March 30, 2000
Gun Maker's Accord on Curbs Brings
Industry Pressure
By FOX BUTTERFIELD and RAYMOND HERNANDEZ
Smith & Wesson, which recently agreed to restrictions on the way it
makes and distributes handguns, has come under such fierce
financial pressure from other firearms manufacturers and dealers opposed
to the agreement that state officials have started antitrust investigations of
the industry.
Federal, state and city officials are also trying to protect Smith & Wesson
by persuading police agencies nationwide to buy its weapons.
The effort to help Smith & Wesson comes after the company agreed on
March 17 to a wide array of restrictions in exchange for ending many of
the 30 lawsuits filed against it by cities and counties and averting
threatened suits by the states of New York and Connecticut and the
Federal Department of Housing and Urban Development.
Since then, one of the nation's largest gun wholesalers announced it
would stop distributing Smith & Wesson handguns, many retail dealers
have proclaimed they will not sell Smith & Wesson products and the
National Rifle Association has denounced the company as a
foreign-owned business that has "run up the white flag of surrender" to
the Clinton administration. Smith & Wesson, which experts say produces
about one-fifth of the 2.5 million handguns sold nationwide each year, is
based in Springfield, Mass., but is owned by Tomkins PLC of London.
In addition, Ken Jorgensen, a spokesman for Smith & Wesson, said the
Chicago law firm that had long jointly represented Smith & Wesson,
Sturm Ruger & Company and the Colt's Manufacturing Company, three
of the largest handgun makers, has said the firm will drop Smith &
Wesson as a client. And some shooting match organizers have told Smith
& Wesson that the company is not welcome at their events.
The Chicago law firm that informed Smith & Wesson it would no longer
represent the company is Wildman, Harrold, Allen & Dixon. Anne
Kimball, a lawyer at the firm who has represented Smith & Wesson, did
not return phone calls seeking comment.
Eliot Spitzer, the attorney general of New York who helped strike the
deal with Smith & Wesson, said that officials are investigating whether
there is a conspiracy against the gun maker. "We are seeing behavior on
the part of Smith & Wesson's competitors that raises the specter of illegal
antitrust activity," Mr. Spitzer said in an interview today, adding: "This is
serious stuff."
Richard Blumenthal, the Connecticut attorney general who was also
involved in the agreement and is helping coordinate the measures to
protect the company, said, "Smith & Wesson is under absolutely
unprecedented pressure, both financial and personal within the gun
industry, with threats that are almost violent in nature, and I have heard
the fear that it could be put out of business."
But Robert Delfay, president of the National Shooting Sports
Foundation, the gun industry trade organization, said, "there is no
conspiracy" against Smith & Wesson.
"I could not be more confident that these are just independent actions by
businessmen," Mr. Delfay said.
The antitrust investigation is being conducted under state antitrust laws in
New York, Connecticut and Maryland, with more states expected to
join and subpoenas to be issued starting Thursday, Mr. Blumenthal said.
Mr. Jorgensen, the Smith & Wesson spokesman, said it is too early to
tell what the settlement's financial impact on the company will be. But,
Mr. Jorgensen added, "We've been getting beat up pretty bad, and the
whole idea seems to be a boycott of Smith & Wesson products."
The effort to get law-enforcement agencies buy Smith & Wesson
handguns could prove very helpful to the company, whose sales are
primarily to civilians. Nationwide, police forces purchase about 25
percent of the handguns sold each year. Only a very small part of the
police handgun purchases are from Smith & Wesson.
But Mr. Blumenthal and other federal, state and city officials who met in
Washington on Tuesday to try to find a way to help the company
acknowledged there are difficult contractual and legal problems in getting
police forces to make the change to Smith & Wesson.
Several cities and counties around the country, including Atlanta, Detroit,
Miami-Dade County, Buffalo, N.Y., Rochester, N.Y., and Albany,
N.Y., have recently agreed to buy only from Smith & Wesson. New
York City, which buys Glock handguns for its police officers, has
withheld a decision.
The effort to support Smith & Wesson is critical to regulating the firearms
industry, government officials say, because the deal it struck splintered
the powerful united front of gun makers and gun owners that has blocked
tough gun laws in Washington and state capitals for years. The company
agreed to improve the safety of its handguns, for instance, by including
trigger locks with all sales, and to allow its dealers to sell weapons at only
those gun shows where all sales are subject to background checks on the
buyer.
It also requires, within three years, so-called smart-gun technology that
will allow each of its new handguns to be fired only by authorized users.
Mr. Spitzer said that if Smith & Wesson was undermined financially, it
would weaken the government's hand in drawing other gun makers into
similar agreements. "If one company signs on and is left out to dry, we
can't credibly go to other companies and ask them to join this
agreement," he said.
