Industry News: New York City’s Lawsuit Against Firearm Industry Dismissed
By Robert M. Hausman

The Protection of Lawful Commerce in Arms Act proved the basis for dismissal of the notorious lawsuit by the City of New York against the firearms industry. This suit by the city and its mayor, billionaire Michael Bloomberg, sought to hold manufacturers responsible for the criminal misuse of firearms.

“The dismissal of this bogus lawsuit against America’s firearm industry is an important victory,” declared Chris W. Cox, executive director for the National Rifle Association (NRA). “New York City’s lawsuit was a politically motivated attack by an anti-gun mayor to bankrupt a lawful industry.”

The Manhattan-based U.S. Court of Appeals for the Second Circuit ruled that the Protection of Lawful Commerce in Arms Act, which NRA helped pass into law in 2005, is constitutional and that Judge Jack B. Weinstein erroneously interpreted that law in his district court ruling allowing the suit to proceed. Similar suits have been dismissed in the Seventh Circuit, the District of Columbia Court of Appeals, and in other courts throughout the country.

“We think Congress clearly intended to protect from vicarious liability members of the firearms industry who engage in the ‘lawful design, manufacture, marketing, distribution, importation, or sale’ of firearms,” noted Judge Robert J. Miner, writing for the Second Circuit Court of Appeals in dismissing the suit.

This decision represents another setback to Mayor Bloomberg, who has also been publicly rebuked by the Bureau of Alcohol, Tobacco, Firearms and Explosives for his unlawful “sting” operations against firearm retailers in several states.

Retailer Stands Alone Against NYC

While the suit filed by New York City against firearms manufacturers has been dismissed, the city is still suing individual retailers. With the brokering of a settlement between two Georgia firearms retailers and New York City in Mayor Michael Bloomberg’s 2006 suit against them, there now remains a single defendant in a lawsuit resulting from the infamous and spurious sting operations conducted by the city against so-called “rogue gun dealers.”

That defendant is Smyrna, Georgia based Adventure Outdoors, which has not only refused to enter into a settlement agreement (which would entail allowing a representative of New York City to monitor its sales) but has filed a defamation suit against Bloomberg.

The city had sent out private investigators several years ago to a variety of firearms retailers (both in New York and other states) and deliberately attempted to induce them through trickery to complete firearms sales to the investigators which could be construed as being so-called “strawman transactions.” The “investigations” resulted in the city filing two federal lawsuits against some 27 gun shops in 2006.

The city claimed it had identified the owners of the 27 shops as “rogues” who cared more about making money than public safety and alleged that firearms sold by these shops were a frequent source of guns that were used to commit crimes in New York City. The lawsuit claims 21 guns sold at Adventure Outdoors were used during the commission of a crime in New York City between 1994 and 2001.

The lawyer for Adventure Outdoors’ co-owner, Jay Wallace, says his client will not settle with Bloomberg. He told The Atlanta Journal-Constitution that his client “will go as far as to hock his car and his shop and all the guns in it to see this case through.”

“This guy has complete moral conviction that he did not do anything wrong,” the lawyer continued. “He feels he has been wronged, and he’s going to show the jury that New York City is wrong. They sued the wrong guy.” At SAR presstime, the case was scheduled to go to trial last spring. The city has pulled strings to steer the trial to be heard in the courtroom of the notorious anti-gun activist, Judge Jack B. Weinstein.

A gun shop in Virginia and another in South Carolina, who are also contesting the city’s claims, are slated to have their cases heard in federal court this fall when the second case is scheduled for trial.

The cases are embarrassing to ATF as New York City attempts to appropriate its regulatory authority - and it does so in a Draconian manner, much worse than ATF’s now well-known “zero tolerance policy” for record-keeping errors by licensees.

The gun shops that settled with the city (even those in states other than New York) had to agree to have their store operations monitored for three years by a “special master” appointed to the position and paid by New York City. The “master” reviews records and inventory, is permitted to videotape sales activities and to send in “undercover customers” to attempt straw purchases. Store employees are given enhanced training on making legal firearms sales, and identifying straw purchasers.

In a side note, soon after Bloomberg filed his original series of suits against the retailers in 2006, ATF said it would investigate the legality of his sting investigation, which was conducted by non-law enforcement personnel. To date, nothing has been forthcoming from ATF on the issue.

Those retailers who have settled their cases were said to have done so for financial reasons as they didn’t have the financial resources to match those of the New York City government.

