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Testimony by H. Sterling Burnett, Ph.D. Senior Fellow National Center for Policy Analysis

Wednesday, April 17, 2002

H.R. 2037 The Protection of Lawful Commerce in Arms Act

Presented to

Subcommittee on Commerce, Trade and Consumer Protection within the Committee on Energy and Commerce of the United States House of Representatives

Thursday, April 18, 2002

Chairman Sterns, distinguished members of the committee, thank you for the opportunity to testify concerning the merits of H.R. 2037 today. I am H. Sterling Burnett. I work for the National Center for Policy Analysis (NCPA), a non-partisan, non-profit research institute based in Dallas that promotes innovative private sector solutions to public policy problems. In my capacity as Senior Fellow with the NCPA, I have worked on firearms issues in general, and the municipal lawsuits against firearms manufacturers, wholesalers and retailers in particular for more than five years. One example of my work on this issue is, "Suing Gun Manufacturers: Hazardous To Our Health" which details the significant public policy and legal problems with the lawsuits currently being pursued by approximately 30 cities and counties against the firearms industry. This paper appears in the Spring 2001 Texas Review of Law & Politics . I offer this law review article as a written supplement to my testimony here today.

Rather than examine the merits of the lawsuits, as my study does, I wish to address today why H.R. 2037 is an appropriate response to the threat that municipal lawsuits aimed at gun makers pose, and propose a couple of revisions that I would argue would improve the bill.

Gun control activists, mayors and trial lawyers complain that legislation banning gun lawsuits usurps local authority and threatens public safety. Quite the opposite is true: if H.R. 2037 becomes law, the public will owe the legislature a debt of gratitude since the bill defends democracy, the economy and the public from harm.

The U. S. does not have a pure free-market economy with respect to consumer goods. As part of the political process, legislatures control, limit or prohibit access to some products, such as tobacco, guns and prescription drugs. It’s a delicate balancing act to give a free people access to certain products while maximizing public safety.

These lawsuits are an attempt to circumvent the will of the majority as expressed through the legislature with the determinations of the judiciary. Several of the mayors and district attorney`s have admitted as much upon filing their suits by stating that the lawsuits are not really about money but rather about changing the way the firearm industry does business. Shaping an industry`s business practices is regulation pure and simple.

Fortunately, so far both federal and state courts have been nearly unanimous in holding that courts shouldn’t legislate gun policy. As one federal court ruled: “It is the province of legislative or authorized administrative bodies, and not the judicial branch, to advance through democratic channels polices that would directly or indirectly either 1) ban some classes of handguns or 2) transform firearm enterprises into insurers against misuse of their products. Frustration at the failure of legislatures to enact laws sufficient to curb handgun injuries is not adequate reason to engage the judicial forum in efforts to implement a broad policy change.”

Lawsuit proponents, unable to convince democratically elected legislators that removing guns from the hands of law abiding citizens will reduce crime, are attempting to use the courts to impose their views on a skeptical public. By protecting lawful gun makers from frivolous lawsuits, legislators are defending the democratic process.

In addition, each federal legislator swears to uphold the Constitution of the United States — this bill is a step in satisfying that pledge. How so? The firearms industry is relatively small with sales of approximately $2 billion dollars for the 1999 fiscal year. This translated to only $200 million dollars in profit for the entire industry. To put that in perspective, that is less than some major companies like G.M., Exxon or Phillip Morris makes in a week. These lawsuits have already helped push two companies into bankruptcy. With each company`s failure, the remaining companies must divert more of their limited resources to fight the lawsuits. One large judgement, such as the $400 million sought in the city of Chicago`s lawsuit, could bankrupt the entire industry. If this happens, the "the right to keep and bear arms," becomes academic. Though firearms, if well maintained, have long product lifespans, every gun in regular use will wear out over time. With no new guns on the market, the right to keep and bear arms will become a right in name only. Even if some gun manufacturers remain, the prices for firearms will be so high that owning guns will be a right reserved, in fact if not in principle, for the relatively wealthy.

Ending this municipal attempt at judicial extortion would also reemphasize that Congress, and Congress alone was delegated the power to regulate interstate commerce. Make no mistake, this is about interstate commerce. While a majority of the nation`s states have shown the wisdom and foresight to ban these lawsuits within their borders, other states have not so acted. Accordingly, a substantial judgement against the firearm industry in a state that lacks a law prohibiting lawsuits against the firearm industry, would have the effect of regulating or ending firearms manufacturing and sales in states with such a ban. When commercial regulations, whether created by the legislature or created de novo in the courts, in one state significantly affect commerce in other states, Congress has legitimate oversight authority in the situation.

