, you are recognized for 5 minutes. TESTIMONY OF DENNIS A. HENIGAN, DIRECTOR, LEGAL ACTION PROJECT, BRADY CENTER TO PREVENT GUN VIOLENCE Mr. Henigan. Thank you, Mr. Chairman, and thank you to the entire Subcommittee for this opportunity to appear today. Let me state my position on this bill in the must unequivocal terms. This bill is nothing but a special interest giveaway to the gun lobby and a shameful attack on the legal rights of gun violence victims. As an attorney at the Brady Center, I have had the honor to represent on a pro bono basis gun violence victims whose rights would be trampled by this legislation, and I have a difficult time explaining to those clients why we are here today. As Ranking Member Conyers noted, just recently we have heard that suspected terrorists repeatedly have been able to buy guns over the counter in our country. The Department of Homeland Security recently issued an alert about that Belgian gun manufacturer that is selling a handgun in this country that shoots bullets that can penetrate police body armor. And what is the response of the U.S. Congress to these recent threats to our national safety and security? Is it to move quickly to prevent terrorists from buying guns over the counter? Is it to ban copkiller handguns? No. It is to hold hearings on a bill to give special legal protection to the most reckless gun sellers in America. Mr. Chairman, this Congressional response defies rational explanation. I regret to say the only explanation is the overarching power of the gun lobby. Now, the proponents of this bill say it affects only frivolous lawsuits brought to bankrupt the gun industry. This assertion is insulting to the victims who have sought to assert their legal rights against this industry and it also grossly misrepresents what this bill does. Consider first the lawsuit brought by Brady Center attorneys for New Jersey Police Officers David Lemongello and Ken McGuire. These two officers were seriously wounded in a shoot-out with an armed robbery suspect, and the Ruger pistol used by the shooter was sold by a West Virginia pawn shop called Will's Jewelry and Loan. It was one of 12 handguns sold by Will's in a single transaction 6 months before the shooting to a gun trafficking team. A woman named Tammi Lea Songer acted as a straw buyer for a gun trafficker, James Gray. Gray pointed out the guns he wanted. Songer paid the clerk $4,000 in cash. It was perfectly obvious those guns were headed to the illegal market. So the officers brought a civil damages suit against Will's and a West Virginia judge determined that the suit stated legally valid claims. If this legislation had passed last year, the judge's decision would have been nullified and the police officers' suit would have been dismissed. But fortunately, the bill failed. The suit went forward. And in June of last year, Will's settled the suit with a payment of $1 million in damages to those two brave police officers. And as a result of this suit, that gun shop no longer engages in large-volume sales of handguns. So because this bill failed last Congress, two brave police officers received a measure of justice, the pawn shop was held accountable for this reckless sale, and the pawn shop now operates more responsibly than it did before, and I might add, no one went bankrupt. But consider also the case brought by Brady Center lawyers for the victims of the D.C. area sniper shootings against Bull's Eye Shooter Supply, the gun shop in Tacoma, Washington, that Mr. Smith referred to, where the gun that was used in that shooting mysteriously disappeared from that gun shop. And it turned out that in the previous 3 years, some 238 other guns had mysteriously walked away from that gun shop. So eight D.C. sniper victims and their victims brought a lawsuit with our help seeking damages against Bull's Eye, and we also sued Bushmaster, the manufacturer of the assault rifle, because it sold military-style assault rifles to the general public while doing absolutely nothing to ensure that the retailers it chose to do business with were responsible corporate citizens. Well, in June of 2003, a Washington State trial judge ruled the victims' claims were legally valid against both of those defendants, but if this immunity bill had passed, Mr. Chairman, it would have required dismissal of that lawsuit, even though a Washington State court had already held it consistent with accepted principles of law. And in the last Congress, we had letters from former White House Counsel Lloyd Cutler as well as noted attorney David Boies analyzing exactly the question Mr. Smith raised and concluding that, in fact, this would bar that lawsuit. Mr. Smith. Mr. Chairman, I'm sorry to break the flow here, but could I ask a question on that? Mr. Chabot. [Presiding.] Yes, if you will make it quick. Mr. Smith. In reading the bill, it says that the immunity shall apply but shall not include an action brought against a seller for negligent entrustment or negligence per se. I guess given that exception, you're telling me you couldn't make a case for negligence in that situation? Mr. Henigan. That's right, Mr. Smith. Neither of those exceptions would have applied, and let me explain why. First of all, negligence per se would have required a showing that the gun shop violated a law leading to the shooting that occurred. That's what negligence per se requires, as opposed to ordinary negligence, Mr. Smith, which simply requires a violation of the common law duty of ordinary care. In every State that adopts negligence per se, you have to show a violation of a law and then you have to show the causal link between the shooting and the violation. Here, what we had was a situation in which---- Mr. Smith. You could go on, but that answers the question. Mr. Chabot. Okay, and if you wouldn't mind wrapping up your testimony, Mr. Henigan. Mr. Henigan. Okay. Mr. Chabot. Your 5 minutes are up. Mr. Henigan. I'd be happy to do that. These cases, Mr. Chairman, show how the proponents of this bill have misrepresented what the bill does, because these are two cases that were not frivolous. They were two cases not about trying to hold gun sellers responsible simply because a criminal uses the gun to shoot somebody, but to hold them responsible for their own conduct. I would suggest, Mr. Chairman, that if we are going to be in the business of immunizing from civil liability the most reckless gun sellers among us, that is not only going to deprive gun violence of their legal rights, it's going to make us all more unsafe. It's going to mean more guns on the streets, and for those reasons, we urge that this bill be defeated. Thank you. Mr. Chabot. Thank you, Mr. Henigan. [The prepared statement of Mr. Henigan follows:] Prepared Statement of Dennis A. Henigan Chairman Cannon, Ranking Member Watt, Members of the Subcommittee, I appreciate this opportunity to appear before you today. On behalf of Jim and Sarah Brady, and their organizations, let me state my position on H.R. 800 in the most direct and unequivocal terms: this bill is nothing but a special interest giveaway to the gun lobby and a shameful attack on the legal rights of innocent victims of gun violence. As Director of the Legal Action Project at the Brady Center to Prevent Gun Violence,\1\ I have the honor to represent, on a pro bono basis, innocent victims of gun violence whose rights would be trampled by this legislation. I have a difficult time explaining to these clients, who have personally faced the horror of gun violence, why the response of the United States Congress to their personal tragedies, and to the continuing national tragedy of gun deaths and injuries, is to give special legal protection to the most reckless members of the gun industry. --------------------------------------------------------------------------- \1\ The Brady Center, and its affiliate, the Brady Campaign to Prevent Gun Violence united with the Million Mom March, are the largest organizations dedicated to creating an America free from gun violence. --------------------------------------------------------------------------- Just last week, the GAO reported that suspected terrorists, who are not permitted to board airplanes or cruise ships, repeatedly have been allowed to purchase guns over-the-counter. The Department of Homeland Security recently issued an alert to all its law enforcement personnel about a Belgian gun maker selling a handgun in America that shoots bullets that penetrate police body armor. Another gun maker is selling .50 caliber sniper rifles with such extraordinary range and power that they can bring down airplanes. And gun deaths in America, after a seven-year decline, have started to rise again and are now over 30,000 a year. In the last two weeks, our Nation has learned, once again, that no one is truly safe from gun violence: a judge's family slain in Chicago, a judge and two others murdered in an Atlanta courtroom and, on Saturday, seven worshippers shot and killed while attending church services in Milwaukee. What is the response of the United States Congress to these clear and present threats to our national safety and security? Is it to move quickly to strengthen the Brady background check system to stop terrorist suspects from buying guns? Is it to ban cop-killer guns and terrorist sniper rifles? No. It is to hold hearings on a bill that would protect from legal accountability the most reckless gun sellers in America. Mr. Chairman, this Congressional response is beyond rational explanation. I suggest the only explanation is the power of the gun lobby. GUN INDUSTRY IMMUNITY LEGISLATION IS A SHAMEFUL ATTACK ON THE LEGAL RIGHTS OF GUN VIOLENCE VICTIMS The proponents of this legislation claim it would block only ``frivolous'' lawsuits against gun sellers brought only to bankrupt the gun industry. Not only is this assertion a gross misrepresentation of the bill, it also is an insult to gun violence victims who have sought justice in the courts - justice that would be denied if this bill became law. This legislation would provide legal immunity in many cases to grossly irresponsible gun dealers who supply the criminal gun market, as well as to manufacturers of defectively designed firearms. It would throw out of court innocent victims of gun violence, even where courts have found their cases justified by general and established principles of law. Never before has a class of persons harmed by the dangerous conduct of