Date: 05-12-2009

Case Style: Lillian S. Ileto, et al. v. Glock, Inc.

Case Number: 06-56872

Judge: Susan P. Graber

Court: United States Court of Appeals for the Ninth Circuit on appeal from the Central District of California

Plaintiff's Attorney: Peter Nordberg, Berger & Montague, P.C., Philadelphia, Pennsylvania; and Sayre Weaver, The Educational Fund to Stop Gun Violence, La Habra, California, for the plaintiffs appellants.

Defendant's Attorney: Charles H. Dick, Jr., and Shannon D. Sweeney, Baker & McKenzie LLP, for defendant-appellant/appellee China North.

Christopher Renzulli, Renzulli Law Firm, LLP, White Plains, New York, for defendants-appellees Glock & RSR.

H. Thomas Byron, III, Appellate Staff Civil Division, Department of Justice, Washington, D.C., for the defendant intervenor- appellee.

Beth S. Brinkman, Morrison & Foerster LLP, Washington, D.C., for amicus curiae.

Description: By enacting the Protection of Lawful Commerce in Arms Act (“PLCAA� or “Act�), 15 U.S.C. §§ 7901-7903, Pub. L. No. 109-92, 119 Stat. 2095 (2005), Congress has protected federally licensed manufacturers and sellers of firearms from most civil liability for injuries independently and intentionally inflicted by criminals who use their non-defective products. Under the terms of the PLCAA, the claims brought here, by the victims of a criminal who shot them, against a federally licensed manufacturer and a federally licensed seller of firearms must be dismissed. But the claims brought against an unlicensed foreign manufacturer of firearms may proceed. We therefore affirm.

FACTUAL AND PROCEDURAL HISTORY

On August 10, 1999, Bufford Furrow shot and injured three young children, one teenager, and one adult at a Jewish Community Center summer camp in Granada Hills, California. Later that day, he shot and killed Joseph Ileto, a postal worker. Furrow was carrying at least seven firearms, which he possessed illegally.

In 2001, the shooting victims and Ileto’s surviving wife filed this action against the manufacturers, marketers, importers, distributers, and sellers of the firearms. They alleged that Defendants intentionally produce, market, distribute, and sell more firearms than the legitimate market demands in order to take advantage of re-sales to distributors that they know or should know will, in turn, sell to illegal buyers. They also alleged that Defendants’ deliberate and reckless marketing and distribution strategies create an undue risk that their firearms would be obtained by illegal purchasers for criminal purposes.

1 They did not, however, allege that Defendants violated any statute prohibiting manufacturers or sellers from aiding, abetting, or conspiring with another person to sell or otherwise dispose of firearms to illegal buyers. Instead, Plaintiffs brought their claims against Defendants solely under California common law tort statutes for foreseeably and proximately causing injury, emotional distress, and death through knowing, intentional, reckless, and negligent conduct.

In 2002, the district court dismissed the case for failure to state a claim under California law. Ileto v. Glock, Inc., 194 F. Supp. 2d 1040 (C.D. Cal. 2002). We affirmed in part and reversed in part. Ileto v. Glock, Inc., 349 F.3d 1191 (9th Cir. 2003) (“Ileto I�). We held that Plaintiffs stated cognizable negligence and public nuisance claims under California law with respect to the firearms actually used in the shootings. Id. at 1203-15. We therefore reversed the dismissal of the action against Defendants RSR Management Corp. and RSR Wholesale Guns Seattle Inc. (collectively “RSR�), Glock Inc., and China North Industries Corp. (“China North�), because Plaintiffs alleged that Furrow may have used the firearms manufactured and distributed by those Defendants. Id. at 1215-16. We affirmed the dismissal of the action against all other Defendants, however, because the allegations did not support a conclusion that Furrow fired the firearms associated with those Defendants. Id. at 1216.

That holding resulted in disagreement within our court. The majority of our colleagues declined, however, to take the case en banc. Ileto v. Glock Inc., 370 F.3d 860 (9th Cir. 2004) 1Although Plaintiffs alleged knowing conduct by Defendants, the underlying factual basis for the claims is, of course, Furrow’s criminal acts. Had the tragic shootings not occurred, there would be neither damages, nor cognizable claims, nor standing by Plaintiffs to bring these claims. (order denying rehearing). As noted in our opinion our holding was not an outlier: Other jurisdictions had upheld similar claims against manufacturers and distributors of firearms under other state laws. Ileto I, 349 F.3d at 1200 n.10, 1206- 07, 1214 & n.30 (citing Hamilton v. Beretta U.S.A. Corp., 750 N.E.2d 1055, 1061 (N.Y. 2001); City of Cincinnati v. Beretta U.S.A. Corp., 768 N.E.2d 1136, 1142 (Ohio 2002); City of Chicago v. Beretta U.S.A. Corp., 785 N.E.2d 16, 24 (Ill. Ct. App. 2002), rev’d, 821 N.E.2d 1099 (Ill. 2004)).

The dispute soon reached the floor of the United States Congress and, in 2005, Congress enacted the PLCAA. The PLCAA generally preempts claims against manufacturers and sellers of firearms and ammunition resulting from the criminal use of those products. The PLCAA affects future and pending lawsuits, and courts are required to “immediately dismiss[ ]� any pending lawsuits preempted by the PLCAA. 15 U.S.C. § 7902(b).

After enactment of the PLCAA, the district court halted discovery and sought briefing on the effect of the Act on this case. Plaintiffs argued that the PLCAA did not apply here and, in the alternative, that the PLCAA is unconstitutional. The district court permitted the United States to intervene, pursuant to 28 U.S.C. § 2403(a), to defend the constitutionality of the Act.

In a published opinion, the district court dismissed Plaintiffs’ claims against Defendants Glock and RSR. Ileto v. Glock, Inc., 421 F. Supp. 2d 1274 (C.D. Cal. 2006). The court held that the PLCAA preempted Plaintiffs’ claims against those Defendants, id. at 1284-98, and upheld the constitutionality of the Act, id. at 1298-1304. The court eventually entered a final judgment pursuant to Federal Rule of Civil Procedure 54(b) as to Defendants Glock and RSR. Plaintiffs timely appealed.

