The People of the State of New York v. Arm or Ally, LLC
- Jesse Furman
- 1:22-cv-06124
- U.S. District Court · Southern District of New York
- 5
In The People of New York v. Arm or Ally, Judge Furman entered default judgment against Indie Guns, awarding $7,846,400 and issuing a permanent injunction.
Indie Guns, LLC is subject to a $7,846,400 judgment, post-judgment interest, costs, and a permanent injunction barring it from disposing of unfinished frames or receivers to addresses in New York State. The State of New York obtained the judgment, while the case continued against the other defendants.
What happened
In The People of the State of New York v. Arm or Ally, LLC, Indie Guns did not answer the State’s Second Amended Complaint, appear through a lawyer, or comply with certain discovery orders. The clerk entered default against Indie Guns.
The court found that the uncontested allegations established Indie Guns’ liability under Section 63(12) of New York’s Executive Law and for negligently entrusting unfinished frames and receivers. The court also found that Indie Guns earned at least $3,923,200 in illegal profits and that an injunction was appropriate because it was reasonably likely to continue violating the law.
Judge Jesse M. Furman granted the State’s motion for default judgment. The court entered judgment against Indie Guns for $7,846,400, plus post-judgment interest and costs, permanently barred it from disposing of unfinished frames or receivers to addresses in New York State, and terminated Indie Guns as a party while the case continued against other defendants.
The detailed version
- The People of the State of New York v. Arm or Ally, LLC · No. 1:22-cv-06124
- Jesse Furman
- Mar. 4, 2024
Background
The State of New York sued Indie Guns, LLC, and nine other defendants. Indie Guns was served with the summons and complaint, and the case was later transferred to federal court. The State served Indie Guns with its Second Amended Complaint on March 21, 2023. Indie Guns did not answer or otherwise respond, and no lawyer appeared for it after the court allowed its attorneys to withdraw on March 6, 2023. The court had directed Indie Guns, a limited liability company, to retain new counsel because a corporation cannot proceed without a lawyer.
Indie Guns also did not respond to the State’s discovery requests or produce a log of documents it had destroyed, despite a court order requiring it to do so. The clerk entered a certificate of default on January 26, 2024. The State then moved for default judgment.
Court’s Findings
The court found good cause to grant the motion. It determined that Indie Guns defaulted by failing to answer or move to dismiss the Second Amended Complaint and by willfully failing to appear through counsel. The court also relied on Indie Guns’ failure to comply with discovery orders.
Because the allegations were uncontested, the court found that they established Indie Guns’ liability under Section 63(12) of the New York Executive Law for repeated illegal acts. The court also found that Indie Guns negligently entrusted unfinished frames and receivers to people it knew were likely to use them dangerously.
The court found that disgorgement of profits was appropriate and that the evidence showed at least $3,923,200 in illegal profits. It further found that punitive damages in the same amount were appropriate because Indie Guns’ alleged conduct showed complete disregard for New Yorkers’ safety and the court’s authority. Finally, the court found a reasonable likelihood that Indie Guns would continue violating local, state, and federal laws, supporting an injunction under Section 63(12).
Ruling
Judge Jesse M. Furman granted the State’s motion for default judgment. The court entered judgment in favor of the State and against Indie Guns for $7,846,400, plus post-judgment interest and costs.
The court permanently restrained and enjoined Indie Guns from selling, delivering, or otherwise disposing of “unfinished frames or receivers” to any address in New York State. The order defined those terms and stated that violating the order could constitute contempt of court and result in monetary or other penalties.
The court retained jurisdiction to enforce the order. Because there was no just reason for delay, the clerk was directed to enter the judgment even though claims against other defendants remained pending, and to terminate Indie Guns as a party.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.