others been so wholly deprived of the right to legal recourse. As Senator Mike DeWine (R-Ohio) stated so eloquently in opposing this legislation of the Floor of the United States Senate a year ago: ``I oppose this bill because...it singles out one particular group of victims and treats them differently than all other victims in this country...It denies them their access to court.'' When this bill was debated in the last Congress, two lawsuits, then pending in the courts, were at the center of the debate. Lawyers at the Brady Center represented the victims in both cases. Had this legislation been passed into law last year, these lawsuits would have been blocked. Gun Industry Immunity Legislation Would Have Deprived Two New Jersey Police Officers of their Legal Rights Against a Reckless West Virginia Pawnshop The first suit had been filed by two brave New Jersey police officers, David Lemongello and Ken McGuire. Almost two years ago, Officer Lemongello testified before this Subcommittee and told their story. In January of 2001, Dave Lemongello was on a stakeout of a gas station in Orange, New Jersey that had been the target of several armed robberies. He spotted an individual walking near the station who matched the description of a suspect in the robberies. When the officer approached, the individual, career criminal Shuntez Everett, opened fire with a Ruger pistol. Lemongello was hit three times, fell to the ground, and radioed for help. Officer McGuire responded, chased Everett into a nearby backyard, and the two exchanged fire. McGuire also was seriously wounded, but was able to return fire. Everett died from his wounds. The shootings ended the police careers of the two officers. How was a convicted felon like Shuntez Everett able to obtain a handgun? It turned out that the gun used in the shooting was one of twelve handguns purchased from a West Virginia pawnshop six months before by a gun trafficking team. Tammi Lea Songer, acting as a straw purchaser for gun trafficker James Gray, paid $4,000 in cash for the guns, after Gray pointed out which guns he wanted. The pawnshop, Will Jewelry and Loan in Charleston, West Virginia, completed the sale, even though it was obvious that the handguns were headed directly into the illegal market. Indeed, the sale was so suspicious that Will reported it to ATF the next day, long after the shop had pocketed the profits and the guns were headed to New Jersey. Ironically, another one of the twelve guns was taken by Ken McGuire from a criminal suspect months before the gas station shooting. Because of the recklessness of a West Virginia gun dealer, Orange, New Jersey became a more dangerous place and the careers of two police officers were ended. We represented Officers McGuire and Lemongello in a civil damages lawsuit against Will's pawnshop. The suit charged the pawnshop with negligence, and contributing to a public nuisance, in the sale of guns, creating a foreseeable risk that the guns would be used in criminal activity. In March of 2003, Judge Irene Berger of the Kanawha County Circuit Court denied Will's motion to dismiss our case, finding that the officers had stated a legally valid claim under general principles of West Virginia law. If the last Congress had enacted the predecessor of H.R. 800, Judge Berger's ruling would have been superceded and Officers McGuire and Lemongello would have been denied their day in court. Because gun industry immunity legislation was defeated in the Senate a year ago, the case against Will's pawnshop went forward. In June of last year, Will's settled the case by paying $1 million in damages to the two officers. As a result of the suit, the pawnshop changed its policies and now no longer engages in large-volume gun sales. Two other gun dealers in the Charleston area have adopted similar policies. I ask the Subcommittee to consider the outcome of this lawsuit. For these two brave police officers, justice was done. Will's pawnshop was properly held accountable for its reckless sale to a gun trafficking team and it now operates more responsibly. And no one declared bankruptcy. This outcome was possible only because this special interest immunity legislation did not become law. Gun Industry Immunity Legislation Would Have Deprived the DC-area Sniper Victims of Their Legal Rights Against a Reckless Washington State Gun Dealer and the Assault Weapon Manufacturer that Supplied It A second lawsuit that would have been blocked by this legislation is the civil damages action brought by the victims of the DC-area sniper shootings. Certainly no one on this Subcommittee will ever forget the paralyzing fear inflicted on this community by the snipers John Lee Muhammad and Lee Boyd Malvo in the Fall of 2002. For some families, that fear became tragedy, as 10 people were killed and four more injured by the snipers. When the snipers were arrested, they were found with the Bushmaster XM-15 assault rifle that had been used in the shootings. The gun was traced back to Bull's Eye Shooter Supply, a Tacoma, Washington gun shop. Incredibly, though, Bull's Eye had no record of what happened to the gun. The shop had no record of sale, no record of a background check, and had not reported the gun lost or missing. The gun had mysteriously disappeared. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) audits showed that Bull's Eye had mysteriously ``lost'' 238 other guns in a three-year period, an average of more than one gun missing every week. Bull's Eye was one of the most irresponsible gun dealers in the Nation. It ranked in the top .27% of gun dealers nationwide in number of missing guns and in the top 1% in the number of guns traced to crime. Neither Malvo nor Muhammad could legally have purchased a gun. Malvo was a juvenile; Muhammad had a disqualifying domestic violence restraining order on his record. Only through the gross negligence of Bull's Eye could they have obtained the Bushmaster assault rifle. The Brady Center represented eight of the sniper victims and their families in a lawsuit against Bull's Eye, charging that the shop's negligence put a deadly assault rifle in the hands of the killers. We also sued Bushmaster, the manufacturer of the gun, on the ground that companies that make high-firepower assault weapons have a special duty to ensure that their retailers are responsible corporate citizens. Bushmaster did not even require its retail dealers to report to it the results of ATF audits, which would have revealed Bull's Eye's chronic problem of ``missing'' guns. Indeed, even after the press reported the gun shop's record, Bushmaster stated that it still considered Bull's Eye a ``good customer''. In June of 2003, a Washington State trial judge denied motions to dismiss by both Bull's Eye and Bushmaster, deciding that the victims' claims were legally valid under general principles of Washington State law. The Washington State Court of Appeals denied Bushmaster's appeal of this ruling. As former White House Counsel Lloyd Cutler concluded, after conducting his own independent analysis, the immunity bill that reached the Floor of the Senate in the last Congress would have superceded the judge's ruling and required the sniper case to be dismissed. Because the legislation was defeated, however, the lawsuit brought by the sniper victims went forward. In September of last year, the parties reached a settlement, resulting in the payment, by both Bull's Eye and Bushmaster, of a combined total of $2.56 million in damages to the victims. Bushmaster also agreed in the settlement to make its dealers aware of programs to encourage safe sales practices by gun retailers - something the company had never done before. Again, consider the outcome of this lawsuit. The sniper victims received justice. Bull's Eye and Bushmaster were made accountable for their shoddy business practices. And, again, no one declared bankruptcy. No one can seriously argue that these were ``frivolous'' lawsuits, and yet they would have been blocked by the immunity legislation. It is hardly surprising that in February of last year, Henry Cohen, a 28-year veteran of the Congressional Research Service and the author of a report on gun industry immunity legislation, stated ``it does not appear the bill would be limited to frivolous lawsuits. That's my neutral assessment.'' \2\ --------------------------------------------------------------------------- \2\ Steve Volk, Specter Shoots Blanks, Philadelphia Weekly, February 18, 2004. --------------------------------------------------------------------------- Gun Industry Immunity Legislation Would Protect a Careless Gun Manufacturer that Hired Criminals and Allowed Them to Walk Away with Guns H.R. 800 would also affect currently pending cases brought by gun violence victims. An example is the lawsuit brought by the family of a young man named Danny Guzman, an innocent bystander who was shot on the street in Worcester, Massachusetts on Christmas Eve in 1999. After the shooting, the loaded gun used in the shooting was found behind an apartment building by a four-year-old child. The gun had no serial number. Police investigators determined that the gun was one of several stolen from Kahr Arms, a Worcester gun manufacturer, by Kahr's own employees who were hired despite their long criminal records. One of the thieves, Mark Cronin, had been hired by Kahr to work in its plant despite his history of crack addiction, theft to support that addiction, alcohol abuse and violence, including several assault and battery charges. Cronin had been able to walk out of the factory with stolen guns, even before they had been stamped with serial numbers. Cronin told an associate that he takes guns from Kahr ``all the time'' and that he ``can just walk out with them.'' Cronin later pled guilty to the thefts. The investigation also led to the arrest of another Kahr employee, Scott Anderson, who also had a criminal history and who pled guilty to stealing guns from Kahr. At least fifty Kahr firearms disappeared from its manufacturing plant in a five-year period. Worcester Police Captain Paul Campbell classified the record keeping at the Kahr facility as so ``shoddy'' that it was possible to remove weapons without detection. Brady Center attorneys represent Danny Guzman's family in a wrongful death suit against Kahr arms, charging Kahr with negligence in completely failing to screen its employees for criminal history and in maintaining a security system so