Attorneys for Appellant Attorneys for Appellees
James B. Meyer James P. Dorr
Lukas I. Cohen Sarah L. Olson
W. Anthony Walker Chicago, Illinois
Terence M. Austgen
Dennis A. Henigan Elizabeth M. Bezak
Brian J. Siebel Munster, Indiana
Daniel R. Vice
Washington, DC Kenneth D. Reed
John P. Reed
John E. Hughes
Stephen E. Scheele
Ihor A. Woloshanski
Indiana Supreme Court
City of Gary, Indiana, by its Mayor,
Scott L. King
Appellant (Plaintiff below),
Smith & Wesson, Corp., et al.
Appellees (Defendants below).
Appeal from the Lake Superior Court, No. 45D05-0005-CT-243
The Honorable James J. Richards, Judge
On Petition To Transfer from the Indiana Court of Appeals, No. 45A03-0105-CV-155
December 23, 2003
The City of Gary sued for injunctive relief and money damages for the
harm it alleges is caused by the unlawful marketing and distribution of handguns.
The City alleges claims for public nuisance and negligence against manufacturers, wholesalers,
and distributors of these products. We hold that the Citys complaint states
a claim against certain sales practices of all defendants. We also hold
that the Citys negligent design claim states a claim against the manufacturer-defendants.
Factual and Procedural Background
In September 1999, the City filed this action in state court against a
number of participants at various stages in the manufacture and distribution of handguns.
After an amended complaint disposed of some defendants, the remaining named defendants
are eleven manufacturers,
and five retailers.
The City has also
named multiple John Doe defendants in all three categories.
The complaint alleges that manufacturers of handguns typically sell to distributors who resell
at wholesale to dealers who in turn sell at retail to the general
public. Some categories of persons are prohibited by law from purchasing guns,
and all dealer-defendants are alleged to have knowingly sold to illegal buyers through
intermediaries in straw purchases. Specifically, three dealers, Cash America, Ameri-Pawn, and Blythes
Sporting Goods, are alleged to have e
ngaged in straw purchases that were the
subject of a sting operation conducted by the Gary police department against suspected
violators of the gun distribution laws. The police employed a variety of
techniques in these operations. In general, an undercover officer first told a
dealers salesperson that he could not lawfully purchase a gun, for example, because
he had no license or had been convicted of a felony, and a
second undercover officer then made a purchase with the clerks knowledge that the
gun would be given to the first. Some other practices of dealers
are also alleged to generate illegal purchases. These include failure by some
dealers to obtain the required information for background checks required by federal law,
sales of a number of guns to the same person, and intentional diversion
of guns by some dealers to illegal purchasers.
The City alleges that the manufacturers know of these illegal retail sales of
handguns, and know that a small percentage of dealers, including the dealer-defendants here,
account for a large portion of illegally obtained handguns. The City alleges
the manufacturers and distributors have the ability to change the distribution system to
prevent these unlawful sales but have intentionally failed to do so.
The City alleges that these and other practices generate substantial additional cost to
the public in general and the City in particular. Possession of unlawfully
purchased guns is claimed to contribute to crime that requires expenditure of public
resources in addition to the obvious harm to the victims. The complaint
alleges that seventy murders with handguns took place in Gary in 1997, and
another fifty-four in 1998. From 1997 through 2000, 2,136 handguns used in
crimes were recovered. Of these, 764 were sold through dealers who are
defendants in this suit. The City also asserts that harm is suffered
by the City at the time of the sale of an illegal han
because these unlawful sales generate additional requirements to investigate and prosecute the violations
In addition to challenging the distribution practice of the defendants, the City also
alleges negligent design of the handguns by the manufacturers that contributes to these
injuries. Finally, the City alleges that the manufactu
rers engage in deceptive advertising
of their product by asserting that a gun in the home offers additional
safety for the occupants when in fact the contrary is the case.
Count I of the complaint alleges that these facts support a claim for
public nuisance. Count II asserts a claim for negligence in distribution of
guns and Count III presents a claim for their negligent design. All
Counts request compensatory and punitive damages and injunctive relief. The trial court
granted a motion by all defendants to dismiss both counts for failure to
state a claim.
The City appealed and the Court of Appeals affirmed
the dismissal of the negligence count as to all defendants. Dismissal of
the claim for public nuisance was affirmed as to the manufacturers and distributors,
but the Court of Appeals concluded that the complaint stated a claim for
public nuisance as to the dealers to the extent it alleged that they
engaged in straw purchases. City of Gary v. Smith & Wesson Corp.,
776 N.E.2d 368, 389 (Ind. Ct. App. 2002). We granted transfer.
The standard of review for a motion to dismiss is well settled.
A complaint may not be dismissed for failure to state a claim unless
it is clear on the face of the complaint that the complaining party
is not entitled to relief. City of New Haven v. Reichhart, 748
N.E.2d 374, 377 (Ind. 2001). Because this comes to us as a
review of a dismissal of the Citys complaint for failure to state a
claim, we accept the allegations of the complaint as true for purposes of
this motion. It remains for trial whether the City can establish the
facts it alleges. We view the pleadings in the light most favorable
to the City as the nonmoving party and draw every reasonable inference in
favor of it. Id.
I. Public Nuisanc e
The City asserts that public nuisance is an independent cause of action and
that any business unreasonably and unnecessarily operating in a dangerous manner can constitute
a nuisance. It contends that its allegations against the defendants meet that
Public Nuisance as an Unreasonable Interference with a Public Right
The essence of the Citys claim is that handgun manufacturers, distributors, and dealers
conduct their business in a manner that unreasonably interferes with public rights in
the City of Gary, and therefore have created a public nuisance. In
addressing this contention all parties to the lawsuit look to the Restatement (Second)
of Torts section 821B, which defines a public nuisance as an unreasonable interference
with a right common to the general public. Indiana nuisance law is
grounded in a statute enacted in 1881, and now appearing at Indiana Code
(1) injurious to health;
(3) offensive to the senses; or
(4) an obstruction to the free use of property;
so as essentially to interfere with the comfortable enjoyment of life or property,
is a nuisance, and the subject of an action.
The Indiana statute, unlike the Restatement and most common law formulations of public
nuisance, makes no explicit mention of the reasonableness of the conduct that is
alleged to constitute a nuisance. However, the language of the statute is
very broad, and if read literally would create a cause of action for
many activities not actionable as nuisances at common law and not generally viewed
as improper even though they produce, at least to some extent, one or
more of the effects listed in the statute. In recognition of this
practical reality, over the intervening 122 years, Indiana courts have consistently referred to
the common law reasonableness standard in applying the Indiana nuisance statute. Indeed,
in 1881, the year of the statutes enactment, this Court referred to the
need to avoid unnecessary inconvenience or annoyance to others. Owen v. Phillips,
73 Ind. 284 (1881), was a private nuisance case by adjoining property owners
seeking to have a mill declared a nuisance. This Court pointed out
the need to balance the usefulness of the activity against the harm to
others in evaluating a claim of nuisance:
We approve, in its fullest extent, the doctrine, that in some localities a
business will be considered a nuisance, while it would not be so in
others. But wherever the mill or factory may be located, whatever its surroundings,
property owners of the vicinity have a right to require that it shall
be properly managed, conducted with ordinary care and proper regard for the rights
of others, and in such a way as that no unnecessary inconvenience or
annoyance shall be caused them.
Id. at 295-96.
More recently, in addressing a nuisance claim based on an alleged hazardous use
of real property, this Court adopted a more modern formulation of essentially the
same concept. A pu
blic nuisance was described as an activity reasonably and
naturally calculated to injure the general public:
Not every dangerous agency is a nuisance, and we believe it can be
said generally that an instrumentality maintained upon private premises may only be said
to be a nuisance upon the ground that it is calculated to produce
personal injuries when it is of such character, and so maintained, that it
is reasonably and naturally calculated to injure the general public or strangers who
may come upon the premises.
Town of Kirklin v. Everman, 217 Ind. 683, 688, 28 N.E.2d 73, 75
(1940). In addition, several Indiana Court of Appeals decisions, including that of
the Court of Appeals in this case, have adopted the Restatements formulation of
a nuisance as an unreasonable interference with common or public rights.