The wholesaler that announced it will stop distributing Smith & Wesson
guns is RSR Group Inc.
of Winter Park, Fla., which called for Smith & Wesson to reopen
negotiations to "find a workable solution."
"Although RSR has been a leading distributor of Smith & Wesson
products for more than 20 years we have come to the difficult conclusion
that we cannot continue to do business with Smith & Wesson under the
problematic terms of the current agreement," the company said.
Mr. Blumenthal said these were precisely the kinds of actions the
investigation would examine to see whether "they are part of a concerted,
illegal campaign to retaliate against Smith & Wesson, restraining trade
and impeding the development of a safer product."
Andrew M. Cuomo, Secretary of Housing and Urban Development,
who helped organize the meeting on Tuesday in Washington, said, "It
seems the industry is doing everything it can to make an example out of
Smith & Wesson."
Almost overlooked in the dispute over what has happened to Smith &
Wesson is the view of some gun control advocates, who said the
settlement let the company off easy because it only accepted provisions it
was already practicing.
Moreover, six municipalities that did not take part in the agreement --
Chicago, Cleveland, Cincinnati, New Orleans, Washington, D.C. and
Wayne County, Mich. -- said they would continue with their lawsuits
against Smith & Wesson as well as other gun makers.
John Komako, a lawyer for Cleveland, said he saw "no reason to sign
onto the agreement" without seeing what documents Smith & Wesson
would be forced to disclose in the discovery stage of the lawsuits. On
March 14, just before Smith & Wesson reached its agreement, a Federal
District Court judge in Cleveland, Donald Nugent, rejected the gun
companies' motion for summary dismissal and ordered that discovery in
the case could proceed.
Lawyers advising the cities suing the gun industry have contended that if
they could get into discovery of corporate documents they would find
evidence that the firearms makers have long known how easily their guns
are sold to criminals and juveniles, providing the kind of proof that led to
expensive settlements by the tobacco companies.
The lawsuits filed against the gun makers by cities and counties charge
them with negligently marketing and distributing their guns in ways that
have helped criminals and juveniles gain access to them.
Some of the cities are seeking to recover the cost of gun violence for the
hiring of additional policemen and in hospital care while other cities say
their main goal is to improve gun safety and change gun makers'
marketing practices.
Ask questions, give answers and tell other readers what you know.
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Copyright 2000 The New York Times Company
Gun Maker's Accord on Curbs Brings
Industry Pressure
By FOX BUTTERFIELD and RAYMOND HERNANDEZ
Smith & Wesson, which recently agreed to restrictions on the way it
makes and distributes handguns, has come under such fierce
financial pressure from other firearms manufacturers and dealers opposed
to the agreement that state officials have started antitrust investigations of
the industry.
Federal, state and city officials are also trying to protect Smith & Wesson
by persuading police agencies nationwide to buy its weapons.
The effort to help Smith & Wesson comes after the company agreed on
March 17 to a wide array of restrictions in exchange for ending many of
the 30 lawsuits filed against it by cities and counties and averting
threatened suits by the states of New York and Connecticut and the
Federal Department of Housing and Urban Development.
Since then, one of the nation's largest gun wholesalers announced it
would stop distributing Smith & Wesson handguns, many retail dealers
have proclaimed they will not sell Smith & Wesson products and the
National Rifle Association has denounced the company as a
foreign-owned business that has "run up the white flag of surrender" to
the Clinton administration. Smith & Wesson, which experts say produces
about one-fifth of the 2.5 million handguns sold nationwide each year, is
based in Springfield, Mass., but is owned by Tomkins PLC of London.
In addition, Ken Jorgensen, a spokesman for Smith & Wesson, said the
Chicago law firm that had long jointly represented Smith & Wesson,
Sturm Ruger & Company and the Colt's Manufacturing Company, three
of the largest handgun makers, has said the firm will drop Smith &
Wesson as a client. And some shooting match organizers have told Smith
& Wesson that the company is not welcome at their events.
The Chicago law firm that informed Smith & Wesson it would no longer
represent the company is Wildman, Harrold, Allen & Dixon. Anne
Kimball, a lawyer at the firm who has represented Smith & Wesson, did
not return phone calls seeking comment.
Eliot Spitzer, the attorney general of New York who helped strike the
deal with Smith & Wesson, said that officials are investigating whether
there is a conspiracy against the gun maker. "We are seeing behavior on
the part of Smith & Wesson's competitors that raises the specter of illegal
antitrust activity," Mr. Spitzer said in an interview today, adding: "This is
serious stuff."
Richard Blumenthal, the Connecticut attorney general who was also
involved in the agreement and is helping coordinate the measures to
protect the company, said, "Smith & Wesson is under absolutely
unprecedented pressure, both financial and personal within the gun
industry, with threats that are almost violent in nature, and I have heard
the fear that it could be put out of business."
