Opinion ID: 852959
Heading Depth: 4
Heading Rank: 4

Heading: Commerce Clause Limitations on State Tort Law

Text: The trial court concluded that granting relief to the City would violate the Commerce Clause of the federal constitution. The manufacturer-defendants assert that because the City seeks to prohibit some sales practices, for example sales at gun shows or multiple sales to the same purchaser, this lawsuit constitutes an attempt to regulate firearms through the courts. Defendants cite BMW for their contention that state tort law can be viewed as regulation of interstate commerce. BMW noted that state judicial doctrine may be viewed as regulation, but held the Alabama punitive damages award in that case to violate Fourteenth Amendment due process. We recognize that some have viewed BMW as grounded in the Commerce Clause. [11] But as explained above, the reasons given by the Supreme Court in vacating the Alabama award relate not to state interference with interstate transactions, but rather to Alabama's effort to deter or punish conduct in other states. As such we think BMW is a due process case, not a Commerce Clause case. The activities of the manufacturers that the City seeks to curtail are all directed at the effects on local activities by dealers. Accordingly, we think BMW does not support the defendants' Commerce Clause contention. Whether a particular state remedy rises to the level of a burden on interstate commerce is essentially a balancing exercise in which any inconvenience to the national economy must be justified by the state's interest in protecting its own citizens. Prohibition of sales to these purchasers is within the police power of the state. Presser v. Illinois, 116 U.S. 252, 265, 6 S.Ct. 580, 29 L.Ed. 615 (1886). Indeed, several states ban one form of firearm, the Saturday night special, apparently without significant Commerce Clause challenge. [12] See C.D.M. Prods., Inc. v. City of New York, 76 Misc.2d 369, 350 N.Y.S.2d 500, 503 (N.Y.Sup.Ct.1973). The federal government also imposes requirements on purchases. It is a violation of federal law for a dealer to sell a handgun to a variety of classes of individuals. [13] But federal legislation has expressly denied any intent to preempt state laws regulating guns. 18 U.S.C. 927 (2000). [14] State tort doctrines are equally allowed to thrive as a part of the law of a state. Defendants contend that the City's relief would require manufacturers to change their distribution methods nationwide, and therefore constitutes extraterritorial regulation which violates the Commerce Clause. It is true that the City seeks to change how handguns are distributed, but only those handguns that are sold in and around Gary. Indiana law requires that no sales be made to felons and some others deemed as significant risks. I.C. § 35-47-2-7(b). Imposing liability for negligent, reckless or intentional facilitation of violations of these regulations that cause harm within the local jurisdiction does no more than state tort law has historically done. To avoid that liability, the defendants need only comply with existing state and federal laws governing gun distribution. Defendants also cite Edgar v. MITE Corp., 457 U.S. 624, 102 S.Ct. 2629, 73 L.Ed.2d 269 (1982), for their contention that a state regulatory scheme may violate the Commerce Clause. Edgar involved a state statute that required state approval of a tender offer for a company whose shares were owned across the nation. Id. at 627, 102 S.Ct. 2629. Thus Illinois sought to prevent transactions between buyers and sellers, both of whom were outside the forum state. Here, with the possible exception of the City's effort to block internet sales (which could also be locally regulated by using the shipping address of the buyer), all of the requested relief can be accomplished at a local level. At a minimum, the distributors and manufacturers can stop doing business with those few dealers in the Gary area known to be sources of unusually high volumes of illegal sales. Other more tailored forms of relief limited to local impact are presumably also available. It is well established that a state can establish product liability standards in the absence of federal preemption of the area. Sprietsma v. Mercury Marine, 537 U.S. 51, 60, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002); Geier v. Am. Honda Motor Co., 529 U.S. 861, 886, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000). The defendants raise no Second Amendment issue. For purposes of the Commerce Clause, there is no qualitative difference between recognition of the negligence and nuisance claims the City asserts as to handguns and restrictions on any other product deemed dangerous. We also see no difference between local requirements designed to make the product itself more safe and requirements that its distribution be conducted consonant with public intent. Applying these general principles, we find no Commerce Clause bar to the City's claim. The City seeks to abate the allegedly unreasonably injurious practices of the defendants in the distribution of handguns that find their way into the hands of criminals in Gary. Local safety concerns have been found to justify banning some products altogether. See, e.g. Nat'l Paint & Coatings Ass'n v. City of Chicago, 45 F.3d 1124, 1130 (7th Cir.1995) (spraypaint); Cohen v. Bredehoeft, 290 F.Supp. 1001, 1003 (S.D.Tex.1968), aff'd 402 F.2d 61 (5th Cir.1968) (fireworks). Certainly where only local retail sales are affected, even an outright ban would not discriminate either formally or in effect against interstate or out of state interests. Nat'l Paint & Coatings Ass'n, 45 F.3d at 1132. Accordingly, a rational basis grounded in public safety may justify it. Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 124, 98 S.Ct. 2207, 57 L.Ed.2d 91 (1978). Even if such a ban were to be evaluated under the more stringent balancing of Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970), its survival of a commerce clause challenge would turn on factual issues resolved at this pleading stage in favor of the plaintiff. In any event, the form of relief the City seeks falls far short of banning handguns. Even under the traditional Pike test, whether there are less restrictive means and proof of the degree of harm alleviated remain issues for trial. They do not justify dismissal of the claim on Commerce Clause grounds.