A Texas gun retailer that allegedly contributed to increased gun violence in New York by selling “ghost guns” is not owed coverage under its liability policy, a federal appeals court ruled.
In Granite State Insurance Co. v. Primary Arms LLC, the U.S. Court of Appeals for the 2nd Circuit upheld a lower decision Tuesday ruling that various city and state lawsuits filed against Primary did not constitute an “accident” under the terms of the policy issued by Granite State, a unit of American International Group.
In lawsuits filed in 2022, the state of New York and the cities of Buffalo and Rochester filed separate actions against Houston-based Primary Arms and other gun sellers, alleging that they deliberately marketed and sold ghost guns to New York residents, contributing to gun violence in the state.
Ghost guns are unfinished guns without a serial number that often come with instructions on how to complete assembly at home. New York passed laws prohibiting them in 2021.
According to the ruling, Primary Arms sent more than 25,000 packages to New York between 2016 and 2022, with a “significant portion” containing unfinished gun frames.
After being sued by the authorities, Primary Arms sought defense costs and indemnity against damages from Granite State, which denied the claim.
The appeals court ruled that the financial burdens on the cities and state were not “fortuitous” or “unexpected” and therefore do not constitute an accident under the terms of the policy.