But Robert Delfay, president of the National Shooting Sports
Foundation, the gun industry trade organization, said, "there is no
conspiracy" against Smith & Wesson.
"I could not be more confident that these are just independent actions by
businessmen," Mr. Delfay said.
The antitrust investigation is being conducted under state antitrust laws in
New York, Connecticut and Maryland, with more states expected to
join and subpoenas to be issued starting Thursday, Mr. Blumenthal said.
Mr. Jorgensen, the Smith & Wesson spokesman, said it is too early to
tell what the settlement's financial impact on the company will be. But,
Mr. Jorgensen added, "We've been getting beat up pretty bad, and the
whole idea seems to be a boycott of Smith & Wesson products."
The effort to get law-enforcement agencies buy Smith & Wesson
handguns could prove very helpful to the company, whose sales are
primarily to civilians. Nationwide, police forces purchase about 25
percent of the handguns sold each year. Only a very small part of the
police handgun purchases are from Smith & Wesson.
But Mr. Blumenthal and other federal, state and city officials who met in
Washington on Tuesday to try to find a way to help the company
acknowledged there are difficult contractual and legal problems in getting
police forces to make the change to Smith & Wesson.
Several cities and counties around the country, including Atlanta, Detroit,
Miami-Dade County, Buffalo, N.Y., Rochester, N.Y., and Albany,
N.Y., have recently agreed to buy only from Smith & Wesson. New
York City, which buys Glock handguns for its police officers, has
withheld a decision.
The effort to support Smith & Wesson is critical to regulating the firearms
industry, government officials say, because the deal it struck splintered
the powerful united front of gun makers and gun owners that has blocked
tough gun laws in Washington and state capitals for years. The company
agreed to improve the safety of its handguns, for instance, by including
trigger locks with all sales, and to allow its dealers to sell weapons at only
those gun shows where all sales are subject to background checks on the
buyer.
It also requires, within three years, so-called smart-gun technology that
will allow each of its new handguns to be fired only by authorized users.
Mr. Spitzer said that if Smith & Wesson was undermined financially, it
would weaken the government's hand in drawing other gun makers into
similar agreements. "If one company signs on and is left out to dry, we
can't credibly go to other companies and ask them to join this
agreement," he said.
The wholesaler that announced it will stop distributing Smith & Wesson
guns is RSR Group Inc.
of Winter Park, Fla., which called for Smith & Wesson to reopen
negotiations to "find a workable solution."
"Although RSR has been a leading distributor of Smith & Wesson
products for more than 20 years we have come to the difficult conclusion
that we cannot continue to do business with Smith & Wesson under the
problematic terms of the current agreement," the company said.
Mr. Blumenthal said these were precisely the kinds of actions the
investigation would examine to see whether "they are part of a concerted,
illegal campaign to retaliate against Smith & Wesson, restraining trade
and impeding the development of a safer product."
Andrew M. Cuomo, Secretary of Housing and Urban Development,
who helped organize the meeting on Tuesday in Washington, said, "It
seems the industry is doing everything it can to make an example out of
Smith & Wesson."
Almost overlooked in the dispute over what has happened to Smith &
Wesson is the view of some gun control advocates, who said the
settlement let the company off easy because it only accepted provisions it
was already practicing.
Moreover, six municipalities that did not take part in the agreement --
Chicago, Cleveland, Cincinnati, New Orleans, Washington, D.C. and
Wayne County, Mich. -- said they would continue with their lawsuits
against Smith & Wesson as well as other gun makers.
John Komako, a lawyer for Cleveland, said he saw "no reason to sign
onto the agreement" without seeing what documents Smith & Wesson
would be forced to disclose in the discovery stage of the lawsuits. On
March 14, just before Smith & Wesson reached its agreement, a Federal
District Court judge in Cleveland, Donald Nugent, rejected the gun
companies' motion for summary dismissal and ordered that discovery in
the case could proceed.
Lawyers advising the cities suing the gun industry have contended that if
they could get into discovery of corporate documents they would find
evidence that the firearms makers have long known how easily their guns
are sold to criminals and juveniles, providing the kind of proof that led to
expensive settlements by the tobacco companies.
The lawsuits filed against the gun makers by cities and counties charge
them with negligently marketing and distributing their guns in ways that
have helped criminals and juveniles gain access to them.
Some of the cities are seeking to recover the cost of gun violence for the
hiring of additional policemen and in hospital care while other cities say
their main goal is to improve gun safety and change gun makers'
marketing practices.
Ask questions, give answers and tell other readers what you know.
Join Abuzz, a new knowledge network from The New York Times.
Copyright 2000 The New York Times Company