inadequate that employees repeatedly were able to walk out of the plant with unserialized guns. In April, 2003, a Massachusetts trial judge denied Kahr's motion to dismiss the suit, finding it supported by general principles of Massachusetts law. It is now in pretrial discovery. Had immunity legislation been passed, the ruling of the Massachusetts court would have been nullified and Danny Guzman's family would be denied the right to justice against a gun maker that allowed drug criminals to ``help themselves'' to free lethal weaponry. gun industry immunity legislation would be a ``breathtakingly radical'' revision of liability law for the benefit of a single industry Far from affecting only ``frivolous'' lawsuits, H.R. 800 would exempt the gun industry from the oldest principle of our civil liability law: that persons, or companies, who act negligently should be accountable to the foreseeable victims of their negligence. Indeed, in the last Congress, over sixty law professors, from across the country, joined a letter calling the legislation ``breathtakingly radical'' because it ``affords to a handpicked few - those who make, distribute, and sell guns - special protection against the most commonplace, long-established form of tort liability: accountability to the standard of care required by principles of negligence.'' The professors called the immunity bill ``one of the most radical statutory revisions of the common law of torts that any legislature - federal or state - has ever considered, let along passed.'' Proponents of this legislation try to obfuscate its radicalism through arguments that simply misstate the law. First, they assert that it is unfair to hold the seller of a product responsible for the conduct of a criminal. However, the cases brought by Officers McGuire and Lemongello and the sniper victims did not seek to hold the defendant gun sellers liable simply because guns they sold were used by criminals. Rather, these victims sought to hold the gun sellers liable for their own irresponsible conduct that enabled criminals to be armed and to commit violent crimes. The courts in West Virginia and Washington State based their rulings on the longstanding legal doctrine that a defendant can be liable when his own negligent conduct creates a foreseeable risk that a third party will commit a criminal act. Courts, for example, have applied this doctrine to hold landlords liable when their failure to secure their buildings allows criminals to victimize their tenants. It has been applied to drivers who leave their keys in the ignition in high-crime areas, allowing thieves access to a car that is then used to inflict injury on others. Courts in these cases are holding the landlords and the drivers liable for their own negligence that enabled someone else to commit a criminal act. Second, proponents of the bill argue that it is unfair to hold a gun company liable if its product, and its conduct, are entirely legal. This argument confuses criminal liability, which requires a showing of illegal conduct, with civil liability, which does not. The issue in a civil negligence case is whether the defendant has acted with reasonable care, not whether the defendant has violated a statute. For example, when a doctor leaves forceps in a surgical patient, he can be liable for his failure to use reasonable care. There is no requirement that his conduct violate a statute. It is particularly telling that the exception from immunity in H.R. 800 for illegal conduct applies only where a gun manufacturer ``knowingly violated'' a State or Federal gun statute. In other words, under this bill, a gun company is immunized from liability even if it has violated the law, as long as the company can demonstrate its ignorance of the law. It is also telling that the proponents of gun industry immunity opposed, and defeated, an amendment offered last year by Senator Levin (D-Mich.) that would have permitted lawsuits where a gun injury or death was caused by ``grossly negligent or reckless'' conduct by a gun company. Can there be any doubt that the purpose of this legislation is to protect gun manufacturers and dealers from civil liability, even if their conduct has been grossly negligent, reckless or even illegal? Third, the legislation's supporters assert that they are merely asking the Congress to do what over 30 states have already done. It is flatly untrue that over 30 states have enacted radical legislation of this kind. The vast majority of state immunity statutes apply only to suits brought by local governments and have no effect on the legal rights of individual gun violence victims. In fact, only five states have enacted legislation that limits the legal rights of individual gun violence victims to the extent of H.R. 800. For those in Congress who regard themselves as guardians of state prerogatives against federal encroachment, it is fair to ask: Why should Congress override the decisions of 45 states not to strip away the legal rights of gun violence victims? In virtually all states, victim claims against gun sellers are judged by the courts according to age-old principles of law that apply to everyone else. H.R. 800 is an effort by the United States Congress to impose a special set of legal rules on state courts that apply only to suits against gun companies. This bill is the worst form of special interest legislation. Its passage would be a tribute to the power of the gun lobby and an embarrassment to the country. GUN INDUSTRY IMMUNITY LEGISLATION WOULD ENDANGER COMMUNITIES BY DESTROYING A STRONG INCENTIVE FOR GUN SELLERS TO BEHAVE RESPONSIBLY Mr. Chairman, irresponsible conduct by gun sellers has tragic real- world consequences. As the Brady Center lawsuits dramatically show, reckless gun sellers put guns into the hands of criminals and endanger innocent lives. ATF has found from its own gun trafficking investigations that licensed gun dealers are the largest single source of guns trafficked into the underground market.\3\ Because of irrational statutory limitations on its enforcement powers, and limited resources, ATF is hampered in its efforts to ensure that gun dealers obey the law. The Office of the Inspector General of the Justice Department recently estimated that, at ATF's current rate of inspections, it will take the Bureau twenty-two years to inspect all of the approximately 100,000 current federal firearms licensees.\4\ When ATF does inspect dealers, violations of the law often are found, but severe statutory constraints on ATF's license revocation powers make it difficult for the Bureau to take meaningful action. According to the Inspector General, in FY 2003, ATF found that 1,812 of its inspections had revealed violations, with an average of over 80 violations for each inspection. However, ATF had issued only 54 notices of license revocation.\5\ --------------------------------------------------------------------------- \3\ Following the Gun: Enforcing Federal Firearms Laws Against Firearms Traffickers, Bureau of Alcohol, Tobacco and Firearms (June 2000), at 13. \4\ Inspections of Firearms Dealers by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Report No. I-2004-005, U.S. Dept. of Justice Office of the Inspector General (July 2004), at iii. \5\ Id. at vi. --------------------------------------------------------------------------- The National Rifle Association has worked for years to weaken ATF's enforcement of federal gun laws. It has been tragically successful in this endeavor, by limiting ATF's legal authority and its resources. As a result, it is all the more important to maintain a strong civil liability system to give gun sellers a powerful incentive to behave responsibly. One of the recognized purposes of civil liability is to encourage individuals and companies to use reasonable care to prevent injury to others by ensuring that wrongful and dangerous conduct will result in damages liability. Having weakened ATF's enforcement powers, now the gun lobby seeks to remove the only remaining incentive for gun sellers to consider public safety in their business practices. The importance of civil liability was noted by former gun industry insider Robert Ricker, who wrote in a sworn declaration that ``until faced with a serious threat of civil liability for past conduct, leaders in the industry have consistently resisted taking constructive voluntary action to prevent firearms from ending up in the illegal gun market.'' \6\ --------------------------------------------------------------------------- \6\ Mr. Ricker is a former NRA lawyer and former Executive Director of the American Shootings Sports Council, an industry trade association. His revelations about the gun industry are discussed in greater depth in the attached Brady Center special report, Smoking Guns: Exposing the Gun Industry's Complicity in the Illegal Gun Market, which details much of evidence against the gun industry uncovered in litigation. --------------------------------------------------------------------------- Far from pursuing legislation to strengthen ATF, proponents of immunity in Congress would rather reassure reckless gun sellers that they need no longer worry about the prospect that courts will hold them accountable to the victims of their conduct. If H.R. 800 passes, it will mean more gun sellers acting with utter contempt for public safety, with disastrous consequences for communities throughout the Nation. This is why, Mr. Chairman, there is substantial opposition to this legislation in the law enforcement community, including the Major Cities Chiefs Association, the International Brotherhood of Police Officers, the Police Foundation, the National Black Police Association, the Hispanic Police Command Officers Association and several state associations of police chiefs.\7\ In addition to recognizing that police officers like David Lemongello and Ken McGuire may be among the gun victims whose rights are infringed by this bill, these organizations also understand that H.R. 800 will only mean more illegal guns on the streets. It only takes a few ``bad apple'' gun dealers to funnel thousands of guns to criminals. ATF has found that only one percent of licensed gun dealers account for 57% of the guns traced to crime.