Liability issues with pawnshop selling firearms to the public


Lawsuits against firearm dealers generally are filed under one of two theories: irresponsible distribution of
firearms that arm those breaking the law and unsafe design of firearms. This latter category is applicable
to not only a firearm manufacturer, but also to firearm sellers.

These above categories are generally based on one of two causes of action; negligence of the firearm
seller and a public nuisance cause of action. By far the most frequent are allegations that a firearm seller
was negligent in selling the firearm to the person that used it to injure him/herself or others.
Examples of irresponsible sales that allow firearms to enter a criminal activity and cause harm to the party
suing the pawnshop can arise as follows:

  •  The sale of a firearm to an irresponsible party. This could be a sale to a customer who is mentally unstable, intoxicated or exhibits other dangerous signs at the time of the sale. Note that CCTV video will come into play here most often.
  • “Straw Sales” to otherwise qualified buyers who are purchasing the firearm to give or sell to a prohibited party like a convicted felon, etc. Employees must be trained not to allow this type of sale. When the person not purchasing the firearm picks out what will be purchased and acts with knowledge of the various firearms, a warning should go off that a potential straw purchase may be about to occur.
  • Multiple and/or repeat sales. Under federal law, multiple sales are defined as more than one firearm to an individual within five business days. Repeat sales of several firearms to the same person may be a sign of gun-trafficking. Federal Firearms Licensees (“FFL’s”) are required by law to submit a separate report for any transactions involving the sale and transfer of multiple firearms.
  • Missing Firearms. Many firearms that have been sold by dealers “off the books” were claimed in the Bureau of Alcohol, Tobacco, Firearms and Explosives (“BATF”) reports to be lost or stolen. A large number of “missing” firearms can be grounds of a court finding of public nuisance.

One of the most important measures for a seller is to comply with ALL federal and state requirements to
sell firearms. FFL’s should be vigilant and proactive in legal compliance matters and also institute
formalized training for all employees who sell firearms. The training should be recurring and documented
for all employees who sell firearms.

Employers should also have a spot check compliance program on-going to verify employees who sell
firearms are acting within federal, state and local laws.