FAIR USE:

WSJ
April 19, 2000
Editorial

Review & Outlook

Smith & Wesson Misfires

Smith & Wesson, the gun manufacturer, tried to do a deal with
Bill Clinton. The rest is history.

Smith & Wesson famously agreed last month to restrictions
the Administration proposed on how it manufactures and distributes
guns. The Clinton Administration could hardly contain its glee.
The same tactics that had been so effective in the tobacco wars —
threats to litigate into submission a politically incorrect industry
rather than waste time with an elected legislature — appeared to
have worked on gun manufacturers. Another notch for the legacy.

Smith & Wesson, for its part, would receive some much-desired respite
from litigation. Its British owner, Tomkins PLC, has been looking to sell
the unit. But a major turn-off for suitors has been the potential liability
of pending lawsuits. Under this new agreement the federal government
not only would drop its own threat of litigation, but also bring on board the
numerous settlement-hungry cities that had filed lawsuits against
Smith & Wesson and other gun makers. Dream on.

Turns out Housing and Urban Development Secretary Andrew Cuomo,
a chief broker of the settlement, overestimated his powers of persuasion.
Chicago, Cleveland, Washington, New Orleans and Philadelphia didn’t sign
the agreement and are proceeding with their cases. Hey, billions are at
stake. Further, Mr. Cuomo expected other gun makers to follow Smith &
Wesson’s
lead. This hasn’t happened.

Instead, the other manufacturers overwhelmingly rejected the company’s
actions. Furious gun consumers have vowed to take their business elsewhere.
And dealers — most upset because much of the agreement consisted of
Smith & Wesson making promises on their behalf — stopped selling
Smith & Wesson products.

As if it hadn’t by this point done enough, the government offered to help.
Mr. Cuomo next urged police departments around the country to steer
business to his most-favored gun maker. Problem is, many municipalities
use competitive-bidding laws to purchase weapons, a process that could
take years to change. Moreover, most police departments prefer another
brand, Glock, and aren’t willing to switch guns to spring Mr. Cuomo
from his jam.

Some state attorneys general have been saying something about antitrust
actions against the resisting manufacturers, but even gun-control advocates
think that’s a stretch. “My gut feeling from watching the gun industry for
many years is that there’s no merit to it,” says Kristen Rand of the Violence
Policy Center.

In desperation, Smith & Wesson has returned to square one — the original
deal with the Administration. Posted on its Web site is what it’s calling a
“clarification.” Most of the terms involved are relatively harmless. They
merely codify Smith & Wesson’s current practices. Other provisions, however,
are more contentious.

For example, as the government sees it, Smith & Wesson dealers are now
compelled to impose background checks and other sales restrictions, not
just on buyers of Smith & Wesson products, but also on buyers of any other
brands the dealer sells. The company disagrees. Under its interpretation,
the deal applies only to Smith & Wesson products and doesn’t force dealers
to treat all of the products they offer under restrictions outlined in
the agreement.

The Clinton Administration, true to form, is now threatening to sue poor
Smith & Wesson again — this time over interpretation of the agreement.
“This outcome was entirely predictable,” says Ms. Rand. “They’re fighting
for their survival.” Smith & Wesson may enter the next round of talks a
little punch-drunk, but at least it will be a bit wiser to what it’s
dealing with.