\8\ These law enforcement organizations agree with us that good gun dealers don't need legal immunity; bad gun dealers don't deserve it. --------------------------------------------------------------------------- \7\ A letter opposing H.R. 800 from these organizations, and other members of the law enforcement community, is attached. \8\ Commerce in Firearms in the United States, Bureau of Alcohol, Tobacco and Firearms (February 2000), at 2. --------------------------------------------------------------------------- GUN INDUSTRY IMMUNITY LEGISLATION IS FAR MORE RADICAL THAN TORT REFORM Finally, it is important to distinguish H.R. 800 from other legislation this Congress has considered, and will consider, to reform our civil justice system. This bill is far more radical than any other proposal the Congress will address. Unlike class action reform, H.R. 800 does not simply change the legal forum in which gun liability cases are considered; it protects reckless gun sellers from liability in any forum. Unlike medical malpractice reform, H.R. 800 does not simply limit the amount and kind of damages that can be recovered by gun violence victims against reckless gun sellers; it deprives victims of any recovery. Unlike the asbestos litigation reform proposals, H.R. 800 sets up no alternative to the court system for victims to be compensated; it denies all avenues for compensation. In short, H.R. 800 gives the gun industry special legal privileges that other industries can only dream about. And it makes the victims of reckless gun sellers into ``second-class'' citizens, who lack the basic civil liberties of other Americans who have been injured by the wrongful conduct of others. For these reasons, on behalf of the Brady Center to Prevent Gun Violence, and the brave gun violence victims we represent in court, I urge you to oppose this legislation. Thank you again for the opportunity to share my views. ATTACHMENT
Mr. Chabot. Mr. Beckman, you are recognized for 5 minutes. TESTIMONY OF BRADLEY T. BECKMAN, BECKMAN AND ASSOCIATES, COUNSEL TO NORTH AMERICAN ARMS Mr. Beckman. Good morning, Mr. Chairman and Members of the Subcommittee. My name is Bradley Beckman and I'm National Counsel for North American Arms, which is in Mr. Cannon's district. The legal assault that has been brought against North American Arms and the other manufacturers by Mr. Henigan's organization and various municipalities are nothing short of legal terrorism. This has been an assault that has been ongoing for many years. North American Arms is a small manufacturer, relatively modest-sized, been in business for 30-odd years. It employs a number of people and it has a number of suppliers that are employed and it goes on down the line. The burden that is put upon a small company like North American Arms and many that are similarly situated is extraordinary. I listened to Mr. Henigan's comments about what this bill has to do with, and respectfully, I suggest that this bill has nothing to do with terrorism, 50-caliber ammunition, armor- piercing bullets, copkiller handguns, but it has everything to do with prevention of legal terrorism. Companies like North American Arms have been essentially held for ransom because they've been told if they don't, they're going to continue to be assaulted with litigation of this sort. I listened with interest to the comments about the Bull's Eye case because I was involved in that case. I was engaged as trial counsel. The acts of those criminals were just that. That was a firearm that was stolen. Bushmaster sold a lawful product in a non-defective condition which was openly stolen from the retailer. This legislation, I submit, under my understanding of the way it is written, would not prevent litigation such as that against a wrongful seller, somebody who has violated the law by allowing that firearm to escape their clutches. With regard to the Lemongello case in West Virginia, we're talking about, again, tragedies where we've seen law enforcement officers killed. Ruger sold another product in a non-defective condition in compliance with a host of laws. It did nothing wrong. To suggest that this legislation will prevent somebody from getting into the courthouse door, I think is simply a misstatement of what this bill is designed to prevent. Mr. Henigan was involved since the mid-1990's with approximately 30 lawsuits brought by municipalities throughout the country--Cincinnati, several in California, Detroit. Each and every one of them has been unsuccessful. However, the cost has been staggering. That is what this legislation is about. If the courthouses in America were designed to address that, then I would submit that we wouldn't have a legislature. We would have just a judicial branch. But this is up to the legislative body to make the laws. If our legislature should determine that firearms are illegal in some form or another, that's a matter for another day. This is to prevent the proverbial gun in the ribs to the manufacturers, the distributors, and the lawful sellers who comply with a very large host of law and regulation. If somebody could explain--I listened to Mr. Smith ask what liability is left. Well, we have retailers who are complying with law, distributors, and manufacturers. As we go through the chain, as we find somebody who violates the laws that presently exist, that's not going to be covered by this legislation. What is covered is the--truly a perversion of the tort system to try to use the tort law of public nuisance, which has been one of the prime sticks that the plaintiffs have tried to use against this industry, to essentially bankrupt them, and while there may have been some companies larger than others, better able to withstand some of the legal assault, I can tell you from the perspective of a modest-sized manufacturer like North American Arms, it cannot withstand that assault and there are a number of other similarly situated companies. I see that my time is expiring, and I thank you. Mr. Chabot. I can assure you you'll have an opportunity to respond to questions and speak some more. [The prepared statement of Mr. Beckman follows:] Prepared Statement of Bradley Beckman Mr. Chairman, my name is Bradley Beckman and I am here representing a modest-sized firearms manufacturer with which I am sure you are familiar, North American Arms. North American Arms is based in your district. I want to begin by thanking you for holding this hearing. The legal assault on the firearms industry by opportunistic lawyers and anti-gun politicians threatens to bankrupt an entire industry that scrupulously follows all federal, state and local laws in the manufacture of our products and their sale to federally licensed firearms distributors. North American Arms employs approximately 40 people and specializes in the manufacture of small-sized, personal protection firearms. Many individuals who choose to carry our high-quality products are members of the law enforcement community who use them as a second or ``backup'' firearm to their standard sidearm. North American Arms has been named in several of the state and municipal suits against the firearms industry. The lawsuits brought against gun manufacturers are nothing short of outrageous. Holding gun makers liable for the criminal misuse of our products--one of the central accusations in these suits--is akin to holding Ford, Chevy or Honda responsible for the illegal actions of a drunk driver or holding Kodak responsible for the use of their film in the vile world of child pornography. It is an accusation that defies common sense. While these lawsuits barely pass the straight face test, the consequences of these suits are no laughing matter. North American Arms is literally being crushed under the weight of legal expenses. Money that could be used for developing new markets, hiring workers, improving firearms design and safety is instead channeled to fund the huge costs associated with the legal defense of the company. These lawsuits are nothing short of legal backmail-lawyers, politicians and anti-gun groups want to achieve in the courtroom draconian changes in gun laws that have been rejected by Congress and state legislatures. Their message is simple: ``settle with us or we will bankrupt you with lawsuits.'' This legal extortion must be stopped. North American Arms is a responsible firearms manufacturer that adheres strictly to all laws governing the manufacture and sale of our products to distributors. We have an excellent relationship with law enforcement. We have done nothing wrong, yet if a judge and jury in, for example, New York, decide against our industry it holds the potential of bankrupting not just North American Arms, but the entire U.S. firearms industry. It is doubtful that North American Arms or other manufacturers could post the necessary bond to appeal a verdict. If these suits are successful, they will be a wrecking ball on our national economy. Any member of Congress from Michigan should be ready for a similar assault on the auto industry. We already see suits against purveyors of fast food. The list of targeted industries could go on and on. I want to close with two quotes. The first from a recent decision by California Judge James Marchiano, writing for a unanimous state Court of Appeals decision in favor of the firearms industry just last month. Judge Marchiano wrote: ``The only business practice the defendants in this case have engaged in is marketing their products in a lawful manner to federally licensed dealers . . .'' ``In this case, there is no causal connection between any conduct of the defendants and any incident of illegal acquisition of firearms or criminal acts or accidental injury by a firearm. Defendants manufacture guns according to federal law and guidelines.'' In March 2002, the City of Boston dismissed with prejudice its lawsuit against firearms manufacturers. The city, facing mounting legal bills and recognizing that it would lose its case, stated in its dismissal that: ``. . . members of the Industry and firearms trade associations are genuinely concerned with and are committed to, the safe, legal and responsible sale and use of their products . . . The Industry and the City believe that through cooperation and communication they can continue to reduce the number of firearm related accidents, can increase awareness of the issues related to the safe handling of storage of firearms, and can reduce the criminal acquisition of firearms.'' Mr. Chairman, passage of H.R. 800 is common-sense judicial reform. This bill will protect jobs, prevent the misuse of the courts to circumvent elected officials and prevent abuse of the judicial