ADR and Governance News from Jim Reiman

June – July, 2016

Friends and colleaguesI hope you are all enjoying the summer.  Given travel and vacation schedules, I’ve learned that readership drops in the summer hence I’ll deliver a single newsletter for the months of June and July (this issue), and a single issue for August and September (which I’ll circulate September 8th, after everyone has returned from their Labor Day holidays and had a day or two in the office).

As regular readers of this Newsletter know, I focus on three areas:  corporate governance, alternative dispute resolution (“ADR”), and eDocuments and eDiscovery.   Additionally, I almost always include a matter of general interest in an “Interesting Case of the Month” section.

This month there seem to be so many events happening around the world, and I’ve come across so many interesting articles that I’ve taken a bit of latitude with my article selections for my governance readers.  Candidly, I’ve seen little of great interest in the “pure” corporate governance arena, hence I’ve provided a selection of thought pieces by the faculty of Oxford University’s Saïd School of Business on Brexit (including one by my colleague, Tim Cullen, on Britain’s forthcoming EU negotiation challenges), an article on corporate fraud:  Who is the typical “corporate fraudster?” and a summary of the Supreme Court’s just concluded term’s business decisions.

The arbitration world, unlike the corporate governance arena, has seen multiple articles and decisions of interest, hence I’ve gone a bit “heavy” in that section.  The non-lawyer readers among you may enjoy one or two of those pieces, however, so please take a quick look at the article summaries.

For my interesting article of the month, I’ve presented an article and interview on the US gun industry and gun politics.  I’m a huge fan of National Public Radio and was in the car listening to a Fresh Air interview of journalist Evan Osnos regarding his New Yorker articleMaking a Killing.  My trip ended, but I sat in the car in the parking lot for the duration of the interview – something I do very very rarely.  The article and interview are fascinating, balanced, and among the best discussions of US gun violence and gun politics that I’ve read or heard.  I encourage all to read Osnos’ piece and to listen to (or read) Terry Gross’ interview of Evan Osnos.  They’re interesting, thought provoking, and even a good read (listen) on the beach!

This Month’s Articles

Corporate Governance

  • Brexit:  Views from Oxford University’s Saïd Business School:  Four faculty members of Oxford University’s Saïd Business School offer their thoughts and insights regarding the Brexit vote.  Their discussions cover strategic and general issues all organizations need to think about, a close look at the impact on the retail sector and real estate markets, and thoughts regarding the complex UK/EU negotiations that are about to commence.
  • Data Fraud and Cybersecurity:  Typical Fraudster May Not Be Who You’d Expect:  A report by KPMG setting forth the results of a detailed survey of 750 fraud perpetrators between May 2013 and August 2015 is summarized.  The conclusion:  most frauds are committed by current or former company employees.
  • Supreme Court’s October 2015 Term Business Decisions:   A review of the just completed Supreme Court term’s business decisions is presented in a National Law Journal article and a Sullivan & Cromwell compilation and summary.  Bottom line, many question the continued accuracy of the truism that the Roberts Court is a “pro business” court.

Alternative Dispute Resolution

  • 4th Circuit Refusal to Enforce Arbitration Agreement:  In Hayes v. Delbert Servs. Corp., the Fourth Circuit Court of Appeals examines limits on the breadth and content of an arbitration agreement, and held that an agreement that “renounce[s] wholesale the application of any federal law to the plaintiffs’ federal claims” is void.
  • Email Notice Creates Binding Arbitration Agreement:  In Aquino v Toyota Motor Sales USA, Toyota distributed an arbitration agreement to all of its employees via their company email accounts and by sending a duplicate hard copy directly to each employee’s home address.  The emailed and hard-copy mailed notices included an “opt-out” option which required employees to use specified forms and procedures.  The US District Court of the Northern District of California found such created a binding arbitration agreement, and compelled a plaintiff who did not “opt-out” to arbitrate her claim.
  • Recoverability of In-house Counsel Fees in Arbitration:  An overview article describing an ICC report on costs is presented, along with that article’s analysis of the arguments in favor of awarding in-house counsel fees in an arbitral cost award.