In an unpublished order, the district court denied Defendant China North’s motion for summary judgment. The court held that the PLCAA did not preempt Plaintiffs’ claims against China North because, by contrast to Glock and RSR, China North is not a federal firearms licensee, as required by the PLCAA. The district court then certified an interlocutory appeal of that order.

We consolidated the appeals. In addition to the parties, the United States appears before us as an intervenor in support of the constitutionality of the PLCAA, and we accepted an amicus curiae brief from the Legal Community Against Violence in support of Plaintiffs.

STANDARD OF REVIEW

All the questions presented here are questions of law that we review de novo. See United States v. Lujan, 504 F.3d 1003, 1006 (9th Cir. 2007) (“[T]he constitutionality of a federal statute [is] a question of law that we review de novo.�); J.&G. Sales Ltd. v. Truscott, 473 F.3d 1043, 1047 (9th Cir.) (“We apply a de novo standard of review to . . . questions of statutory interpretation.�), cert. denied, 128 S. Ct. 208 (2007); Fajardo v. County of Los Angeles, 179 F.3d 698, 699 (9th Cir. 1999) (“This court reviews de novo Rule 12(c) judgments on the pleadings.�).

DISCUSSION

A. Preemption of Claims Against Defendants Glock and RSR

[1] The PLCAA requires that federal courts “immediately dismiss[ ]� a “qualified civil liability action.� 15 U.S.C. § 7902(b).

The term “qualified civil liability action� means a civil action or proceeding or an administrative proceeding brought by any person against a manufacturer or seller of a qualified product, or a trade association, for damages, punitive damages, injunctive or declaratory relief, abatement, restitution, fines, or penalties, or other relief, resulting from the criminal or unlawful misuse of a qualified product by the person or a third party, but shall not include [specified enumerated exceptions.]

Id. § 7903(5)(A). We agree with the parties that this case meets all the elements of that general definition as applied to Defendants Glock and RSR. This case is a “civil action� brought by a “person� for damages and other relief to redress harm “resulting from the criminal . . . misuse of a qualified product by . . . a third party.� Id. Additionally, Glock and RSR are “manufacturer[s] or seller[s] of a qualified product,� id., because they are, respectively, a federally licensed manufacturer and a federally licensed distributor of the firearms allegedly used in the shootings, see id. § 7903(2) (defining “manufacturer�); id. § 7903(6) (defining “seller�).

[2] The PLCAA therefore requires dismissal if none of the specified exceptions applies. Plaintiffs argue that the third exception, § 7903(5)(A)(iii), applies. Under that exception, the PLCAA does not preempt an action in which a manufacturer or seller of a qualified product knowingly violated a State or Federal statute applicable to the sale or marketing of the product, and the violation was a proximate cause of the harm for which relief is sought, including— (I) any case in which the manufacturer or seller knowingly made any false entry in, or failed to make appropriate entry in, any record required to be kept under Federal or State law with respect to the qualified product, or aided, abetted, or conspired with any person in making any false or fictitious oral or written statement with respect to any fact material to the lawfulness of the sale or other disposition of a qualified product; or

(II) any case in which the manufacturer or seller aided, abetted, or conspired with any other person to sell or otherwise dispose of a qualified product, knowing, or having reasonable cause to believe, that the actual buyer of the qualified product was prohibited from possessing or receiving a firearm or ammunition under subsection (g) or (n) of section 922 of Title 18[.]

Id. § 7903(5)(A)(iii) (emphasis added).

[3] This exception has come to be known as the “predicate exception,� because a plaintiff not only must present a cognizable claim, he or she also must allege a knowing violation of a “predicate statute.� City of New York v. Beretta U.S.A. Corp., 524 F.3d 384, 390 (2d Cir. 2008), cert. denied, 129 S. Ct. 1579 (2009); District of Columbia v. Beretta U.S.A. Corp., 940 A.2d 163, 168 (D.C. 2008), cert. denied, 129 S. Ct. 1579 (2009); Smith & Wesson Corp. v. City of Gary, 875 N.E.2d 422, 429-30 (Ind. Ct. App. 2007). That is, a plaintiff must allege a knowing violation of “a State or Federal statute applicable to the sale or marketing of the product.� 15 U.S.C. § 7903(5)(A)(iii). In City of New York, for instance, the plaintiffs brought a common-law public nuisance claim (the cause of action) and also alleged that the defendants knowingly violated a state criminal statute (the predicate statute). 524 F.3d at 390.

Here, we previously ruled that Plaintiffs’ negligence and public nuisance allegations state cognizable claims under California law.2 Ileto I, 349 F.3d at 1209, 1215. To meet the requirements of the predicate exception, Plaintiffs do not point to an allegation of a knowing violation of any separate statute. Instead, Plaintiffs point out that, unlike many jurisdictions, California’s general tort law is codified in its civil code. See Cal. Civ. Code § 1714(a) (negligence); id. § 3479 (nuisance); id. § 3480 (public nuisance). Plaintiffs argue that their allegations of knowing violations of those statutes satisfy the requirements of the predicate exception. In short, Plaintiffs argue that California Civil Code sections 1714, 3479, and 3480 (“California tort laws�), provide both the cause of action and the requisite predicate statute under the PLCAA. Defendants counter that only a separate statute, regulating firearms exclusively (or at least explicitly), can be a predicate statute.

The parties’ disagreement, then, is whether the California tort laws are predicate statutes under the PLCAA. More specifically, the parties dispute whether the California tort statutes are “applicable to the sale or marketing of [firearms3].� 15 U.S.C. § 7903(5)(A)(iii). When interpreting a statute, we look first to its text. See Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997) (“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.�); FMC Corp. v. Holliday, 498 U.S. 52, 57 (1990) (“We begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.� (internal quotation marks omitted)). “If the statute’s terms are ambiguous, we may use canons of construction, legislative history, and the statute’s overall purpose to illuminate Congress’s intent.� Jonah R. v. Carmona, 446 F.3d 1000, 1005 (9th Cir. 2006).

