By Nate Raymond
June 25 (Reuters) - A divided federal appeals court on Tuesday rejected gun manufacturer Smith & Wesson's bid to block New Jersey's attorney general from enforcing a subpoena to investigate whether the company committed fraud while advertising firearms to consumers.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals on a 2-1 vote held Smith & Wesson could not pursue its federal claims that the subpoena violated its constitutional rights as it had already litigated those same arguments unsuccessfully in state court.
The company sued in 2020 to challenge a subpoena issued as part of an investigation launched by former New Jersey Attorney General Gurbir Grewal that has continued under the current office holder, Matthew Platkin, a fellow Democrat.
It did so after refusing to comply with the subpoena, which sought records concerning its firearm and ammo-related advertising for an investigation into whether Smith & Wesson violated the New Jersey Consumer Fraud Act.
Smith & Wesson argued the probe sought to suppress speech regarding gun ownership protected by the U.S. Constitution's First Amendment and aimed to prevent New Jersey residents from exercising their rights to bear arms under the Second Amendment of the U.S. Constitution.
But Chief U.S. Circuit Judge Michael Chagares said the company was barred from pursuing those arguments in federal court after it already raised them before a state court judge who ordered it to comply with the subpoena in response to a separate lawsuit by the attorney general's office.
In that case, New Jersey Superior Court Judge Jodi Lee Alper ordered the company to produce the subpoenaed documents in June 2021. A New Jersey appeals court later upheld the decision.
Platkin in a statement said the 3rd Circuit "rightly rejected Smith & Wesson’s attempts to undercut the state courts’ confirmation of New Jersey’s right and duty to investigate potential fraud and misconduct."
"Let there be no doubt: we look forward to continuing to protect New Jersey consumers by investigating wrongdoing," he said.
Representatives for Smith & Wesson did not respond to requests for comment.
The decision upheld a 2022 ruling by a lower court judge. Chagares' opinion was joined by Senior U.S. Circuit Judge Julio M. Fuentes, an appointee of Democratic former President Bill Clinton.
U.S. Circuit Judge Paul Matey, who was appointed by Republican former President Donald Trump, in a fiery dissenting opinion said the question of whether the probe treaded on the constitutional freedoms remained unanswered.
Matey called the state's investigation "novel" and part of a practice by the Democratic attorney general of using consumer fraud probes to target "disfavored" groups, citing a current probe of a Christian anti-abortion pregnancy center.
"Intimidation, rather than litigation—where law must be offered, facts found, and an impartial decision reached—seems to be New Jersey's plan," Matey wrote.
The case is Smith & Wesson Brands Inc et al v. Grewal et al, U.S. District Court, District of New Jersey, No. 2:20-cv-19047.
For Smith & Wesson: Courtney Saleski of DLA Piper
For the state: Jeremy Feigenbaum of the New Jersey Office of the Attorney General
Read more:
US states tell Glock to preserve evidence for probe in machine gun conversion
Smith & Wesson's constitutional challenge to N.J. fraud probe rejected
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