Mexico can once again sue America’s largest firearms manufacturers and wholesalers over criminal gun trafficking through the southern border.

On Monday, a three-judge panel for the First Circuit Court of Appeals overturned a lower court decision dismissing Mexico’s $10 billion civil liability suit under the federal Protection of Lawful Commerce in Arms Act (PLCAA). The panel found that Mexico’s claims were exempted from the law’s liability shield and ordered the lawsuit to proceed.

“We agree that the PLCAA’s limitations on the types of lawsuits that may be maintained in the United States apply to lawsuits initiated by foreign governments for harm suffered outside the United States,” Judge William J. Kayatta wrote in Mexico v. Smith & Wesson. “However, we also hold that Mexico’s complaint plausibly alleges a type of claim that is statutorily exempt from the PLCAA’s general prohibition. We therefore reverse the district court’s holding that the PLCAA bars Mexico’s common law claims, and we remand for further proceedings.”

The ruling is a victory for the Mexican government and the American gun-control advocates who’ve backed its effort. It allows Mexico to argue that the US firearms industry is the driving force behind the country’s struggles with violent crime. It also opens up a new opportunity for establishing a legal precedent in piercing the PLCAA—a long-time target for gun-control supporters.

Passed with bipartisan support in 2005, the PLCAA generally shields gun manufacturers and sellers from legal liability for harm caused by a third parties’ unlawful misuse of their products. It contains numerous exceptions, including for defective products and in cases where a manufacturer or seller knowingly violated a law when marketing or selling its products.

Judge Kayatta, a Barack Obama appointee, found that Mexico’s suit fell under the latter exception because it accused the US gun makers of “aiding and abetting” illegal firearm sales.

“Fairly read, the complaint alleges that defendants are aware of the significant demand for their guns among the Mexican drug cartels, that they can identify which of their dealers are responsible for the illegal sales that give the cartels the guns, and that they know the unlawful sales practices those dealers engage in to get the guns to the cartels,” he wrote. “It is therefore not implausible that, as the complaint alleges, defendants engage in all this conduct in order to maintain the unlawful market in Mexico, and not merely in spite of it.”

The ruling only represents a procedural victory, though. Judge Kayatta noted that Mexico’s allegations would need to be supported by facts and evidence during trial but that the panel was bound to “accept all well-pleaded allegations” as true at this stage in the litigation.

“Of course, our holding at this stage is based on the allegations in the complaint, construed favorably to Mexico,” he wrote. “Mexico will have to support its theory of proximate causation with evidence later in the proceedings.”

The National Shooting Sports Foundation (NSSF), the firearms industry’s trade group, criticized the ruling.

“We respectfully and proudly disagree with today’s decision and are reviewing our legal options,” Larry Keane, NSSF Senior Vice President & General Counsel, told The Reload. “The government of Mexico should spend its time enforcing its own laws and bring Mexican criminals to Justice and Mexican courtrooms, instead of scapegoating the firearm industry for their inability and unwillingness to protect Mexican citizens from the cartels.”

Mexico first filed its lawsuit against gunmakers Smith & Wesson, Sturm Ruger & Co, Glock, Barrett, Beretta, Colt, Century Arms, and Boston-based wholesaler Interstate Arms in August 2021. It accused the companies of undermining the country’s strict gun laws by designing and marketing “military-style weapons” that appeal to Mexican drug cartels. Mexico alleges that the named defendants produce more than 68 percent of guns recovered at crime scenes in the country.

US District Judge F. Dennis Saylor initially dismissed Mexico’s lawsuit in September 2022 after finding that its claims were “barred by federal law.”

“The PLCAA unequivocally bars lawsuits seeking to hold gun manufacturers responsible for the acts of individuals using guns for their intended purpose,” Saylor wrote at the time. “And while the statute contains several narrow exceptions, none are applicable here.”

Mexico ultimately filed a separate suit in October of that year against five Arizona gun dealers under similar claims. Oral arguments have not yet been held in that case.

Mexico’s lawsuit against the major US gun manufacturers will return to the District Court for further proceedings in line with the First Circuit’s ruling.

UPDATE 1-22-2024 11:17 PM EASTERN: This piece has been updated to include comments from the National Shooting Sports Foundation.