Opinion
06-CV-6504.
February 15, 2008
MEMORANDUM ORDER
I. Introduction
The City of New York commenced this action in December 2006 against twelve gun retailers located in Georgia, Ohio, Pennsylvania, South Carolina and Virginia. In a similar action filed in May 2006, the City sued fifteen additional retailers on similar grounds. See City of New York v. A-1 Jewelry Pawn, Inc., No. 06-CV-2233 (E.D.N.Y.) ("A-1 Jewelry Pawn"). From the total of twenty-seven defendants in these two separate actions, fifteen have entered into settlement agreements with the City. Nine of the original twelve defendants in the instant action have settled. The remaining defendants are: (1) Bob Moates' Sport Shop, Inc. ("Moates'"); (2) Toccoa Pawn Variety, Inc. ("Toccoa"); and (3) Trader World, Inc. ("Trader").
Pending before the court are motions to dismiss for lack of personal jurisdiction by Moates', Toccoa and Trader. Nearly identical motions to dismiss for lack of personal jurisdiction have been rejected twice by this court. See A-1 Jewelry Pawn, 501 F. Supp. 2d 369 (E.D.N.Y. 2007), reconsideration denied, Order dated Sept. 27, 2007, Docket Sheet for No. 06-CV-2233 ("A-1 Docket") Entry No. 280 ("A-1 Personal Jurisdiction I"); A-1 Jewelry Pawn, ___ F.R.D. ___, 2007 WL 4462448 (E.D.N.Y. Dec. 18, 2007), A-1 Docket Entry No. 402 ("A-1 Personal Jurisdiction II"). The defendants in this action advance the same legal arguments in support of the same kind of motion. Argument was heard on January 23, 2008.
For the reasons set forth below, defendants' motion to dismiss for lack of personal jurisdiction is denied. Trial is set for July 21, 2008.
II. Facts A. Overview
An overview of the sources of information available to the City regarding guns sold by the defendants has been discussed in A-1 Personal Jurisdiction I and A-1 Personal Jurisdiction II. Familiarity with these two opinions is assumed. To briefly summarize, the City has available to it five general sources of information concerning guns sold by the moving defendants: (1) trace data from the National Firearms Trace Database, provided to the City by the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"), limited to guns recovered in New York City and New York State from 1994-2002; (2) trace data from the National Firearms Trace Database sold by ATF, through a private vendor, and available to the public until approximately 2001; (3) ATF trace requests made directly to a moving defendant that, if retained, should have been produced by defendants during the discovery in this action (the "Discovery Traces"); (4) court documents and related information generated in connection with federal criminal prosecutions; and (5) AMERICANS FOR GUN SAFETY FOUNDATION, SELLING CRIME: HIGH CRIME GUN STORES FUEL CRIMINALS (January 2004) (the "AGSF Report").
Also discussed thoroughly in the two A-I Jewelry Pawn personal jurisdiction opinions are a list of factors that are instructive in determining personal jurisdiction for gun retailers on a case-by-case basis:
• Number of handguns linked to criminal investigations in New York and elsewhere that are attributable to a gun retailer;
• Distribution practices of gun retailers as evidenced by the City's simulated straw purchases, gun trafficking prosecutions, and sales of multiple handguns to a purchaser by a retailer and their possible effects on crimes in New York;
• Time-to-crime of a retailer's guns recovered in New York; a short time-to-crime suggesting that a firearm was recently and illegally diverted from a retail outlet;
• Sales price and type of guns sold by a retailer since some brands of cheap handguns — known as "Saturday Night Special" — are favored by low-end criminals, have a short time-to-crime and are more likely to give rise to public nuisance and public danger when in the hands of prohibited purchasers;
• Crimes committed in New York with a retailer's guns;
• Total number of handguns the retailer sold in the United States and its total revenue from the United States and New York markets; and
• Receipt of a Demand Letter by the ATF — or the fact that a retailer has met the criteria for its receipt — because it is a determination by an administrative agency with expertise in the subject area that the retailer's practices are associated with the recovery of a disproportionate number of guns used in criminal activity.