system. Thank You. Mr. Chabot. Mr. Keane? TESTIMONY OF LAWRENCE G. KEANE, SENIOR VICE PRESIDENT AND GENERAL COUNSEL, NATIONAL SHOOTING SPORTS FOUNDATION, INC. Mr. Keane. Chairman Cannon, distinguished Members of the Subcommittee, my name is Lawrence Keane and I'm the Senior Vice President and General Counsel for the National Shooting Sports Foundation, the trade association for the firearms industry. We strongly support this bill because it's an important common sense legal reform that will help restore integrity and fairness to our nation's judicial system by preventing lawsuit abuse. This vital, bipartisan legislation is critical to protecting America's firearms industry from destruction and bankruptcy at the hands of opportunistic trial lawyers, seriously misguided politicians, and radical anti-gun interest groups who seek to destroy and bankrupt our industry through massive damage awards and/or bleeding us dry through ever- mounting legal fees. These ``regulation-through-litigation'' lawsuits misuse our judicial system in an attempt to dictate to all Americans public policy choices that are rightfully the purview of Congress and the elected State legislators. Under our Constitution, those policy choices are for Congress, not judges. The threat posed by ``regulation-through-litigation'' is why the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Association of Wholesalers, and others support this bill. As the National Association of Manufacturers has said, ``It is a certainty that other businesses will be the next target if these groups succeed in misusing the courts against the firearms industry.'' This legislation is also supported by organized labor. The United Mine Workers, representing about 1,000 Remington factory workers, said the bill will, ``help prevent lawsuits by various parties that are intended to shut down the legitimate and legal firearms industry in the United States because of the improper use of firearms by individuals.'' These lawsuits seek to blame federally-licensed firearms manufacturers for the actions of criminals. Despite some industry success in the courts, this well- funded, highly-coordinated onslaught of abusive lawsuits against Members of our industry continues unabated. A single $100 million verdict will bankrupt virtually all the defendants. Members of our industry are being sued today, right here in the District of Columbia, under a law that imposes absolute liability upon manufacturers for criminal shootings occurring in the District because they lawfully sold a gun that was then later illegally brought into the District and used in a crime. Bushmaster is being sued under this same statute with respect to the firearm misused in the sniper case. But the poster child for this bill is a case called Ileto v. Glock, where a manufacturer is being sued in Federal court in California for selling a firearm to a police department in Washington State that was later used in a criminal shooting. A distributor is being sued in that case, even though it never owned, possessed, or sold the firearm in question. Winning on the merits is not necessary in order for these politician and anti-gun activists, like Mr. Henigan, to impose through litigation or financially extorted or coerced settlements, a gun control agenda repeatedly rejected by Congress and State legislature. These anti-gun plaintiffs can implement their gun control policies through the entire nation if the coercive effect resulting from the staggering cost to defend these cases forces manufacturers into a Hobson's choice of capitulation or bankruptcy. The industry-wide cost to defend these cases is staggering. It exceeds $200 million, which is a huge sum for a small industry like ours that taken together doesn't equal a simple Fortune 500 company. These lawsuits threaten the very existence of the manufacturers, such as Sigarms, that produce the tools for law enforcement and military agencies that they use to protect America's freedoms here and abroad every day. These lawsuits have national defense and homeland security implications. The legislation you are considering today is as important for what it does not do. It does not, as Mr. Henigan tries to allege, close the courthouse door to those who have been injured by firearms that have been, for example, illegally sold or have been negligently entrusted or are defectively designed. The bill expressly provides that injured parties will be able to assert well-established tort law claims against the manufacturers themselves of firearms. The Wall Street Journal in an editorial got it right when it said, ``This isn't immunity, as some critics claim. The gun makers and distributors would still have to abide by product liability laws and still face civil suits for violating regulations on the sale and distribution. But just as Sony is not responsible for someone who uses a camcorder to film child pornography, no longer could Beretta be held responsible for someone using its legally purchased product to rob a liquor store.'' It's that judicial abuse that this legislation is carefully drafted to stop, and nothing more. There are several refinements to the bill that was passed by the House in the 108th Congress. We support those changes because they enhance and clarify the bill's purpose and intent. We agree with President Bush, who said, ``Recently our nation depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine the confidence in our courts while hurting our economy, costing jobs, and threatening small business.'' Over 30 States have already enacted similar laws designed to stop junk lawsuits that are intended to destroy our industry and to achieve gun control regulation through litigation. The time has come for Congress to enact common sense legal reform to prevent an unconstitutional attempt to circumvent Congress and State legislatures, to restore integrity and fairness to our judicial system, to protect one of America's oldest and most important industries, and to prevent the loss of thousands of American jobs vital to the health of our economy, and to protect a critical component of our national security industrial base. Today, it's guns. We are already seeing similar legal assaults on the fast food industry. Are cars, alcohol, and distilled spirits next in line at the courthouse door? We've already seen it start with alcohol. The National Shooting Sports Foundation urges you to vote in favor of the Protection of Lawful Commerce in Arms Act. Thank you, Mr. Chairman, for permitting the National Shooting Sports Foundation the opportunity to address the Subcommittee and for the Subcommittee's time and attention. Mr. Cannon. [Presiding.] 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 senior vice president and general counsel of the National Shooting Sports Foundation, Inc. (NSSF). The National Shooting 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. 800). Formed in 1961, the National Shooting Sports Foundation, with approximately 2,500 members, is the trade association for the firearm, hunting and recreational shooting sports industry. NSSF is proud of our industry's cooperative relationship with law enforcement, as exemplified by the NSSF--Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) partnership program called Don't' Lie for the Other Guy that ATF Director Carl Truscott described as ``vital in educating Federal firearms licensees (FFL's) and their employees how to recognize and deter the illegal purchase of firearms through straw purchases.'' He called the program ``an important tool for ATF as we pursue our missions of preventing terrorism, reducing violent crime, and protecting the public through Project Safe Neighborhoods and other initiatives.'' NSSF's commitment to promoting the safe and responsible use of firearms is typified by our Project ChildSafe program. Operating under a grant from the U.S. Department of Justice, NSSF, in partnership with state and local governments throughout the United States, has distributed to the public over 25 million firearm safety kits, which includes a free firearm lock. We are very proud that Don't Lie and Project ChildSafe are both components of the Justice Department's Project Safe Neighborhoods program. We strongly support the Protection of Lawful Commerce in Arms Act (H.R. 800) because it is an important common sense legal reform that will help restore integrity and fairness to our nation's judicial system by preventing lawsuit abuse. This vital bipartisan legislation is critical to protecting America's firearm industry from destruction and bankruptcy at the hands of opportunistic trial lawyers, seriously misguided politicians and radical antigun interest groups who seek to destroy and bankrupt our industry through massive damage awards and/or bleed us dry through ever mounting legal fees. These predatory lawsuits misuse and abuse our nation's judicial system in an attempt to dictate to all Americans public policy choices that are rightfully the purview of Congress and elected state legislators. In dismissing one such suit, a Florida appellate judge astutely observed that [Miami-Dade 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 County's frustration cannot be alleviated through litigation as 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. This misuse of lawsuits by interest groups to force public policy changes, so-called ``regulation through litigation,'' when under our Constitution those policy choices are for Congress and state legislatures to make, represents a direct threat to the entire business community and the nation's economy. This is why the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Association of Wholesalers, the American Tort Reform Association, and many others support H.R. 800. As National Association of Manufacturers executive vice president Michael Baroody has said, ``It is a certainty that other businesses will be the next target if these groups succeed in misusing the courts against the firearms industry.'' This legislation is supported by organized labor as well. Cecil Roberts, president of the United Mine Workers of America, which represents nearly a thousand workers at the Remington Arms Company's plant in New York, said this bill ``will help prevent lawsuits by various parties that are intended to shut down the legitimate and legal firearms industry in the United States because of improper use of firearms by individuals.'' He cautioned, ``The United States is losing our industrial base and since January 2001 we have lost 2.5 million industrial jobs in the U.S. . . . We need to take steps to protect and encourage growth of our industrial base, including our firearms manufacturers.'' 