1. Text of the Predicate Exception

[4] “The plainness or ambiguity of statutory [text] is determined by reference to the [text] itself, the specific context in which that [text] is used, and the broader context of the statute as a whole.� Robinson, 519 U.S. at 341. Here, the statutory text states that a predicate statute is “a State or Federal statute applicable to the sale or marketing of [firearms].� 15 U.S.C. § 7903(5)(A)(iii). There is no dispute that the California tort laws, which are codified in the California Civil Code, are state statutes. The issue is whether those statutes are “applicable� to the sale or marketing of firearms within the meaning of the PLCAA.

As discussed below, Plaintiffs and Defendants present competing definitions of the term “applicable.� Like most terms, “applicable� does not have only one meaning when viewed in isolation. Not surprisingly then, courts have struggled to determine the meaning of “applicable� as used in a variety of statutes. See, e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (statute governing medical devices); McGee v. Peake, 511 F.3d 1352 (Fed. Cir. 2008) (statute governing the United States Court of Appeals for Veterans Claims); Peter Pan Bus Lines, Inc. v. Fed. Motor Carrier Safety Admin., 471 F.3d 1350 (D.C. Cir. 2006) (statute governing the Federal Motor Carrier Safety Administration).

One everyday meaning, and a dictionary definition, of the term “applicable� is “capable of being applied.� Black’s Law Dictionary 98 (6th ed. 1990). Plaintiffs urge us to conclude that this expansive definition is the only possible meaning of the term “applicable� in the PLCAA’s predicate exception. Under that definition, Plaintiffs would prevail: Because we held in Ileto I that Plaintiffs’ claims concerning the sale and marketing of firearms are cognizable, the California tort laws are “[capable of being applied to] the sale or marketing of [firearms].�

By contrast, Defendants argue that Congress intended a very narrow use of the term “applicable,� which can mean “relevant� or “applicable specifically.� Defendants argue that, under that narrow meaning of the term, the requirements of the predicate exception would be met only if a plaintiff alleged a knowing violation of a statute that pertained exclusively to the sale or marketing of firearms. The dictionary captures this narrower definition, see Black’s Law Dictionary at 98 (defining “applicable� as “relevant�), and so does everyday usage.4

[5] We are convinced at the outset, then, that the term “applicable� has a spectrum of meanings, including the two poles identified by the parties. To determine Congress’ intended meaning in the PLCAA, we must examine “the specific context in which [the term ‘applicable’] is used[ ] and the broader context of the statute as a whole.� Robinson, 519 U.S. at 341. Congress listed examples of predicate statutes in the PLCAA:

(I) any case in which the manufacturer or seller knowingly made any false entry in, or failed to make appropriate entry in, any record required to be kept under Federal or State law with respect to the qualified product, or aided, abetted, or conspired with any person in making any false or fictitious oral or written statement with respect to any fact material to the lawfulness of the sale or other disposition of a qualified product; or

(II) any case in which the manufacturer or seller aided, abetted, or conspired with any other person to sell or otherwise dispose of a qualified product, knowing, or having reasonable cause to believe, that the actual buyer of the qualified product was prohibited from possessing or receiving a firearm or ammunition under subsection (g) or (n) of section 922 of Title 18[.]

15 U.S.C. § 7903(5)(A)(iii). We conclude from those illustrations that Plaintiffs’ asserted meaning of “applicable� appears too broad, but that Defendants’ proposed restrictive meaning appears too narrow. See Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307 (1961) (noting that "a word is known by the company it keeps�); Cal. State Legislative Bd. v. Dep’t of Transp., 400 F.3d 760, 763 (9th Cir. 2005) (“[T]he general term should be defined in light of the specific examples provided.�).

The illustrative predicate statutes pertain specifically to sales and manufacturing activities, and most also target the firearms industry specifically. Those examples suggest that Plaintiffs’ proposed all-encompassing meaning of the term “applicable� is incorrect, because each of the examples has— at the very least—a direct connection with sales or manufacturing. Indeed, if any statute that “could be applied� to the sales and manufacturing of firearms qualified as a predicate statute, there would be no need to list examples at all. Similarly, the examples suggest that Defendants’ asserted narrow meaning is incorrect, because some of the examples do not pertain exclusively to the firearms industry.

In conclusion, we hold that, viewed in isolation, the term “applicable� has a range of meanings. The context in which the term appears in the PLCAA suggests that neither Plaintiffs’ nor Defendants’ asserted meaning is wholly correct. In any event, we conclude, as did the Second Circuit, City of New York, 524 F.3d at 401, that the text of the statute alone is inconclusive as to Congress’ intent.5 We thus are left to examine the additional indicators of congressional intent. Jonah R., 446 F.3d at 1005.

2. The Purpose of the PLCAA

Congress enacted the PLCAA in response to “[l]awsuits . . . commenced against manufacturers, distributors, dealers, and importers of firearms that operate as designed and intended, which seek money damages and other relief for the harm caused by the misuse of firearms by third parties, including criminals.� 15 U.S.C. § 7901(a)(3). Congress found that manufacturers and sellers of firearms “are not, and should not, be liable for the harm caused by those who criminally or unlawfully misuse firearm products or ammunition products that function as designed and intended.� Id. § 7901(a)(5). Congress found egregious “[t]he possibility of imposing liability on an entire industry for harm that is solely caused by others.�

Id. § 7901(a)(6). Congress reasoned that “[t]he liability actions . . . are based on theories without foundation in hundreds of years of the common law and jurisprudence of the United States and do not represent a bona fide expansion of the common law.� Id. § 7901(a)(7).

[6] The PLCAA’s stated primary purpose is: To prohibit causes of action against manufacturers, distributors, dealers, and importers of firearms or ammunition products, and their trade associations, for the harm solely caused by the criminal or unlawful misuse of firearm products or ammunition products by others when the product functioned as designed and intended. Id. § 7901(b)(1).