Since the two personal jurisdiction decisions in the A-1 Jewelry Pawn action, the City has obtained one new source of information not available to it before: serial numbers and brands of all handguns sold by Moates' from 2000 to September 2006 and by Trader and Toccoa from 2000 to September 30, 2007.
A. Facts as to Each Defendant
1. Bob Moates' Sport Shop — Midlothian, Virginia
Traces from 's distribution Time to crime of 's Sales prices, types NY crimes 's total unit and Actions of criminal methods and their guns recovered in and intended uses committed with dollar sales of regulatory investigations to possible effects on NY of handguns that handguns that guns in US and authorities handguns that crime in NY (e.g., sold sold NY markets related to 's sold straw sales) practices 162 of 's guns were In a single month, At least 12 guns were Approx. 14% of guns At least one 4.061 guns sold in met criteria recovered in crimes sold at least nine recovered in New sells are Sat. Night homicide, assault, US from 2000- for ATF nationwide from handguns to straw York less than three Specials ('s aggravated assault, 2006 ('s discovery Demand 1990-1997 (National purchasers who year after sale (New discovery responses). and robbery (New responses); Letter. FOIA Data). trafficked them to York Trace Data). York Trace Data). assuming New York and 42% of guns comparable sales 31% of the 162 guns elsewhere (Ex. A). recovered in crimes in figures, about 4% were recovered in New York were Sat. of guns sold crimes in states other Night Specials (New annually 1990-1997 than Virginia York Trace Data). recovered in crimes (National FOIA (National FOIA Data). More than one-third Data). of guns recovered in About 18% of the 162 crimes nationally, were recovered in 1990-1997, were Sat. connection with Night Specials crimes in New York (National FOIA Data). State (National FOIA Data). Nearly 20% of the guns recovered in 26 of 's guns were New York had defaced recovered in New serial numbers (New York State (New York York Trace Data). Trace Data).a. Number of Trace Handguns Linked to Criminal Investigations in New York and Elsewhere that are Attributable to the Defendant
Based on the National FOIA Data, 162 guns sold by Moates' were recovered in crimes nationally during the period 1990 to 1997. Moates's role in serving an interstate market is evident — about 31% of its guns appearing in the National FOIA Data were recovered outside of Virginia, with more than half of those out-of-state guns traveling to New York. During the period from March 1994 through October 2001, the New York Trace Data reveals that at least 26 guns sold by Moates' were recovered in New York State.b. Distribution Methods and Their Possible Effects on Crimes in New York — Straw Purchases
Ian Blackstock, a New Yorker convicted of a felony, enlisted several straw purchasers to buy some 113 firearms for him from several Virginia gun dealers, including at least nine guns from Moates'. One of the straws bought three semi-automatic pistols for Blackstock in a two-week period in September 1990; in the same month, a second straw bought an additional two handguns from Moates', and a third straw bought four more handguns from Moates'. Blackstock paid the straws with a combination of cash and crack cocaine for their efforts, and resold the guns in New York and Washington, D.C. Eight of the nine guns that Moates' sold to Blackstock's straws were part of multiple sales.
c. Time-to-Crime of Retailer's Guns Recovered in New York
Consistent with the notion that Moates' handguns recovered in the City are trafficked guns, many have a short time to crime.See Blaustein Reich, Inc. v. Buckles, 365 F.3d 281, 285 (4th Cir. 2004). Guns sold by Moates' were recovered in New York as soon as 72 days after sale, with at least three additional handguns recovered less than one year from date of purchase, and 46% recovered within three years.
