In 2000, as part of a settlement of dozens of product liability/negligence lawsuits brought by local governments and the threat of litigation by the federal government, the then-British-owned gunmaker Smith & Wesson signed a deal brokered by the Clinton White House. In exchange for a full settlement of all claims that were raised or could have been raised, the company agreed to develop “authorized user technology” (a.k.a. “smart guns”) and incorporate that technology in all new firearm models within 36 months. The NRA described the deal as requiring manufacturers to meet unproven “bureaucratic mandates of capricious changes to gun design.” Smith & Wesson faced an immediate backlash from retailers and the gun-owning public and its sales plummeted; a year later, the company was sold. The new Bush administration declined to enforce the agreement and, in the end, the only thing of substance the litigation accomplished was, ironically, the enactment of the federal Protection of Commerce in Lawful Arms Act (PLCAA).
Now, however, a new decision by the Ontario Court of Appeal in Canada has sought to squeeze some further anti-gun utility out of the agreement. The case, Price v. Smith & Wesson Corp., 2025 ONCA 452, is a proposed class action lawsuit alleging that the gunmaker is liable for injuries and deaths caused by the criminal misuse of a stolen gun.
In July 2018, Faisal Hussain randomly shot at pedestrians before opening fire into businesses in the area of Toronto’s Danforth Avenue. He used a Smith & Wesson M&P 40 handgun to kill two people and wound thirteen others before he killed himself.
Hussain had never applied for nor been granted a firearms license (in Canada, handguns are restricted firearms and require a restricted possession and acquisition license). The handgun he used had been lawfully imported into Canada and stolen in a break-and-enter at a Saskatchewan gun dealer’s three years earlier. It is unclear how Hussain obtained the handgun, but a CBC article speculated that Hussain’s older brother, who had a criminal history and ties to both a street gang and a home in Toronto “where police seized 33 firearms” and over 40 kg. of an illegal drug, “may have once possessed the handgun his brother used in the Danforth shooting.” A 2019 Toronto Police report outlines Hussain’s extensive interactions with school officials, medical/mental health professionals, and the police in the years leading up to the shooting, raising concerns over his risk of harm to self and others.
The lawsuit in which the victims and their families are seeking millions of dollars in damages is solely against Smith & Wesson and based in claims of negligence, strict liability and public nuisance.
According to the plaintiffs, the lynchpin of the suit is the 2000 agreement:
the essence of the cause of action is that Smith & Wesson was aware of the risks posed by lost and stolen handguns yet sold products in Canada without any safety devices, mechanical or electronic, to prevent unauthorized use. Safety devices were not included even though the company’s products were frequently lost and stolen in Canada, recovered at Canadian crime scenes, and the subject of crime gun traces by Ontario law enforcement agencies.
Specifically, the plaintiffs pointed to the fact that as early as 1998, Smith & Wesson began developing “smart gun” or “authorized user technology” and filed at least seven related patent applications. It later entered into the agreement that required it to incorporate “authorized user technology” in its new firearm designs. Even though Smith & Wesson did not develop any prototypes from its patents; eventually permitted them to lapse; and never actually adopted authorized user technology, the plaintiffs nonetheless allege that this is enough to establish a claim in negligence because the defendant recognized the risk of unauthorized use and had developed technology to make its products less susceptible to that risk.
Ontario law requires a judge to certify a class action before it may proceed, and in this case, the judge initially dealing with the certification motion bifurcated the claims. The strict liability and public nuisance claims were struck, as it was plain and obvious that they were doomed to fail, but the negligence claim was allowed to proceed to the second phase of the hearing. The question here was not whether the plaintiffs’ claims were likely to succeed on the merits, but whether the claims could appropriately be prosecuted as a class proceeding. This required “some basis in fact” to show that there was a common issue as an essential ingredient of each proposed class member’s claim, which justified the court in avoiding an individual trial of each. The common element alleged was design negligence, the failure to incorporate authorized user technology.
The motions judge denied certification because this evidentiary threshold required some expert testimony that an M&P 40 without authorized user technology was a design defect and that safer, economically feasible ways to manufacture the product were available, which was “a vastly more difficult matter to prove than proving that Smith & Wesson had already developed patents for a prototype of a gun with authorized user technology.” For instance, there was no evidence that the technology could be incorporated without impairing the utility of the M&P 40 for police forces and the military, the end users for which the gun was designed. It did “not follow that because something can be designed, even something beneficial, that it is careless or below the standard of care not to implement the design… Put shortly, the design standards set by this agreement are good public policy independent of design negligence but they do not provide some basis in fact for design negligence.”
On appeal, however, the Ontario Court of Appeal reversed and certified the plaintiffs’ claim in negligence, in a decision that highlighted the 2000 agreement. The motions judge, the decision held, erred in requiring expert evidence; all that was needed at this stage was “some minimal evidence.” The 2000 agreement provided this “minimal evidence” and therefore, “some basis in fact.” In signing the agreement,
the defendant acknowledged that the use of authorized user technology might prevent unauthorized users from wielding handguns. So there is some basis in fact to support that contention that had the gun been outfitted with authorized user technology, Hussain might have been prevented from using the gun and causing the harm that he did. And if that is so, then the failure to include the technology on the gun was a but-for cause of the injuries and deaths that ensued.
The decision also ruled the 2000 agreement, the patents, and an “expert regulator’s report on the dangers associated with unauthorized use” all pointed to a conclusion that a reasonable company in the defendant’s position would have been aware of the connection between unauthorized firearm use and harm to third parties. The agreement also featured in the appeals court’s decision to allow a claim for punitive damages to proceed: “The commitment to implementing authorized user technology, its apparent feasibility, and the retreat in the face of legislative immunity provide ‘some minimal evidence’ that the defendant’s conduct amounted to ‘malicious, oppressive and high-handed misconduct’…”
While all of this is preliminary procedural wrangling that doesn’t yet reach the merits of the actual liability issues, the decision makes it possible for the claims to eventually succeed. In the meantime, Smith & Wesson may opt to seek leave to appeal to the Supreme Court of Canada.
These kinds of lawsuits not only illustrate the failure of gun control but exemplify why the PLCAA was enacted. In June, the United States Supreme Court unanimously upheld the PLCAA’s “core purpose” of barring litigation to hold law-abiding gun manufacturers liable where the suit is founded on a third party’s criminal use of the company’s product. There, as here, one of the claims was the defendants failed to develop so-called “smart gun” technology, with the plaintiffs insisting that the legal and economic responsibility for the harm perpetrated by criminals, with illegally obtained firearms, ultimately lies with the highly-regulated manufacturer of an equally highly-regulated and lawful product.
Should liability be ultimately imposed against the defendant in Canada, we predict the outcome for public safety will be negligible, at best, and likely adverse. Authorized user technology is far from dependable (here, here and here, including a case where a “smart” gun’s security features were easily defeated), and, unfortunately, criminals will continue to be criminals.
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