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Testimony of Lawrence G. Keane, Vice President & General Counsel, National Shooting Sports Foundation, Inc.

Wednesday, April 17, 2002

House Subcommittee on Commerce, Trade and Consumer Protection

IN SUPPORT OF

 “PROTECTION OF LAWFUL COMMERCE IN ARMS ACT”

 (H.R. 2037)

April 18, 2002

Chairman Stearns and distinguished members of the Subcommittee, my name is Lawrence G. Keane.  I am the vice president and general counsel to the National Shooting Sports Foundation, Inc. (“NSSF”).  The National Shootings Sports Foundation appreciates the opportunity to appear before the Subcommittee to offer testimony in support of the “Protection of Lawful Commerce in Arms Act.” (H.R. 2037), which is an important piece of common sense legislation.

Formed in 1961, the National Shooting Sports Foundation, with approximately 1,900 members, is the major trade association for the firearms and recreational shooting sports industry.  The NSSF manages a variety of programs designed to promote a better understanding of, and a more active participation in, the shooting sports.  The NSSF’s programs and initiatives reflect the firearms industry’s genuine and longstanding commitment to fostering firearm safety and education and further reducing the illegal acquisition and criminal misuse of firearms.  Our members are engaged in the interstate and foreign commerce of firearm and ammunition products, a lawful and highly regulated activity.

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 against federally licensed firearms manufacturers, wholesale distributors and retailers.  On March 28, 2002 the City of Jersey City, New Jersey became the most recent city to file suit.  Additional suits are threatened, and there are a growing number of private (non-municipal) suits against the industry.

As the courts have recognized, these suits are an improper attempt to use litigation to regulate the design, manufacturer, marketing, distribution and sale of firearms, thereby circumventing state legislatures and Congress.  In dismissing the New Orleans’ case, the Louisiana Supreme Court commented on local suits threatened the public safety and welfare because they will result in haphazard and inconsistent rules.

Winning on the merits is not necessary in order for these politicians to impose their will.  Their policy judgments can be implemented throughout the nation if the coercive effect resulting from the staggering financial cost to defend these suits forces the industry into a Hobson’s choice of either capitulation or bankruptcy.  At the time he filed his suit, Chicago Mayor Richard Dailey said, “We’re going to hit them where it hurts – in their bank accounts…”  Andrew Cuomo, then Housing and Urban Development Secretary, threatened firearms manufacturers with “death by a thousand cuts.”   

The collective industry-wide cost to defend these ill-conceived, politically motivated suits has been truly staggering.  Exact figures are not available because the defendants are still competitors and their defense cost is considered confidential business information.  However, based on discussions with insurance industry executives, manufacturers’ corporate counsel, cost estimates in various publications, and NSSF’s own experiences, I believe a conservative estimate for the total, industry-wide, cost of defense to date exceeds $50 million dollars.

This cost has been borne almost exclusively by the companies themselves.  With few exceptions, insurance carriers have denied coverage.  This has resulted in large, across-the-board, price increases for consumers.  Many of these suits allege that industry’s products are defectively designed.  While this allegation is patently untrue, these suits have ironically forced companies to scale back research and development to further improve the overall safety and design of their products.

As a result of these suits, firearms industry members have experienced dramatic premium increases when renewing their insurance policies.  Renewed policies almost invariably exclude coverage for the municipal suits.

These suits have been an unnecessary distraction to our nation’s firearms manufacturers whose time and attention would be better-spent supplying law enforcement and our armed forces with the equipment they need to protect America and combat global terrorism.

Of the twenty-four municipal suits that have been filed to date, ten have been dismissed by the courts, with six of those cases being fully and finally adjudicated.  Every appellate court in the nation to decide a municipal firearms case has ruled in favor of the industry and ordered the cases dismissed, including three state supreme courts and the United States Supreme Court denied certiorari of New Orleans’ appeal.  Seven cases are currently on appeal.

On March 27, 2002 the City of Boston, after completing 18 months of comprehensive discovery, became the first municipality to voluntarily dismiss its case against the industry.  In dismissing its case, Boston acknowledged it had learned the firearms industry has a genuine and longstanding commitment to further reducing firearms accidents; cooperating with law enforcement in their efforts to combat the criminal misuse of firearms; and promoting the safe and responsible distribution of firearms.  Boston now believes the best way to achieve these shared goals is through cooperation and communication, rather than through expensive, time-consuming and distracting litigation.

The National Shootings Sports Foundation urges you to vote in favor of the Protection of Lawful Commerce in Arms Act (H.R. 2037).

                                                                                    Respectfully Submitted,

                                                                                     Lawrence G. Keane

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