[7] In view of those congressional findings and that statement of purpose, Congress clearly intended to preempt common-law claims, such as general tort theories of liability.6 Plaintiffs’ claims—"classic negligence and nuisance,� Ileto I, 349 F.3d at 1202—are general tort theories of liability that traditionally have been embodied in the common law. With this background in mind, which strongly suggests that Congress intended to preempt Plaintiffs’ claims, we turn to the predicate exception at issue here.

The predicate exception covers causes of action that allege knowing violations of a state or federal statute applicable to the sale or marketing of firearms. Plaintiffs argue that this exception covers all state statutes that could be applied to the sale or marketing of firearms. Because California long ago codified its common law into the California Civil Code, Plaintiffs argue that its general tort claims fall within this exception. We disagree for three reasons.

[8] First, although the California legislature codified its common law, it was not the intention of the Legislature in enacting section 1714 of the Civil Code, as well as other sections of that code declarative of the common law, to insulate the matters therein expressed from further judicial development; rather it was the intention of the Legislature to announce and formulate existing common law principles and definitions for purposes of orderly and concise presentation and with a distinct view toward continuing judicial evolution. Li. v. Yellow Cab Co. of Cal., 532 P.2d 1226, 1233 (Cal. 1975). In other words, although California has codified its common law, the evolution of those statutes is nevertheless subject to the same “judicial evolution� as ordinary commonlaw claims in jurisdictions that have not codified common law. That “judicial evolution� was precisely the target of the PLCAA:

The liability actions . . . are based on theories without foundation in hundreds of years of the common law and jurisprudence of the United States and do not represent a bona fide expansion of the common law. The possible sustaining of these actions by a maverick judicial officer or petit jury would expand civil liability in a manner never contemplated by the framers of the Constitution, by Congress, or by the legislatures of the several States. 15 U.S.C. § 7901(a)(7).

Second, congressional findings speak to the scope of the predicate exception. Against the backdrop of Congress’ findings on the unjustified “expansion of the common law,� id., Congress also found that “[t]he manufacture, importation, possession, sale, and use of firearms and ammunition in the United States are heavily regulated by Federal, State, and local laws,� id. § 7901(a)(4). We find it more likely that Congress had in mind only these types of statutes—statutes that regulate manufacturing, importing, selling, marketing, and using firearms or that regulate the firearms industry—rather than general tort theories that happened to have been codified by a given jurisdiction.

Third, Plaintiffs’ argument leads to a result that is difficult to square with Congress’ intention to create national uniformity. If Plaintiffs’ view is correct, then general tort theories of liability are not preempted by the PLCAA in those states, like California, that have codified its common law. But, at the same time, those same theories of liability are preempted by the PLCAA in the states that have not codified their common law.

[9] In conclusion, an examination of the text and purpose of the PLCAA shows that Congress intended to preempt general tort theories of liability even in jurisdictions, like California, that have codified such causes of action.

3. Legislative History

[10] We make two general observations from our review of the extensive legislative history of the PLCAA.7 First, all of the congressional speakers’ statements concerning the scope of the PLCAA reflected the understanding that manufacturers and sellers of firearms would be liable only for statutory violations concerning firearm regulations or sales and marketing regulations. See, e.g., 151 Cong. Rec. S9087-01 (statement of Sen. Craig) (“This bill does not shield [those who] . . . have violated existing law . . . and I am referring to the Federal firearms laws.�); id. S9217-02 (statement of Sen. Hutchison) (“[Lawsuits] would also be allowed where there is a knowing violation of a firearms law.�); id. (statement of Sen. Craig reading a Wall Street Journal article) (“The gun makers . . . would continue to face civil suits for defective products or for violating sales regulations.�); id. (statement of Sen. Reed in opposition to the PLCAA) (“We will let [plaintiffs] proceed with their suit if there is a criminal violation or a statutory violation, a violation of regulations, but for the vast number of other responsibilities we owe to each other, that are defined for the civil law, one will not have the opportunity to go to court.�); id. S8927-01 (statement of Sen. Reed) (stating that the PLCAA would not apply to violations of “statutes related to the sale or manufacturing of a gun�); id. S9246-02 (statement of Sen. Santorum) (“This bill provides carefully tailored protections that continue to allow legitimate suits based on knowing violations of Federal or State law related to gun sales.�).

[11] Second, congressional speakers referred to this very case as the type of case they meant the PLCAA to preempt. See 151 Cong. Rec. E2162-03 (statement of Rep. Stearns) (“I want the Congressional Record to clearly reflect some specific examples of the type of predatory lawsuits this bill will immediately stop[:] . . . [An] example is the case of Ileto v. Glock, in Federal court in Los Angeles, CA.�); id. (statement of Sen. Craig) (“I want to give some examples of exactly the type of predatory lawsuits this bill will eliminate. . . . [An] example of a lawsuit captured by this bill is the case of Ileto v. Glock, pending in Federal court in Los Angeles, CA.�); see also Adames v. Sheahan, 880 N.E.2d 559, 586 (Ill. Ct. App. 2007) (noting that “Congress was primarily concerned with novel nuisance cases like Ileto�), rev’d on other grounds, ___ ILETO v. GLOCK 5567 N.E.2d ___, No. 105789, 2009 WL 711297 (Ill. Mar. 19, 2009).

We are mindful of the limited persuasive value of the remarks of an individual legislator. See, e.g., Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 118 (1980) (“[O]rdinarily even the contemporaneous remarks of a single legislator who sponsors a bill are not controlling in analyzing legislative history.�); Brock v. Writers Guild of Am., W., Inc., 762 F.2d 1349, 1356 (9th Cir. 1985) (“The remarks of legislators opposed to legislation are entitled to little weight in the construction of statutes.�). Nevertheless, the unanimously expressed understanding of the scope of the PLCAA assists our analysis, particularly when that expressed understanding is in complete harmony with the congressional purpose and the statutory text.

