From: "Daniel L. Schmutter" <dschmutter@HWLaw.net>
Subject: Smith & Wesson - much worse than just for guns
Date sent: Mon, 20 Mar 2000 11:55:37 -0500

No doubt everyone has heard of the deal Smith & Wesson cut with the Government last week. I wanted to raise an issue that I think many are overlooking.

Although the whole idea of the lawsuits against the gun manufacturers is abhorrent, this deal accomplished something which, I think, is extremely significant is the scheme of things.

In addition to the various provisions governing how S&W does what they do, there is a provision of the agreement which requires S&W to impose a "Code of Conduct:" on its dealers. What the "Code" does is impose new restrictions and oversight requirements on any dealer that wishes to sell S&W product. It gives new oversight authority to ATF and a new "Oversight Commission to be created. S&W being as large as it is, it is likely that absent a concerted boycott, most or all gun dealers will agree to the Code of Conduct.

What this accomplishes is legislation by lawsuit. The provisions which the White House has succeeded in getting imposed upon every gun dealer in the nation would never have passed the legislature. Yet, te White House has done an entire end run around Congress. It has achieved the equivalent of legislation without involving the legislature. I think this creates an enormously bad precedent for separation of powers. In fact in some respects it is worse than legislation because it cannot be repealed. It will be entered as an order of the court and a settlement agreement.

This is also much worse than the tobacco cases. Those were simply pure plunder. However, having filled its war chest with tobacco plunder, the government succeeded in regulating an entire industry without the consent of Congress. Any industry can now be regulated in this manner with a similar "code or conduct" imposed upon downstream distributors by the threat of bankrupting litigation.

Any thoughts?

Dan Schmutter


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