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 firearm manufacturers, wholesale distributors and retailers. These suits blame federally licensed firearm manufacturers for the actions of criminals. The plaintiffs in these cases allege that the sale of a legal product in full compliance with the vast and extensive array of federal, state and local laws and regulations somehow causes criminal violence to occur. They allege that members of the industry are subverting the law by knowingly and willingly selling guns to criminals and are funneling firearms to the so-called ``criminal market.'' These despicable allegations are both patently false and highly offensive and defamatory to the tens of thousands of men and women who work in our industry. Despite some success in the courts, this well-funded, highly coordinated onslaught of abusive lawsuits against members of our industry continues unabated. Several cases are currently pending at the trial court level with several more cases at various stages of appeal that could be returned to trial courts for costly and time-consuming discovery and trial. A single hundred million dollar verdict will bankrupt virtually all of the defendants. In fact, the companies would almost certainly be unable to post the bond required to enable them to appeal such an award. Recently, the City of New York enacted into law the Gun Industry Responsibility Act that imposes absolute liability on law abiding, federally licensed firearm manufacturers and dealers for criminal shootings that occur in New York City. Members of our industry are being sued today right here in the District of Columbia under a similar law that imposed absolute liability upon manufacturers and dealers for criminal shootings occurring in the District because they lawfully sold a firearm that was then illegally brought into the District and used in the commission of a crime. A manufacturer is being sued in federal court in California for selling firearms to a police department in Washington State that was later used in a criminal shooting. In that same case, a distributor is being sued even though it never owned, possessed or sold the firearm in question. This case, Ileto v. Glock, is the poster child for the Protection of Lawful Commerce in Arms Act. Winning on the merits is not necessary in order for these politicians and antigun activists to impose through litigation, or financially extorted and coerced settlements, a radical gun control agenda repeatedly rejected by Congress and state legislatures, 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 firearm 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, and thousands of people thrown out of work, vindicating themselves against baseless lawsuits; just ask Dow Corning. The collective, industry-wide cost to defend these ill-conceived, politically motivated, predatory lawsuits 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 defending ourselves to date now exceeds $200 million dollars. This is a huge sum of money for a small industry like ours. The firearm industry taken together would not equal a Fortune 500 company. The cost of litigation is borne almost exclusively by the companies themselves. With few exceptions, insurance carriers have denied coverage. These antigun 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. Because of these lawsuits, firearm industry members now confront skyrocketing premium increases when renewing their insurance policies. In addition, insurance policies now universally exclude 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 would be better spent hiring more police officers, procuring new equipment or funding critical social services. These lawsuits threaten the very existence of the manufacturers that produce the tools our military and law enforcement agencies use every day to protect America and our freedoms both here at home and abroad. If these companies are driven out of business, from whom will our military and law enforcement purchase firearms? Make no mistake about it; these lawsuits have national defense and homeland security implications. The legislation you are considering today is perhaps more important for what it does not do. It does not, as antigun interest groups have falsely alleged, ``close the courthouse doors'' to those who have been injured by firearms that have been illegally sold, supplied to a person likely to use the firearm in a manner involving an unreasonable risk of injury to himself or another, or prevent a suit due to a defectively designed or manufactured product. The bill expressly provides that injured parties will be able to assert well-recognized tort law claims against the manufacturers and sellers of firearms. The Wall Street Journal clearly stated in an editorial that, ``This isn't immunity, as some critics claim. Gun makers and distributors would still have to abide by product liability laws and still face civil suits for violating regulations on sales or distribution. But just as Sony is not responsible for someone who uses a camcorder to film child pornography, no longer could Beretta be held responsible for someone using its legally purchased product to rob a liquor store.'' (Wall Street Journal, April 17, 2003.) It is that abuse of our judicial system that this legislation is carefully drafted to stop, nothing more and nothing less. 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 firearm industry in ways Congress and state legislatures have roundly rejected and hold no support with the American public. There are several refinements between the bill passed by the House in the 108th Congress (H.R. 1036) and this legislation. One change better clarifies that suits can proceed where there is a defective product, but that when a criminal volitionally pulls the trigger causing injury, the manufacturer cannot be sued. As revised, for instance, a juvenile who while target shooting without written permission from his parents (a violation of 18 U.S.C. Sec. 922(y)) is injured by defective ammunition could still be able to bring a suit against the ammunition manufacturer. H.R. 800 defines a ``trade association'' based on Internal Revenue Code and regulations. This new definition avoids specious arguments that the former definition was intended to protect the National Rifle Association. There was never any such intention in the previous bill, and this language makes that clear. H.R. 800 provides that manufacturers or sellers can be sued if they ``knowingly'' violate laws applicable to the sale or marketing of the product, and the violation is a proximate cause of harm to the plaintiff. By comparison, H.R. 1036 said ``knowingly and willfully.'' We support these refinements because they enhance and further clarify the bill's purpose and intent. Over thirty states have already enacted similar laws to stop ``junk'' lawsuits designed to destroy this industry and to achieve gun control regulation through litigation. We agree with President Bush who recently said, ``Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy, costing jobs and threatening small businesses.'' The time has come for Congress to enact a common sense legal reform to restore integrity and fairness to our judicial system, protect American jobs and industry and to prevent an unconstitutional attempt to circumvent Congress and state legislatures. We call upon Congress to prevent lawsuit abuse. The future of one of America's oldest, most important industries and the loss of thousands of American jobs vital to the health of our economy is at stake, as is a critical component of our national security industrial base. The shuttering of the firearm industry will hit states--especially rural states--especially hard. Each year hunters and shooters spend $21 billion generating 366,344 jobs that pay more than $8,896,623,900 in salaries and wages and provide $1,223,049,215 in state tax revenue. In closing, if these lawsuits are not stopped, then it is open season on any industry. It is guns today, and we are already seeing similar legal assaults on the fast food industry--cars, alcohol and distilled spirits could be next in line at the courthouse door. In some way, these lawsuits will impact job creation in your districts and states and not for the better. The National Shootings Sports Foundation urges you to vote in favor of the Protection of Lawful Commerce in Arms Act (H.R. 800). I thank you Mr. Chairman for permitting the NSSF to address the Subcommittee and for the Subcommittee's attention this morning. ATTACHMENT
Mr. Cannon. We'd like to welcome Mr. Delahunt from Massachusetts, who's joined us. We have a vote coming up, and I'd hate to hold the panel through that vote and it would be hard for Members to come back, so I'd ask unanimous consent to limit questioning by the Members to 3 minutes. No objection, so ordered. Mr. Watt, would you like to begin? Mr. Watt. Thank you, Mr. Chairman. I think in light of our time constraints, I think I will not ask any questions. We've been through this several times now in this Committee, and here we go again. I mean, I made that point in my opening statement. I would just say that this whole notion that Mr. Beckman and Mr. Walton have--obviously, it's some public relations thing that you've undertaken to compare this war to the war in Iraq or call this legal terrorism and make it in some kind of way comparable to terrorism in general, I think is insulting to your argument, and I'll just leave that alone and tell you that's my opinion. That's a constructive suggestion. For you all to compare these things like that, I think is a bad, bad public relations move. I yield back, Mr. Chairman. Mr. Cannon. The gentleman yields back. Mr. Gohmert, would you like to question the witnesses? Mr. Gohmert. Yes, I would. Mr. Cannon. The gentleman is recognized for 3 minutes. Mr. Gohmert. Thank you. Mr. Henigan, let me ask, what do you take the term negligent entrustment to mean? Mr. Henigan. Congressman, negligent entrustment is actually defined in this bill, so it has a very special definition that is not necessarily the same as the common law definition. According to this bill, the suits that would be allowed under that doctrine are suits in