Second Circuit Upholds New York’s Landmark Gun Industry Accountability Law

The following piece ran online in the New York Law Journal on September 19, 2025. Reprinted with permission.

Many attorneys are generally aware of a federal law granting the gun industry broad protection from liability for the criminal misuse of its products by third parties. That statute, the Protection of Lawful Commerce in Arms Act—or PLCAA—was signed into law by President Bush 20 years ago.

PLCAA is often misunderstood as providing the gun industry with “blanket immunity.” It does not. In fact, Congress included several exceptions that allow for liability against gun-industry defendants for harm resulting from third parties misusing firearms.

Perhaps the most important of those exceptions allows lawsuits to proceed if the defendant “knowingly” violated a federal or state statute “applicable to the sale or marketing of firearms” and that violation was “a proximate cause” of the harm.

In other words, a gun manufacturer or retailer can be held legally responsible for a shooting by a third party if the company also knowingly violated the law and its own legal violation was a substantial factor in bringing about the harm.

A simple example is where a gun store violates the law by selling a firearm to a straw purchaser it knows or should know is illegally buying the weapon for someone else, typically a person with a felony conviction, who later uses the weapon in a shooting.

This so-called “predicate exception” has been the basis for a number of successful lawsuits against reckless gun-industry actors. For example, it featured in the case against Remington arising out of the Sandy Hook shooting, which resulted in a $73 million settlement. It was used against now-defunct ghost gun seller Polymer80 in several municipal and individual lawsuits, resulting in numerous seven figure settlements.

And—just a few weeks ago—the predicate exception helped pave the way in a case against a firearms retailer for selling thousands of ghost gun kits that contributed to a public nuisance in Baltimore, resulting in a landmark $62 million jury verdict.

The predicate exception is also at the center of many ongoing lawsuits against major firearms manufacturers and sellers arising out of mass shootings and the much more common daily gun violence that takes the lives of tens of thousands of Americans every year.

Over the summer, the U.S. Court of Appeals for the Second Circuit issued an important decision that reinforces the importance of PLCAA’s predicate exception in holding bad actors in the gun industry accountable. The case, National Shooting Sports Foundation, Inc. v. James, 144 F.4th 98 (2d Cir. 2025), involved a pre-enforcement, facial challenge to New York’s firearms-related public nuisance law, N.Y. Gen. Bus. Law § 898-a, et seq. (“Section 898”), which was enacted in 2021. Section 898 sets out two mandates specifically applicable to the gun industry, and provides that a public nuisance exists when a gun-industry member violates either mandate and that violation results in harm in New York. Id. §§ 898-b, 898-c.

The first of these mandates, sub-section b(1), requires that a gun-industry member not engage in unlawful or unreasonable conduct by which it knowingly or recklessly “create[s], maintain[s] or contribute[s] to a condition in New York state that endangers the safety or health of the public.” Id.§ 898-b(1). This sub-section closely tracks the language of New York’s longstanding general criminal public nuisance provision, New York Penal Law § 240.45.

The second mandate, sub-section b(2), requires that every gun-industry member that conducts business in New York “establish and utilize reasonable controls and procedures to prevent its [] products from being possessed, used, marketed or sold unlawfully in New York state.” NY GBL § 898-b(2). Section 898 provides causes of action to the New York State Attorney General, the corporation counsels of New York municipalities, and private plaintiffs harmed by conduct that violates the statute. Id. §§ 898-d, 898-e.

Section 898, which expressly applies to the sale and marketing of firearms, fits squarely within PLCAA’s predicate exception. Nevertheless, the National Shooting Sports Foundation (NSSF – the gun industry’s main trade group) brought a legal challenge, arguing that Section 898 is: (a) inconsistent with and preempted by PLCAA and (b) unconstitutional. In an opinion issued on July 10, 2025, authored by Judge Eunice Lee and joined by Judge Raymond Lohier, the Second Circuit rejected all of NSSF’s arguments and held that Section 898 is not facially invalid.

Reviewing PLCAA’s legislative findings and purposes, the court found “some support” for both NSSF’s view that “PLCAA’s purpose [i]s primarily substantive—to insulate gun manufacturers and distributors from excess liability,” and the State’s view that PLCAA’s purpose was “structural and procedural—to preserve the balance of power between legislatures and the judiciary and to ensure that gun industry members are not exposed to liability without proper notice via a legislative enactment.”

The court found that PLCAA’s text and history do not, however, support NSSF’s argument that Congress intended “to prevent state legislatures from creating avenues to hold gun manufacturers liable for downstream harms caused by their products.” And it explained that PLCAA plainly was “not [intended] to protect those manufacturers who violate state or federal laws.”

The court also echoed the Supreme Court’s description of the predicate exception—that it “opens a path to making a gun manufacturer civilly liable for the way a third party has used the weapon it made”—from its recent, and first, decision addressing PLCAA in Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos, 145 S. Ct. 1556, 1562 (2025). It concluded that “[b]ecause Section 898 expressly regulates firearms” and is a duly enacted state law, it is consistent with PLCAA’s predicate exception and therefore not preempted.

