(CN) — The New Jersey attorney general may have obtained documents from gunmaker Smith and Wesson over how it advertised its firearms in the Garden State, but the question of whether the office can use those documents in an investigation is far from over.
On Tuesday, the gunmaker appeared before the Third Circuit hoping to fight the matter further in district court, arguing a federal judge improperly abstained from hearing its suit that attacked the lawfulness of the New Jersey subpoena.
Smith and Wesson's attorney Courtney Saleski told a three-judge panel of the Philadelphia-based appeals court that “the compliance is ongoing right now.”
But a brief filed by acting New Jersey Attorney General Andrew Bruck's office pointed out that a protective order in state proceedings over the subpoena says the state would return or destroy the documents if a court decides the subpoena was unlawful.
Saleski told the Third Circuit panel the matter should be heard in district court because none of the exceptional circumstances where federal courts decide it is best to sit out from a case apply to this one.
Meanwhile, some of the judges seemed reluctant to adopt the position of Smith and Wesson, pointing out that doing so could creating dueling parallel litigation and an opportunity for dissatisfied litigants to have two shots at disputed issues.
In October 2020, the Attorney’s General Office issued a subpoena against the gun manufacturer seeking records relating to statements it made about using its products for home defense and concealed carry. The subpoena was issued under the New Jersey Consumer Fraud Act.
According to attorney Angela Cai, deputy state solicitor, the company had made statements, for instance, that its guns were the most accurate and most reliable.
“Other governmental agencies have been investigating Smith and Wesson for the same,” Cai said.
Smith and Wesson told the state it would not comply with the subpoena. It filed a lawsuit in federal court last year that said the state had launched an “unconstitutional fishing expedition.”
But the district court tossed the suit in August. U.S. District Judge Julien Neals reasoned that the gun company had already made its case before the state court over the constitutionality of the claims and the matter related to the state courts’ contempt process.
Similarly, losing in state court, Smith and Wesson has appealed its state claims.
Cai, arguing for New Jersey, said Tuesday the gun manufacturer was launching “an assault on the state court’s power.”
Smith and Wesson, Cai argued, was attacking a state enforcement proceeding by trying to prevent the state from enforcing a subpoena. It was engaged in a wrong act when it refused to comply with the subpoena, a document that is allowed to be issued by the Consumer Affairs Division by statute, she said.
A subpoena issued under the state’s consumer fraud act is a “civil enforcement proceeding that is akin to criminal proceedings in important respects,” Cai said.
Furthermore, Cai said, Smith and Wesson had an opportunity to make its constitutional arguments in state court, and the state courts found those arguments wanting.
Saleski told the panel there was a difference between a court and administrative subpoena. In other cases courts decided to abstain from hearing cases involving individuals, for instance, facing contempt of court charges issued by a judge.
No such thing happened in this case, Smith and Wesson's attorney argued. Instead, the gunmaker was fielding a subpoena administered administratively, Saleski said.
In its brief, the gun manufacturer said it was prevented from meaningfully attacking the constitutionality of the subpoena at the state court. But Saleski said the appeals court did not need to examine that, because her client's position is that the case did not warrant the federal judge's abstention.
In the brief, however, the gunmaker worried about an end-run around federal rights.
"The district court effectively held that no litigant may ever avail itself of the federal civil rights statutes in federal court when a state issued subpoena is involved, because the state need only move to enforce the subpoena in state court to deprive the federal courts of jurisdiction. That cannot be the law,” Smith and Wesson’s brief states.
The Third Circuit panel was made up of U.S. Circuit Judges Thomas M. Hardiman, Paul Matey and Anthony Scirica, appointees of George W. Bush, Donald Trump and Ronald Reagan, respectively. The judges heard the arguments in person but streamed the audio over YouTube. They did not indicate when they would rule.
The arguments come after Smith and Wesson recently announced it would be relocating from its longtime headquarters in Springfield, Massachusetts, to eastern Tennessee.
Follow @jcksndnl
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Minnesota governor appoints two Supreme Court justices April 22, 2024 -