which a seller transfers a gun to an obviously dangerous person and then that person misuses the gun against someone. So it would be, for example, a situation where a seller sells a gun to someone who is intoxicated and then goes out and shoots someone. That is a very rare kind of case. The much more frequent kind of case is the kind of thing that happened in that gun shop in West Virginia, where the sale of the gun is to a gun trafficking team and the person who pulled the trigger was nowhere near the gun shop, but nevertheless, the sale was incredibly suspicious. It had all the earmarks of a sale to people who were going to take those guns and sell them directly into the illegal market. So the doctrine of negligent entrustment as it is defined in this bill would not have preserved that case at all. Mr. Gohmert. Well, it does seem, though, that the Second Amendment, when it says--talks about not infringing the right to keep and bear arms, doesn't mean what one constable back in Texas thought it meant, that he had the right to wear short sleeves. But until such time as that is amended, it seems like we should be affording people the right to act within the purview of that amendment. I yield back the remainder of my time. Thank you, Mr. Chairman. Mr. Cannon. Thank you, Mr. Gohmert. Mr. Van Hollen? Mr. Van Hollen. Thank you, Mr. Chairman. Whenever the case of the sniper victims comes up, the proponents of the bill say, oh, no, no, no, we're not talking about trying to bar people like the sniper victims and their families from court. It's other people in the world. In fact, as I understood your testimony, Mr. Beckman, you said your understanding of the bill was it would not bar that case. Is that what your testimony was? Mr. Beckman. Insofar as the claims against the manufacturer of that firearm---- Mr. Van Hollen. Let--go ahead. Mr. Beckman. Insofar as the claims against the manufacturer of that firearm, I believe that this legislation would prevent that. But respectfully, I suggest that Bushmaster sold its lawful product in a non-defective condition, which the Congress of the United States as well as every State said was a lawful product. Mr. Van Hollen. If I could, let me focus on the gun store, the gun store that sold the weapons. Is it your testimony that a lawsuit against the gun store on the facts of the sniper case would still be allowed to go forward under this bill? Mr. Beckman. Well, it---- Mr. Van Hollen. And if so, if you could point to the specific provisions--specific provisions of this bill, because, as you know, when you go in front of a court of law and you sit before a judge, you've got to make an argument based on the language in this bill. If you could tell me, based on the facts, what provisions would allow that case would go forward, I'd appreciate it. Mr. Beckman. Okay. That firearm was not sold by Bull's Eye. It was stolen by Bull's Eye. Strike that, stolen from Bull's Eye. The qualified civil liability action would not include, in my opinion, the failure of Bull's Eye to have maintained control over whatever it--its inventory, because we already have plenty of Federal law that dictates the inventory control that the firearms manufacturers--the firearms retailers should have, and it is the unlawfulness use that is--it would not be precluded. And it would deal with, perhaps--you're asking me to interpret this draft statute as I sit here, and I believe---- Mr. Van Hollen. Right. I'm not--you made a statement in your testimony that I interpreted to mean that you thought that this would allow this to go forward, so I thought that you looked at the provisions. That's all. Mr. Beckman. Yes, sir, I have, and I believe that the claim against the retailer would have not been foreclosed under the language of the statute. I believe that it would have foreclosed the---- Mr. Van Hollen. And all I was asking you, Mr. Beckman, based on your reading of the statute, what provisions in the statute, based on your understanding of the facts, would allow it to go forward, because the fact of the matter is, although over 250 weapons were missing from this store, under the requirements in this bill, you have to show a direct connection between the particular gun that was stolen and used in the shootings and a proximate cause between the disappearance of that gun and the shootings. And I just--the way I read this bill, and the way many lawyers who have looked at the bill and written opinions and submitted opinions to the Congress, it's quite clear, I believe, that those claims would be barred against the store. Mr. Beckman. Well, but again, I respectfully disagree, sir, because I believe that it is a violation of Federal law, existing Federal law, for the retailer to have not reported the theft. Mr. Van Hollen. If I could ask you, the requirement is if you know of a theft, right? Mr. Beckman. Well---- Mr. Van Hollen. In this case--Mr. Chairman, I don't mean to belabor this point, but I'd just like to just wrap up, because in this case, the testimony was that about 230 weapons had been missing from the store. Their testimony was, and it was unrefuted, that they were not aware of the theft of the Bushmaster rifles used in the sniper killings until after the killings took place, and therefore, there would be no legal obligation on them to report something that they did not know about under the statutes. Even though the record is clear that this is a gun store that did not keep control over its weapons--that's why 230 were missing and they couldn't account for them. But the way this is written, because their testimony is they didn't know about it, therefore, they didn't have a legal obligation to report it. Even though they were totally negligent in keeping control of their arsenal, of the guns they were selling, they couldn't-- the claim would not be brought. I would ask if you could, in a written statement, show us how that is not the case. Thank you, Mr. Chairman. Mr. Beckman. I'd be pleased---- Mr. Cannon. You're welcome to answer that question, if you'd like. Mr. Beckman. I believe that I've given my view as to why the statute would not have precluded that case against the retailer. It's still a violation of Federal law. It is just akin go what Mr. Henigan explained in the West Virginia case, where it was a knowing violation of the straw purchase. That has been and will remain a violation of Federal law. Where we have somebody who violates the law, that's not within the purview of this statute. What is within the purview of this statute is the 30-odd lawsuits that were brought by municipalities around this country, all of which had no effect whatsoever on this industry other than to cost them staggering sums of money. And indeed, the lawsuits themselves were abject failures. That's what this legislation is designed to address. Mr. Van Hollen. Mr. Chairman, at some point, if you could maybe later supply for the record the particular provision in this bill that you say would still allow that lawsuit to go forward, because what this bill does is provide general liability and creates certain exceptions. If you could, please, pinpoint what in the bill allows the lawsuit against the seller of the weapons used in the sniper suit to go forward, I would appreciate it. Mr. Cannon. And if you could get that within 5 days, we would appreciate that, so that we can include it in the record. Mr. Beckman. I'd be pleased to do so. Mr. Cannon. Thank you, Mr. Beckman. The gentleman from Arizona, Mr. Franks, is recognized for 3 minutes. Mr. Franks. Mr. Chairman, I know this isn't the appropriate venue to kind of dissect this legislation, but it occurs to me that in section 5, article III, 1, 2, the Malvo case is made very clear. Neither of these individuals involved in the sniper case could have legally purchased a gun in the first place, and so I think it's a red herring. But the ultimate situation is that in the final analysis here, this is going to a deeper question in our country, and that is simply the right of people to own and bear arms and defend themselves and the right of manufacturers to manufacture weapons that can accomplish that. Ultimately, even those that are opponents of this bill would suggest that the police officers of this nation should have the ability to defend other people. So with that statement made, it lays out very clearly that it's not the weapons, it's whose hands they are in. If we don't refocus our attentions as a nation into making sure that the people who misuse the weapons are our focus rather than the weapons, then we merely disarm the innocent and merely prevent people from being able to defend themselves, and I can suggest to you that criminals have always preferred unarmed victims, and that is at the core bases of this discussion. Thank you, Mr. Chairman. Mr. Cannon. Thank you. The bell has not yet run. Mr. Delahunt, would you like to ask questions? Mr. Delahunt. If the chair doesn't object. Mr. Cannon. How could I object? I wish you were on our side, but what the heck. We'll do with the information we get, whatever---- Mr. Delahunt. I just want to pick up on something that the gentleman just talked about, a basic right and the Second Amendment. I want to assure you, I support the Second Amendment. But I also support what I consider as a basic right of a citizen who, if he or she feels that there has been an injury because of negligence or because of the actions of someone else, a basic right to the justice system, to the civil justice system. That is probably the core, most fundamental right that we enjoy as Americans, access to a justice system. You know, the gentleman speaks of staggering sums. How much has been spent? Mr. Beckman. Are you---- Mr. Delahunt. I'm speaking to the gentleman with the nice white hair. [Laughter.] Mr. Beckman. Are you talking about for North American Arms specifically, or---- Mr. Delahunt. No. In other words, I'll tell you, I'm having real difficulty finding out what the problem is. You know, all I see is in the findings, I don't read anything about empirical data supporting a premise that the industry is going to go under. Mr. Beckman. Well, respectfully, Congressman, we have other laws that preclude us from sharing all of our information among the manufacturers and distributors. So I can only speak to the company, or companies, that I have first-hand knowledge of. Mr. Delahunt. Okay. Mr. Beckman. And I can tell you that my client has spent hundreds