City of New York v. Bob Moates' Sport Shop, Inc.

253 F.R.D. 237, 2008 U.S. Dist. LEXIS 75578, 2008 WL 4458862
District Court, E.D. New York·Decided September 29, 2008·No. No. 06-CV-6504·Published·Cited by 6 cases

Opinion

MEMORANDUM & ORDER APPROVING SETTLEMENT

JACK B. WEINSTEIN, Senior District Judge.

I. Introduction

This memorandum and order deals with the proposed settlement of the last of a series of civil cases brought by the City of New York to limit violence from the illegal use of guns in the City. As indicated below, the settlement is reasonable. It is approved, effectively terminating this complex litigation in favor of the City of New York.

The City 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”). Both actions allege an equitable civil cause of action for public nuisance under New York State law. They are based upon a theory that a relatively small number of out-of-state gun retailers have been illegally and negligently furnishing firearms to prohibited persons that are trafficked into New York City, creating a dangerous public nuisance.

The City alleges that it has evidence of the use of a substantial number of these guns in New York City for serious crimes. Each of [239] the defendants has sold guns to straw purchasers standing in for the real buyers, a practice that transfers guns through the illegal interstate market to criminals in New York City. Other delicts leading to a public nuisance are alleged. Relief sought by the City is an injunction abating the public nuisance by the appointment of a special master mutually agreed upon by the parties. The special master would monitor the gun retailers to ensure that the retailer did not make illegal sales that contributed to the nuisance in New York City. Monetary penalties would be imposed should defendants violate the judgment.

Most of the twenty-seven defendants in these two separate actions have voluntarily entered into settlement agreements with the City. Some have been voluntarily dismissed. A few have defaulted. Eleven of the original twelve defendants in the instant action have settled.

Trial for Bob Moates’ Sport Shop, Inc. (“Moates”’), the only pending ease in these two actions, had been scheduled for September 2, 2008. A hearing on a motion for summary judgment, in limine motions and a pretrial conference had been scheduled for August 21, 2008. At the hearing, the parties reported that were engaged in settlement discussions and that trial should be adjourned. The terms of this settlement are somewhat similar to the ones involving other defendants in these two actions. [See Appendix A].

II. Background

This is an equitable cause of action involving the safety of many people in the city and the freedom of the defendant-retailers to operate a lawful business in their home state. See Staples v. United States, 511 U.S. 600, 610-13, 114 S.Ct. 1793, 128 L.Ed.2d 608 (1994) (discussing history of legal gun ownership); NAACP v. AcuSport, Inc., 271 F.Supp.2d 435, 526-39 (E.D.N.Y.2003) (detailing public nuisance resulting in New York City from the presence of illegal firearms). Consonant with “[t]he essence of equity jurisdiction ... to do equity and to mould each decree to the necessities of the particular case,” the court must satisfy itself as to the reasonableness of a settlement before it can be approved as a judgment of this court. Hecht v. Bowles, 321 U.S. 321, 329-30, 64 S.Ct. 587, 88 L.Ed. 754 (1944) (“The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.”).

The factual foundations of the City’s claims have been sufficiently established. See City of New York v. Bob Moates’ Sport Shop, Inc., No. 06-CV-6504, 2007 WL 906753, 2007 U.S. Dist. LEXIS 21085 (E.D.N Y. Mar. 23, 2007) (facts supporting exercise of subject matter jurisdiction); City of New York v. Bob Moates’ Sport Shop, Inc., No. 06-CV-6504, 2008 WL 427964, 2008 U.S. Dist. LEXIS 11699 (E.D.N.Y. Feb. 15, 2008) (personal jurisdiction at motion to dismiss stage); A-1 Jewelry & Pawn, Inc., 252 F.R.D. 130 (E.D.N.Y.2008) (personal jurisdiction on summary judgment); A-1 Jewelry & Pawn, 501 F.Supp.2d 369 (E.D.N.Y.2007) (personal jurisdiction at motion to dismiss stage); A-1 Jewelry & Pawn, 247 F.R.D. 296 (E.D.N.Y. 2007) (personal and subject matter jurisdiction at motion to dismiss stage, failure to state a cause of action, vagueness, remedy, extraterritoriality, comity, and due process). See also Johnson v. Bryco Arms, 304 F.Supp.2d 383 (E.D.N.Y.2004) (claims by victim of gun violence against gun manufacturer, wholesaler, distributor, and retailer); NAACP, 271 F.Supp.2d 435 (claims by an organization against gun manufacturers, importers, and distributors); Hamilton v. Accu-Tek, 32 F.Supp.2d 47 (E.D.N.Y.1998) (claims by relatives of gun violence victims against gun manufacturers and distributors).

Two legal issues must be addressed before judgment can be entered. First is whether this court has personal jurisdiction over the defendant. Personal jurisdiction was established in deciding the motion to dismiss and summary judgment standards. Second, can the settlements and decrees resulting from default judgment be enforced in light of the Protection of Lawful Commerce in Arms Act, Pub.L. No. 109-92, 119 Stat. 2095 (“PLCAA”) and the Supreme Court’s recent decision in District of Columbia v. Heller, [240] - U.S. -, 128 S.Ct. 2783, 171 L.Ed.2d 637 (2008). The PLCAA mandates dismissal of lawsuits against gun retailers unless the retailer has violated a federal or state statute applicable to sale or marketing of firearms. If Heller calls into question the constitutionality of those statutes providing a predicate exception to the PLCAA which the City alleges the defendants have violated, the actions must be dismissed and the judgment and settlements cannot be enforced.

III. Personal Jurisdiction

Extensive evidence already produced in this and related eases establishes personal jurisdiction over the defendant. Personal jurisdiction in diversity eases such as this one is determined in accordance with the law of the forum state, subject to federal due process constraints. See, e.g., Savin v. Ranier, 898 F.2d 304, 306 (2d Cir.1990). Jurisdiction in this ease is asserted under section 302 of the New York Civil Procedure Law and Rules, the New York long arm statute. Section 302(a) provides:

[A] court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent . 1. commits a tortious act without the state causing injury to person or property within the state ... if he ... expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.

N.Y.C.P.L.R. 302(a)(3)(ii).

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City of New York v. Bob Moates' Sport Shop, Inc., 253 F.R.D. 237, 2008 U.S. Dist. LEXIS 75578, 2008 WL 4458862 (E.D.N.Y. 2008).

253 F.R.D. 237 (City of New York v. Bob Moates' Sport Shop, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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