4. Conclusion

[12] “Our inquiry into the scope of a statute’s pre-emptive effect is guided by the rule that ‘[t]he purpose of Congress is the ultimate touchstone in every pre-emption case.’ � Altria Group, Inc. v. Good, 129 S. Ct. 538, 543 (2008) (quoting Medtronic, Inc., 518 U.S. at 485) (some internal quotation marks omitted). The purpose of the PLCAA leads us to conclude that Congress intended to preempt general tort law claims such as Plaintiffs’, even though California has codified those claims in its civil code.8 Our examination of the legislative history of the Act further confirms that conclusion. Accordingly, we hold that the district court correctly held that 8The constitutional avoidance doctrine therefore does not apply. See Boumediene v. Bush, 128 S. Ct. 2229, 2271 (2008) (“The canon of constitutional avoidance does not supplant traditional modes of statutory interpretation. We cannot ignore the text and purpose of a statute in order to save it.� (citation omitted)); see also supra Part B.4.

Plaintiffs’ California tort claims against Defendants Glock and RSR are preempted by the PLCAA.9

B. Constitutionality of the PLCAA Decrying primarily the retroactive aspects of the Act, Plaintiffs argue that the PLCAA is unconstitutional on its face and as applied. We note at the outset that “retroactive statutes raise particular concerns.� Landgraf v. USI Film Prods., 511 U.S. 244, 266 (1994). Indeed,

[t]he Legislature’s unmatched powers allow it to sweep away settled expectations suddenly and without individualized consideration. Its responsivity to political pressures poses a risk that it may be tempted to use retroactive legislation as a means of retribution against unpopular groups or individuals. Id.

The strongest protection that federal courts give to those concerns, however, is a requirement that Congress manifest the retroactive nature of legislation with “clear intent.� Id. at 272. “[A] requirement that Congress first make its intention clear helps ensure that Congress itself has determined that the benefits of retroactivity outweigh the potential for disruption or unfairness.� Id. at 268; see also id. at 272-73 (“Requiring clear intent assures that Congress itself has affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits.�). “Such a requirement allocates to Congress responsibility for fundamental policy judgments concerning the proper temporal reach of statutes, and has the additional virtue of giving legislators a predictable background rule against which to legislate.� Id. at 273. 9We need not, and do not, express any view on the scope of the predicate exception with respect to any other statute.

Where, as here, Congress has expressed its clear intent that the legislation be retroactive, “the constitutional impediments to retroactive civil legislation are now modest.� Id. at 272; see also id. at 267 (“The Constitution’s restrictions, of course, are of limited scope.�). “[T]he potential unfairness of retroactive civil legislation is not a sufficient reason for a court to fail to give a statute its intended scope.� Id. “Retroactivity provisions often serve entirely benign and legitimate purposes, [including] . . . simply to give comprehensive effect to a new law Congress considers salutary.� Id. at 267-68.

Additionally, we note that the only function of the PLCAA is to preempt certain claims. The practical effect of the PLCAA is thus to shift the economic burden for those claims from the firearms industry to the would-be plaintiffs. “It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality . . .� Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976). “[T]he strong deference accorded legislation in the field of national economic policy is no less applicable when that legislation is applied retroactively . . . .� Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 729 (1984).

With that background understanding, we address each of Plaintiffs’ constitutional challenges. Like all appellate courts that have assessed the constitutionality of the PLCAA, City of New York, 524 F.3d at 392-98; Adames, 2009 WL 711297, at *20-21; District of Columbia, 940 A.2d at 172-82, we hold that the Act is constitutional on its face and as applied.

1. Separation of Powers

[13] Plaintiffs argue that, on its face, the PLCAA violates the constitutional requirement of separation of powers because, by enacting that Act, Congress impinged on the role of the judiciary. It has long been recognized that Congress may not “prescribe rules of decision to the Judicial Department of the government in cases pending before it.� United States v. Klein, 80 U.S. (13 Wall.) 128, 147 (1872). “Whatever the precise scope of Klein, however, later decisions have made clear that its prohibition does not take hold when Congress ‘amend[s] applicable law.’ � Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 218 (1995) (quoting Robertson v. Seattle Audubon Soc’y, 503 U.S. 429, 441 (1992)). “Thus, if a statute ‘compel[s] changes in the law, not findings or results under old law,’ it merely amends the underlying law, and is therefore not subject to a Klein challenge.� Imprisoned Citizens Union v. Ridge, 169 F.3d 178, 187 (3d Cir. 1999) (alteration in original) (quoting Robertson, 503 U.S. at 438).

[14] Here, Congress has amended the applicable law; it has not compelled results under old law. The PLCAA sets forth a new legal standard—the definition (with exceptions) of a “qualified civil liability action"—to be applied to all cases. As we explained in Catholic Social Services, Inc. v. Reno, 134 F.3d 921, 926 (9th Cir. 1997) (per curiam), the Supreme Court in Robertson “held that a statute affecting pending cases, indeed designating them by name and number, did not offend separation of powers because Congress was changing the law applicable to those cases rather than impermissibly interfering with the judicial process.� Here, Plaintiffs’ argument that the PLCAA runs afoul of Klein is even less compelling than the argument in Robertson because the PLCAA applies generally to all cases, both pending and future.

We likewise reject Plaintiffs’ alternative argument that the PLCAA violates the Supreme Court’s holding in Plaut that Congress cannot “overrule[ ] ‘the judicial department with regard to a particular case or controversy.’ � (Quoting Plaut, 514 U.S. at 227.) As the quoted sentence makes clear, that rule applies to final decisions by the judiciary, not to pending cases. See id. (“[E]ach court, at every level, must decide [a case] according to existing laws. Having achieved finality, however, a judicial decision becomes the last word of the judicial department with regard to a particular case or controversy [and cannot be overruled by congressional act].� (emphasis added) (citation and internal quotation marks omitted)). The PLCAA applies only to pending and future cases and does not purport to undo final judgments of the judiciary. The mere fact that members of Congress wanted to preempt this pending case by name does not change our analysis. [15] For those reasons, we hold that the PLCAA does not violate the constitutional separation of powers. See also City of New York, 524 F.3d at 395-96 (holding that the PLCAA does not violate separation of powers doctrine); District of Columbia, 940 A.2d at 172-73 (same).