d. Sales Price and Types of Guns
Approximately 14% of the handguns Moates' sells are "Saturday Night Specials." While this percentage is relatively low compared with some of the other defendants' sales, guns sold by Moates' bear other significant indicia of trafficking: of the guns sold by Moates' and recovered in New York (as shown in the New York Trace Data), 42% are Saturday Night Specials, as are more than one-third of the Moates' guns recovered in connection with crimes nationwide during an earlier interval (1990-1997) for which trace data is available. Moates' role in supplying the illegal gun market in New York is further evidenced by the fact that nearly 20% of its guns recovered in New York had defaced serial numbers.
e. Crimes Committed in New York with Retailer's Handguns
Some of the reported incidents involving Moates' guns include the following:
• In March 1997, a person killed by a gunshot to the head was found in the street in Queens, with a handgun lying alongside the body;
• In October 1996, a woman in a Bronx shoe store was robbed at gunpoint by a 15-year-old child who put a .38 caliber gun to her head and demanded money;
• In April 1997, a man was shot in the back while in the hallway of a public housing project in the Bronx;
• In February 2000, a 16-year-old in the Bronx was arrested for possession of a loaded 9mm Taurus handgun; and
• In August 1996, two people, including a 16-year-old child, were arrested in the Bronx with burglar's tools, and three loaded handguns.See Complaint ¶ 66, Docket Entry No. 1
f. Total Number of Handguns the Retailer Sold in the United States and its Total Revenue from the United States and New York Markets
Moates' sold an estimated approximately 4,061 handguns between 2000 and 2006, an average of 580 handguns per year. The National FOIA Data shows 162 guns traced to Moates' over a seven-year period (1991-1997), or 23.1 per year. Thus, about 4% of the total handguns sold by Moates' in any given year ended-up recovered in connection with crimes.
g. Actions of Regulatory Authorities Related to the Gun Store's Distribution Practices
Moates' met the criteria for issuance of a Demand Letter by the ATF. 2. Trader World — North Charleston, South Carolina
Traces from 's distribution Time to crime of Sales prices, types NY crimes 's total unit and Actions of criminal methods and their 's guns recovered and intended uses committed with dollar sales of regulatory investigations to possible effects on in NY of handguns that handguns that guns in US and authorities handguns that crime in NY (e.g., sold sold NY markets related to 's sold straw sales) practices 39 of 's guns were Repeated instances of Average time for 39 Nearly half of guns Three homicides, 7,678 handguns met criteria recovered in New multiple purchases — guns = 2.44 years sold by and assault, aggravated sold 2000-Sept. for ATF York crimes, Dec. at least 10 shown by (New York Trace recovered in crimes assault, and robbery 2007 in US (('s Demand 1994-Jan. 2002 (New available data Data). in New York were Sat. (New York Trace discovery Letter. York Trace Data) (National FOIA Night Specials (New Data). responses). Data). At least 9 guns York Trace Data). An additional 11 of recovered less than 's guns were one year from data of 49% of guns sold by recovered in New sale, and 69% and recovered in York between 2004- recovered within crimes nationwide 2007 (Trader's three years of sale 1990-1997 were Sat. discovery responses). (New York Trace Night Specials Data). (National FOIA 53 of 's guns were Data). recovered in crimes nationwide (National 18% of guns FOIA Data). recovered in New York had defaced 79% of these guns serial numbers (New were recovered in York Trace Data). crimes in states other than South Carolina (National FOIA Data). About 45% (24 guns) were recovered in connection with crimes in New York State (National FOIA Data).a. Number of Trace Handguns Linked to Criminal Investigations in New York and Elsewhere that are Attributable to the Defendant
Based on National FOIA Data, 53 guns sold by Trader were recovered in crimes nationally during the period 1990 to 1997. Guns sold by Trader move in an interstate market: 79% of the guns sold by Trader appearing in the National FOIA Data were recovered outside of South Carolina, with 45% of the total in New York.During the period from March 1994 through October 2001, the New York Trace Data shows that at least 39 guns sold by Trader were recovered in New York. Trader's alleged contribution to the public nuisance in New York City is ongoing: based on matches between serial numbers and brands of handguns sold by Trader and the NYPD Ballistics Data, an additional 11 Trader guns have been recovered in crimes in New York.
