NYC Can’t Enjoin Gun Shops for Nuisance

MANHATTAN (CN) - The 2nd Circuit overturned an "overbroad" injunction Mayor Michael Bloomberg won two years ago against gun shops in the South.

Georgia-based Mickalis Pawn Shop and South Carolina-based Adventure Outdoors appealed the default judgment that a federal judge slapped against them and 13 other gun brokers for allegedly causing a public nuisance by haphazardly selling firearms in a manner that made it easy to traffick them illegally into New York City.

Though a three-judge appellate panel found that the default judgment was properly entered since the shops had each withdrawn from the litigation as it stretched on since 2006, the judges agreed that the injunction was improper.

Mickalis' lawyers withdrew as the shop's counsel in 2008 because owner Larry Mickalis said he wanted to devote his financial resources to his defense of a South Carolina grand jury indictment he faced for knowingly selling a firearm and ammunition to a convicted felon.

Unlike Mickalis, Adventure Outdoors sold guns over the Internet to out-of-state clients prepared to pick up their firearms at the South Carolina shop. The company defended itself against New York's lawsuit through discovery in 2009 and was the last defendant standing after each other party had either defaulted or settled.

After a judge concluded that neither Adventure Outdoors nor the city were entitled to a jury trial, the company's counsel withdrew, saying their client did not have enough financial resources to devote to an unfair bench trial.

A three-judge panel of the federal appeals court concluded in an 87-page decision that the court was justified in entering default judgment against both companies.

"We will not excuse the defendants' forfeiture in this instance, where there is every indication that the defendants' default was not the product of inadvertence, but a deliberate tactic instead," Judge Robert Sack wrote for the court on Wednesday. "We will not allow the defendants to 'escape the consequences' of their strategic decisions simply because they have proven to be disadvantageous to themIn entering default judgment, the District Court erred in imposing separate, mostly identical, permanent injunctions to abate the defendants' ongoing "public nuisance."

Sack and his colleagues tossed the injunction as overbroad.

In a concurring judgment, Judge Richard Wesley chastised the lower court for devising "a test that has no basis in the New York statute governing long-arm jurisdiction."

"There is nothing in the record that supports the conclusion that defendants knew or should have known that sales of guns in their home states were having consequences in New York," Wesley wrote.

Still the defendants waived their jurisdictional attacks by defaulting before trial, both opinions state.

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