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Gun companies argue suit is barred by a 2005 US law

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US firearms linked to many homicides in Mexico

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Arguments come at fraught time for US-Mexico ties

(Adds beginning of arguments and quote from lawyer representing

gun companies in paragraph 8)

By John Kruzel and Blake Brittain

WASHINGTON, March 4 (Reuters) - The U.S. Supreme Court

was hearing arguments on Tuesday in a bid by two American gun

companies to throw out the Mexican government's lawsuit accusing

them of aiding illegal firearms trafficking to drug cartels and

fueling gun violence in the southern neighbor of the United

States.

U.S. firearms maker Smith & Wesson and distributor

Interstate Arms have appealed a lower court's ruling that the

lawsuit could proceed on the grounds that Mexico has plausibly

alleged that the companies aided and abetted illegal gun sales,

harming the Mexican government. The arguments were ongoing.

The case comes before the Supreme Court at a fraught time

for U.S.-Mexican relations as President Donald Trump pursues

tariffs on Mexican goods and accuses Mexico of doing too little

to stop the flow of synthetic drugs such as fentanyl and migrant

arrivals at the border.

At issue is whether Mexico's suit should be dismissed under

a 2005 federal law called the Protection of Lawful Commerce in

Arms Act that broadly shields gun companies from liability for

crimes committed with their products - or whether the alleged

conduct of the companies falls outside these protections, as the

lower court found.

Mexico's lawsuit, filed in Boston in 2021, accused the gun

companies of violating various U.S. and Mexican laws. Mexico

claims that the companies have deliberately maintained a

distribution system that included firearms dealers who knowingly

sell weapons to third-party, or "straw," purchasers who then

traffic guns to cartels in Mexico.

The suit also accuses the companies of unlawfully designing

and marketing their guns as military-grade weapons to drive up

demand among the cartels, including by associating their

products with the American military and law enforcement.

The gun companies have argued that they have done nothing

more than make and sell lawful products.

"If Mexico is right, then every law enforcement organization

in America has missed the largest criminal conspiracy in history

operating right under their nose, and (beer maker) Budweiser is

liable for every accident caused by underage drinkers since it

knows that teenagers will buy beer, drive drunk and crash," Noel

Francisco, the lawyer arguing for the gun companies, told the

justices.

Mexico is seeking monetary damages of an unspecified amount

and a court order requiring Smith & Wesson and Interstate Arms

to take steps to "abate and remedy the public nuisance they have

created in Mexico."

Most of the 180,000 homicides involving guns in Mexico, a

country with strict firearms laws, from 2007 to 2019 were

committed with weapons trafficked from the United States,

according to court papers.

Guns trafficked from the United States to Mexico - counting

those made by the defendants and other companies - are valued at

more than $250 million annually, according to court papers.

Mexico in a Supreme Court brief said the accused companies

"deliberately sell their guns through dealers who are known to

disproportionately sell firearms that are recovered at crime

scenes in Mexico," adding that they "intentionally do all this

to boost their bottom lines."

According to the lawsuit, gun violence fueled by trafficked

American-made firearms has contributed to a decline in business

investment and economic activity in Mexico, and forced its

government to incur unusually high costs on services including

healthcare, law enforcement and the military.

U.S. District Judge Dennis Saylor in Boston sided with the

gun companies in 2022 and threw out the case. The Boston-based

1st U.S. Circuit Court of Appeals reversed Saylor's decision in

January 2024 and ruled that the suit could proceed.

The 1st Circuit ruled that Mexico had plausibly alleged that

the gun companies had aided and abetted violations of federal

laws prohibiting the sale and export of guns without a license,

and sales to straw purchasers - placing their alleged conduct

beyond the Protection of Lawful Commerce in Arms Act.

A ruling in the case is expected by the end of June.