By Jacob Gershman

The Supreme Court on Tuesday appeared apprehensive about Mexico's effort to hold the U.S.'s largest gun maker legally responsible for cartel-fueled violence south of the border in a case that tests the firearm industry's legal exposure from gun violence.

The justices seemed inclined to reverse an appeals court ruling that allowed Mexico to pursue billions of dollars in damages from gun companies, including Smith & Wesson, accused of trying to profit from the country's drug cartels.

The case marks the first time that justices are examining a 20-year-old federal law shielding gun manufacturers, distributors and dealers from potentially ruinous lawsuits over the criminal misuse of their products.

Mexico's government has sought to pierce that shield through a lawsuit it brought against six gun manufacturers.

It accuses gun makers of arming cartels by allowing traffickers to stock up on high-powered weapons through straw purchases and bulk sales from dealers. Manufacturers, the country alleges, aren't just aware of the gun pipeline arming cartels but have deliberately sought that business, estimating that $170 million in arms made by the original defendants are trafficked into Mexico each year.

The gun industry expected Mexico's lawsuit would be barred by the Protection of Lawful Commerce in Arms Act, the 2005 law that generally immunizes firearm companies from civil liability over gun violence.

But Mexico argues its suit fits into an exception in the law that allows lawsuits against gun companies engaged in illegal sales or marketing activity that directly causes injury. Last year, a three-judge panel of the First U.S. Circuit Court of Appeals agreed, reviving the case after a trial judge in Massachusetts had dismissed it.

During Tuesday's hearing, justices, including liberal members, voiced concerns about the vagueness of Mexico's claims, which don't allege that gun makers were aware of any particular unlawful sale. They said they were unsure of which specific gun law defendants had violated.

"They don't really tell us which dealers are doing this, who they're aiding and abetting," said Justice Sonia Sotomayor.

"I worry that without that clarity in a complaint like yours...that we're running up against the very concerns that motivated this statute to begin with," said Justice Ketanji Brown Jackson.

Justice Brett Kavanaugh, in an exchange with an attorney arguing for Mexico, Catherine Emily Stetson, said he was worried about the broader implications of the case.

"Lots of sellers and manufacturers of ordinary products know that they're going to be misused by some subset of people," he said. "Pharmaceuticals, cars, you can name lots of products. So that's a real concern, I think, for me about accepting your theory of aiding-and-abetting liability."

A lower-court judge in August dismissed claims against most of the defendants because of their lack of connection to the court's jurisdiction, winnowing it down to Smith & Wesson and wholesaler Interstate Arms.

Congress passed the shield law after a coalition of city mayors and mass-tort lawyers unleashed a torrent of lawsuits in the late 1990s blaming gun makers for urban gun violence and seeking tobacco industry-sized jury verdicts.

The case comes to the Supreme Court at a time of heightened tensions between the U.S. and Mexico. President Trump has hit Mexico with tariffs, claiming the country hasn't done enough to halt the flow of deadly fentanyl into the U.S. Mexico has in turn blamed the U.S. for failing to stop American guns from reaching cartels.

It is also unfolding amid a resurgent legal campaign against gun makers, with nine states recently enacting laws making it easier to bring civil lawsuits against gun makers and several pending lawsuits brought by families of mass-shooting victims.

Noel Francisco, a former Trump administration U.S. Solicitor General representing the defendants, likened his clients to social-media companies that defeated lawsuits blaming them for allowing Islamic terrorists to use their platforms.

"If Mexico is right," Francisco told justices, "then every law-enforcement organization in America has missed the largest criminal conspiracy in history operating right under their nose, and Budweiser is liable for every accident caused by underage drinkers."

Write to Jacob Gershman at jacob.gershman@wsj.com

(END) Dow Jones Newswires

March 04, 2025 13:24 ET (18:24 GMT)

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