b. Distribution Methods and Their Possible Effects on Crimes in New York — Multiple Sales
The National FOIA Data confirms that handguns sold by Trader in multiple sales end up being recovered in crimes. For instance, two Hi-Points which Trader sold on February 10, 1994 turned up in crimes in New York City in March 1996 and June 1996, the former in an aggravated assault.
c. Time-to-Crime of Retailer's Guns Recovered in New York
Consistent with the notion that the Trader guns recovered in the City are trafficked guns, they have a much shorter time-to-crime — 2.44 years (New York Data) — than the six-year average for all ATF trace requests. See Blaustein, 365 F.3d at 285. Handguns sold by Trader were recovered in New York as soon as fourteen days after sale. At least nine guns sold by Trader were recovered within one year of sale, and 69% of Trader's guns recovered in New York were recovered under the three-year threshold that ATF sets for guns suspected of being trafficked.
d. Sales Price and Types of Guns
Just over 15% of the handguns it sold from 2000 to 2006 are Saturday Night Specials. While this percentage is relatively low compared with some of the other defendants' sales, guns sold by Trader bear other significant indicia of trafficking; nearly half of Trader's guns recovered in crimes both in New York (1994-2001) and nationwide (1990-1997) were Saturday Night Specials; and almost one-fifth of Trader's guns recovered in New York had defaced serial numbers.
e. Crimes Committed in New York with Retailer's Handguns
The reported incidents involving Trader guns include the following:
• In June 1999, a 17-year-old boy was found in possession of a .22 caliber Intratec while riding his bicycle on a sidewalk in Brooklyn;
• In June 2000, a woman was robbed of her cell phone at gunpoint in her Manhattan apartment by two young men; and
• In August 2001, a 25-year old man opened fire on passengers on a Greyhound Bus at the Port Authority Bus Terminal in Manhattan, using a semiautomatic 9mm sold by Trader. The shooting ended only when a wounded passenger begged the shooter to spare the life of her 8-year-old daughter. Before the man was apprehended by police, four passengers were shot.See Complaint ¶ 191.
f. Total Number of Handguns the Retailer Sold in the United States and its Total Revenue from the United States and New York Markets
Trader sold 7,678 firearms between 2000 and September 30, 2007, or an estimated 1,011 firearms per year.
g. Actions of Regulatory Authorities Related to the Gun Store's Distribution Practices
Trader meets the criteria for issuance of a Demand Letter. 3. Toccoa Pawn — Toccoa, Georgia
Traces from 's distribution Time to crime of 's Sales prices. types NY crimes 's total unit and Actions of criminal methods and their guns recovered in and intended uses committed with dollar sales of regulatory investigations to possible effects on NY of handguns that handguns that guns in US and authorities handguns that crime in NY (e.g., sold sold NY markets related to 's sold straw sales) practices At least 20 of 's demonstrates a Average time for 20 More than one- Rape, assault, and 2,548 handguns meets the guns were recovered willingness to engage guns = 3.30 years quarter of guns sells robbery (New York sold in US from criteria for in crimes in New in multiple sales: at (New York Trace are Sat. Night Specials Trace Data). 2000-Sept. 2007. ATF Demand York (New York least six of 's guns Data). ('s discovery Letter. Trace Data). were recovered in responses). New York crimes — At least 40% of 's An additional 10 of 30% — were sold in guns recovered in More than one-third 's guns were multiple purchases New York were of guns sold by and recovered in New (New York Trace recovered in under recovered in New York since 2002 Data). three years (New York York City were Sat. (Toccoa's discovery Trace Data). Night Specials (New responses). York Trace Data).a. Number of Trace Handguns Linked to Criminal Investigations in New York and Elsewhere that are Attributable to the Defendant
New York Trace Data shows that at least 20 guns sold by Toccoa were recovered in connection with crimes in New York between 1994 and 2001. Matches between the NYPD Ballistics Data and serial numbers and brands of handguns sold by Toccoa reveal that Toccoa's handguns continue to flow into New York: an additional ten handguns recovered in New York since 2002, seven of them from 2004 onward.b. Distribution Methods and Their Possible Effects on Crimes in New York — Multiple Sales
Toccoa displays a readiness to engage in multiple sales. The New York Trace Data shows that Toccoa sold three identical Davis Industries P380 handguns on January 18, 1994, all of which were transported to the New York market and recovered separately in connection with crimes in 1994, 1997 and 1999. Multiple sales of identical guns on the same day are especially significant because Toccoa has a relatively low sales volume.