2. Equal Protection, Substantive Due Process, and Takings

[16] Plaintiffs next argue that the PLCAA violates equal protection and substantive due process principles because the Act is an unconstitutional exercise of congressional power that cannot withstand rational basis review. Plaintiffs face an uphill battle: “[B]arring irrational or arbitrary conduct, Congress can adjust the incidents of our economic lives as it sees fit. Indeed, the Supreme Court has not blanched when settled economic expectations were upset, as long as the legislature was pursuing a rational policy.� Lyon v. Agusta S.P.A., 252 F.3d 1078, 1086 (9th Cir. 1989) (citations omitted); see also Pension Benefit, 467 U.S. at 729 (“Provided that the retroactive application of a statute is supported by a legitimate legislative purpose furthered by rational means, judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches[.]�); Usery, 428 U.S. at 15 (“It is by now well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality, and that the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way.�).

There is nothing irrational or arbitrary about Congress’ choice here: It saw fit to “adjust the incidents of our economic lives� by preempting certain categories of cases brought against federally licensed manufacturers and sellers of firearms.

In particular, Congress found that the targeted lawsuits “constitute[ ] an unreasonable burden on interstate and foreign commerce of the United States,� 15 U.S.C. § 7901(a)(6), and sought “[t]o prevent the use of such lawsuits to impose unreasonable burdens on interstate and foreign commerce,� id. § 7901(b)(4).10 Congress carefully constrained the Act’s reach to the confines of the Commerce Clause. See, e.g., id. § 7903(2) (including an interstate- or foreign-commerce element in the definition of a “manufacturer�); id. § 7903(4) (same: “qualified product�); id. § 7903(6) (same: “seller�). Plaintiffs disagree with Congress’ judgment in this regard.

In their view, the firearms industry is subject to relatively few lawsuits compared to other major industries and, in any event, the pending lawsuits could not possibly have an appreciable effect on the firearms industry (and, by extension, on interstate or foreign commerce). We need not tarry long on these considerations, because our only task is to consider whether Congress’ chosen allocation was “irrational or arbitrary.� Lyons, 252 F.3d at 1086; Usery, 428 U.S. at 15; see also Pierce County v. Guillen, 537 U.S. 129, 147 (2003) (upholding a Commerce Clause challenge because “Congress could reasonably believe� that the statute affected interstate commerce).

We have no trouble concluding that Congress rationally could find that, by insulating the firearms industry from a specified set of lawsuits, interstate and foreign commerce of firearms would be affected. And “it was eminently rational for Congress to conclude that the purposes of the [PLCAA] could be more fully effectuated if its . . . provisions were applied retroactively.� Pension Benefit, 467 U.S. at 730; see also City of New York, 524 F.3d at 395 (“We find that Congress has not exceeded its authority in this [PLCAA] case, where there can be no question of the interstate character of the industry in question and where Congress rationally perceived a substantial effect on the industry of the litigation that the Act seeks to curtail.�); District of Columbia, 940 A.2d at 175 (“Thus the PLCAA . . . is reasonably viewed as an ‘adjust[ment of] the burdens and benefits of economic life’ by Congress, one it deemed necessary in exercising its power to regulate interstate commerce.� (alteration in original) (quoting Usery, 428 U.S. at 15)); Adames, 2009 WL 711297, at *20-21 (similarly rejecting a Commerce Clause challenge to the PLCAA).

Plaintiffs argue, in the alternative, that both equal protection and substantive due process principles require us to conduct a more searching review. Plaintiffs cite Lawrence v. Texas, 539 U.S. 558 (2003), but they fail to identify—and we fail to see—any suspect classification common to those adversely affected by the PLCAA.

Plaintiffs also argue that greater scrutiny is required because they have a vested property right in their accrued state-law causes of action. Plaintiffs’ premise is incorrect: “We have squarely held that although a cause of action is a species of property, a party’s property right in any cause of action does not vest until a final unreviewable judgment is obtained.� Lyon, 252 F.3d at 1086 (emphasis and internal quotation marks omitted); see also Fields v. Legacy Health Sys., 413 F.3d 943, 956 (9th Cir. 2005) (“Causes of action are a species of property protected by the Fourteenth Amendment’s Due Process Clause. However, a party’s property right in any cause of action does not vest until a final unreviewable judgment is obtained.� (citation, internal quotation marks, and emphasis omitted)); Austin v. City of Bisbee, 855 F.2d 1429, 1435 (9th Cir. 1988) (explaining that, although a cause of action is a species of property, “it is inchoate and affords no definite or enforceable property right until reduced to final judgment� (internal quotation marks omitted)).

Plaintiffs’ argument that the PLCAA effects an unconstitutional taking without just compensation fails for the same reason. See Landgraf, 511 U.S. at 266 (“The Fifth Amendment’s Takings Clause prevents the Legislature (and other government actors) from depriving private persons of vested property rights . . . .� (emphasis added)); see also Concrete Pipe & Prods. of Cal. Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 641 (1993) (“Given that [the petitioner’s] due process arguments are unavailing, it would be surprising indeed to discover [that] the challenged statute nonetheless violat[ed] the Takings Clause.�); District of Columbia, 940 A.2d at 180-82 (rejecting a Takings Clause challenge to the PLCAA).

3. Procedural Due Process

Plaintiffs next argue that the PLCAA violates their procedural due process rights because their pending lawsuit was abridged without adequate hearing. “As [the Supreme Court’s] decisions have emphasized time and again, the Due Process Clause grants the aggrieved party the opportunity to present his case and have its merits fairly judged.� Logan v. Zimmerman Brush Co., 455 U.S. 422, 433 (1982).

In Logan, state law required a state commission to conduct a fact-finding conference within 120 days of receiving of an employment discrimination complaint. Id. at 424. The plaintiff filed a timely complaint, but the commission inadvertently convened the conference after the 120-day deadline. Id. at 424-25. The Illinois Supreme Court held that the Commission therefore lacked jurisdiction over the complaint because the 120-day deadline was jurisdictional, and rejected the plaintiff’s due process arguments. Id. at 426-27.