and hundreds of thousands of dollars---- Mr. Delahunt. Defending lawsuits. Mr. Beckman. Well, I'm talking about the municipal litigation. I'm not talking about---- Mr. Delahunt. All right. Now, you've won those suits, correct? Mr. Beckman. Well, thus far, and where I have the problem with it, why I think that this legislation---- Mr. Delahunt. Could I ask you--let me just interrupt, okay? You represent a manufacturer. Mr. Beckman. Yes, sir. Mr. Delahunt. Would you have problems if manufacturers enjoyed this particular--the benefit of this legislation, because, you know, I dare say that the most obvious party in terms of responsibility and negligence would be the seller, the immediate seller. Now, if legislation were redrafted which would continue the common law as it applies to the distributor, the immediate seller, would you have a problem with that? Mr. Beckman. I have a problem with holding--trying to hold somebody liable for damages that is very remote, because it is the same thing. We all know about the problems with drunk driving in this country, and if we start holding the auto manufacturers liable---- Mr. Delahunt. No, no, but you're not answering my question. I'm saying, let's use your analogy. What about the bartender, okay, that gives that customer who's obviously inebriated that extra drink, as opposed to the maker of the scotch that was consumed? Do you see a distinction there? Mr. Beckman. Well, I do, and we have the Dram Shop Acts that---- Mr. Delahunt. I'm not asking about the Dram Shop Acts. I'm asking about the analogy between the producer of the whiskey and the bartender who sells it in terms of responsibility. Do you see a distinction there? Mr. Beckman. I do. I do. I think that if you hold the manufacturer of the whiskey responsible, that's not---- Mr. Delahunt. But what about the bartender? Mr. Beckman. If the bartender is serving somebody who's clearly inebriated, I think that's wrong. Mr. Delahunt. Okay, and should be held liable? Mr. Beckman. Indeed. If somebody is then injured by that drunk person, yes, I have no problem with---- Mr. Delahunt. Well, I guess that's what I'm suggesting in terms of the difference between the manufacturer and the seller in that gun store to that individual who comes in. Mr. Beckman. Well, unless we have a vertically integrated industry where---- Mr. Delahunt. I'm not asking about vertical integration. I'm asking about the individual who sells the gun at the gun store, not--if you guys want to have a caucus, I'll be quiet here and you two can work out the answer. Can I just please ask the question without the gentleman whispering in your ear for just a moment, okay? I'm sure he's more than capable of giving me an answer. Mr. Cannon. Do you want an answer to the question, or do you want to embarrass the witness, Bill? Mr. Delahunt. Maybe both, but at least an attempt---- Mr. Beckman. Fortunately, I don't embarrass very easily. Mr. Delahunt. No. At least an attempt at giving me an answer. There's a distinction between the manufacturer and the gun store. Mr. Beckman. I think there's a great distinction between the manufacturer and the gun store, because you have somebody who is the proverbial--18 inches away---- Mr. Delahunt. I'm not---- Mr. Cannon. The gentleman's time has expired and we have a vote called---- Mr. Delahunt. Okay. Mr. Cannon. --so if you don't mind, I'm going to give the gentleman a chance to answer the question and you can clarify a little bit if you want, but we probably do need to come to a close. Mr. Delahunt. I'll do the clarification at a later time. Mr. Beckman. To answer your question, the person who is 18 inches away in a retail store, they have an obligation to comply with the law, and if they're selling through straw purchasers or if they're selling to somebody who is an unqualified buyer, that is a violation of the law and that is not something that is going to be barred under this statute. Mr. Cannon. The gentleman's time having expired, Mr. Watt? Mr. Watt. Mr. Chairman, Mr. Conyers has asked me to put some things in the record, so I ask unanimous consent to insert in the record a copy of the GAO report entitled, ``FBI Could Better Manage Firearm-Related Background Checks Involving Terrorist Watch List Records.'' Mr. Cannon. Without objection--oh, go ahead. Mr. Watt. A copy of the bill that Mr. Conyers and Representative Chris Shays introduced in response to the GAO report; some information taken from a website which describes the Five-Seven as a 20-round pistol that fires a 5.7 millimeter bullet that will, quote, ``defeat most body armor in military service around the world today;'' a copy of the bill Representative Eliot Engel introduced which limits the use of the Five-Seven firearm; and some articles which highlight nearly a dozen or so assault weapons-related shootings which all occurred in the past 9 months, many of the shootings involving law enforcement officers. Mr. Cannon. Without objection, so ordered. [The material referred to is inserted in the Appendix.] Mr. Cannon. I want to thank the panel for being here today. The language which you said has helped us frame the language of the debate that I think we're going to have. Actually, I think it was more interesting year than it was last cycle, so perhaps we can get to a vote in the House and also in the Senate and make this thing move forward. I just want to, not having taken my 5 minutes, let me just make one point. That is, the hundreds of thousands of dollars that your company, Mr. Beckman, spent on defense of these lawsuits means the jeopardy of jobs in my district, and I would prefer that we keep liability the way it historically has been in America. That is personal, with personal responsibility, and I think this bill does that. Thank you very much, gentlemen. This hearing is adjourned. [Whereupon, at 11:27 a.m., the Subcommittee was adjourned.] A P P E N D I X ---------- Material Submitted for the Hearing Record Prepared Statement of the Honorable Chris Cannon, a Representative in Congress from the State of Utah, and Chairman, Subcommittee on Commercial and Administrative Law Good morning ladies and gentlemen; this hearing of the Subcommittee on Commercial and Administrative Law will now come to order. We consider today H.R. 800, the ``Protection of Lawful Commerce in Arms Act,'' which was introduced on February 15 by Representative Stearns. It currently has 157 co-sponsors, including myself. H.R. 800 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 or proceeding brought 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 a drug trafficking crime, or a 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 actions 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 the 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 actions for damages resulting directly from a defect in design or manufacture 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 theories of liability that would 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. In January, the Supreme Court refused to overturn a decision by the notorious Ninth Circuit Court of Appeals that allowed a frivolous lawsuit brought against gun manufacturers for a crime committed by a third party to go forward. One of the personal injury lawyers suing the firearms industry--John Coale--told The Washington Post--quote--``The legal fees alone are enough to bankrupt the industry.'' Professor David Kopel (Ko-PELL) has also stated that the cities suing the firearms industry--quote--``don't even have to win . . . All they have to do is keep suing . . . They'll kill [the industry] with the cost of defending all the lawsuits.'' Lawsuits seeking to hold the firearms industry responsible for the criminal and unlawful use of its products by others are attempts to accomplish through litigation what has not been achieved by legislation and the democratic process. As explained by one federal judge--quote-- ``the plaintiff's 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, as well as the Second Amendment. Such lawsuits also directly implicate core federalism principles articulated by the Supreme Court, which has made clear that--quote-- ``one State's power to impose burdens on the interstate market . . . is not only subordinate to the federal power over interstate commerce, but 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. Where will it end? Knives are mostly used for nonviolent purposes, such as cooking, but hundreds of thousands of violent crimes every year are perpetrated with knives. We've already seen multi-million dollar lawsuits against the makers of hamburgers and steaks for damages caused when other people abuse those products and overeat. Surely the manufacturers of steak knives will be sued next when such knives are used for criminal purposes. 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 state courts from bankrupting the national firearms industry and denying all Americans their fundamental right to bear arms. We need to preserve the benefit of American-made weapons for our soldiers overseas who are so ably defending all of us from terrorism. Let's not allow the American firearms industry to be bankrupted so we're left to rely on foreign countries to provide weapons for our own soldiers. I now yield to Mr. Watt, the Ranking Member of the Subcommittee, for an opening statement. Prepared Statement of the Honorable Cliff Stearns, a Representative in Congress from the State of Florida
H.R. 1225, the ``Terrorist Apprehension and Record Retention (TARR) Act of 2005''
GAO Report entitled ``GUN CONTROL AND TERRORISM: FBI Could Better Manage Firearm-Related Background Checks Involving Terrorist Watch List Records
The ARMS site description of FN's Five-seveN Pistol
H.R. 1136, the ``Protect Law Enforcement Armor (PLEA) Act''
News Articles for the record offered by the Honorable John Conyers, Jr., a Representative in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary
Response to Post-Hearing Questions from a Minority Member to Bradley T. Beckman, Counsel, Beckman and Associates, Counsel to North American Arms
Article submitted by Lawrence G. Keane, Counsel, Beckman and Associates, Counsel to North American Arms
Op-Ed Article from New York Daily News, Sunday, January 9, 2005, submitted by Lawrence G. Keane, Counsel, Beckman and Associates, Counsel to North American Arms
Letter from Walter Olson, Senior Fellow, Manhattan Institute for Policy Research to the Honorable Chris Cannon