Two months after the city filed its first lawsuit, Adventure Outdoors filed a $400 million defamation suit in federal court in Atlanta against the city and Bloomberg. The store’s attorney, former Georgia Congressman Bob Barr, took issue with the city’s allegation that his client is a “rogue gun dealer.” Barr commented, “These are outrageous statements, they are false, they are defamatory and they are slanderous and that is what we have alleged in our lawsuit.”

A judge has cleared the way for Adventure Outdoors tortuous interference with business claim and the case is pending. Lawyers for Bloomberg unsuccessfully attempted to have the case heard in New York City (where it probably would have been steered into Weinberg’s courtroom). It will be heard in Georgia.

Wallace estimates that he will incur legal costs of at least $400,000 in defending and prosecuting the two actions. He has received a $5,000 contribution from the Second Amendment Foundation, $1,000 from the National Rifle Association and $2,500 from a fellow Georgia firearms retailer, Chuck’s Gun & Pawn of Warner Robins, GA.

A fund has been started to help finance the actions. Non-tax deductible contributions may be sent to: Bloomberg Fight Back Fund, 630 Windy Hill Road, Smyrna, GA 30080.

Wal-Mart to Video Tape Gun Buyers

Wal-Mart recently joined New York City Mayor Michael Bloomberg at a gathering of Bloomberg’s anti-gun group, Mayors Against Illegal Guns, to announce a series of changes to the way in which Wal-Mart handles firearm transactions.

At the press event, J.P. Suarez, chief compliance officer for Wal-Mart Stores, Inc., said: “The costs are, we think, part of what it takes to be responsible.” Suarez also added, “This is not a signal that we’re getting out of firearms.”

Once these changes are up and running, firearm purchases at Wal-Mart will involve a video record of the sale, which the store will keep on file - effectively creating a video database of gun purchasers. In addition, Wal-Mart announced that its employees will be given discretion to deny firearms purchases to anyone who has had a firearm traced by BATFE for any reason - including those who have had a firearm stolen and later used in criminal activity.

Wayne LaPierre, NRA Executive Vice President, said, “I view it as a public relations stunt that stigmatizes law-abiding firearms purchasers exercising their constitutional freedoms. I honestly think it’s a corporation trying to curry favor with politicians as opposed to doing anything meaningful about stopping crime.”

RZM Imports Employee Admits Stealing $816,129 from Company

A former employee of RZM Imports, Inc., the large Southbury, Connecticut-based marketer of World War Two military and firearms books, magazines, videos, etc., has pled guilty to one count of wire fraud and one count of income tax evasion.

According to documents filed with the U.S. District Court and statements made in court, Leslie Tavolacci, 56, a part-time employee of RZM Imports, as part of her duties opened and sorted incoming mail, and then deposited checks received by RZM from customers into the company’s bank account. In pleading guilty, Tavolacci admitted that she unlawfully took a large number of checks payable to her employer and deposited them into other checking accounts she had opened under the RZM Imports, Inc. name. She then withdrew the money from these accounts, usually using bank debit cards, and used the funds for her own use and enrichment. Through this scheme, she was alleged to have embezzled approximately $816,129 between 1997 and 2004.

As a result of her guilty plea, Tavolacci faces a maximum term of imprisonment of 25 years and a fine of up to $350,000.

FNH Doubles Web Site Traffic

Traffic to the FNH USA website (www.FNHUSA.com) doubled recently after enhancements were made, the firm says. These include an interactive dealer locator, downloadable wallpapers and logos, a photo gallery, product reviews and video content.

Sturm, Ruger Wins Prisons Contract

Sturm, Ruger & Company, Inc. announces that it has been awarded a 5-year requirements contract for the Federal Bureau of Prisons.

The contract is for 1,750 9mm pistols, with the potential to replace up to 3,000 pistols for the federal prison system. The pistols to be supplied are based on the Ruger KP95 models. The pistols are double-action only, incorporate a stainless steel slide, and feature a custom polymer composite frame with a Picatinny rail.

The Ruger pistols to be supplied under this contract will be manufactured in the company’s Prescott, Arizona manufacturing facility over the next five years.

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. Visit www.FirearmsGroup.com. He may be reached at: FirearmsB@aol.com.

This article first appeared in Small Arms Review V11N11 (August 2008)
and was posted online on August 24, 2012


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