The United States Supreme Court reversed. The Court held that the plaintiff had a protected property interest in her claim and “that ‘some form of hearing’ is required before the owner is finally deprived of a protected property interest.� Id. at 433 (quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 570 n.8 (1972)). “To put it as plainly as possible, the State may not finally destroy a property interest without first giving the putative owner an opportunity to present his claim of entitlement.� Id. at 434.

But the Court explicitly limited its holding to “a procedural limitation on the claimant’s ability to assert his rights, not a substantive element of the [underlying] claim.� Id. at 433. The

Court explained:

Of course, the State remains free to create substantive defenses or immunities for use in adjudication—or to eliminate its statutorily created causes of action altogether—just as it can amend or terminate its welfare or employment programs. The Court held as much in Martinez v. California, 444 U.S. 277 (1980), where it upheld a California statute granting officials immunity from certain types of state tort claims. We acknowledged that the grant of immunity arguably did deprive the plaintiffs of a protected property interest. But they were not thereby deprived of property without due process, just as a welfare recipient is not deprived of due process when the legislature adjusts benefit levels. In each case, the legislative determination provides all the process that is due.

Id. at 432-33 (some citations omitted) (emphasis added). [17] Here, the PLCAA does not impose a procedural limitation; rather, it creates a substantive rule of law granting immunity to certain parties against certain types of claims. In such a case, “the legislative determination provides all the process that is due.� Id. at 433. On the substantive question created by the PLCAA—whether this case meets the definition of a “qualified civil liability action"—Plaintiffs were, of course, afforded an ample hearing before the district court. We therefore hold that the PLCAA did not violate Plaintiffs’ procedural due process rights. See also District of Columbia, 940 A.2d at 177 (“[W]e hold that while the plaintiffs’ cause of action . . . ‘is a species of property protected by . . . [d]ue process,’ they received ‘all the process that is due’ when Congress barred pending actions such as theirs from proceeding as a rational means ‘to give comprehensive effect to a new law that it considered salutary.’ � (quoting Logan, 455 U.S. at 428; Landgraf, 511 U.S. at 268) (brackets omitted)).

[18] In conclusion, like all other appellate courts to have addressed the issue, we hold that the PLCAA is constitutional.

4. Constitutional Avoidance

[19] We respond briefly to the thoughtful views of our dissenting colleague on the topic of constitutional avoidance. That doctrine does not apply where, as here, congressional intent is clear from the text and purpose of the statute. See supra note 8 (quoting Boumediene, 128 S. Ct. at 2271). Because the dissent’s alternative interpretation of the PLCAA rests entirely on the doctrine, we explain below why the doctrine would not apply, even if congressional intent were not clear from the text and purpose of the statute.

We begin with the scope of the doctrine. In Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Construction Trades Council, the Supreme Court stated that, “where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress.� 485 U.S. 568, 575 (1988) (emphasis added); see also Clark v. Martinez, 543 U.S. 371, 381 (2005) (describing the doctrine as “a tool for choosing between competing plausible interpretations of a statutory text, resting on the reasonable presumption that Congress did not intend the alternative which raises serious constitutional doubts� (emphasis added)). As the Court has instructed, we may invoke the doctrine only if we have “grave doubts� about the constitutionality of the statute. Almendarez- Torres v. United States, 523 U.S. 224, 237-38 (1998) (quoting United States v. Jin Fuey Moy, 241 U.S. 394, 401 (1916)); see also id. at 238 (“[T]hose who invoke the doctrine must believe that the alternative is a serious likelihood that the statute will be held unconstitutional.� (emphasis added)).

We have no grave doubts here. The dissent does not, and cannot, point to a single case in which we, the Supreme Court, or any sister circuit has held that a federal statute violates substantive due process for the reasons asserted by Plaintiffs. And, as discussed above, we have upheld against constitutional challenges many statutes with characteristics nearly identical to those of the PLCAA.

The dissent bypasses those important and indisputable facts in the following way. First, it argues that the Supreme Court has never addressed the precise issue at hand: whether Congress may abolish pending common-law claims11 without providing any alternative means of redress. Second, the dissent argues that the Supreme Court has suggested that this issue would raise serious constitutional questions. We disagree on both counts.

First, the PLCAA does not completely abolish Plaintiffs’ ability to seek redress. The PLCAA preempts certain categories of claims that meet specified requirements, but it also carves out several significant exceptions to that general rule. Some claims are preempted, but many are not. Indeed, as we hold below, Plaintiffs may proceed on their claims against Defendant China North. Plaintiffs’ ability to seek redress has been limited, but not abolished.12

Second, we do not doubt the constitutionality of the PLCAA, let alone have “grave doubts.� As discussed above, no decision by us, the Supreme Court, or any sister circuit has held that a statute violates substantive due process for the reasons asserted by Plaintiffs. To the contrary, scores of cases concerning very similar statutes have held that the statutes do not violate substantive due process principles.

The dissent finds, in a small number of sources, hints that there could be a lurking, serious constitutional question. Justice Marshall stated in a concurrence that he would adopt a more searching review, see PruneYard Shopping Ctr. v. Robins, 447 U.S. 74, 93-94 (1980) (Marshall, J., concurring), and Justice White stated in a dissent from dismissal of certiorari that he would prefer to address the issue, see Fein v. Permanente Med. Group, 474 U.S. 892, 894-95 (1985) (White, J., dissenting from dismissal of certiorari). Dissent at 5597-98.

Those comments do not raise a serious constitutional question. The doctrine of constitutional avoidance requires “grave doubts,� not occasional statements by a justice or two.

More importantly, the dissent quotes majority opinions in two cases: N.Y. Cent. R.R. Co. v. White, 243 U.S. 188, 201 (1917); and Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 88 (1978). Dissent at 5597-98. But those sources do not demonstrate a serious constitutional question either. In White, the Court expressed concern about whether “a State might, without violence to the constitutional guaranty of ‘due process of law,’ suddenly set aside all common-law rules respecting liability as between employer and employee, without providing a reasonably just substitute.� 243 U.S. at 201 (emphasis added). That dictum is inapposite. The PLCAA contains numerous exceptions and comes nowhere near setting aside all common-law rules concerning firearm manufacturers.