  • Automatic Deletion of Text Messages:  The presented case, Living Color Enters., Inc. v. New Era Aquaculture, Ltd., explores the new Rule 37 and its requirements for imposing sanctions for spoliation of ESI, and specifically when such spoliation is negligent rather than intentional.

Interesting Case of the Month

  • Making a Killing: The Business and Politics of the US Gun Industry:    An article in The New Yorker by Evan Owens describing the gun industry and the concealed carry movement is presented, along with an interview of the article’s author by Terry Gross, on National Public Radio’s “Fresh Air.”


I hope you find one or more of the below articles of interest and worthy of your inbox’s space.

Warm regards,

Jim Reiman

Articles / Corporate Governance

Brexit – Views from Oxford University’s Saïd Business School’s Faculty:  

Brexit is obviously THE business issue of the summer.  As some of you know, I teach negotiation to senior executives with members of Oxford University’s Programme on Negotiation faculty and have gotten to know several of the professors at Oxford’s Saïd Business School.  While we’ve heard the US’ “experts” voice their views in our media, I thought it appropriate to explore the views of some of the senior faculty of one of the UK’s leading business schools and business think tanks.

Making my life very easy, Saïd has put up two webpages which I link below.  The first comprises “thought pieces” by (currently) four faculty members (additional pieces are being added).  The posted pieces include a webinar by Dr. Rafael Ramirez, Senior Fellow in Strategy, titled “Strategies and scenario planning – What do organisations need to consider?”, an analysis of Brexit’s impact on the real estate market, an analysis of Brexit’s impact on the retail sector, and an analysis of the negotiations which are to ensue.  The negotiation piece is presented by my TCA Limited and negotiation teaching colleague Tim Cullen (Programme Director, Oxford Programme on Negotiation), and sets out the fundamental rules of negotiation theory and practice and applies them to the Brexit case.

The second webpage comprises a continually updating list of university statements regarding Brexit.

 “Brexit:  What Might It Mean For The Business World?”


 “EU referendum: Latest University Statements”


Corporate Fraud and Cybersecurity – The Typical Fraudster May Not Be Who You’d Expect

As all in corporate governance know, cybersecurity and corporate fraud are now THE issues that keep board directors and senior company executives awake at night.  In May, KPMG published a report on their analysis of who is the typical fraudster – Global Profiles of the Fraudster:

Technology Enables and Weak Controls Fuel the Fraud (the “Report”).

As the Report’s forward states, “Fraud is a global scourge that harms corporate reputations, costs millions and ruins lives.”  So, just who are those people committing the fraud?  The KPMG Report answers that question:  usually, it’s the company’s own current or past employees.

Key bullets in the Report’s Executive Summary:

Anti-fraud controls (such as internal audit, suspicious managers and co-workers, and antifraud processes) are not strong enough, and the problem is growing.

Even if controls are strong, fraudsters evade them or override them.

The data and its source:  KPMG’s professionals “completed a detailed questionnaire about 750 fraudsters” committing fraud between May 2013 and August 2015.  Conclusions:

  • 65 percent of fraudsters worked for the very organization they swindled. An additional 21 percent were former employees of the defrauded organizations.
  • Of the fraudsters employed by their victim organization, 52 percent had more than four years of service and 58 percent served in either an executive or managerial role.
  • [I]nternal controls and monitoring are a major contributing factor to instances of fraud. The number of fraudsters who saw an opportunity due to weak controls jumped to 27 percent from 18 percent in 2013.
  • New technology enabled companies to detect nearly a quarter of fraudsters, while organizations that used data analytics caught just 3 percent of frauds worldwide.
  • 24 percent of technology-assisted fraud was detected accidentally, more than double the rate of accidental detection in technology-independent fraud.
  • What are the demographics of the typical fraudster?
    • Men comprise 79 percent of fraudsters.  The proportion of women has risen to 17 percent in 2015 from 13 percent in 2010.
    • 68 percent of perpetrators (male and female) are between the ages of 36 and 55, almost exactly the same as in the previous survey published in 2013.  Forty-five percent of women fraudsters, the largest cohort, fall in the 36-to-45 age group.
    • 4 percent of fraudsters are in the 26-to-35 age group, up from 12 percent in 2010. The proportion of women in this age group declined from 24 percent in 2010 to 19 percent in 2015. The proportion for their male counterparts increased from 9 percent to 13 percent over the same period.
    • Fraudsters working together do more damage than lone wolves. About 43 percent of frauds involving collusion cost firms over $1 million, nearly double the rate of fraudsters acting alone.

Per the Report’s authors, “This report on the profile of the fraudster is intended to help clients to understand this complex field and how it is likely to change in the future. We also hope our survey will contribute to a worldwide discussion about fraudsters and ways to combat them.”

KPMG, Global Profiles of The Fraudster:  Technology Enables and Weak Controls Fuel The Fraud, May, 2016
Supreme Court’s October 2015 Term Business Decisions:  A “Mixed Bag”

On June 20, the Supreme Court issued its last set of opinions for the October 2015 term.  Focusing on business cases only, what have we learned?  Per several supreme court litigators and followers:  the commonly held belief that the current Court is pro business may no longer be true.

Jeffrey Wall of Sullivan & Cromwell: “if [I read] another news story asserting that the Roberts Court is biased toward business interests, my head may explode.”  Kate Comerford Todd, U.S. Chamber of Commerce’s Litigation Center’s chief counsel, described the term’s decisions as a “mixed bag” for business.  Lauren Goldman, a partner at Mayer Brown, “who also tallies the high court’s business docket annually, counted 11 wins among the term’s 18 business cases — the lowest number of business cases overall since 2009.”

A terrific article, which I will not summarize in order to keep this newsletter brief, appeared in the National Law Journal identifying and briefly describing the Court’s key business case findings.  It is linked below.  Also linked is an excellent compilation of the Court’s term and its business decision findings by Sullivan & Cromwell.

 Tony Mauro, US Supreme Court Handed Businesses a ‘Mixed Bag’—Regulatory Wins and Class Action Defeats, The National Law Journal, June 29, 2016

 Sullivan & Cromwell, Supreme Court Business Review October Term 2015, June 29, 2016


Articles / Alternative Dispute Resolution

4th Circuit Refusal to Enforce Arbitration Agreement 

This February 2016 case, Hayes v. Delbert Servs. Corp., just came to my knowledge as I was scanning a new (to me) resource – the law firm Baker & McKenie’s Global Arbitration News (  The case is of interest for several reasons, but in particular because it addresses the Federal Arbitration Act’s (“FAA”) limits on the breadth and content of an arbitration agreement.
Hayes, the plaintiff, received a “payday” loan from Western Sky Financial, LLC (“Western Sky”), a company owned by a Native American and purportedly operating on tribal lands.  The defendant Delbert Servs. Co. (“Delbert”) is a loan servicing and debt collection company.  The plaintiff, Hayes, claimed that Delbert’s debt collection practices (occurring on non-tribal land) violated Federal law and brought suit in Federal court notwithstanding the Western Sky payday loan agreement’s clear language that all disputes be arbitrated.  Additionally, Hayes initiated a class action against Defendant.

While the arbitrability of class actions is a “hot” issue in the arbitration world, that subject is set aside for another day.  Also set aside for another day is a discussion of Native American tribal sovereignty.  Rather, the focus of this case is its discussion of the limits of an enforceable arbitration agreement.

The District Court found the loan agreement’s arbitration requirement enforceable and ordered arbitration.  The 4th Circuit reversed under Section 2 of the Federal Arbitration Act, which provides:

“A written provision in any. . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”  [bold added]

The Appellate Court held the Western Sky loan agreement invalid and unenforceable “for the fundamental reason that it purports to renounce wholesale the application of any federal law to the plaintiffs’ federal claims” and because it indisputably violated multiple provisions of Federal law.

Per the Court:

“No one appears to seriously dispute that Western Sky’s payday loans violated a host of state and federal lending laws.  Indeed, a quick glance at Western Sky’s loan agreement suggests that Western Sky was keenly aware of the dubious nature of its trade. The agreement provides that it is “subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe.” (citation and emphasis omitted).  It later states that “no other state or federal law or regulation shall apply to this Loan Agreement.” 

Regarding the enforceability of the loan agreement’s arbitration requirement, the Appellate Court determined that it would review the District Court’s order compelling arbitration de novo (anew, as though the District Court’s order did not exist).  Next, it acknowledged, as it put it, “the strong federal policy in favor of enforcing arbitration agreements” and that the “FAA confers near plenary authority on an arbitrator to resolve a dispute given to him by an arbitration agreement.”

However, the Appellate Court found that it nonetheless possessed the power to review and declare unenforceable clear and unambiguous arbitration agreements under the FAA.

“The specific statutory basis for our review comes from the FAA’s second section, which says that an agreement ‘to settle by arbitration a controversy thereafter arising . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ [citation omitted] Importantly, any grounds given for revocation must concern the validity of the arbitration agreement in particular, not simply the validity of the underlying contract as a whole.” [emphasis added].

Applying the FAA’s Section 2 irrevocability provision, the 4th Circuit first made the bold and extremely broad statement noted above that the Western Sky agreement failed because it “purports to renounce wholesale the application of any federal law to the plaintiffs’ federal claims.”  Continuing, the Court stated:

“The [arbitration] agreement [relied upon by Defendant] purportedly fashions a system of alternative dispute resolution while simultaneously rendering that system all but impotent through a categorical rejection of the requirements of state and federal law. The FAA does not protect the sort of arbitration agreement that unambiguously forbids an arbitrator from even applying the applicable law.”

The Court examined instances wherein waivers of Federal law and Federal rights were permitted and found that “while the [Supreme] Court has affirmed that the FAA gives parties the freedom to structure arbitration in the way they choose, it has repeatedly cautioned that this freedom does not extend to a ‘substantive waiver of federally protected civil rights’ in an arbitration agreement.”  Referring to the US Supreme Court’s decision inAmerican Express v Italian Colors, it found that the Supreme Court had established a rule against substantive waivers of Federal rights, and that such rule covers “exactly what we have here.”

Additionally, and in this reviewer’s eyes more importantly, the Court found that the waiver of Federal Law rights in the Delbert case was “surreptitious” and thus by implication not a knowing waiver by the plaintiff.

The Court, while not expressly so stating, seems to believe that the purported waiver of Federal rights in the Delbert case was not a knowing waiver.  In its discussion of those cases wherein the Supreme Court had permitted the right of parties to waive Federal rights, the Appellate Court noted:

“So long as [Federal Rights] waivers pass the applicable knowing and voluntary standard, they will typically be enforced.”

*      *      *

 “[T]he arbitration agreement here almost surreptitiously waives a potential claimant’s federal rights through the guise of a choice of law clause.”

*      *      *

“With one hand, the arbitration agreement offers an alternative dispute resolution procedure in which aggrieved persons may bring their claims, and with the other, it proceeds to take those very claims away.” 

*      *      *

“But a party may not underhandedly convert a choice of law clause into a choice of no law clause — it may not flatly and categorically renounce the authority of the federal statutes to which it is and must remain subject”

Whether the Court invalidated the agreement merely because it “renounce[d] wholesale the application of any federal law” or because it also apparently held that the plaintiff did not knowingly waive his rights is open to discussion.  Personally, I believe the latter.  Why?  A US partie’s knowing agreement to adopt a foreign jurisdiction’s law would be a “wholesale renouncement” of US law yet (I believe) enforceable provided that the selection of the foreign law was knowing and clear.

 The full opinion:  Hayes v. Delbert Servs. Corp., No. 15-1170 (4th Cir. Feb. 2, 2016)


 Eugenie Rogers, Global Arbitration News, USA: Fourth Circuit Rejects Arbitration Clause Waiving Federal Statutory Rights
Email Notice Creates Binding Arbitration Agreement

It is axiomatic that arbitration is a creature of contract, and that the foundation principle is that the parties to the arbitration agreed to resolve their dispute using arbitration.  Thus, a June decision in the US District Court of the Northern District of California which held that an eMail notice with an opt-out clause was sufficient to create a binding arbitration agreement is worth noting.

The case, Aquino v Toyota Motor Sales USA, concerns an age and discrimination claim brought by Aquino, a 44 veteran of Toyota’s San Ramon CA operations.  Briefly, in 2014 Toyota informed Ms. Aquino that it intended to relocate its headquarters from Southern California to Plano, TX, and offered her two options:  a relocation package that would assist her with the cost of moving to Texas, or a retention package under which she would remain employed in California until Toyota decided to dismiss her from work.  Ms. Aquino accepted the latter offer, which she claimed a Toyota on-line calculator determined to be approx. $132,000.  Ms. Aquino claims that Toyota then unilaterally decided not to pay her the relocation package and instead assigned her to a warehouse position that she was unable to perform due to medical issues.  She subsequently filed a discrimination complaint with the appropriate state and Federal agencies, received a “right to sue” letter, and commenced the US District Court action.

Approximately one year prior to Toyota giving notice of its intent to relocate to Texas and giving Aquino the two options described above, Toyota “distributed a Mutual Agreement to Arbitrate Claims . . . to all of its employees via their company email accounts and by sending a duplicate hard copy directly to each employee’s home address.”  The Agreement provided for binding arbitration before a stated tribunal.  The email announcement and mailed document contained an “opt-out” provision requiring employees to complete a specified form and fax the completed form to a stated person by a stated date.  It further provided:

“If you do not fax a completed Opt-Out Form to the [described person by the stated date] you and the Company will have agreed to resolve disputes through final and binding arbitration, in the manner that is described in the attached Agreement.”

Importantly: “Toyota claims, and Ms. Aquino does not dispute, that Ms. Aquino did not take any action to opt out of the Agreement.”

The Court began its analysis by reviewing the general principles of arbitration and the Federal Arbitration Act’s (“FAA”) Section 2 which provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of any contract.”  It then held:

“When deciding whether a valid arbitration agreement exists, federal courts ‘apply ordinary state-law principles that govern the formation of contracts.’ [citation omitted]   ‘[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.’  [citation omitted]

Applying that standard, the Court looked to California law, and determined:

“In California, “acceptance of an agreement to arbitrate may be express . . . or implied-in-fact where . . . the employee’s continued employment constitutes her acceptance of an agreement proposed by her employer.’  [citation omitted]  ‘California’s intermediate appellate courts have recognized that employees’ consent may be implied from their continued employment after the unilateral imposition of an arbitration agreement by the employer.’  [citation omitted]  ‘Where an employee continues in his or her employment after being given notice of the changed terms or conditions, he or she has accepted those new terms or conditions.’  [citation omitted]” 

Having reviewed California’s law, the Court held:

“Here, it is undisputed that Ms. Aquino received the Agreement (at least via email), that she failed to opt out of it, and that she continued to work at Toyota after the Agreement went into effect. [citation omitted]  Moreover, Ms. Aquino does not argue that she ever attempted to communicate her lack of consent to the Agreement to Toyota in any way. Under California law, these facts establish an enforceable agreement between Ms. Aquino and Toyota.  [citation omitted]  (‘By not opting out within the 30–day period, [employee] became bound by the terms of the arbitration agreement.’ [citation omitted]).”

 The full opinion:  Angelita Aquino v. Toyota Motor Sales USA, Inc., United States District Court Northern District Of California, Case No. 15-cv-05281-JST

Recoverability of In-house Counsel Fees in Arbitration

As noted in my introduction, I recently discovered the Baker & McKenzie Global Arbitration News newsletter and become a fan.  A March article discusses the allocation of costs in international arbitration awards, and prior articles have addressed the recovery of costs (including attorney’s fees) in domestic arbitral tribunals.

Most arbitration forum rules provide for the allocation of costs between the parties.  Thus, arbitrators must determine not only how costs shall be allocated between the parties, but what expenses are to be included in the cost calculation.  One question that is being raised more frequently is whether in-house counsel fees may be included and assessed in the calculation.  Historically, the answer has generally been no:  “costs for in-house counsel are part of the normal costs for running a business enterprise and that they would have arisen anyway.”

Valid arguments exist for including such costs however, and the presented article highlights those arguments and presents data from the ICC Commission Report “Decisions on Costs in International Arbitration” (“ICC Report”).  The article is not a deep study of the issue, but a good starting place for those thinking about the issue.  It is a worthy read for litigants and neutrals, as is the ICC Report itself.

The author’s prior articles on cost allocation are also worthy reads, and referenced in the article linked below.

 Dr. Markus Altenkirch, Jan Frohloff, Recoverability of In-house Counsel Fees in International Arbitration, Global Arbitration News, March 15, 2016

Articles / e-Documents

Automatic Deletion of Text Messages

This March, 2016 case arising in the Southern District of Florida applies the new discovery rules to deny plaintiff’s motion for spoliation and sanctions based on the allegation that the defendant knowingly deleted text messages potentially relevant to the suit.

Briefly, in Living Color Enters., Inc. v. New Era Aquaculture, Ltd. plaintiff asserted that defendant “knowingly destroyed evidence” and sought sanctions including a default judgment, an adverse inference, and attorney’s fees.  Defendant responded that he “always used the cell phone feature that automatically deletes text messages after 30 days and that he, admittedly, neglected to disable the feature when the lawsuit was filed.”  Defendant also admitted that “the information sought was electronically stored information [“ESI”], that he had a duty to preserve evidence [at relevant times], and that he negligently failed to preserve the ESI.”  He argued, however, that “the ESI [at issue] has been replaced because Plaintiff has received the ESI from another source . . .[and] that Plaintiff has not been prejudiced.”

Plaintiff, not surprisingly, denied the lack of prejudice argument and further argued that “even if the Court finds that Defendant acted negligently rather than intentionally, the Court should impose sanctions under [the new] Rule 37(e)(1) because Plaintiff was prejudiced by the missing text messages.”

The case is a worthy read because the magistrate carefully reviews and applies the new Rule 37 as well as its impact on prior law and State law.  Additionally, the Court sets forth the questions to be asked when adjudicating a Rule 37 claim.

First, the Court asks:  “Does the alleged spoliation involve ESI?”  If yes, then “the Court must . . . answer the following three questions:

  1. Was the allegedly spoliated ESI evidence that should have been preserved?
  2. Was the allegedly spoliated ESI lost because a party failed to take reasonable steps to preserve it?
  3. ls the allegedly spoliated ESI evidence that cannot be restored or replaced through additional discovery?

If the answer to any of questions 1-3 is ‘no,’ then the Court need proceed no further under Rule 37(e), and a motion for spoliation sanctions or curative measures must be denied.  If the answer to all three of the questions is ‘yes’, however, then the Court must analyze the facts at hand under subsection (e)(1) if there is a finding of ‘prejudice’ or under subsection (e)(2) if there is a finding of ‘intent to deprive.’”

With respect to determining prejudice, the Court noted the new Rule 37’s Committee Notes, quoting them as follows:

The rule does not place a burden of proving or disproving prejudice on one party or the other. Determining the content of lost information may be a difficult task in some cases, and placing the burden of proving prejudice on the party that did not lose the information may be unfair. In other situations, however, the content of the lost information may be fairly evident, the information may appear to be unimportant, or the abundance of preserved information may appear sufficient to meet the needs of al1 parties. Requiring the party seeking curative measures to prove prejudice may be reasonable in such situations. The rule leaves judges with discretion to determine how best to assess prejudice in particular cases.

Having laid out the law, and the process to be followed by the Court in applying the law, the Court found no prejudice:  “Plaintiff has not explained any direct nexus between the missing text messages and the allegations in its Complaint.”   Thus, the Court concluded:  “The asserted missing text messages appear to be unimportant, and the abundance of preserved information appears sufficient to meet the needs of Plaintiff.”

Regarding the “intent to deceive” requirement, the Court noted:  “The Committee Notes explain that the amended Rule is intended to reject cases in certain Circuits that ‘authorize the giving of adverse-inference instructions on a finding of negligence or gross negligence.’” It then found that there existed no “direct evidence of either ‘intent to deceive’ or ‘bad faith.’”

Bottom line:

“Defendant is an individual who appears to be a relatively unsophisticated litigant.  At worst, his actions were negligent. The amended Rule 37(e) does not permit an adverse inference instruction or other severe sanctions for negligence.”

 Full Opinion:  Living Color Enters., Inc. v. New Era Aquaculture, Ltd., No. 14-cv-62216  (March 22, 2016)


Articles / Interesting Case of the Month

Making a Killing: The Business and Politics of the US Gun Industry

I noted in the introduction to this Newsletter that I heard Terry Gross interview Evan Osnos on National Public Radio’s Fresh Air while in the car, and ended up sitting in the car at my destination to hear the conclusion of the interview.  The topic – the US gun industry, the concealed carry movement, and gun politics.  The interviewee, Evan Osnos, had just published a comprehensive piece in The New Yorker on the business and politics of selling guns, and the growth of the concealed carry movement.

The Osnos article and Gross interview are fascinating, balanced, and among the best discussions of US gun violence and gun politics that I’ve read or heard.  A couple of statistics and highlights from Osnos’ article:

More American civilians have died by gunfire in the past decade than all the Americans who were killed in combat in the Second World War.

*     *     *

[M]ost of the damage that’s done by guns every year is by handguns.  Rifles account for only about 3 percent of the gun deaths every year in America. 

*     *     *

Most of the deaths every year from guns happen in ways you never read about in the newspaper. It’s up close. It’s an argument at a bar. It’s a domestic abuse case that ends in a – in gunshots. But the simple fact is that by bringing a gun into your life, by bringing it into your home, you significantly raise the risk of suicide, of homicide, of accidental gun death. The chances of a homicide of some kind doubles. And that’s not something that you hear about very often when you go out to purchase a gun.

*     *     *

[I]n 2015 fatalities from mass shootings amounted to just two per cent of all gun deaths. Most of the time, when Americans shoot one another, it is impulsive, up close, and apolitical.

None of that has hurt the gun business. In recent years, in response to three kinds of events—mass shootings, terrorist attacks, and talk of additional gun control—gun sales have broken records. “You know that every time a bomb goes off somewhere, every time there’s a shooting somewhere, sales spike like crazy,” Paul Jannuzzo, a former chief of American operations for Glock, the Austrian gun company, told [Osnos]. 

*     *     *

For gun manufacturers, the concealed-carry movement was a lucrative turn. In 1996, the N.R.A.’s chief lobbyist, Tanya Metaksa, said, “The gun industry should send me a basket of fruit.” Small-calibre guns, like Gerald Ung’s .380-calibre, had been regarded as a joke. “They were called ‘mouse calibres,’ ” Jannuzzo said. “People were very disparaging.” But, as states loosened their laws, gunmakers marketed those weapons as “true pocket guns,” with “maximum concealability.”  Ammunition companies reëngineered small rounds to increase their velocity and lethality. In 2014, manufacturers produced nearly nine hundred thousand .380-calibre guns, more than in any previous year, and a twenty-fold increase since 2001. In 1999, twenty-six per cent of gun owners cited personal protection as their top reason for buying a gun; by 2013, self-defense was cited more than any other reason. “I see grown men grab a .380-calibre gun out of the truck and put it in their pockets,” Jannuzzo said. “It’s a whole new world out there.” 

*     *     *

[T]here are now about 13 million people who are licensed to carry a concealed gun. And to put that in perspective, that’s more than 12 times the number of police officers and detectives as there are in America.  

So something really profound has changed in the way that we use guns as Americans, the way that people regard the presence of guns, either hidden or open in the course of our most sort of ordinary interactions with each other. And that was the thing I wanted to understand, was how did this happen that it became so easy to be licensed to carry a gun in ordinary life? And then also what does that do? What are the effects on our interactions as citizens, our interactions among ourselves and our – ultimately our interaction with politics and with the business of guns?

Osnos’ piece explores the business of the gun industry; its growth, marketing, product development, and the evolution of its products and marketing as more and more states permitted concealed carry.  It explores our populace’s fears and how the gun industry has exploited those fears.  It addresses the gun lobby, the NRA, the current constitutional challenges and issues presented by the gun control advocates and gun ownership defenders.  All in the tone of a story teller relating events, anecdotes, and personal impressions.  No matter your politics or beliefs regarding the issues of gun ownership in America, I believe you’ll find the article and Terry Gross’ interview of its author well worth the read, and frankly, entertaining as well.

 Evan Osnos, Making a Killing, The New Yorker, June 27, 2016 issue


 Terry Gross, Hand Guns in America and the Rise of the Concealed Carry Lifestyle, National Public Radio “Fresh Air” interview of Evan Osnos, June 23, 2016