Estados Unidos Mexicanos v. Diamondback Shooting Sports Incorporated et al

Filing 110

ORDER DENYING Defendants' 99 Motion to Stay. Signed by Judge Rosemary Marquez on 1/24/25. (BAC)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Estados Unidos Mexicanos, Plaintiff, 10 11 v. 12 Diamondback Shooting Incorporated, et al., 13 No. CV-22-00472-TUC-RM ORDER Sports Defendants. 14 15 Pending before the Court is Defendants’ Motion to Stay (Doc. 99), which is fully 16 briefed (Docs. 100, 101). The Court finds the Motion suitable for resolution without oral 17 argument. 18 I. Background 19 In this action, Plaintiff Estados Unidos Mexicanos sues various Arizona firearm 20 dealers for harms deriving from criminal misuse of firearms in Mexico. (See Doc. 1.) 21 Plaintiff alleges that Defendants “systematically participate in trafficking military-style 22 weapons and ammunition to drug cartels in Mexico” through “reckless and unlawful 23 business practices.” (Id. at 4 ¶ 1.) Plaintiff raised similar claims in a lawsuit filed in the 24 District of Massachusetts against firearm manufacturers and a firearm distributor 25 (“Manufacturer Case”). (See Doc. 99-1.) In the Manufacturer Case, the district court 26 dismissed Plaintiff’s Complaint, and the First Circuit Court of Appeals reversed and 27 remanded. See Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc., 91 F.4th 511 28 (1st Cir. 2024). On October 4, 2024, the United States Supreme Court granted certiorari 1 on the following issues: 2 5 1. Whether the production and sale of firearms in the United States is the “proximate cause” of alleged injuries to the Mexican government stemming from violence committed by drug cartels in Mexico. 2. Whether the production and sale of firearms in the United States amounts to “aiding and abetting” illegal firearms trafficking because firearms companies allegedly know that some of their products are unlawfully trafficked. 6 (See Doc. 99-2 at 2); Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos, No. 23- 7 1141, 2024 WL 4394115 (Oct. 4, 2024). Inherent in these issues is the question of 8 whether the Protection of Lawful Commerce in Arms Act (“PLCAA”) bars the claims 9 asserted in the Manufacturer Case. (See generally Doc. 99-2.) The district court has 10 stayed proceedings in the Manufacturer Case pending issuance of the Supreme Court’s 11 decision. (Doc. 101-1.) 3 4 12 In resolving Defendants’ Motion to Dismiss in the above-captioned matter, this 13 Court found that Plaintiff’s Complaint “adequately alleges that Defendants’ knowing 14 violation of firearm-specific statutes proximately caused Plaintiff’s injuries for purposes 15 of the predicate exception to the PLCAA.” (Doc. 50 at 14-15.) In so finding, the Court 16 relied upon the First Circuit’s decision in the Manufacturer Case. (See id.) 17 II. Legal Standard 18 “[T]he power to stay proceedings is incidental to the power inherent in every court 19 to control the disposition of the causes on its docket with economy of time and effort for 20 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In 21 evaluating whether to stay proceedings, a court must weigh “the competing interests 22 which will be affected,” including: 23 24 25 26 the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay. CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). 27 A court may “find it is efficient for its own docket and the fairest course for the 28 parties to enter a stay of an action before it, pending resolution of independent -2- 1 proceedings which bear upon the case,” even if the other proceedings are not “necessarily 2 controlling of the action before the court.” Leyva v. Certified Grocers of Cal., Ltd., 593 3 F.2d 857, 863-64 (9th Cir. 1979). However, “[o]nly in rare circumstances will a litigant 4 in one cause be compelled to stand aside while a litigant in another settles the rule of law 5 that will define the rights of both.” Landis, 299 U.S. at 255. “[I]f there is even a fair 6 possibility that the stay ... will work damage” to another, the party seeking the stay “must 7 make out a clear case of hardship or inequity in being required to go forward[.]” Id. 8 “[B]eing required to defend a suit, without more, does not constitute a clear case of 9 hardship or inequity[.]” Lockyer v. Mirant Corp., 398 F.3d 1098, 1112 (9th Cir. 2005) 10 (internal quotation marks omitted). Furthermore, “[a] stay should not be granted unless it 11 appears likely the other proceedings will be concluded within a reasonable time in 12 relation to the urgency of the claims presented to the court.” Leyva, 593 F.2d at 864. 13 “Generally, stays should not be indefinite in nature.” Dependable Hwy. Exp., Inc. v. 14 Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). 15 III. Discussion 16 In their Motion to Stay, Defendants urge the Court to stay this litigation until the 17 Supreme Court issues a decision in the Manufacturer Case. (Doc. 99.) The Supreme 18 Court is likely to issue a decision in that case by June 2025, when its October 2024 term 19 ends. Although the requested stay is likely of limited duration, granting the stay would 20 nevertheless delay resolution of this action, in which Plaintiff alleges ongoing and future 21 harm of great magnitude and seeks injunctive relief. See Lockyer, 398 F.3d at 1112 22 (recognizing a fair possibility of harm from the granting of a stay where the plaintiff 23 sought injunctive relief against ongoing and future harm). 24 Defendants would suffer in being required to go forward is the hardship of incurring 25 litigation costs which may prove unnecessary depending on how the Supreme Court 26 resolves the Manufacturer Case. Such litigation costs do not constitute a clear case of 27 hardship or inequity for purposes of a Landis stay. See Lockyer, 398 F.3d at 1112. 28 The only hardship that Furthermore, although the Supreme Court’s decision in the Manufacturer Case -3- 1 may affect the scope of this action, it is not clear how or to what degree it will do so. As 2 Plaintiff notes, the connection between the defendants’ conduct and illegal firearm 3 trafficking is more attenuated in the Manufacturer Case than it is here, and the Supreme 4 Court will not address the PLCAA’s negligent entrustment exception, which is at issue 5 here. (Doc. 100 at 6-8.) 6 7 After weighing the competing interests which will be affected by the granting or denial of a stay, the Court declines to grant a Landis stay. 8 IT IS ORDERED that Defendants’ Motion to Stay (Doc. 99) is denied. 9 Dated this 24th day of January, 2025. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4-

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