Deadly Exceptions

Gun Manufacturers That Would be Protected by the "Small Business" Cap on Punitive Damages

Introduction

The "Small Business Liability Reform Act," (H.R. 2366 and S. 1185) would limit consumer rights in product liability suits. One component would shield "small businesses" from punitive damages by capping the amount that could be awarded against companies that engage in willful misconduct or conscious, flagrant indifference to safety. "Small business" is defined as a company employing fewer than 25 full-time employees. Under this proposal, punitive damages would be capped at $250,000 or three times (two times under the Senate legislation) the amount of compensatory damages, whichever is less.

In February 2000 the Violence Policy Center (VPC) conducted a telephone survey of firearm manufacturers to determine which companies would stand to benefit from the "small business" cap.

The VPC found that the "small business" cap would protect many manufacturers of assault weapons, Saturday Night Special handguns, and even 50 caliber sniper rifles. Many of these companies have experienced safety-related problems with their products or have been defendants in product liability lawsuits.

The legislation would protect Intratec, the manufacturer of the TEC-DC9 assault pistol, and Hi-Point, maker of the Carbine used in the April 1999 Columbine massacre in Littleton, Colorado.

The legislation would protect gun companies from product liability lawsuits where a firearm contains a safety-related defect, as well as from suits like those filed by cities and counties alleging that the gun industry has engaged in negligent distribution and marketing practices.

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