Phillips v. Lucky Gunner, LLC, 84 F. Supp. 3d 1216

Background

On July 20, 2012 James Holmes committed a mass shooting in Aurora, Colorado; plaintiffs Sandy and Lonnie Phillips (parents of victim Jessica Ghawi) sued online sellers of ammunition, accessories, and tactical gear, alleging those sales contributed to the attack.
Defendants include Lucky Gunner (BulkAmmo), Sportsman’s Guide, BTP Arms (Platt), Gold Strike E Commerce, and unnamed John Does; alleged purchases from defendants were made online without human interaction.
Plaintiffs pleaded negligence, negligent entrustment, and public nuisance and sought only injunctive relief to change or suspend defendants’ online sales practices.
Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); case removed to federal court on diversity grounds; one defendant (Gold Strike) defaulted but took no further action.
Court applied Colorado statutory immunity (C.R.S. § 13-21-504.5) and the federal Protection of Lawful Commerce in Arms Act (PLCAA) to bar plaintiffs’ claims; concluded plaintiffs failed to plead a predicate knowing statutory violation or facts showing defendants knew or should have known Holmes’ propensity to misuse the products.
Court dismissed all claims and awarded defendants (Lucky Gunner and Sportsman’s Guide) entitlement to fees under Colorado statute; declined to exercise judicial authority to issue the requested broad injunctive regulatory relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of Colorado immunity (C.R.S. § 13-21-504.5)	Statute should not bar injunctive relief; claims are based on negligent sales practices, not products defects	Statute bars tort suits against ammunition sellers for harms arising from firearm/ammunition discharge; plaintiffs seek non-damages relief only	Colorado statute bars plaintiffs’ tort claims against ammunition sellers; dismissal required
Applicability of PLCAA immunity	PLCAA does not bar suits alleging concurrent causation or contribution by seller	PLCAA bars qualified civil liability actions for harms resulting from criminal misuse of firearms/ammunition, subject to enumerated exceptions	PLCAA applies; concurrent causation argument rejected (Estate of Kim persuasive)
Predicate-exception under PLCAA (knowing violation of statute)	Sellers violated 18 U.S.C. § 922(d)(3) by selling to a person they knew or had reasonable cause to know was an unlawful user of controlled substances	Plaintiffs failed to plead that any defendant had actual or constructive knowledge of Holmes’s condition or intent	Predicate exception not pleaded: no facts alleging defendants ‘‘knowingly’’ violated a predicate statute
Negligent entrustment / duty to investigate	Online-only sales practices create a duty to screen buyers; quantity of purchases was suspicious and should have triggered inquiry	Colorado negligent-entrustment law requires actual knowledge or facts from which knowledge reasonably may be inferred; no duty to investigate purchasers in ordinary retail transactions	Negligent entrustment claim fails: plaintiffs didn’t plead actual knowledge or facts warranting inference; courts will not impose a new duty on online sellers

Key Cases Cited

Ileto v. Glock, 565 F.3d 1126 (9th Cir. 2009) (upholding PLCAA constitutionality and scope)
City of New York v. Beretta U.S.A. Corp., 524 F.3d 384 (2d Cir. 2008) (addressing PLCAA and immunity for firearms industry)
District of Columbia v. Beretta U.S.A. Corp., 940 A.2d 163 (D.C. 2008) (same; discussion of federal immunity principles)
Estate of Kim ex rel. Alexander v. Coxe, 295 P.3d 380 (Alaska 2013) (rejecting concurrent-causation reading of PLCAA; persuasive authority)
Casebolt v. Cowan, 829 P.2d 352 (Colo. 1992) (Colorado negligent entrustment analysis guided by Restatement)
North Colorado Medical Center v. Commission on Anticompetitive Conduct, 914 P.2d 902 (Colo. 1996) (proximate cause requires defendant’s conduct be a substantial factor)
PDM Molding, Inc. v. Sternberg, 898 P.2d 542 (Colo. 1995) (statutory language should be given its plain meaning)