c. Time-to-Crime of Retailer's Guns Recovered in New York
Consistent with the notion that the Toccoa guns recovered in the City are trafficked guns, they have a much shorter time-to-crime — 3.30 years (New York Data) — than the six-year average for all ATF trace requests. See Blaustein, 365 F.3d at 285. Eight Toccoa guns — 40% — were recovered in less than three years of sale, the threshold that ATF sets for guns suspected of being trafficked.
d. Sales Price and Types of Guns
e. Crimes Committed in New York with Retailer's Handguns
• In February 1996, three young men — including a 16-year-old boy — arrested for attempting to steal a car in Brooklyn were in possession of a .380 caliber gun;
• In March 1998, a woman living in a single room occupancy building in Brooklyn was threatened by another occupant in possession of a .22 caliber gun;
• In August 1999, during a routine traffic stop in Brooklyn, a man driving with a suspended license was in possession of a .380 caliber gun; and
• In February 2000, five men, including three 19-year-olds, and two 20-year-olds, robbed a man at gunpoint in his apartment building in Brooklyn, brandishing two loaded handguns.See Complaint ¶ 169.
f. Total Number of Handguns the Retailer Sold in the United States and its Total Revenue from the United States and New York Markets
Toccoa sold a total of 2,548 handguns during the Relevant Period, an average of 332 handguns per year. Assuming Toccoa's annual sales volume was comparable during 1996-2001, 1% of handguns sold annually by Toccoa are recovered in crimes in New York.
g. Actions of Regulatory Authorities Related to the Gun Store's Distribution Practices
Toccoa met the criteria for issuance of a Demand Letter.
III. Discussion
The legal basis for exercising personal jurisdiction over these defendants has been set out in A-1 Personal Jurisdiction I, 501 F. Supp. 2d 369, reconsideration denied, Order dated Sept. 27, 2007, A-1 Docket Entry No. 280 and A-1 Personal Jurisdiction II, ___ F.R.D. ___, 2007 WL 4462448 (E.D.N.Y. Dec. 18, 2007). These decisions discuss at length the legislative history, requirements and court interpretation of New York's long arm statute, N.Y. C.P.L.R. 302(a)(3), the federal due process limitations on the exercise of personal jurisdiction, and various factors bearing on prudential aspects of personal jurisdiction analysis applicable to gun manufacturers and distributors. Defendants in the instant action have not provided any reason to depart from the analysis in those two opinions.
In the instant action, the City has assembled, as to each moving defendant, strong evidence of a continuous, long-standing course of conduct having adverse effects in New York City. This evidence documents a practice of facilitating the illegal sale of guns for movement into the underground New York City crime market. The City has demonstrated that each moving defendant has maintained a long, profitable and continuing commercial relationship affecting people in the State of New York. Personal jurisdiction is sought here not simply to vindicate an individual right or to resolve an individual commercial dispute, but to protect the safety of an entire community.
