August 20, 2009

In a case of first impression in New Jersey, a Morris County Superior Court Judge has refused to grant statutory immunity to a gun dealer sued when an ex-employee stole a handgun from his employer dealer and shot a police officer. The gun dealer, Sarco, Inc. of Stirling, New Jersey claimed it was covered under the federal Protection of Lawful Commerce in Arms Act (“PLCAA”), which immunizes gun dealers from suits by victims of gun-related crimes. However, in Schramm v. Sarco Firearms, MRS-L-2481, the Court ruled that Sarco’s failure to tell authorities that the gun was missing violated the statute. Consequently, the Court found that a jury should decide whether that failure constituted negligence and whether it was the proximate cause of the officer’s injuries. In reaching its decision, the Court ruled that the PLCAA was intended to apply to suits that impose strict liability against firearms dealers simply because they sold guns. The Court found that the PLCAA was not intended to apply to private citizen suits in cases where the handgun was used by the defendant’s own employee, possibly due to the lack of security measures. In any event, this opinion signals a victory to victims of gun related crimes and will likely be a hotly contested area of litigation in the years to come.

Joseph R. McCarthy is an associate at Hill Wallack LLP in the Princeton office where he is a member of the Creditors’ Rights/Bankruptcy Practice Group. Mr. McCarthy concentrates his practice in all matters of creditors’ rights and bankruptcy, including workouts, foreclosures, replevin actions, and collections.