WASHINGTON (Reuters) -The U.S. Supreme Court heard arguments on Tuesday in a bid by two American gun companies to throw out the Mexican government's lawsuit accusing them of aiding illegal firearms trafficking to drug cartels and fueling gun violence in the southern neighbor of the United States.
U.S. firearms maker Smith & Wesson and distributor Interstate Arms have appealed a lower court's ruling that the lawsuit could proceed on the grounds that Mexico has plausibly alleged that the companies aided and abetted illegal gun sales, harming the Mexican government. The arguments were ongoing.
The case comes before the Supreme Court at a fraught time for U.S.-Mexican relations as President Donald Trump pursues tariffs on Mexican goods and accuses Mexico of doing too little to stop the flow of synthetic drugs such as fentanyl and migrant arrivals at the border.
At issue is whether Mexico's suit should be dismissed under a 2005 federal law called the Protection of Lawful Commerce in Arms Act that broadly shields gun companies from liability for crimes committed with their products - or whether the alleged conduct of the companies falls outside these protections, as the lower court found.
Mexico's lawsuit, filed in Boston in 2021, accused the gun companies of violating various U.S. and Mexican laws. Mexico claims that the companies have deliberately maintained a distribution system that included firearms dealers who knowingly sell weapons to third-party, or "straw," purchasers who then traffic guns to cartels in Mexico.
The suit also accuses the companies of unlawfully designing and marketing their guns as military-grade weapons to drive up demand among the cartels, including by associating their products with the American military and law enforcement.
The gun companies have argued that they have done nothing more than make and sell lawful products.
"If Mexico is right, then every law enforcement organization in America has missed the largest criminal conspiracy in history operating right under their nose, and (beer maker) Budweiser is liable for every accident caused by underage drinkers since it knows that teenagers will buy beer, drive drunk and crash," Noel Francisco, the lawyer arguing for the gun companies, told the justices.
'THE BEGINNING OF THE BEGINNING'
The task before the Supreme Court is merely to decide whether the case can proceed, Catherine Stetson, the lawyer arguing for Mexico, told the justices.
"We are at the beginning of the beginning of this case. This court need not vouch for Mexico's allegations, but it must assume they are true," Stetson said. "Mexico should be given a chance to prove its case."
Francisco cited a legal principle called proximate cause involving when an action brings about a legal injury, and argued that the gun companies were not the proximate cause of the harms claimed by Mexico.
In its lawsuit, Mexico must show that the gun companies were the proximate cause of their harms, in addition to showing that the companies aided and abetted illegal gun sales and marketing, to sidestep the 2005 law's general bar on suits against American gun companies for the criminal misuse of their products.
Liberal Justice Sonia Sotomayor seemed sympathetic to Mexico's theory of the role played by the gun companies in causing the legal injury to Mexico's government.
"We know that a straw seller is going to sell to someone who is going to use the gun illegally, because if they weren't they wouldn't use the straw purchaser - and that illegal conduct is going to cause harm, and harm like this that the gun is going to be used in some way to injure people, correct?" Sotomayor asked Stetson.
Mexico is seeking monetary damages of an unspecified amount and a court order requiring Smith & Wesson and Interstate Arms to take steps to "abate and remedy the public nuisance they have created in Mexico."
Most of the 180,000 homicides involving guns in Mexico, a country with strict firearms laws, from 2007 to 2019 were committed with weapons trafficked from the United States, according to court papers.
Guns trafficked from the United States to Mexico - counting those made by the defendants and other companies - are valued at more than $250 million annually, according to court papers.
The lawsuit details that the accused companies "deliberately supply the illegal Mexican market by selling guns through the small number of dealers that they know sell a large number of crime guns and who repeatedly sell in bulk to the cartel traffickers," Stetson told the justices.
According to the lawsuit, gun violence fueled by trafficked American-made firearms has contributed to a decline in business investment and economic activity in Mexico, and forced its government to incur unusually high costs on services including healthcare, law enforcement and the military.
U.S. District Judge Dennis Saylor in Boston sided with the gun companies in 2022 and threw out the case. The Boston-based 1st U.S. Circuit Court of Appeals reversed Saylor's decision in January 2024 and ruled that the suit could proceed.
A ruling in the case is expected by the end of June.
(Reporting by John Kruzel and Blake Brittain; Editing by Will Dunham)