The necessarily clandestine nature of the commerce at issue — with moving defendants aware that their participation in interstate gun sales could potentially subject them to criminal and civil prosecution — means that the evidence of that interstate commerce is unlikely to be openly displayed. Examination of defendants' financial statements and other records will seldom tell the full story. Rather, proof of interstate commerce requires reliance upon inferences drawn from frequently fragmented information. The parallel conduct, which each moving defendant knew about, jointly constitutes a major aspect of interstate commerce and has a particularly harmful effect on the safety of New Yorkers.
Like the defendants in the A-1 Jewelry Pawn action, Moates', Trader and Toccoa unconvincingly argue that the City has not established that they committed a tortious act without the state. As discussed in A-1 Personal Jurisdiction I and A-1 Personal Jurisdiction II, plaintiff need not now prove a prima facie case in tort. Feinberg v. Deloitte Touche, No. 91-CV-4496, 1993 WL 330508, 1993 U.S. Dist. LEXIS 11749 (S.D.N.Y. Aug. 25, 1993). The plaintiff need only establish that the out-of-state conduct attributable to each defendant gives rise to a claim in tort. See Evans v. Planned Parenthood of Broome County Inc., 352 N.Y.S.2d 257, 257 (N.Y.App.Div. 3d Dep't 1974). At this stage of litigation, there is sufficient evidence to find a knowing violation of federal law on part of the defendants when they sold the handguns which ended up in New York City, as a predicate for a home state tort committed by each of the defendants.
Defendants' contention that they had no reason to expect that their sales of handguns outside of New York would produce lethal consequences in New York has been rejected. "[T]here is significant publicly available evidence such that any firearms distributor, by virtue of being in that business, should know of or foresee the existence of an underground market which transports guns from the Southeast to states in the Northeast, including New York." Hamilton v. Accu-Tek, 32 F.Supp.2d 47, 63 (E.D.N.Y. 1998). In light of the facts and analysis in Hamilton it should come as no surprise to any one participating in retail gun marketing that jurisdiction in New York might lie for illegal gun sales in other states.
The City's allegations and proof demonstrate the kind of "purposeful availment" that was absent in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Alleged with abundant factual confirmation are facts that the defendants engaged in straw sales, knew, or should have known, that the apparent purchaser was acting on behalf of a prohibited purchaser, and knew, or should have known, that many of the guns it was selling illegally would be trafficked to New York and used in crimes committed in New York City.
Defendants assert that they should not be subject to New York long arm jurisdiction because they do not derive substantial revenue from interstate or international commerce. The City has provided an ample factual basis for concluding that each moving defendant earns substantial revenue from interstate commerce — revenues more than sufficient to subject them to suit in New York.
Unfounded is defendants contention that this court's exercise of personal jurisdiction over them would somehow offend Constitutional Due Process. First, defendants' long-standing contacts with New York — allegedly supplying guns over the course of more than a decade to individuals who traffic these guns to New York for criminal purposes — are far more than minimal. Second, case law establishes that fewer contacts with New York are required when, as here, the cumulative weight of evidence of many independent retailers knowingly contributing to a large flow of illegal weapons into New York favors acquisition of personal jurisdiction in this State.
The evidence analyzed under applicable jurisdictional criteria satisfies both New York's long-arm statute and federal due process. Given the information available to firearms retailers concerning straw purchases and the illegal traffic in guns, along with defendants' alleged sales practices, defendants' should have reasonably expected their acts to have serious continuing adverse consequences in New York.
New York has a strong interest in the safety its residents and territory from handgun violence as well as in regulating the illegal flow of handguns into its territory. By enacting strong gun control laws to protect its citizens from gun-related crimes New York has expressed a special public policy interest in the subject matter of this litigation. The activities which the defendants' are alleged to be involved in are illegal and against the public interest in all states. Their alleged illegal practices hinder the ability of New York and the federal government to regulate the sale and ownership of firearms in accordance with extant statutes and contribute to serious criminal dangers in this City.
IV. Conclusion
The motions to dismiss for lack of personal jurisdiction by defendants Moates', Trader and Toccoa are denied. Trial is set for July 21, 2008. hearing.
SO ORDERED.