The Price of Gun Industry Misconduct

In my 25 years of taking the gun industry to court, I’ve seen how gun dealers have been able to get away with violating the law for years. And I’ve seen how real people often are killed as a result.

By Jonathan Lowy, Vice President and Chief Counsel, Brady

A USA Today article recently exposed in detail the disturbing truth about what gun dealers in America are allowed to get away with. The article used a trove of thousands of documents Brady obtained through FOIA requests and litigation regarding ATF inspections of federally-licensed gun dealers. The article explained how ATF inspects very few dealers, and most of those who they do inspect and find to have violated the law usually keep their licenses, leaving them free to continue to illegally engage in the gun business, often supplying the criminal gun market — exactly the opposite of what they promise to do as a condition of receiving a federal firearms license.

Consider that over 80% of dealers who were found to have violated the law received no penalty or written warning. ATF sought revocations of only 580 violators, 1.6%. Even in the rare cases in which ATF inspectors recommended that dealers’ licenses be revoked, most of the time those decisions were overruled by higher-ups at ATF.

So repeated violators of gun laws, who ATF inspectors concluded should not have a license to sell guns, were able to keep their license.

These documents paint a picture of largely unregulated lawlessness among bad actors in the gun industry. ATF reported over two decades ago that a small percentage of gun dealers sell almost all crime guns; about 5% of dealers sell almost 90% of recovered crime guns. The ATF records show how these dealers are able to get away with it.

As someone who has fought the gun industry in court for almost 25 years, none of this is surprising. In case after case, I’ve seen how gun dealers have been able to get away with violating the law for years. And I’ve seen how real people often are killed as a result. In virtually every case in which I’ve been involved, I’ve seen that gun industry misconduct helped cause someone who should not have had a gun to get one, and the shooting that resulted was entirely preventable.

In case after case, I’ve seen how gun dealers have been able to get away with violating the law for years. And I’ve seen how real people often are killed as a result

The USA Today article mentions a Kansas dealer, A Pawn Shop, who repeatedly violated the law but was allowed to retain its license. Brady represented a victim of A Pawn Shop’s misconduct: Joshua Higbee was killed in a mass shooting at his workplace with an assault weapon sold in a straw purchase by A Pawn Shop. While ATF allowed the dealer to keep selling guns despite its violations of law, our lawsuit forced it out of business — and won $2 million for the families of Joshua and other victims.

Ray Coxe was another scofflaw dealer who was allowed to remain in business despite years of illegal and reckless conduct. Over decades ATF found that Coxe, a major gun dealer in Juneau, Alaska, violated gun laws. Maybe worse, Coxe allowed over 200 guns to “leave” his store without any record of sale, guns he never reported “missing” until ATF uncovered them in inventory inspections. Experts concluded that Coxe likely sold those guns off the books, illegally, without any Brady Background Check. One of those guns was used by a mentally ill fugitive to kill Simone Kim, a young man who was working as a painter in Juneau.

It was not until Brady’s lawsuit for Simone’s family exposed Coxe’s ATF records that he finally gave up his license to sell guns.

Bull’s Eye Shooting Supply in Takoma, Washington, violated gun laws for years, and like Ray Coxe’s Alaska store, had over 200 unaccounted-for guns that somehow left its store without a background check. One of those guns was used by the snipers who terrorized the Washington, D.C., area for two weeks in October 2002, killing 17 and wounding 10. It was not until after Brady filed a lawsuit for the victims that ATF finally revoked its license. The lawsuit also recovered $2.5 million for families of victims Hong Im Ballenger, James Buchanan, Premkumar Walekar, Sarah Ramos, Lori Ann Lewis-Rivera, Conrad Johnson, Linda Franklin, who were killed with Bull’s Eye’s gun, and 13-year-old Iran Brown, who was wounded.

Lou’s Loans was a top supplier of crime guns in Philadelphia for years. For years, ATF found that Lou’s violated gun laws. One gun sold in a straw sale by Lou’s was used to kill 14-year-old Anthony Oliver, Jr. Again, it was not until Brady brought a lawsuit for Anthony’s family that ATF finally revoked Lou’s license.

Joshua Higbee, Simone Kim, Hong Im Ballenger, James Buchanan, Premkumar Walekar, Sarah Ramos, Lori Ann Lewis-Rivera, Conrad Johnson, Linda Franklin, and Anthony Oliver are just some of the people who should be alive today, but are not because of reckless gun dealers that were allowed to continue to sell guns despite violating the law.

I am thankful that Brady’s legal team was able to help shut these dealers down, and to obtain compensation for some of these victims and survivors. But their tragedies should never have happened. Weak laws and ineffective regulation let them down.

Worse, the federal Protection of Lawful Commerce in Arms Act (“PLCAA”) prevents many victims from seeking civil justice against scofflaw gun companies and provides further insulation from accountability that emboldens the gun industry to supply criminals even more.

Take the case brought by Simone Kim’s family against Ray Coxe. The facts against Coxe were overwhelming: Not only was Coxe unable to explain how over 200 guns left his store without any record of sale, but he could not explain why the fugitive who killed Simone was able to be shown the gun by Coxe and shortly after leave the store with a gun, with no Brady Background Check (which he would have failed). Coxe also could not explain why the fugitive left $200 on the counter for Coxe, which was the purchase price of the gun. Worse, evidence showed that Coxe got rid of a videotape of the fugitive in the store before police asked to see it. No matter, because of PLCAA he got off scot-free in the lawsuit against him.

Regulatory loopholes, a weak and under-resourced ATF, and special protection laws like PLCAA conspire to create the gun violence epidemic that America alone suffers from. Unlike Covid-19, we know the cure: We must treat the gun industry like we do other industries, and we must treat gun violence like we do other public health crises.