The dissent’s reliance on Duke Power is even less persuasive. There, the Court reiterated that it was an open question whether a legislature may abolish a common-law recovery scheme without providing a reasonable substitute remedy.

Duke Power, 438 U.S. at 88. As we have repeatedly noted, here Congress has left in place a number of substitute remedies. For these reasons, we decline to apply the doctrine of constitutional avoidance.

C. Preemption of Claims Against Defendant China North

Finally, we address Defendant China North’s interlocutory appeal from the district court’s order holding that the PLCAA does not preempt Plaintiffs’ claims against it. We return to the text of the PLCAA, which preempts a civil action or proceeding or an administrative proceeding brought by any person against a manufacturer or seller of a qualified product, or a trade association, for damages, punitive damages, injunctive or declaratory relief, abatement, restitution, fines, or penalties, or other relief, resulting from the criminal or unlawful misuse of a qualified product by the person or a third party, but shall not include [specified enumerated exceptions.]

15 U.S.C. § 7903(5)(A) (emphasis added). Again, we agree with the parties that this case is a “civil action� brought by a “person� for damages and other relief to redress harm, “resulting from the criminal . . . misuse of a qualified product by . . . a third party.� Id. The parties dispute, however, whether the case is “brought . . . against a manufacturer or seller of a qualified product.� Id.

[20] In Ileto I, 349 F.3d at 1215, we held that Plaintiffs’ claims against Defendant China North stated a claim under California law because of China North’s status as a manufacturer and seller of firearms. The PLCAA preempts only actions brought against federally licensed manufacturers and sellers of firearms. See id. § 7903(2) (defining the term “manufacturer�); id. § 7903(6) (defining the term “seller�).13 China 13The full text of those provisions states: The term “manufacturer� means, with respect to a qualified product, a person who is engaged in the business of manufacturing the product in interstate or foreign commerce and who is licensed to engage in business as such a manufacturer under [federal law].

15 U.S.C. § 7903(2).

The term “seller� means, with respect to a qualified product—

(A) an importer (as defined in section 921(a)(9) of Title 18) who is engaged in the business as such an importer in interstate or foreign commerce and who is licensed to engage in business as such an importer under [federal law];

(B) a dealer (as defined in section 921(a)(11) of Title 18) who is engaged in the business as such a dealer in interstate or foreign commerce and who is licensed to engage in business as such a dealer under [federal law]; or

(C) a person engaged in the business of selling ammunition (as defined in section 921(a)(17)(A) of Title 18) in interstate or foreign commerce at the wholesale or retail level. Id. § 7903(6).

North concedes that it is not a federally licensed manufacturer or seller of firearms. It follows, then, that the PLCAA does not preempt Plaintiffs’ claims against China North. To escape this straightforward reasoning, China North points out that the PLCAA preempts more than actions brought against federally licensed manufacturers and sellers of firearms. The PLCAA also preempts actions brought against all sellers of ammunition. Id. § 7903(6)(C). China North argues that, because it is a seller of ammunition, the PLCAA preempts Plaintiffs’ claims, notwithstanding the fact that Plaintiffs’ claims concern only China North’s actions as a manufacturer and seller of firearms and have nothing to do with China North’s coincidental status as a seller of ammunition. We are unpersuaded.

The PLCAA preempts specified types of liability actions; it does not provide a blanket protection to specified types of defendants. See id. § 7902(a) (“A qualified civil liability action may not be brought in any Federal or State court.�). Furthermore, Congress chose to preempt certain actions brought against manufacturers and sellers of firearms, but explicitly limited the preemptive effect to those manufacturers and sellers who are federally licensed. China North’s reading of the statute would eviscerate that limitation when, as here, the defendant also happens to be a seller of ammunition.

China North argues that, had Congress intended a nexus between the basis of the allegations and the nature of the defendant’s business, it would have modified the term “qualified product� with the definite article “the,� instead of the indefinite article “a.� The scope of preempted actions thereby would encompass a civil action or proceeding or an administrative proceeding brought by any person against a manufacturer or seller of a qualified product, or a trade association, for damages, punitive damages, injunctive or declaratory relief, abatement, restitution, fines, or penalties, or other relief, resulting from the criminal or unlawful misuse of [the] qualified product by the person or a third party.

15 U.S.C. § 7903(5)(A). We grant that China North’s alteration arguably is more clear but, without more, we are not persuaded on that basis alone that Congress intended to undo the logical reading of the statute as requiring a nexus between the basis of the allegations and the nature of the defendant’s business. Plaintiffs’ claims concern the manufacture and sale of firearms; we cannot conclude that those claims are preempted simply because China North also happens to sell ammunition.

[21] We therefore affirm the district court’s holding that the PLCAA does not preempt Plaintiffs’ claims against China North, and we remand for further proceedings.

* * *

See: http://www.ca9.uscourts.gov/datastore/opinions/2009/05/11/06-56872.pdf

Outcome: We sympathize with Plaintiffs, who suffered grievous harm, that Congress preempted some of their claims. Nevertheless, the Constitution “allocates to Congress responsibility for [such] fundamental policy judgments.� Landgraf, 511 U.S. at 273. Finding no constitutional flaw, we affirm the district court’s holding that the PLCAA applies to Plaintiffs’ claims against Defendants Glock and RSR. We also affirm the district court’s holding that the PLCAA does not apply to Plaintiffs’ claims against Defendant China North because, lacking a federal firearms license, it cannot seek haven under the PLCAA. No. 06-56872: AFFIRMED. Costs on appeal awarded to Defendants-Appellees Glock and RSR. Nos. 07-15403 & 07-15404: AFFIRMED and REMANDED for further proceedings. Costs on appeal awarded to Plaintiffs-Appellants.

Plaintiff's Experts:

Defendant's Experts:

Comments: