Camden County Board of Chosen Freeholders v. Beretta U.S.A. Corp., Civil Action No. 99-2518 (JBS) (D. N.J. 12/5/2000)

Decision Date05 December 2000
Docket NumberCivil Action No. 99-2518 (JBS)
PartiesCAMDEN COUNTY BOARD OF CHOSEN FREEHOLDERS, Plaintiff, v. BERETTA U.S.A. CORP., et al., Defendants.
CourtU.S. District Court — District of New Jersey
OPINION

JEROME B. SIMANDLE, District Judge.

I. INTRODUCTION

In this noteworthy case, the governing body of Camden County, New Jersey (the "County" or "Camden County") has taken aim against various firearms manufacturers (collectively the "defendants"), claiming that their wrongful conduct in marketing and distributing handguns has facilitated the creation of a criminal market for handguns within County borders. As described in its detailed 40-page Second Amended Complaint, the County seeks injunctive and monetary relief in compensation for harm suffered by the County due to the defendants' allegedly reckless and negligent handgun marketing and distribution policies and practices, and due to the defendants' alleged creation of a public nuisance in Camden County that has endangered public safety, health and peace.

Several of the named manufacturing defendants1 presently move to dismiss the County's complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P., the resolution of which calls upon this Court to address several issues of first impression under the laws of this state and the Third Circuit.

The principal issues to be decided are: (1) whether Camden County's complaint in this case is sufficient to allege that the County's injuries (that is, the increased costs of governmental functions due to law enforcement related to illegal use of handguns) are caused by or fairly attributable to the alleged negligence of these manufacturers in their marketing and distribution of legal firearms; and (2) whether Camden County's complaint states a cognizable claim under New Jersey law that these manufacturers control or participate to a substantial extent in the creation of a public nuisance (that is, the criminal market for illegal handguns) within the county. This case, and therefore this Opinion, is not about conduct of local handgun distributors or local retailers who actually sell to the public, nor does Camden County allege that the manufacturers' marketing practices violate federal or state statutes. Further, the Court does not determine whether the defendants are doing all that they reasonably can or should do to diminish the risks that their handguns end up in the hands or criminals.

As discussed in detail below, the Court finds that the County lacks constitutional standing to assert its negligence claims because its injury—increased governmental costs—is too attenuated from the distribution policies of the manufacturers, and the negligence-based claims therefore fail to allege that the County's expenditures are caused by or fairly attributable to the manufacturers' negligence. Second, the Court further finds that, under New Jersey law, Camden County generally has the legal authority to seek to abate a public nuisance and to receive compensation for the remedy of a public nuisance, but that these manufacturers, who distribute lawful handguns in compliance with existing federal and state statutes, may not be held liable for creating or maintaining the public nuisance of which Camden County complains.

Having considered the parties' submissions, and having twice heard extensive oral argument on these submissions, and for reasons discussed herein, the defendants' motion to dismiss will be granted.

II. BACKGROUND
A. Procedural History

Camden County seeks compensation for its expenditures arising from handgun-related violence within its borders, and seeks to prevent such violence and expenditures from occurring in the future.2 In furtherance of these aims, the County presently asserts three causes of action against 16 handgun manufacturers. These three causes of action are: (1) public nuisance; (2) negligent entrustment; and (3) negligence in marketing and distribution. These claims have been refined through a series of amendments to the pleadings.3

B. Factual Allegations in the Second Amended Complaint

In its Second Amended Complaint (SAC), plaintiff alleges that Camden County has suffered immense hardship as a direct result of the defendants' reckless and negligent misconduct in the manufacture, distribution, sale, marketing and design of their firearms. (SAC ¶ 1.) The defendants are manufacturers of handguns who are not engaged in direct sales; instead, they sell the handguns to licensed distributors, who then sell to licensed retailers, who then sell to the purchaser. None of these transactions is claimed to violate existing statutes or regulations, and the County does not contest that these sales involve lawful firearms transactions. Instead, the County maintains that a substantial portion of the handgun market consists of "multiple sales"—one person legally buying two or more handguns at the same time or over a period of time. (Id. ¶ 18.) According to the County, the next step is generally that this multiple purchaser will re-sell the gun to someone else, often someone barred from purchasing a handgun directly.

The County also alleges that a large percentage of persons involved in multiple handgun purchases are allegedly engaging in "straw purchases" where the buyer is really buying for a third party who may be prohibited from buying a gun by state or federal law. (Id. ¶ 21.) Under the system of multiple purchases allegedly facilitated by defendants' loose control over the nation's licensed firearm distributors, most guns end up Camden County as the result of the defendants' allegedly reckless manner distribution.4

The County claims that, beyond simply placing their goods into the stream of commerce, the defendants actually facilitate the criminal market for handguns. The defendants allegedly produce, market and distribute substantially more handguns than they reasonably expect to sell to law-abiding purchasers; they allegedly continually use distribution channels that they know yield criminal and underage end users in Camden County; they allegedly do not monitor or supervise their distributors with respect to multiple purchases; and they fail to adopt even minimal practices or procedures that would eliminate or lessen the criminal market for handguns. (Id. ¶¶ 14-15.)

Plaintiff alleges that the BATF gun trace process provides defendants with actual notice that their guns are being used in the commission of crimes, and that these BATF data identify which gun distributors sell an inordinate percentage of crime guns. Under the BATF trace process, plaintiff explains, each time a gun is recovered as part of a criminal investigation, the BATF informs the manufacturer of that gun the model and serial number of the gun used in the commission of a crime. The County maintains that the manufacturer knows, through its own records, the particular distributor through whom that gun was first distributed.5

Plaintiff asserts that the defendants' failure to react to gun trace data by taking steps to prevent guns from reaching criminals is reckless and negligent. The County further claims that as a result of defendants' reckless and/or negligent conduct, it has incurred a myriad of significant and substantial governmental costs associated with the illegal and/or improper possession and use of firearms within the County. Among the County agencies cited as incurring additional costs due to handgun violence are the offices of the Camden County Prosecutor, Sheriff, Medical Examiner, and Park Police, the County Correctional Facility, and the Camden County courts. (Id. ¶ 2.) Significantly, the County does not claim it has suffered direct damage to its property or harm to its personnel as a result of defendants' conduct.

The County's Second Amended Complaint states three causes of action. The first is public nuisance. Under this theory, the County asserts that defendants have knowingly, recklessly or negligently interfered with public safety, health, and peace, and that defendants are liable to the County for the substantial financial costs necessary to abate the nuisance. (Id. ¶¶ 91-102.) The second cause of action is for negligent entrustment. Under this theory of recovery, the County asserts that the defendants negligently failed to monitor the sales and distribution of their lethal products, and that this negligence has facilitated the creation of a crime market, the prevention of which the County must devote additional personnel, resources, time and money. (Id. ¶¶ 103-109.) The County's third cause of action is for negligence, wherein plaintiff alleges that defendants breached their duty to act in a reasonably prudent manner regarding the marketing and distribution of their lethal products so as to reduce the risks of their handguns being available for criminal use in Camden County. (Id. ¶¶ 110-115.)

As relief, the County seeks (1) compensation for the cost of abating the public nuisance allegedly created by defendants' conduct, (2) injunctive relief forcing defendants to change their marketing and distribution practices, (3) compensatory damages for defendants' negligence, and (4) punitive damages based on defendants' allegedly intentional and reckless conduct. (Id. at Demand, p.40.)

III. DISCUSSION
A. Motion to Dismiss Standard

The defendants have moved to dismiss the Second Amended Complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P. A motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted does not attack the merits of the case, but merely tests the legal sufficiency of the Complaint. See Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). When considering a Rule 12(b)(6) motion, the reviewing court must accept as true all well-pleaded allegations in the Complaint and view them in the light most favorable to the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994); Palladino Ex Rel U.S....

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