On June 25, the US Court of Appeals for the Third Circuit ruled in a 2-1 decision against Smith & Wesson in a case challenging a New Jersey subpoena order as violating its First, Second, Fourth, Fifth, and Fourteenth Amendments.
In a case called Smith & Wesson Brands, Inc. v. Attorney General of the State of New Jersey, the appeals court upheld the lower court’s dismissal of the civil rights action. In broad terms the case was decided on a technical issue of preclusion, with the majority opinion noting, “We express no opinion on whether Smith & Wesson’s claims for Constitutional violations due to further investigative steps would be precluded.”
The genesis of the complaint began when former New Jersey Attorney General Gurbir Grewal (continued under the current Attorney General, Democrat, Matthew Platkin), investigated Smith & Wesson in a politically-motivated action for possible violations of the New Jersey Consumer Fraud Act and demanded information about their firearms and ammo-related advertising via a subpoena which Smith & Wesson ignored.
Smith & Wesson subsequently challenged the subpoena in a 2020 lawsuit, claiming the state was attempting to suppress speech regarding gun ownership. The company lost in the New Jersey state court and then added to its suit claiming retaliation.
It’s difficult to see New Jersey’s use of the Consumer Fraud Act as a means to pursue legal action against the gun manufacturer as anything other than a political attack from a state that is ardently anti-gun.
The Consumer Fraud Act is intended to prevent the, “act, use or employment by any person of any commercial practice that is unconscionable or abusive, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise . . . .”
Federal Judge Paul Matey, expressed serious concerns about New Jersey’s tactics in the case:
Now, for the first time, the State seeks to apply the Consumer Fraud Act to supplement these specific restrictions, waving aside concerns about the protections of the First and Second Amendment rights of New Jersey residents in, as always, the name of safety,” adding, “It is a well-traveled road in the Garden State, where long-dormant regulatory powers suddenly spring forth to address circumstances that have not changed.
In his dissent, Judge Matey paints a similar picture:
More than three years ago, Smith & Wesson asked a federal court to decide whether the novel decision by New Jersey’s Attorney General to use a state consumer fraud law to investigate ads for ordinary guns and ammo treads on the freedoms recognized by the U.S. Constitution. Today, and four opinions later, those questions remain unanswered.
He noted the animus with which the state went after the gun manufacturer, asserting, “Intimidation, rather than litigation—where law must be offered, facts found, and an impartial decision reached—seems to be New Jersey’s plan.”
Instead, the case balanced on numerous technicalities including an appeals court stating that a district court erred in applying previous precedent, along with a concept called preclusive effect, which prevents re-litigation of the same issue in a second case.
Judge Matey concluded:
New Jersey’s Attorney General may cheer the result today. But the expansion of res judicata this win requires cannot be cabined to the chosen causes of the current executive. In time, New Jersey may come to lament losses in less tweet-worthy investigations. Such is the cost of departing from the classical legal tradition, and the reason I would stay firmly tethered to the law of preclusion, unedited. For that reason, I respectfully dissent.
In his victory lap statement, Platkin boasted:
We are gratified that today, the Third Circuit brought an end to Smith & Wesson’s challenge to New Jersey’s subpoena investigating whether the company engaged in deceptive and unlawful consumer practices. Smith & Wesson lost its case at every level of the New Jersey court system, which concluded that the gun company’s efforts to evade subpoena compliance were meritless. The decision shows that Smith & Wesson cannot run to federal court when it did not get its way in state court.
Soon, however, it may be the State running to the federal courts for relief as they are challenged in numerous, ongoing Second Amendment cases in which they have already been dealt partial losses. A major case was just filed against the state, which we reported on last week, challenging its Unconstitutional permitting scheme and fees for firearms ownership.
BREAKING: Smith & Wesson cannot run to federal court to avoid our investigation. We will continue to hold bad actors in the gun industry accountable. pic.twitter.com/nhGw0R6qIz
— Attorney General Matt Platkin (@NewJerseyOAG) June 25, 2024
