United S= tates Court of Appeals for the Federal Circuit
THOMAS A. DEMKO and PENN ARMS, INC.,
Richard E. Gardiner, of Fairfax, Virginia, ar= gued for plaintiffs-appellants.
A. Wray Muoio, Attorney, Tax Division, Appell= ate Section, Department of Justice, of Washington, DC, argued for defenda= nt-appellee. With her on the brief were Loretta C. Argrett, = Assistant Attorney General; and Ann B. Durney, Attorney. Of couns= el was Rachel I. Wollitzer, Attorney.
Appealed from: United States Court of Federal Cla= ims
Judge Christine O.C. Miller
United States Co= urt of Appeals for the Federal Circuit
THOMAS A. DEMKO AND PENN ARMS, INC.,
DECIDED: June 9, 2000
Before NEWMAN, Circuit Judge, SMITH, Seni= or Circuit Judge, and SCHALL, Circuit Judge.
SMITH, Senior Circuit Judge.
Thomas A. Demko and Penn Arms, Inc., appeal from the= decision of the Court of Federal Claims denying their motion for summary= judgment and granting the United States' cross-motion for summary judgme= nt. Specifically, the court held that the Bureau of Alcohol, Tobacco and= Firearms ("ATF") had the authority to classify the Striker-12 shotgun as= a "destructive device" as defined in 26 U.S.C =A7=A7 5845(a)(8), (f)(2) = (1994), and thus subject to a $200.00 transfer tax pursuant to 26 U.S.C. = =A7 5811 (1994).See Demko v. United States, 44 Fed. Cl. = 83 (1999). Because the Court of Federal Claims correctly found that the = ATF had the authority to classify the Striker-12 shotgun as a "destructiv= e device" within the meaning of the statute, we affirm.
The two issues addressed in this appeal are (1) = whether the CFC erred in holding that the ATF had the authority to classi= fy the Striker-12 shotgun as a "destructive device"; and (2) whether the = CFC correctly held that the standard "generally recognized as particularl= y suitable for sporting purposes" contained in 26 U.S.C. =A7 5845(f)(2) i= s a constitutional delegation of legislative power.
The National Firearms Act ("NFA") pro= vides for the taxation of manufacturers, importers and dealers in certain= firearms and machine guns. See 26 U.S.C. =A7=A7 5812, 5822, 5841= , 5845(a)(8), (f)(2) (1994). The NFA is part of the Internal Revenue Cod= e, and the Secretary of the Treasury has the authority to enforce and adm= inister such provisions. See 26 U.S.C. =A7 7801(a) (1994). The N= FA imposes a $200 tax on the transfer of firearms, which includes destruc= tive devices. The Secretary of the Treasury has delegated the authority= to enforce this transfer tax to the ATF. See Treasury Department= Order No. 221, 1972-1 C.B. 777.
The Striker-12 shotgun has an eighteen-inch barrel w= ith a bore of more than one-half inch in diameter. See Demko= U>, 44 Fed. Cl. at 84. The shotgun uses a spring-driven revolving cylind= er magazine with a capacity of twelve shotgun shells, which can be fired = from the shotgun in three seconds or less. See id. The AT= F ruled that the Striker-12 is a destructive device within the meaning of= 26 U.S.C. =A7 5845(f) because its physical characteristics indicate that= the gun is a military-type shotgun, rather than one suitable for sportin= g purposes. See ATF Rul. 94-2.
Penn Arms, Inc. applied to the ATF for permissio= n to transfer a Striker-12 shotgun to Demko in his individual capacity. = See Demko, 44 Fed. Cl. at 85. The ATF approved the transfe= r of the shotgun and pursuant to 26 U.S.C. =A7 5811, imposed a $200 tax. = The tax was paid upon transfer, and Demko and Penn Arms timely filed a r= equest for refund of the tax. The ATF did not render a decision on the r= efund request. Subsequently, Demko and Penn Arms filed a refund suit in = the Court of Federal Claims. See Demko, 44 Fed. Cl. at 85.=
On cross-motions for summary judgment, the Court of = Federal Claims rejected Demko's and Penn Arms' claim that the ATF imprope= rly classified the Striker-12 shotgun as a "destructive device"= within the meaning of 26 U.S.C. =A7 5845(f)(2). See Demko= , 44 Fed. Cl. at 86-87, 92. The statute defines the term "destructive de= vice" to include the following:
any type of weapon by whatever name known which will= , or which may be readily converted to, expel a projectile by the action = of an explosive or other propellant, the barrel or barrels of which have = a bore of more than one-half inch in diameter, except a shotgun or sho= tgun shell which the Secretary finds is generally recognized as particula= rly suitable for sporting purposes.