Furthermore, though not its intention, H.R. 2037 would have the additional benefit of helping the municipalities involved to be fiscally responsible. While, the cities and counties involved have supposedly pursued their claims in the cause of ``public health,`` and "public safety," these lawsuits have been a waste of public funds. To date millions of public dollars have been spent. There is no telling how many more infants might have been immunized, how many more mothers might have received prenatal treatment, or how many more gun crime prosecutions could have been pursued, had scarce public funds not been diverted to highly suspect civil litigation against the gun industry. It would be interesting to research how many of the cities filing suits against the gun industry have simultaneously requested increased federal funding for government services, such as, policing, after-school programs, drug interdiction and prevention, public health care, etc.

Moreover, what kind of message do such lawsuits send? If gun makers are blamed when their products are misused, what products are safe? Knives, cars and many household products are used each year to commit crimes. And accidents involving automobiles, ladders and swimming pools cost the public millions of dollars annually. Should the manufacturers of these products compensate the public for the costs incurred when criminals misuse them or when people drown or die in automobile accidents or falls? If this is the new product liability standard, then we will have to forego the benefits these products provide. Some companies would be unable to survive the lawsuits, others might simply move overseas to countries that still hold individuals, rather than inanimate objects, responsible when they take criminal, stupid or negligent actions.

If the mayors were really concerned about public safety, they would be encouraging gun ownership. Citizens use guns in self-defense between 800,000 and 3.6 million times annually. This exceeds the total number of firearm crimes — 483,000 reported in 1996. I have calculated that the net economic benefits from defensive gun uses range from between $1 billion to nearly $39 billion annually.

The fact is that the best defense against violence is an armed response. For example, women under attack are 2.5 times less likely to suffer serious injury if they defend themselves with a gun rather than responding with other weapons or by offering no resistance. In addition, persons defending themselves with guns during an assault were injured only 12 percent of the time, compared to 25 percent for those using other weapons and 27 percent for those offering no resistance. Firearms are the safest, most effective way to protect oneself against criminals — which is why police carry guns rather than going unarmed or carrying knives.

Ironically, by preventing these suits, H.R. 2037 would be doing mayors a favor. The lawsuits will not reduce crime, poverty, or homelessness, improve the schools, or fill pot holes. Guns are not the cause of our cities’ ills, they are just scapegoats for the mayors’ inability to check crime. If the suits result in a decline in lawful gun ownership, crime and unemployment would likely increase as citizens are left defenseless against criminal violence and industries flee to friendlier and safer business environments.

Before closing, I would like to modestly suggest a few modifications to H.R. 2037 that would help it more efficiently in meet its goal.

In this information age, it would seem that the U.S. government, like so many state governments have, should enter the age of one stop shopping. In this regard, rather than having each licensed gun manufacturer, wholesaler and retailer contact the Secretary of Commerce to be placed on the list of protected businesses, it would seem more efficient and more secure, for the Bureau of Alcohol, Tobacco and Firearms (BATF) to send its list of licensed firearms brokers, manufacturers, wholesalers and retailers to the Secretary of Commerce. This list could be easily updated as firearms licensees are added or deleted. This would cut down on paperwork for the business sector, should ensure that only licensed business are given immunity from litigation, and remove the need for the Commerce department to check on the legitimacy of a claim for lawsuit immunity.

Whether the responsibility for notifying the Secretary of Commerce remains, as at present, with the firearms businesses or, as I have suggested, with the BATF, language should be included in the law limiting the amount of time the Secretary is allowed before listing an immune business. Without actual language specifying how long the Secretary has to list licensed dealers (14 days, 30 days, etc.), an administration, less sympathetic to the plight of gun owners and the gun industry than the present administration might be slow in updating the list — leaving unlisted businesses open to suits in the meantime. I propose that the language go farther and hold the department and the Secretary himself/herself fiscally liable for any court costs or damages incurred by a licensed party in the gun trade during the time between the responsible party notifies the Secretary of Commerce of their immune status and the Secretary listing such status.

In addition, under section 13, (c) (3), I would change the language of (a) to read "as a result of harm caused by criminal, other unlawful misuse, suicide or negligence of such a firearm or ammunition product by any other person." I would argue that there is no more excuse for holding licensed firearms businesses, operating within the bounds of the law, responsible for negligent or suicidal firearms use than for criminal misuse. While this may seem common sense, I would argue that, absent actual legislative language forbidding such suits, trial lawyers and gun control organizations might try to convince citizens, local, state and the federal government that this is a loophole in the law which they can exploit.

Finally, though this is beyond the scope of this particular piece of legislation, I would draft similar legislation that would provide similar liability protection for all legal product. Suits such as these are a threat to any product which might conceivably cause harm through criminal misuse and as such, pose a threat to our current standard of well-being, continued innovation and economic progress.

Thank you for your time and attention. I remain, of course, available for questions.

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