An appeals court ruling has revived a lawsuit brought by the government of Mexico against U.S. gun manufacturers.

Mexico filed the $10 billion lawsuit against Smith & Wesson Brands, Beretta and other gun-makers in 2021. It argues that despite strict federal firearm regulation in Mexico, U.S. gun companies design, market and sell guns in ways that arm drug cartels and drive up gun violence there. The filing says more than 500,000 guns are trafficked into Mexico from the U.S. every year, nearly 70% of which are made by the companies in the suit.  

A lower court dismissed the case in 2022 on the grounds that companies were protected by the Protection of Lawful Commerce in Arms Act, a federal law that shields arms companies from lawsuits. The Mexican government appealed the ruling, and this week, a three-judge panel at the 1st U.S. Circuit Court overturned it.

Consul of Mexico in Tucson Rafael Barceló Durazo says it’s a welcome development. 

"There are three judges who actually agreed with Mexico’s argument in this sense that the companies do not have immunity for this case and must answer for their actions in court," he said. "The government of Mexico thoroughly welcomes the decision of the U.S. court of appeals, particularly because it is important that a U.S. court be able actually listen to the evidence that the government of Mexico is ready to present." 

In 2022, a separate suit filed by the Mexican government alleged five Arizona firearm dealers “participate systematically in the trafficking of weapons." Barceló says that suit is still pending and expected to proceed next month.

In the appeals' ruling, issued Monday, U.S. Circuit Judge William Kayatta says in Mexico, there is one gun store nationwide issuing fewer than 50 permits a year — making it "virtually impossible' for criminals to obtain firearms legally." Still, he says, Mexico has the third-most gun-related deaths in the world. 

"The number of gun-related homicides in Mexico grew from fewer than 2,500 in 2003 to approximately 23,000 in 2019. The percentage of homicides committed with a gun similarly rose from 15% in 1997 to 69% in 2021. The increase in gun violence in Mexico correlates with the increase of gun production in the United States, beginning with the end of the United States' assault-weapon ban in 2004," the ruling reads. 

The circuit court ruling says while the Protection of Lawful Commerce in Arms Act does protect companies from some types of claims, it did not extend to the type of claim brought by Mexico — which focuses on the illegal arms trade.

"Importantly, according to the complaint, the aspects of defendants' businesses that facilitate trafficking are not unfortunate and unintended byproducts of a lawful enterprise. Rather, they are the result of defendants' affirmative and deliberate efforts to create and maintain an illegal market for their weapons in Mexico," the ruling reads. 

Lawyers for the gun companies being sued did not respond to requests for comment. In a press release following the ruling, the Mexican government said the  lawsuit is the first brought by a foreign state against the gun industry in U.S. courts, and that when the case returns to the lower court, Mexico will present evidence "to demonstrate the defendants’ negligence and seek reparation for the damages, which will be determined by the judge.