The court went on to reject NSSF’s constitutional arguments. With respect to the dormant Commerce Clause, the court found that NSSF had not shown that Section 898 discriminates against or imposes an undue burden on interstate commerce or that it regulates wholly extraterritorial conduct in every application of the statute.

The court also rejected the argument that Section 898 is unconstitutionally vague on its face. While NSSF argued that Section 898 is insufficiently specific on what conduct—including what reasonable controls—are required or forbidden, it explained that “reasonableness is a well-established legal standard that is employed in a wide range of statutes consistent with the requirements of the Due Process Clause” and emphasized that the law’s definition of “reasonable controls and procedures” provides specific examples and is “‘sufficiently clear.'”

Judge Dennis Jacobs concurred with the result—making the decision unanimous—but wrote separately, focusing on PLCAA and preemption. His is a very different take on Section 898. In his view, by enacting PLCAA, “Congress shut the door on litigation that would destroy the nation’s firearms industry.” Quoting from then-Governor Andrew Cuomo’s statement that New York’s law would “‘right the wrong’ done by PLCAA,'” Judge Jacobs concludes that Section 898 “is nothing short of an attempt to end-run PLCAA.”

Jacobs nevertheless concurred in the result because he felt bound by a prior Second Circuit decision, City of New York v. Beretta U.S.A. Corp., 524 F.3d 384 (2d Cir. 2008), which found that the predicate exception is satisfied by statutes that: (a) “expressly regulate firearms,” (b) “courts have applied to the sale and marketing of firearms,” or (c) “do not expressly regulate firearms but that clearly can be said to implicate the purchase and sale of firearms.” Because Section 898 “undoubtedly ‘expressly regulate[s] firearms,'” Jacobs wrote, “it satisfies Beretta.”

A few observations on Jacobs’ concurrence. First, although he didn’t expressly say so, it seems fairly clear that he principally (if not exclusively) takes issue with sub-section b(1), not sub-section b(2). In discussing why he believes New York’s “repurposed nuisance law is infirm,” he quotes only sub-section b(1) to argue that the law “imposes liability for diffuse and generalized conduct: ‘creat[ing], maintain[ing] or contribut[ing] to a condition in New York state that endangers the safety or health of the public.'”

Jacobs includes no specific criticism—and indeed no criticism at all—of 898-b(2), the part of the statute that requires firearms industry members to “establish and utilize reasonable controls and procedures.”

Nor would his critique of liability for “diffuse and generalized conduct” make sense in the context of 898-b(2), as the statute defines “reasonable controls and procedures” with illustrative examples such as “(a) instituting screening, security, inventory and other business practices to prevent thefts of qualified products as well as sales of qualified products to straw purchasers, traffickers, persons prohibited from possessing firearms under state or federal law, or persons at risk of injuring themselves or others; [and] (b) preventing deceptive acts and practices and false advertising…” NY GBL §898-a(2).

Second, although Jacobs felt bound by Second Circuit precedent, he went on to explain that, were he “deciding Beretta afresh,” he would adopt a narrower definition of “applicable to”—limiting PLCAA’s predicate exception to statutes that “[a] bear upon firearms more specifically than by mere reference,…[b] give notice of [their] requirements sufficient to allow compliance with confidence, and…[c] require proximate cause.”

In an era of statutory interpretation where textualism reigns supreme, Judge Jacobs’ proposed standard is a conspicuously a textual way to define or apply the broad phrasing that Congress used when it chose the words “applicable to.” And it is far from clear how Judge Jacobs’ proposed test would apply, for example, to state unfair trade practices or anti-fraud laws that other courts have held do satisfy the predicate exception.

Finally, while Jacobs echoed NSSF’s concern that allowing laws like Section 898 to stand would leave “the firearms industry [] in jeopardy of enforcement so abusive and arbitrary that it can be destroyed by litigation expense, damages, and impediments to insurance and the raising of capital,” no evidence is cited to support these oft-heard but far-fetched industry claims.

So what does all this mean for the future of gun-industry accountability laws and litigation? New York’s gun-industry accountability law, like the laws of nine additional states that have followed New York’s lead, reflects a legislative judgment—consistent with PLCAA’s structure—that the gun industry should abide by the same kinds of standards that govern other industries.

In that sense, these laws are not an “end-run around” PLCAA; instead, they are answering PLCAA’s express invitation to state (and federal) lawmakers to act through the democratic process to set rules and standards against which the gun industry may be held accountable. Section 898 does not “right the wrong” done by PLCAA, but instead follows the path expressly set out by Congress in PLCAA in the predicate exception.

As the statute’s title makes clear, Congress intended to protect “lawful commerce in arms,” not unlawful practices, and nothing in PLCAA suggests Congress meant to prevent future lawmakers from expanding the gun industry’s legal obligations to act to prevent gun violence.

The NSSF v. James decision confirms that New York’s legislature acted comfortably within its authority when it passed a law requiring gun companies to take reasonable, affirmative steps to protect New Yorkers from gun violence and gun crime and allowing those companies to be held liable when they fail to live up to those standards.

While as-applied challenges are to be expected as cases are brought under Section 898, much of the majority opinion’s reasoning is likely to apply with equal force to defeat such challenges. NSSF v. James thus serves as an important marker that the fight over gun industry accountability is alive and well in the courts and growing in scope and intensity.