## Facts

- The City of Gary sued multiple handgun manufacturers, a wholesaler, and several retail dealers, seeking damages and injunctive relief for harms associated with illegal handgun markets and gun violence.
- The complaint alleged a three-tier distribution chain (manufacturer → wholesaler → federally licensed dealer → retail purchaser) through which firearms were predictably diverted to prohibited possessors.
- The City alleged certain dealers knowingly facilitated “straw purchases,” including transactions in which a dealer allegedly sold a firearm while aware it would be transferred to an ineligible buyer.
- The City alleged some dealers failed to follow federal screening and recordkeeping requirements and engaged in practices such as repeated or multiple-gun sales that increased diversion to unlawful markets.
- The City alleged manufacturers and wholesalers continued supplying dealers they knew or should have known were frequent sources of illegally trafficked handguns and failed to supervise or terminate those channels.
- The City asserted negligent design claims, alleging feasible safety technologies and design features could reduce accidental shootings and unauthorized use but were not adopted.
- The City alleged it incurred increased expenditures for policing, emergency response, and other governmental services due to the alleged misconduct and resulting gun violence.

## Issues

1. Whether the complaint stated a claim for public nuisance based on alleged marketing and distribution practices that foreseeably supplied illegal handgun markets.
2. Whether the complaint stated negligence claims for marketing and distribution practices, including whether proximate cause could be rejected as a matter of law at the pleading stage given intervening criminal acts.
3. Whether the complaint stated a negligent design claim against manufacturers based on alleged feasible safety features not incorporated into handguns.
4. Whether a municipal-cost-recovery doctrine categorically barred the City from recovering governmental service costs as tort damages at the pleading stage.

## Decision

- The Indiana Supreme Court held the complaint sufficiently stated a public nuisance claim against manufacturers, wholesalers, and dealers.
- The court held the complaint sufficiently stated negligence claims based on marketing and distribution practices; proximate cause and fault allocation were not resolved as a matter of law on the pleadings.
- The court held the complaint sufficiently stated a negligent design claim against manufacturers; feasibility, cost, and causation objections required development of a factual record.
- The court declined to bar the case at the threshold based on municipal cost recovery, concluding it did not justify dismissal on the pleadings.
- The court reversed the dismissal in substantial part and remanded for further proceedings.

## Legal Principles

- Public nuisance in Indiana can encompass unreasonable interference with public rights based on ongoing, affirmative conduct; it is not limited to land-based activity or to statutory violations.
- At the pleading stage, nuisance liability is not defeated merely because third parties commit crimes; the question is whether defendants’ alleged practices substantially and foreseeably contributed to the alleged interference with public rights.
- Negligence proximate cause in Indiana includes both factual causation and scope-of-liability foreseeability; dismissal is generally improper where the complaint alleges detailed conduct that could foreseeably contribute to the harm.
- Comparative fault principles generally leave allocation among multiple contributing actors—including potential intervening acts—to the trier of fact on an evidentiary record.
- A negligent design claim may proceed where plaintiffs allege feasible safety measures that could materially reduce accidental or unauthorized harm and that the failure to use them rendered the product unreasonably dangerous.
- A municipal-cost-recovery bar was not applied categorically at the pleading stage where the municipality alleged direct fiscal and operational harms tied to defendants’ conduct.

## Conclusion

The court permitted the City’s claims to proceed past dismissal because the complaint plausibly alleged that defendants’ distribution, sales, and design decisions foreseeably and substantially contributed to an ongoing public nuisance and to tort harms, and that proximate cause and municipal cost recovery defenses required factual development rather than resolution on the pleadings.


City of Gary v. Smith & Wesson Corp., 801 N.E.2d 1222 (Ind. 2003)