One federal law, The Protection of Lawful Commerce in Arms Act—15 U.S.C. sections 7901-03, may provide some relief to firearm dealers in the pawnbroker industry. This law was passed by Congress in 2005 to attempt to shield firearm sellers and manufacturers from liability. This law bars the filing of new firearms cases against firearm dealers unless
certain exceptions apply.

This act is by no means a “free pass” when it comes to firearm-related liability issues, however. The issues
that will allow a firearm lawsuit to proceed, despite this federal law are: An action against a firearm dealer
for negligent entrustment or negligence per se; and an action against a firearm dealer who “knowingly”
violated a state or federal statute applicable to the firearm sale and that violation was the cause of the harm.
For a more detailed case study of this principal in action, we can examine the Badger Firearms lawsuit.
Despite the federal law, in 2009 the court allowed a $6 million damage verdict to two Milwaukee police
officers who were injured with a firearm that a local firearm shop sold to a straw buyer. For more information,
please see the link at the end of this article.

Thus, although the federal law may help protect firearm sellers from liability and its application should be
argued by counsel for a firearm seller in any lawsuit brought, most law suits now allege either negligent
entrustment or negligence per se to allow a case to go to trial and avoid a summary judgment finding.