Despite the statutes absolutist approach, all parties to this lawsuit have couched their
rguments in terms of the reasonableness of the defendants conduct. Given this
consistent interpretation of a statute long on the books, we reaffirm that a
nuisance claim is, as the Restatement says, predicated on unreasonable interference with a
public right. Reasonableness in evaluating a nuisance claim appears to have been
used by Indiana courts in two related but facially different senses. Defining
a nuisance as conduct reasonably calculated to injure seems to focus on the
predictability of resulting injury. Reasonable conduct, on the other hand, focuses on
the activity claimed to constitute a nuisance. The formulation of the Restatement
seems consistent with the first view, by looking to the resulting injury to
the public as the test of unreasonable interference. Comment (e) to the
Restatement section 821B defines an unreasonable interference: the defendant is held liable
for a public nuisance if his interference with the public right was intentional
or was unintentional and otherwise actionable under the principles controlling liability for negligent
or reckless conduct or for abnormally dangerous activities. . . . If
the interference with the public right is intentional, it must also be unreasonable.
Restatement (Second) of Torts § 821B cmt. e.
We think this boils down to the same question for the trier of
fact framed by
Owen over a century ago: a nuisance is an activity
that generates injury or inconvenience to others that is both sufficiently grave and
sufficiently foreseeable that it renders it unreasonable to proceed at least without compensation
to those that are harmed. Whether it is unreasonable turns on whether
the activity, even if lawful, can be expected to impose such costs or
inconvenience on others that those costs should be borne by the generator of
the activity, or the activity must be stopped or modified. W. Page
Keeton, Prosser and Keeton on The Law of Torts § 88 at 629-30
(5th ed. 1984). And of course the same activity may constitute a
nuisance in some contexts, but be acceptable in others where its adverse effects
are not sufficient to require a remedy.
B. The Citys Public Nuisance Claim
The City alleges that the manufacturers, distributors, and dealers knowingly pa
rticipate in a
distribution system that unnecessarily and sometimes even intentionally provides guns to criminals, juveniles,
and others who may not lawfully purchase them. Specifically, the City asserts
that [d]efendants affirmatively rely upon the reasonably foreseeable laxness of dealers, and employees,
and the ingenuity of criminals to ensure that thousands of handguns find their
way into their expected place in the illegal secondary market.
The defendants first contend that the lawful distribution of their products cannot const
a public nuisance. The manufacturers point out, correctly, that in every one
of over 1,000 Indiana state court and 50 federal public nuisance decisions courts
have recognized public nuisance claims only in two circumstances. Either a statute
is violated, or the nuisance stems from use of real property. A
variation on this argument is the contention advanced by one retailer that an
independent tort must be pleaded to support a public nuisance claim. From
this the defendants infer that it is a requirement of a public nuisance
action that the claim be based on either misuse of real property or
unlawful conduct in the form of either a violation of a statute or
an independent tort. The use of real property is not at issue
here as to the manufacturers and distributors. The only question, at least
as to those defendants, is whether a statutory violation or an underlying tort
is required in order to assert a public nuisance claim. The defendants
contend that there is no underlying tort here, and also argue that their
conduct is legislatively authorized and therefore cannot be a public nuisance. The
defendants further contend that even if a public nuisance action could survive, they
do not have sufficient control over the handguns at the time of the
injury to be liable for harm from their misuse. Similarly, the manufacturers
and distributors disclaim control over any unlawful sales and therefore deny liability for
any harm generated by the sale of a weapon.
Courts have divided on the same or very similar issues under the laws
of several other states.
For the reason explained below, we conclude that
a public nuisance has been alleged under Indiana law and the City is
a proper party to assert that claim.
1. Unlawful Activity or Use of Land as a Prerequisite for Nuisance
We are not persuaded that a public nuisance necessarily involves either an unlawful
activity or the use of land. Defendants cite no Indiana case that
establishes this requirement, but point out that all Indiana cases to date have
fallen into one of these two categories. We think that is due
to the happenstance of how the particular public nuisance actions arose and not
to any principle of law.
The Court of Appeals reached a similar
conclusion in rejecting the contention that
a party must be the owner or
controller of property to be held liable for a nuisance: [a]lthough most
nuisance cases refer to the controversy as being between two landowners, it is
because this is the norm, not because the law requires either party to
be a landowner. Gray v. Westinghouse Elec. Corp., 624 N.E.2d 49, 53
(Ind. Ct. App. 1993) (citations omitted). The court went on to point
out that the nuisance statute:
uses the broad term whatever to define the possible sources of a nuisance
and it does not contain any reference to property ownership by the party
creating the nuisance. This indicates the focus of the legislature was on
protecting an indivi
duals right to enjoy property from infringement by any source.
We hold that the party which causes a nuisance can be held liable,
regardless of whether the party owns or possesses the property on which the
Id. at 53. The same reasoning applies to the claim that use
of real estate or conduct of an unlawful activity is a prerequisite of
a public nuisance. The fact that public nuisance has never been applied
to situations other than those involving real property or an unlawful activity does
not mean it cannot arise in other contexts.
The Restatement also supports the view that neither real estate nor unlawful co
is a requirement of a public nuisance claim. It is explicit that
unlike a private nuisance, a public nuisance does not necessarily involve interference with
use and enjoyment of land. Restatement (Second) of Torts § 821B, cmt
The requirement that a public nuisance arise from unlawful conduct
is found in subsection (b) of Restatement (Second) section 821B(2). But subsection
(b) is only one of three circumstances that may give rise to a
public nuisance. Restatement (Second) section 821B, reads in full:
(1) A public nuisance is an unreasonable interference with a right common to
the general public.
(2) Circumstances that may sustain a holding that an interference with a public
right is unreasonable include the following:
(a) Whether the conduct involves a significant interference with the public health, the
public safety, the public peace, the public comfort or the public convenience, or
(b) whether the conduct is proscribed by a statute, ordinance or administrative regulation,
(c) whether the conduct is of a continuing nature or has produced a
permanent or long-lasting effect, and, as the actor knows or has reason to
know, has a significant effect upon the public right.
Subsection (a) acknowledges that a nuisance may arise from a significant interference with
public health, safety or convenience. Subsection (c) recognizes that a predictable significant
effect upon the public right may constitute a nuisance. The three subsections
are plainly alternative means of imposing an unreasonable interference, and the limitations of
subsection (b) do not apply to either subsection (a) or (c).
In sum, neither the language of the Indiana statute nor the standard case
law formulation of public nuisance places those limits on the doctrine. Indeed,
courts in this state and elsewhere have typically rejected any such requirement.
we hold that there is no requirement that the activity involve an
unlawful activity or use of land. If an activity meets the requirements
of an unreasonable interference with a public right, it may constitute a public
Other jurisdictions have reached similar conclusions in the context of handgun cases.
City of Cincinnati, the Ohio Supreme Court noted although we have often
applied public nuisance law to actions connected to real property or to statutory
or regulatory violations involving public health or safety, we have never held that
public nuisance law is strictly limited to these types of actions. City
of Cincinnati v. Beretta U.S.A. Corp., 768 N.E.2d 1136, 1142 (Ohio 2002) (citation
omitted). The court in City of Chicago v. Beretta U.S.A. Corp., noted
common law public nuisance is not limited to those activities the legislature has
declared [to be] public nuisances. 785 N.E.2d 16, 27 (Ill. App. Ct.
2002) (brackets in original) (quoting Young v. Bryco Arms, 765 N.E.2d 1, 17
(Ill. App. Ct. 2001)). See also City of Chicago v. Festival Theatre
Corp., 438 N.E.2d 159, 162 (Ill. 1982). But see City of Philadelphia
v. Beretta U.S.A. Corp., 277 F.3d 415, 421 (3d Cir. 2002).
We also conclude that a public nuisance may exist without an underlying independent
tort, although some elements of the two may be indistinguishable in practical terms,
as the allegations of this complaint demonstrate. Here the complaint does allege
negligence and resulting predicable injury. But a nuisance claim may be predicated
on a lawful activity conducted in such a manner that it imposes costs
This is the case whether the actor intends the adverse
consequences or merely is charged with knowledge of the reasonably predictable harm to
others. In either case, the law of public nuisance is best viewed
as shifting the resulting cost from the general public to the party who
creates it. If the marketplace values the product sufficiently to accept that
cost, the manufacturer can price it into the product. If the manufacturers
and users of the offending activity conclude that the activity is not worthwhile
after absorbing these costs, that is their choice. In either case, there
is no injustice in requiring the activity to tailor itself to accept the
costs imposed on others or cease generating them. Finally, as City of
Chicago noted [o]ne is subject to liability for a nuisance caused by an
activity, not only when he carries on the activity but also when he
participates to a substantial extent in carrying it on. City of Chicago,
785 N.E.2d at 29 (quoting City of Bloomington v. Westinghouse Elec. Corp., 891
F.2d 611, 614 n.5 (7th Cir. 1989) (applying Indiana law)).
Compliance with Regulatory Statutes as a Defense
The Court of Appeals held that legislative authorization of the defendants activities served
as an affirmative defense to any public nuisance claim and insulated the defendants
from liability for a harmful activity. City of Gary, 776 N.E.2d at
379, n.4. We disagree. Presumably the legislative authorization to which the
Court of Appeals referred is found either in Indiana Code sections 35-47-2.5-1 through
15, dealing with the sale of handguns, or Article I, section 32 of
the Indiana Constitution, which gives Indiana citizens the right to bear arms in
defense of themselves and others. See Kellogg
v. City of Gary, 562
N.E.2d 685, 694 (Ind. 1990).
But as established in Part A, an
activity can be lawful and still be conducted in an unreasonable manner so
as to constitute a nuisance.
The Indiana statutes detail the procedure to
be used by a dealer in every handgun transaction involving background checks and
furnishing information on gun purchasers to the state police. Intentional failure to
observe a statutory standard is presumptively unreasonable.
Indeed, the doctrine has been
specifically applied to unlawful gun sales. Over a decade ago the Court
of Appeals held that sales in violation of gun registration laws are negligence
per se for which the seller may be civilly liable. Rubin v.
Johnson, 550 N.E.2d 324, 329 (Ind. Ct. App. 1990).
Some of the activity
alleged in the complaint presumably violates those regulatory statutes, either directly in the
case of the dealers or as knowing accomplices in the case of the
More generally, gun regulatory laws leave room for the defendants to be in
mpliance with those regulations while still acting unreasonably and creating a public nuisance.
As the court in AcuSport recently pointed out, [t]he fact that conduct
is otherwise lawful is no defense where . . . the actions or
failures to act of multiple defendants creating in the aggregate a public nuisance
can justify liability . . . . NAACP v. AcuSport , Inc. , 271
F. Supp. 2d 435, 482 (E.D. N.Y. 2003). The essence of a
nuisance claim is the foreseeable harm unreasonably created by the defendants conduct.
In any event, the City alleges that the defendants, though subject to regulatory
schemes, either directly or as accomplices, are not in compliance with applicable laws.
The City has alleged that (1) dealers engage in illegal sales, and
(2) the distributors and manufacturers know of their practice and have it within
their power to curtail them but do not do so for profit reasons.
More specifically, the City claims that manufacturers are on notice of the concentration
of illegal handgun sales in a small percentage of dealers, and the ability
to control distribution through these dealers, but continue to facilitate unlawful sales by
failing to curtail supply. The City also alleges substantial and ongoing human
and financial harm from these unlawful sales. These allegations state a claim.
Due Process Limitations
The manufacturers and distributors are all located outside the City, and indeed outside
Indiana. They argue that the relief sought by the Citys lawsuit would
violate the Due Process Clause by imposing extraterritorial regulation and imposing sanctions on
conduct outside the City and outside Indiana. It is well established that a
state may assert jurisdiction over activity that is conducted outside the state, but
has its effects within the jurisdiction. Intl Shoe Co. v. Washington, 326
U.S. 310, 315 (1945). The defendants challenge is not lack of personal
jurisdiction, but rather that the form of relief the City seeks amounts to
an attempt to control activity in another state through Indiana state tort law.
BMW of N. Am. v. Gore, 517 U.S. 559 (1996), addressed that
issue. In that case an Alabama state court had awarded punitive damages
based on the nationwide activities of the defendant. Id. at 565.
The Supreme Court held that due process precluded a single state from seeking
to change a tortfeasors conduct in other states. Id. at 572.
At the same time, the Supreme Court observed that [n]o one doubts that
a State may protect its citizens by prohibiting deceptive trade practices . .
. . But the States need not, and in fact do not,
provide such protection in a uniform manner. Id. 568-69. The Court
went on to observe that both statutory schemes and judicially recognized tort principles
are appropriate means to these ends. Id. at 569.
As the Supreme Court put the principles established in
BMW in a nutshell:
Alabama may insist that BMW adhere to a particular disclosure policy in
that State. Alabama does not have the power, however, to punish BMW
for conduct that was lawful where it occurred and that had no impact
on Alabama or its residents. Nor may Alabama impose sanctions on BMW
in order to deter conduct that is lawful in other jurisdictions. Id.
at 572-73. The City here seeks none of the things BMW prohibited.
It alleges among other things that the manufacturers engage in deceptive advertising
aimed at Gary residents. The City also claims that the defendants conduct
produces ongoing and severe impacts on Gary and its residents that take the
form of injuries to its citizens and harm to the City both in
terms of public safety and in financial terms. Nor does the City
seek damages for effects outside the City of Gary. To the contrary,
the harms it alleges are all within its boundaries.
Finally, the defendants contend that the only available relief would effect changes in
ationwide distribution systems and therefore the Citys remedy would both regulate conduct outside
the state and seek to deter activity in jurisdictions other than Indiana.
The City contends that remedies are available for the harm it alleges in
Gary without unduly burdening activity elsewhere. At this stage of the lawsuit
this issue is easily resolved. The availability of an appropriate remedy turns
on factual assertions by both sides that are resolved in favor of the
plaintiff on this motion to dismiss.
Commerce Clause Limitations on State Tort Law
The trial court concluded that granting relief to the City would violate the
Commerce Clause of the federal constitution. The manufacturer-defendants assert that because the
City seeks to prohibit some sales practices, for example sales at gun shows
or multiple sales to the same purchaser, this lawsuit constitutes an attempt to
regulate firearms through the courts. Defendants cite BMW for their contention that
state tort law can be viewed as regulation of interstate commerce. BMW
noted that state judicial doctrine may be viewed as regulation, but held the
Alabama punitive damages award in that case to violate Fourteenth Amendment due process.
We recognize that some have viewed BMW as grounded in the Commerce
But as explained above, the reasons given by the Supreme Court
in vacating the Alabama award relate not to state interference with interstate transactions,
but rather to Alabamas effort to deter or punish conduct in other states.
As such we think BMW is a due process case, not a
Commerce Clause case. The activities of the manufacturers that the City seeks
to curtail are all directed at the effects on local activities by dealers.
Accordingly, we think BMW does not support the defendants Commerce Clause contention.
Whether a particular state remedy rises to the level of a burden on
interstate commerce is essentially a balancing exercise in which any inconvenience to the
national economy must be justified by the states interest in protecting its own
citizens. Prohibition of sales to these purchasers is within the police power
of the state. Presser v. Illinois, 116 U.S. 252, 265 (1886).
Indeed, several states ban one form of firearm, the Saturday night special, apparently
without significant Commerce Clause challenge.
See C.D.M. Prods., Inc. v. City of
350 N.Y.S.2d 500, 503
(N.Y. Sup. Ct. 1973). The federal
government also imposes requirements on purchases. It is a violation of federal
law for a dealer to sell a handgun to a variety of classes
But federal legislation has expressly denied any intent to preempt
state laws regulating guns. 18 U.S.C. 927 (2000).
State tort doctrines
are equally allowed to thrive as a part of the law of a
state. Defendants contend that the Citys relief would require manufacturers to change
their distribution methods nationwide, and therefore constitutes extraterritorial regulation which violates the Commerce
Clause. It is true that the City seeks to change how handguns
are distributed, but only those handguns that are sold in and around Gary.
Indiana law requires that no sales be made to felons and some
others deemed as significant risks. I.C. § 35-47-2-7(b). Imposing liability for
negligent, reckless or intentional facilitation of violations of these regulations that cause harm
within the local jurisdiction does no more than state tort law has historically
done. To avoid that liability, the defendants need only comply with existing
state and federal laws governing gun distribution.
Defendants also cite Edgar v. MITE Corp., 457 U.S. 624 (1982), for their
contention that a state regulatory scheme may violate the Commerce Clause. Edgar
involved a state statute that required state approval of a tender offer for
a company whose shares were owned across the nation. Id. at 627.
Thus Illinois sought to prevent transactions between buyers and sellers, both of
whom were outside the forum state. Here, with the possible exception of
the Citys effort to block internet sales (which could also be locally regulated
by using the shipping address of the buyer), all of the requested relief
can be accomplished at a local level. At a minimum, the distributors
and manufacturers can stop doing business with those few dealers in the Gary
area known to be sources of unusually high volumes of illegal sales.
Other more tailored forms of relief limited to local impact are presumably also
It is well established that a state can establish product
liability standards in
the absence of federal preemption of the area. Sprietsma v. Mercury Marine,
537 U.S. 51, 60 (2002); Geier v. Am. Honda Motor Co., 529 U.S.
861, 886 (2000). The defendants raise no Second Amendment issue. For
purposes of the Commerce Clause, there is no qualitative difference between recognition of
the negligence and nuisance claims the City asserts as to handguns and restrictions
on any other product deemed dangerous. We also see no difference between
local requirements designed to make the product itself more safe and requirements that
its distribution be conducted consonant with public intent.
Applying these general principles, we find no Commerce Clause bar to the Citys
claim. The City seeks to abate the allegedly u
nreasonably injurious practices of
the defendants in the distribution of handguns that find their way into the
hands of criminals in Gary. Local safety concerns have been found to
justify banning some products altogether. See, e.g. Natl Paint & Coatings Assn
v. City of Chicago, 45 F.3d 1124, 1150 (7th Cir. 1995) (spraypaint); Cohen
v. Bredehoeft, 290 F. Supp. 1001, 1003 (S.D. Tex. 1968), affd 402 F.2d
61 (5th Cir. 1968) (fireworks). Certainly where only local retail sales are
affected, even an outright ban would not discriminate either formally or in effect
against interstate or out of state interests. Natl Paint & Coatings Assn,
45 F.3d at 1132. Accordingly, a rational basis grounded in public safety
may justify it. Exxon Corp. v. Maryland, 437 U.S. 117, 124 (1978).
Even if such a ban were to be evaluated under the more
stringent balancing of Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970),
its survival of a commerce clause challenge would turn on factual issues resolved
at this pleading stage in favor of the plaintiff. In any event,
the form of relief the City seeks falls far short of banning handguns.
Even under the traditional Pike test, whether there are less restrictive means
and proof of the degree of harm alleviated remain issues for trial.
They do not justify dismissal of the claim on Commerce Clause grounds.
The Citys Right to Assert the Claim
Defendants contend the City cannot sue at all, and even if it can
bring some claims, it cannot obtain injunctive relief.
Authority to Seek an Injunction Based on a Public Nuisance Claim
Indiana Code section 32-30-6-7 allows an action to abate or enjoin a nuisance
to be brought by the attorney of any city or town in which
a nuisance exists. Indiana Code section 32-30-6-8 allows a nuisance to be
enjoined or abated, and damages recovered for the nuisance. Section 7 allows
a unit of government to bring an action for abatement or injunction without
regard to its status as an injured party. These statutes authorize the
City to bring such a claim.
2. Statutory Limits on the Citys Ability to Regulate Firearms
The trial court found Indiana statutes limiting the powers of municipal corporations to
bar the City from bringing this lawsuit. First, we do not agree
that the filing of this lawsuit violates Indiana Code section 35-47-11-2, which prevents
the regulation of firearms by cities. This lawsuit does not seek to
implement a regulatory scheme. It seeks redress under existing state law of
nuisance and negligence. The manufacturer-defendants contend that judicially fashioned tort remedies may
be viewed as a form of regulation. For this proposition they cite
cases finding that judicial action may constitute regulation for purposes of determining whether
a state law of statutory or judiciary origins impermissibly interferes with interstate commerce.
See, e.g., BMW of N. Am., Inc., 517 U.S. at 573
n.17; San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 246-47 (1959);
Panelas v. Arms Tech, Inc., 778 So. 2d 1042, 1045 (Fla. Dist. Ct.
App. 2001). We do not believe this doctrine grounded in federal-state relationships
is applicable to interpretation of the state municipal law statute the defendants cite.
The same contention of judicial regulation could be leveled at any nuisance
claim, and, as noted elsewhere, Indiana statutes expressly authorize the City to seek
relief against public nuisances.
In sum, the City seeks redress against certain techniques that are alleged to
generate a nuisance. Its lawsuit is no more regulation of firearms than
a suit to enjoin any form of nuisance is a regulation of the
activity. Unless this form of regulation runs afoul of the Commerce Clause,
which it does not, it is a well-established form of permissible relief under
Limitations on the Citys Authority to Obtain Injunctive Relief
The trial court also found Indiana Code section 36-1-6-4 to bar the Citys
claim. That section authorizes a municipal corporation to enjoin persons from violating
an ordinance regulating the use of property or engaging in conduct without a
required license. The trial court accepted the defendants contention that this section
contained an exhaustive list of the circumstances under which the City may seek
injunctive relief. We do not agree. First, this section is a
part of the chapter entitled enforcement of ordinances. Here, the City does
not seek to enforce an ordinance. Rather the City seeks relief from
alleged harm under tort theories. Second, the language of the statute grants
a municipal corporation the power to seek injunctive relief when either of these
two events occurs but does not purport to limit a citys injunctive power
under other circumstances. Third, if there were any doubt, the public nuisance
statute expressly authorizes the City to bring such a claim. I.C. §
32-30-6-7. A statute specifically addressing a subject controls over a generally worded
one. Ross v. State, 729 N.E.2d 113, 116 (Ind. 2000).
Geographical Limits on the Citys Regulatory Power
The trial court also cited Indiana Code sections 36-1-4-1 through 18 and held
that this lawsuit amounted to an attempt by the City to regulate people,
property and activities outside of the Citys boundaries. Once again we disagree.
It is true that Indiana Code section 36-1-3-9(b) defines the jurisdiction of
a City as its corporate boundary, and Indiana Code section 36-1-3-8 expressly prohibits
a City from imposing duties upon other political subdivisions. However, once again
the controlling point is that the City is seeking redress for harm caused
within its geographical boundaries. The fact that some of the actions that
allegedly generate the injury take place outside the City does not preclude the
suit so long as the City can demonstrate that the defendants contribute to
the harms alleged. See, e.g., City of Chicago, 785 N.E.2d at 31
(allowing public nuisance claims against dealers, manufacturers and distributors outside City limits).
The Home Rule Act
The trial court found Indiana Code sections 36-1-3-1 through 9, commonly referred to
as the Home Rule Act, to deny the City the authority to sue.
The Home Rule Act grants local governing bodies all the powers that
they need for the effective operation of government as to local affairs.
I.C. § 36-1-3-2. The Act explicitly declares that [a]ny doubt as to
the existence of a power of a unit shall be resolved in favor
of its existence. I.C. § 36-1-3-3(b). In view of this provision,
the public nuisance statute, which expressly authorizes the City to bring a claim,
resolves any doubt. I.C. § 32-30-6-7(b)(2).
D. Damages Under the Nuisance Claim
In addition to its claim for injunctive relief, the City also seeks damages
as a party uniquely injured by the nuisance. In particular, the City
points to public costs for the care and treatment of . . .
gunshot injuries and economic injuries in the form of increased spending on law
enforcement, emergency rescue services, security at public buildings, pensions, benefits, and jail costs.
The City also asserts that the widespread presence of guns in illegal
hands results in lower tax revenues and lower property values. In addition
to costs imposed by use of lawfully distributed guns, the City claims harm
at the time of an unlawful sale in the form of increased costs
in tracking down illegal handguns. Indiana Code section 32-30-6-8 explicitly allows monetary
damages to be recovered by any successful plaintiff in a nuisance action.
This includes the City as well as private parties. To the extent
the City can establish its claim for damages as an injured party it
has a claim for money damages just as any other injured party.
The City does not claim damage to its property from use of illegally
sold guns. Rather, it seeks compensation for various forms of responses to
gun use or illegal sales. Some courts have concluded that the difficulty
of proof of damages bars a nuisance claim altogether.
Camden County Bd
of Chosen Freeholders v Beretta USA Corp., 273 F.3d 536 (3d Cir. 2001);
Ganim v Smith & Wesson Corp., 780 A.2d 98 (Conn. 2001); People v.
Sturm, Ruger & Co., 761 N.Y.S.2d 192, 204 (N.Y. App. Div. 2003).
We believe these holdings are inapplicable here for the simple reason that Indiana
statutes explicitly provide for a municipality to bring an action to enjoin or
abate a nuisance. Thus, even if money damages are ultimately found to
be barred by doctrines of remoteness, proximate cause, or the like, injunctive relief
We respectfully disagree with those jurisdictions that have dismissed a complaint on the
ground that money damages are too remote from the activity of some defendants
to be recoverable. Related contentions are that administration of such a claim
is judicially unmanageable, and that municipal costs are not recoverable. Although the
City is authorized to sue for money damages, we conclude that the limit
on types of damages recoverable under a negligence theory are equally applicable to
a nuisance claim. Legislative authorization to sue for money damages carries with
it the common law limitations on damages. As explained in Part II.B,
the Citys claims for damages raise a number of issues and the discussion
of damages in Part II.B applies equally to the damages the City claims
under its nuisance count. These issues do not warrant dismissal of the
complaint, however. It is sufficient here to observe that the complaint alleges
the City has incurred damages from the nuisance. This is a conventional
tort pleading subject to no requirement of specificity. What form the Citys
proof will take is currently not before us and we cannot say
as a matter of law it cannot establish some items of damage if
liability is proven. As set forth in Part II, we agree that
there may be major, perhaps insurmountable, obstacles to establishing some or all of
the damage items the City cites. But that is not a basis
to dismiss the complaint before discovery has refined these issues and the precise
nature of the Citys case is known.
In sum, the City alleges that all defendants intentionally and willingly supply the
demand for illegal purchase of handguns. The City alleges that the dealer-defendants
have participated in straw purchases and other unlawful retail transactions, and that manufacturers
and distributors have intentionally ignored these unlawful transactions. The result is a
large number of handguns in the hands of persons who present a substantial
danger to public safety in the City of Gary. I.C. §§ 35-47-2.5-14,
-15. Taken as true, these allegations are sufficient to allege an unreasonable
chain of distribution of handguns sufficient to give rise to a public nuisance
generated by all defendants.
In count II of the complaint the City claims the defendants have acted
negligently in the distribution, marketing, and sale of handguns. The factual basis
of this claim are substantially the same as those supporting the nuisance claim.
In addition, the city alleges that the manufacturers have negligently designed the
guns and failed to include proper warnings of the harm they pose.
The City further claims it was harmed by these practices due to the
shootings committed in the City, the harm handguns cause its citizens, and the
law enforcement and other costs incurred to investigate crimes committed with guns and
to investigate illegal handgun sales.
The trial court dismissed the negligence claim on the ground that the defendants
owed no duty to the City. The Court of Appeals agreed.
City of Gary v. Smith & Wesson, 776 N.E.2d 368, 388 (Ind. Ct.
App. 2002). For the reasons explained below, we reverse the dismissal of
the Citys claim for the negligently unlawful sale of handguns.
Duty of a Custodian of a Gun to Exercise Care
The elements of a negligence action have long been recited by courts in
Indiana and elsewhere as duty, breach, causation and harm. Estate of Heck
v. Stoffer, 786 N.E.2d 265, 268 (Ind. 2003). The Court of Appeals,
following Webb v. Jarvis, 575 N.E.2d 992 (Ind. 1991), viewed the duty issue
in terms of the balance of foreseeability, public policy, and the relationship between
the parties. Where a duty is already recognized it is to be followed,
and we need not turn to a balancing test of factors to determine
whether a duty exists. N. Ind. Pub. Serv. Co. v. Sharp, 790
N.E.2d 462, 465 (Ind. 2003). Here precedent has established that a custodian
of firearms owes a duty to act with reasonable care to see that
the weapons do not fall into the hands of people known to be
dangerous. As we stated in Estate of Heck, [t]he care required is
always reasonable care. This standard never varies, but the care which it
is reasonable to require of the actor varies with the danger involved in
his act, and is proportionate to it. The greater the danger, the
greater the care which must be exercised. 786 N.E.2d 265 at 270
(citing Restatement (Second) of Torts § 298). Estate of Heck recognized a
duty on the part of an owner of a gun to exercise reasonable
care to prevent the weapon from falling into hands known to be dangerous.
This same duty applies to the defendants. Each defendant is a
custodian and owner of the weapon at the times that defendant possesses it
in the chain of distribution. To the extent the defendants argue any
injury to the City to be remote from any unlawful sale, that raises
the issue of proximate cause discussed in Part II.B.2, but does not negate
the existence of a duty on the part of the defendants to act
reasonably to avoid injury to anyone, including the City, who is reasonably foreseeably
Defendants point to legislation regulating the distribution of firearms and argue that compliance
with these statutes is sufficient to immunize them from liability. But these
same statutes also provide that firearms are not to be available to certain
classes of people. Specifically, Indiana Code section 35-47-2-7 prohibits the sale or
transfer of ownership of a handgun to a minor, a convicted felon, a
drug abuser, an alcohol abuser or a mentally incompetent person. These prohibitions
obviously reflect a concern that weapons in the hands of these persons constitute
a danger to the public. These are the very groups that the
City alleges the defendants knowingly facilitated in their efforts to obtain firearms.
We think it clear that these statutes impose on everyone in the chain
of distribution a duty not to facilitate ownership of a handgun by one
of the identified classes.
B. Problems of Causation and Damages
The Citys complaint identifies the damages it seeks as expenses in trying to
abate the nuisance and damages caused by the defendants wrongful design, manufacture, marketing
advertising, distribution and sale of handguns. The specific items identified in the
complaint are police and law enforcement services, additional security in and upon public
facilities, emergency medical services, pension benefits, disability benefits, workers compensation benefits, and losses
in tax revenues and property values.
Recovery of Municipal Costs
Defendants first argue that the items as damages the City seeks are not
recoverable as a matter of law because they fall under the category of
municipal costs incurred in the course of ordinary governmental functions. Although there
is no Indiana precedent, defendants contend these items are not recoverable at common
law. Defendants cite City of Bridgeton v. B.P. Oil, Inc., 750 F.2d
1077, 1080 (D.C. Cir. 1984), and City of Flagstaff v. Atchison, Topeka &
Santa Fe Ry. Co., 719 F.2d 322, 323-24 (9th Cir. 1983), for the
proposition that activities carried on by government are not components of compensable damages.
The defendants point out that the items cited by the City are
all in the general category of additional servicesinvestigation, response to crimes, treatment of
victims, services to children, etc.of the type government provides to the general public.
The doctrine that a tortfeasor is not liable for the cost of municipal
services in responding to an accident has been addressed only infrequently. Then-Judge
Kennedy explained it as based on the nature of the entity seeking recovery,
not on remoteness of the damage item from the tortfeasors act. City
of Flagstaff, 719 F.2d at 324. Thus, the costs of responding to
a single accident or fire may be quantifiable, at least in part, and
may satisfy ordinary requirements of proximate cause. The municipal costs doctrine would
nevertheless deny recovery on the basis in part that all expect the government
to provide emergency services, and if any change is to come in that
doctrine it should originate with the legislature. Id.
The damages the City seeks for the most part are in the nature
of costs of responses to incidents of gun use. There is an
inherent issue in any attempt to recover cost of municipal government in responding
to even a single incident such as an accident. Even if it
is appropriate to charge the arsonist with cost of a run by the
fire department, one can fairly debate to what extent these are recoverable.
The municipality incurs direct costs (gas for the fire truck, the water bill,
etc.), allocated costs of preparedness that would be incurred and are not directly
attributable to the incident (depreciation on the firehouse, salaries of administrative personnel, etc.),
and some costs that are arguably in either category (salaries of the firemen
who respond). In addition to these issues, the Citys claims here raise
a second level of complexity because they also present the broader issue of
identifying the costs attributable to whole classes of incidents, and then allocating those
costs among the various contributing factors, only one of which is the acts
of the alleged tortfeasor. Despite these complexities there may be merit in
some claims by the City for damages to its property from the use
of an illegally purchased weapon, and municipal costs may be recoverable under conventional
tort disputes in some circumstances. The Citys broad description of its damages
suggests an aggregation of disparate claims for response costs under generalized allegations.
It appears to include many fact patterns that presumably do not support a
claim for damages. As explained below, these and other issues may prevent
recovery of some claimed items of damage, but the mere fact that the
City provides services as part of its governmental function does not render the
costs of those services unrecoverable as a matter of law. We do
not agree that the City, as a governmental entity, is necessarily disabled from
recovering costs from tortious activity. Rather, we agree with those courts that
have rejected the municipal cost doctrine as a complete bar to recovery.
See Janus v. Arms Tech, Inc., 820 A.2d 27, 49 (N.J. Super. Ct.
App. Div. 2003); Cincinnati v. Beretta U.S.A. Corp., 768 N.E.2d 1136, 1149 (Ohio
Proximate Cause and Comparative Fault
The defendants point out that at the time a gun is used in
a crime it is no longer in the control of any defendant.
Moreover, a wide variety of conditions, many involving no fault of any defendant,
can lead to use of a firearm in some unlawful manner. Under
standard negligence doctrine, in order for a defendant to be liable for a
plaintiffs injury, the defendants act or omission must be deemed to be a
proximate cause of that injury. Cowe v. Forum Group, Inc., 575 N.E.2d
630, 635 (Ind. 1991), citing Prosser and Keeton on the Law of Torts
§ 41 at 263-66 (5th ed. 1984). Proximate cause in Indiana negligence
law has two aspects. The firstcausation in factis a factual inquiry for
the jury. If the injury would not have occurred without the defendants
negligent act or omission, there is causation in fact. Cowe, 575 N.E.2d at
635. A second component of proximate cause is the scope of liability.
That issue, which is also for the trier of fact, turns largely
on whether the injury is a natural and probable consequence, which in the
light of the circumstances, should have been foreseen or anticipated. Bader v.
Johnson, 732 N.E.2d 1212, 1218 (Ind. 2000). Under this doctrine, liability may
not be imposed on an original negligent actor who sets into motion a
chain of events if the ultimate injury was not reasonably foreseeable as the
natural and probable consequence of the act or omission. Havert v. Caldwell,
452 N.E.2d 154, 158 (Ind. 1983); Control Techniques, Inc. v. Johnson, 762 N.E.2d
104, 108 (Ind. 2002). Under comparative fault, the trier of fact can
allocate fault to multiple contributing factors based on their relative factual causation, relative
culpability, or some combination of both. Control Techniques, Inc., 762 N.E.2d 109;
I.C. § 34-51-2-8.
A crime involving the use of a gun may be attributable in part
to an unlawful sale, but it also requires an act on the part
of the criminal. Among the defendants, the retailers are the closest link
in the causal chain to the criminal act. But even these dealers
may not be the sole cause of the injuries from the illegal use
of the weapon, and in many cases will not bear any share of
the fault. As illustrated by the statistics the City cites in its
complaint, a significant amount of time often passes between the sale of a
handgun and the time a crime is committed using the weapon.
wide variety of intervening circumstances may contribute to the ultimate unlawful use.
And of course lawfully purchased handguns are also used in crimes, so any
attempt to recover costs attributable to unlawfully distributed weapons must address that fact.
We agree with the trial court that legislative policy permitting lawful distribution of
guns is relevant here. As a matter of law, in the absence
of other facts, it is not a natural and probable consequence of the
lawful sale of a handgun that the weapon will be used in a
crime. In this procedural posture the City cites no specific transaction in
which its damages are traceable to use of a gun obtained in an
unlawful sale. The Citys general description of its damages would presumably embrace
a vast number of different unspecified claims arising from a variety of widely
rcumstances. Much of the costs that are within the broad terms
of the Citys complaint are undoubtedly attributable to use of lawfully distributed guns.
Even an unlawfully sold weapon may nevertheless be acquired by a licensed
owner before its use in a crime. In some cases the fault
allocated to the user may overwhelm or even eliminate fault of the seller.
And so on. Because of these many variables, any particular crime
may not be attributable to an unlawful sale at all. And even
if an unlawful sale did contribute in part to some injuries, the relationship
of each defendant to the sale may vary, and the vast majority of
defendants will have no relationship to the transaction that placed the gun in
the hands of its user.
The conclusory allegations of the complaint leave much unanswered. For the reasons
cited, there may be substantial barriers to recovery of any or all of
these damages. However at this pleading stage we have nothing more than
the Citys allegation that it has incurred damages in these general categories.
There may indeed be substantial issues of proximate cause, or, as some courts
put it, remoteness of damage.
City of Cincinnati, 768 N.E.2d at 1144;
People v. Sturm, Ruger & Co., 761 N.Y.S.2d 192, 197 (N.Y. App. Div.
2003). However, we cannot say as a matter of law that no
items are recoverable. Resolution of these issues must await the proof offered
to substantiate each claimed item. Here we have bald allegations of liability
and a claim of resulting damages. That is sufficient to state a
claim. Whether the claim can be substantiated is an issue for another
Market Share Liability
The City seeks to overcome difficulties in proof of damages by relying on
a market share theory. This approach to allocation of liability has not
been adopted in Indiana. To the extent market share has been applied,
it has been used as a means of allocating damages among a group
of defendants when it is known that one of them is liable to
the plaintiff, but it cannot be established which of them caused any particular
plaintiffs injury. For example, in the leading case, Sindell v. Abbott Laboratories,
607 P.2d 924 (Cal. 1980), one of the many manufacturers of a fungible
product was known to be the source of the product alleged to cause
the plaintiffs injuries, but there was no means to identify which of the
manufacturers produced the particular product that injured a specific plaintiff. In this
circumstance, some jurisdictions have allowed recovery against the group of potential sources of
the defective product, and allocated the damages in proportion to each manufacturers sales
in the relevant time period. Where market share theory has been adopted,
the defendants denied any causation, but there was no claim that the injury
was solely attributable to other wrongful acts aside from the product defect.
Here, in contrast, many injuries from crimes involving guns are plainly not attributable
in any respect to any unlawful sale of the weapon, and all are
caused at least partly by substantial wrongful conduct by non-parties. Whatever the
merits of market share in other contexts, we do not believe it is
properly applied in this situation involving such a wide mix of lawful and
unlawful conditions as well as many potentially intervening acts by non-parties.
Negligence Per Se
The City asserts negligence per se, arising from an unlawful sale and cites
Rubin v. Johnson, 550 N.E.2d 324 (Ind. Ct. App. 1990), for the proposition
that the criminal use of a firearm does not constitute an intervening cause.
Under comparative fault, the City is correct that a subsequent misuse of
the gun does not necessarily extinguish liability of one who negligently furnished it.
Estate of Heck, 786 N.E.2d at 271; Control Techniques, Inc., 762 N.E.2d
at 108. The problem with the Citys claim, however, is not a
failure to allege negligence. Rather it is failure to identify any common
relationship between the alleged acts of negligence and the various injuries from criminal
use of guns. Negligence per se is a doctrine that supplies liability,
but does not embrace damages. In short, to the extent the City
seeks to recover damages it must do so by proof of factual causation,
subject to comparative fault and proximate cause, just as any other negligence claim.
Those issues remain for trial.
5. Damages for Harm Occurring at the Time of Sale
The City also seeks to recover for the harm caused by the negligent
sale of handguns independently from the harm caused by the use of handguns.
This alleged injury removes several links from the causal chain needed to
establish harm from the use of the gun. In addition to the
costs in investigating and attempting to prevent crimes committed with handguns, the City
also seeks recovery for the harm caused directly to it by the acts
of illegal handgun sales. Examples of these damages are costs of investigations
of illegal sales and services to juveniles who posses firearms.
The City claims that the costs it seeks to recover are analogous to
cleanup costs of a toxic waste spill which are recoverable even in jurisdictions
that follow the no-recovery-of-municipal-costs rule. See City of Flagstaff, 719 F.2d at
324. Certainly a unit of government has a civil remedy for injury
to its property. City of Marion v. Taylor, 785 N.E.2d 663, 664-65
(Ind. Ct. App. 2003) (suing for damages to stoplight). Cleanup costs are
often in the nature of abatement costs. They restore the situation to
the pre-nuisance status. The damage items the City identifies as arising from
the sales are generally additional police efforts and services to juvenile buyers.
These may present insurpassable issues of causation. Claims with fewer intervening factors
have been regarded as simply too complex to permit proof of damages.
See Illinois Brick Co. v. Illinois, 431 U.S. 720, (1977) (rejecting antitrust price
fixing damages sought by buyers from customers of the price fixers as too
speculative because it would require proof of the extent- to which the inflated
price would be passed on to buyers in the resale market); Camden County
Bd. of Chosen Freeholders v. Beretta U.S.A. Corp, et al, 123 F. Supp.
2d 245, 263 (D. N.J. 2000) (applying reasoning of Illinois Brick to proximate
cause in municipal handgun case). However, once again we are presented with
a motion to dismiss a conclusory allegation of a complaint. Whether the
proof at trial will be sufficient to overcome these issues remains to be
6. Injunctive Relief
For the reasons given, we agree that proof of damages from any specific
use of an unlawfully sold weapon, or from the sale itself, may turn
out to be so inextricably intertwined with other factors that as a matter
of law the City may have difficulty in establishing a claim for money
damages. However, precisely because there may be no effective damage remedy we
conclude that the City has stated a claim for injunctive relief. Tort
law has historically viewed injunctive relief as available only if there is no
adequate remedy at law, i.e. if there is no appropriate money damage award
to compensate the victim. Dobbs, Law of Remedies, § 2.5, at 123,
(2d ed. 1993).
We think the Citys negligence claim for injunctive relief remains viable to the
extent it alleges injury caused by the negligent sale of handguns. The
City has stated facts that, if proven, support the conclusion that it has
incurred some expenses as the result of negligent conduct on the part of
the defendants and will incur more in the future. Although the allocation
and evaluation of monetary damages may prove to be unquantifiable, proof of some
unknown but material additional cost incurred by the plaintiff is sufficient for injunctive
relief. Law of Remedies, § 2.5(2) at 131 and § 5.7(2) at
763. Injunctive relief is not as speculative as monetary damages and does
not involve the apportionment problems that come with a reward of monetary damages.
Even if the City ultimately fails to establishing its action for damages,
an equitable action for injunctive relief may still lie. NAACP v. AcuSport,
Inc., 271 F. Supp. 2d 435, 493 (E.D. N.Y. 2003). This is
simply an application of the widely accepted doctrine that injunctive relief is available
when a party suffers economic harm that cannot necessarily be quantified. See
Barlow v. Sipes, 744 N.E.2d 1, 7, 13 (Ind. Ct. App. 2001) (in
a tort case involving intentional interference with a business relationship and defamation, injunctive
relief was necessary because money damages cannot be calculated with any predictability or
certainty); Daugherty v. Allen, 719 N.E.2d 228, 235 (Ind. Ct. App. 2000) (injunctive
relief is not appropriate when monetary damages make a party whole, but injunctive
relief is available when monetary damages cannot be adequately awarded); Roberts Hair Designers
v. Pearson, 780 N.E.2d 858, 865 (Ind. Ct. App. 2002) (injunctive relief available
to enforce non-competition agreement even if economic loss was not quantifiable).
Deceptive Advertising Claims
The City also asserts claims of misleading and deceptive advertising and marketing of
guns. This is alleged in support of both the nuisance and negligence
claims. Specifically, the City alleges that guns are presented as adding to
a homeowners safety when in fact the opposite is true. Like Count
III, discussed below, these allegations appear to apply equally to lawfully and unlawfully
distributed guns. The City alleges that it incurs additional costs for treatment
of both intentional and accidental gunshot injuries as a result of the increased
placement of guns produced by the deceptive marketing practices. The City attributes
some of its incurred municipal costs to these factors. For the same
reasons applicable to the allegation of contributing to unlawful sales practices, we agree
that these claims, if proven, state a claim for injunctive relief based on
an action for public nuisance and negligence theories. The money damages claim
may suffer from the same complexity and multiplicity of factual allegations that could
bar damages from other allegations, but for the reasons already given, these issues
do not warrant dismissal of the complaint.
III. Negligent Design Claim
The City asserts a negligent design claim in Count III against the manufacturers
alleging the manufacturers were negligent in designing the handguns in a manner such
that the defendants foresaw or should have foreseen that the products would pose
unreasonable risks of harm to the citizens of Gary who are unaware of
the dangers of a firearm or untrained in the use of handguns, or
who are minors or mentally impaired persons. The City alleges that design
of the manufacturers products is defective for lack of adequate safety devices including,
but not limited to, devices that prevent handguns from being fired by unauthorized
users, devices increasing the amount of pressure necessary to activate the trigger, devices
alerting the users that a round was in the chamber, devices that prevent
the firearm from firing when the magazine is removed, and devices to inhibit
unlawful use by prohibited or unauthorized users. The City also claims that
the manufacturer defendants have knowingly and intentionally colluded with each other to adhere
to unsafe industry customs regarding the design of handguns.
These claims presumably apply equally to guns that are distributed lawfully. To
the extent either defective design or deceptive marketing of guns contributes to accidental
injuries, the claim for money damages suffers from the same problems of complexity
and potential remoteness of causal connection that may bar damages recovery for the
defendants alleged contribution to unlawful sales. The allegation of concerted action to
withhold design improvements from the marketplace states a claim of wrongful conduct.
The City is not a purchaser. It has no direct claim under
statutory or common law theories. See, e.g. Illinois Brick Co. v. Illinois,
431 U.S. 720, 746-48 (1977). But to the extent these actions constitute
an unreasonable interference with a public right, the City has alleged a claim
for a public nuisance. Whether these alleged design defects are unreasonable and
the extent to which they contribute to the harm alleged are matters for
trial. Similarly, the availability of relief appropriate to any unreasonable interference, given
that the defendants products are lawful and the public has a right to
acquire them may present substantial obstacles to the Citys claim. However, at
this pleading stage we conclude that the City has stated a claim for
IV. Jurisdiction and Standing
Two Dealers, Blythes Sports Shop, Inc. and Jacks Loan, Inc., argue that this
case is not justiciable for lack of a case or controversy. These
dealers accurately describe federal case or controversy requirements, but there is no such
jurisdictional limitation on Indiana state courts. See Cincinnati Ins. Co. v. Wills,
717 N.E.2d 151, 154 n.2 (Ind. 1999). Indiana does require that plaintiffs
meet the standing requirement recently explained as a showing that they have a
stake in the outcome of the litigation and . . . that they
have suffered or were in immediate danger of suffering a direct injury as
a result of the complained-of conduct.
State ex rel. Cittadine v. Ind.
Dept of Transp., 790 N.E.2d 978, 979 (Ind. 2003). The City has
met this requirement by alleging it was financially injured through the sale and
use of negligently distributed firearms and by alleging a nuisance within its borders
caused by the defendants.
V. The Admissibility of the Settlement Agreemen t
When the City filed its First Amended Complaint, the City attached a settlement
agreement allegedly entered into by Smith & Wesson, one of the manufacturer-defendants.
The trial court granted the defendants motion to strike the agreement from the
complaint and the Court of Appeals affirmed that ruling. The trial court
pointed out that Smith & Wesson is still a party to this litigation,
and found the City had made no showing that the agreement was ever
entered into. The trial court also found the agreement to be irrelevant
and in violation of Rule of Evidence 408 as a purported agreement of
settlement and compromise. The City claims the settlement agreement is relevant because
it shows the feasibility of some of the protections the gun manufactures could
employ to lessen the harm. Smith & Wesson does not address this
We think the agreement was properly ordered stricken from the complaint but conclude
that it is premature to address the admissibility of this purported settlement agreement
at this stage. No party included a copy of the Motion to
Strike in its Appendix, and no party refers to any factual affidavit either
supporting or opposing the motion to strike, so at this stage of the
proceedings, we accept the Citys factual assertions as true. Assuming this agre
was entered into, it forms no essential part of the complaint. It
is at most evidence supporting one allegation of the complaint. On its
face, there may be issues precluding the admission of the agreement into evidence,
at least for some purposes. But whether any part of the agreement
is admissible in evidence, and for what purpose, is a matter to be
addressed at trial.
We hold that the City may proceed on both the public nuisance claim
and negligence claims against all defendants. The City may also pursue its
negligent design claim against the manufacturer defendants. The judgment of the trial
court is reversed. This case is remanded for further proceedings.
SHEPARD, C.J., and DICKSON, SULLIVAN, and RUCKER, JJ., concur.
Smith & Wesson Corp., Beretta U.S.A. Corp., Glock Corp., Charter Arms Corp.,
Hi-Point Firearms Corp., Navegar, Inc. d/b/a Intratec U.S.A. Corp., Bryco Arms Corp., Phoenix
Arms Corp., Lorcin Enginee
ring Corp., Sturm, Ruger & Co. Corp., and Taurus Firearms
B.L. Jennings, Inc.
Footnote: Ameri-Pawn of Lake Station, Inc.; Blythes Sport Shop, Inc.; Cash Indiana, Inc.;
Jim Shemas Outdoor Sports; and Westforth Sports, Inc.
Footnote: Blythes Sport Shop, Inc., and Jacks Loan, Inc., contend that the plaintiffs
First Amended Complaint effected no amendment and therefore was merely an effort to
extend the time for appealing the order of dismissal. These defendants themselves
point out no fewer than nine differences between the two co
trial court allowed the amendment. That is sufficient to constitute an amended
complaint. Templin v. Fobes, 617 N.E.2d 541, 543 (Ind. 1993).
5 The nuisance statute was first codified as Indiana Code section 34-1-52-1.
In 1998 the statute was r
ecodified to appear at 34-19-1-1, and it was
again recodified in 2002 as 32-30-6-6.
Hopper v. Colonial Motel Properties, 762 N.E.2d 181, 184 (Ind. Ct.
App. 2002), a guest in a motel was injured when the patron in
the room above accidentally discharged a gun. The Court of Appeals affirmed
the trial courts dismissal of the nuisance claim against the hotel because the
operation of a hotel would not reasonably or normally lead to gunshot
injuries to a guest. Id. at 187. In Indiana Limestone Co.
v. Staggs, 672 N.E.2d 1377, 1379 (Ind. Ct. App. 1996), an estate sued
a limestone quarry after a driver of a car failed to negotiate a
curve in the road and drowned in the quarry claiming, inter alia, the
quarry constituted a public nuisance. The Court of Appeals affirmed
the dismissal because although the plaintiff provided evidence that other quarries were a
public nuisance, there was no showing that the quarry involved in the accident
unreasonably interfered with the publics use of the highway. Id. at 1384.
See also Sand Creek Partners, L.P. v. Finch, 647 N.E.2d 1149, 1151
(Ind. Ct. App. 1995); Blair v. Anderson, 570 N.E.2d 1337, 1339 (Ind. Ct.
The manufacturer-defendants addressed all issues presented on appeal, except the admissibility of
the settlement agreement. No distributor defendant filed a brief, and of the
dealer defendants, Blythes Sport Shop and Jacks Loan, Inc., filed one brief and
Cash Indiana, Inc., filed a separate brief addressing only the issue of whether
the City is attempting to regulate guns in violation of Indiana statutes, but
rporating the briefs of the other defendants.
City of Philadelphia v. Beretta U.S.A. Corp., 277 F.3d 415, 419
(3d Cir. 2002); Camden County Bd. of Chosen Freeholders v. Beretta, 273 F.3d
536, 538 (3d Cir. 2001); Ganim v. Smith & Wesson Corp., 780 A.2d
98, 133 (Conn. 2001); People v. Sturm, Ruger & Co., 761 N.Y.S.2d 192,
194 (N.Y. App. Div. 2003) (appeal denied); all affirmed a dismissal of a
public nuisance action. White v. Smith & Wesson, 97 F. Supp. 2d
816, 819 (N.D. Ohio 2000); Sills v. Smith & Wesson Corp., No. 99C-09-283-FSS,
2000 Del. Super. LEXIS 444 (Del. Super. Ct. Dec. 1, 2000); City of
Chicago v. Beretta U.S.A. Corp.,
785 N.E.2d 16, 31 (Ill. App. Ct. 2002)
appeal granted, 788 N.E.2d 727 (Ill. 2003);
of Boston v. Smith &
No. 1999-02590, 2000 Mass. Super. LEXIS 352, (Mass. Super. Ct. July
James v. Arms Tech. Inc.,
820 A.2d 27 (N.J. Super.
Ct. App. Div. 2003); and
City of Cincinnati v. Beretta U.S.A. Corp., 768
N.E.2d 1136, 1151 (Ohio 2002)
allowed a nuisance action to proceed.
Nuisances may arise from a lawful activity. Our Court of Appeals
has held that [w]hile the kee
ping of hogs, being a lawful enterprise, cannot
be characterized as an absolute nuisance or a nuisance, per se, such an
activity can become a nuisance per accidens by reason of the manner in
which the hogs are kept, the locality or both. Yeager & Sullivan,
Inc. v. O'Neill, 163 Ind. App. 466, 474, 324 N.E.2d 846, 852 (1975)
(citations omitted). See also Cox v. Schlachter, 147 Ind. App. 530, 537,
262 N.E.2d 550, 554 (1970) (the lawful raising of mice).
A dealer may not sell a handgun until (1) the potential buyer
has agreed in writing to a criminal bac
kground check; (2) the dealer must
provide the buyers personal information including name, birth date, and social security number
to the state police; and request criminal history information from the state police.
I.C. § 35-47-2.5-3 (1998). The dealer must also obtain proper identification
of the purchaser, including a current address. I.C. § 35-47-2.5-5.
See, e.g., City of Cincinnati, 768 N.E.2d at 1150.
Jon S. Vernick & Stephen P. Teret,
A Public Health Approach
to Regulating Firearms as Consumer Products, 148 U. Pa. L. Rev. 1193, 1197
Federal law prohibits sales to a person the dealer knows or has
reasonable cause to believe is under the age of twenty-one, 18 U.S.C. §
922(b)(2) (2000); a person who has been convicted of, or is under indictment
for, a crime punishable by imprisonment for a term exceeding one year, 18
U.S.C. § 922(d)(1); a fugitive from justice, 18 U.S.C. § 922(d)(2); an unlawful
user of or a person
addicted to a controlled substance, 18 U.S.C. §
922(d)(3); a person who has been adjudged a mental defective, 18 U.S.C. §
922(d)(4); an illegal alien, 18 U.S.C. § 922(d)(5); a person who has
been dishonorably discharged from the armed forces, 18 U.S.C. § 922(d)(6) (2003); a
person who has renounced his citizenship, 18 U.S.C. § 922(d)(7) (2000); a person
subject to a restraining order concerning the harassment, stalking, or threatening of an
intimate partner or child, 18 U.S.C. § 922(d)(8); or a person who has
been convicted in any court of misdemeanor domestic violence. 18 U.S.C. §
922(d)(9). Additionally, state law prohibits dealers from selling a handgun to a
person the seller knows or has reason to believe is ineligible for any
reason to purchase or otherwise receive . . . a handgun. I.C.
§ 35-47-2.5-14(b). The state also prohibits sales to minors, convicted felons, children
adjudicated delinquent, a drug or alcohol abuser, or a person who is mentally
incompetent. I.C. § 35-47-2-7.
No provision of this chapter shall be construed as indicating an intent
on the part of the Congress to occupy the field in which such
provision operates to the exclusion of the law of any State on the
same subject matter, unless there is a direct and positive conflict between such
provision and the law of the State so that the two cannot be
reconciled or consistently stand together. 18 U.S.C. § 927.
Footnote: Negligent design and failure to warn are typically asserted product liability
actions. Indianas Product Liability Act allows for actions brought by a user
or consumer . . . for physical harm caused by a pro
Ind. Code. § 34-20-1-1 (1998). Although some units of the City may
be users or consumers of handguns, the City itself is not a user
or consumer in the capacity in which it brings this suit. Accordingly,
it presents no claim under the Product Liability Act. The Product Liability
Act applies to claims for negligence in defective products as well as strict
liability. I.C. §§ 34-20-2-2, -3. However, the City is not suing for
recovery from physical harm, and therefore its negligence claim is not subject to
the Act. I.C. § 34-20-1-1. Because the Act does not apply
either to authorize or limit the Citys claim, the contentions that handguns are
defectively designed and accompanied by inadequate warnings are addressed as a part of
the Citys negligence claim.