Court rejects gun maker Smith & Wesson's challenge to New Jersey's subpoena

Smith & Wesson Brands

25/06/2024 18:26

By Nate Raymond
       June 25 (Reuters) - A divided federal appeals court on
Tuesday rejected gun manufacturer Smith & Wesson's  SWBI.O  bid
to block New Jersey's attorney general from enforcing a subpoena
to investigate whether the company committed fraud while
advertising firearms to consumers.
    The Philadelphia-based 3rd U.S. Circuit Court of Appeals on
a 2-1 vote held Smith & Wesson could not pursue its federal
claims that the subpoena violated its constitutional rights as
it had already litigated those same arguments unsuccessfully in
state court.   
    The company sued in 2020 to challenge a subpoena issued as
part of an investigation launched by former New Jersey Attorney
General Gurbir Grewal that has continued under the current
office holder, Matthew Platkin, a fellow Democrat.
    It did so after refusing to comply with the subpoena, which
sought records concerning its firearm and ammo-related
advertising for an investigation into whether Smith & Wesson
violated the New Jersey Consumer Fraud Act.
    Smith & Wesson argued the probe sought to suppress speech
regarding gun ownership protected by the U.S. Constitution's
First Amendment and aimed to prevent New Jersey residents from
exercising their rights to bear arms under the Second Amendment
of the U.S. Constitution.
    But Chief U.S. Circuit Judge Michael Chagares said the
company was barred from pursuing those arguments in federal
court after it already raised them before a state court judge
who ordered it to comply with the subpoena in response to a
separate lawsuit by the attorney general's office.
    In that case, New Jersey Superior Court Judge Jodi Lee Alper
ordered the company to produce the subpoenaed documents in June
2021. A New Jersey appeals court later upheld the decision.
    Platkin in a statement said the 3rd Circuit "rightly
rejected Smith & Wesson’s attempts to undercut the state courts’
confirmation of New Jersey’s right and duty to investigate
potential fraud and misconduct."
    "Let there be no doubt: we look forward to continuing to
protect New Jersey consumers by investigating wrongdoing," he
said.
    Representatives for Smith & Wesson did not respond to
requests for comment.
    The decision upheld a 2022 ruling by a lower court judge.
Chagares' opinion was joined by Senior U.S. Circuit Judge Julio
M. Fuentes, an appointee of Democratic former President Bill
Clinton.
    U.S. Circuit Judge Paul Matey, who was appointed by
Republican former President Donald Trump, in a fiery dissenting
opinion said the question of whether the probe treaded on the
constitutional freedoms remained unanswered.
    Matey called the state's investigation "novel" and part of a
practice by the Democratic attorney general of using consumer
fraud probes to target "disfavored" groups, citing a current
probe of a Christian anti-abortion pregnancy center.
    "Intimidation, rather than litigation—where law must be
offered, facts found, and an impartial decision reached—seems to
be New Jersey's plan," Matey wrote.
    The case is Smith & Wesson Brands Inc et al v. Grewal et al,
U.S. District Court, District of New Jersey, No. 2:20-cv-19047.
    For Smith & Wesson: Courtney Saleski of DLA Piper
    For the state: Jeremy Feigenbaum of the New Jersey Office of
the Attorney General
    
    Read more: 
    US states tell Glock to preserve evidence for probe in
machine gun conversion
    Smith & Wesson's constitutional challenge to N.J. fraud
probe rejected