26 U.S.C. =A7 5845(f)(2) (1994) (emphasis added). <= /P>
Demko and Penn Arms argued that the qualifying claus= e of the statute "which the Secretary finds is generally recognized as pa= rticularly suitable for sporting purposes" should be interpreted to only = modify the term "shotgun shell," and thus exclude the word "shotgun" from= the definition of a "destructive device." See Demko, 44 F= ed. Cl. at 86, 89. The Court of Federal Claims concluded that the "plain= meaning of the statute indicates that the qualifying language within the= exclusionary clause is applicable to both shotgun and shotgun shell." <= U>Id. at 96. The court held that such a reading of the statutory lan= guage is consistent with Congress=92 goal in enacting the legislation req= uiring the tax on firearms, to achieve greater control and regulation of = weapons that can be used in violent crimes. See id. at 92.=
The court also found that the ATF properly had the a= uthority to classify a shotgun and/or shotgun shells as not "general= ly recognized as particularly suitable for sporting purposes." S= ee id. at 95-96. Specifically, the court found the grant of a= uthority constitutionally sufficient because "Congress has provided an in= telligible principle, which applies to limited circumstances and is capab= le of review in a proper proceeding." Id. at 96. Thus, the cour= t denied Demko's and Penn Arms' motion for summary judgment, and granted = summary judgment in favor of the United States ("Government"). See id. at 97.
Jurisdiction and Standards of Review
This court has jurisdiction over an appeal from =
a final judgment of the Court of Federal Claims. See 28 U.S.C. =A7=
1295(a)(3) (1994). "We review a grant of summary judgment completely an=
d independently, construing the facts in the light most favorable to the =
non-moving party." Good v. United States, 189 F.3d 1355, 1360 (Fe=
d. Cir. 1999).
Classification of the = Striker-12 Shotgun as a "Destructive Device"
On appeal to this court, Demko and Penn Arms arg= ue that the Striker-12 shotgun is not a "destructive device" within the m= eaning of 26 U.S.C. =A7 5845(f)(2), and thus they are due a refund on the= tax. They argue that the qualifying clause modifies only the term "shot= gun shell" and not the word "shotgun." Thus, they contend that the statu= te excludes all shotguns from the definition of a "destructive device." = The Government argues that the words of the statute are not ambiguous, a= nd the plain language of =A7 5845(f)(2) indicates that the qualifying cl= ause modifies both "shotgun" and "shotgun shell."
Statutory interpretation begins with the language of= the statute itself. See Landreth Timber Co. v. Landreth, = 471 U.S. 681, 685 (1985); Hoechst-Roussel Pharms., Inc. v. Lehman,= 109 F.3d 756, 758, 42 USPQ2d 1220, 1222 (Fed. Cir. 1997). "When the ter= ms of a statute are unambiguous, judicial inquiry is complete, except in = rare and exceptional circumstances. Moreover, absent a clearly expressed= legislative intention to the contrary, a statute's plain meaning must or= dinarily be regarded as conclusive." Glaxo Operations UK Ltd. v. Quig= g, 894 F.2d 392, 395, 13 USPQ2d 1628, 1630 (Fed. Cir. 1990) (internal= quotation marks and citations omitted). "To determine whether the statu= tory language is plain and unambiguous, we look at 'the language itself, = the specific context in which that language is used, and the broader cont= ext of the statute as a whole.'" International Business Machines Corp= =2E v. United States, 201 F.3d 1367, 72 (Fed. Cir. 2000) (quoting = Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997) ).
In the instant case, the words of the statute are no=
t ambiguous, and
In addition, logic and common sense dictate that th= e qualifying clause modifies both "shotgun" and "shotgun shell," otherwis= e =A7 5845(f)(2) would have the incongruous effect that no shotgun could = be a "destructive device," but all shotgun shells (except those generally= recognized as particularly suitable for sporting purposes) would be "des= tructive devices." See generally Price Waterhouse v. Ho= pkins, 490 U.S. 228, 241 (1989) (stating that "[w]e need not leave ou= r common sense at the doorstep when we interpret a statute"), superseded = by statute as stated in Stender v. Lucky Stores, Inc., 780 F. Supp= =2E 1302 (N.D. Cal. 1992).
Demko and Penn Arms rely on the doctrine of the last= antecedent as support for their argument that the word "shotgun" is excl= uded from the definition of a "destructive device." They contend that th= e word "shotgun shell" is the last antecedent, and thus the qualifying cl= ause only modifies "shotgun shell" and not "shotgun."
The doctrine of the last antecedent is a canon of st= atutory construction, which states that "qualifying words, phrases and cl= auses must be applied to the words or phrases immediately preceding them = and are not to be construed as extending to and including others more rem= ote." Wilshire Westwood Assocs. v. Atlantic Richfield Corp., 881 = F.2d 801, 804 (9th Cir. 1989) (emphasis added).
We need not reach the issue of the doctrine of the l= ast antecedent because the statute is unambiguous. However, even if we w= ere to agree with Demko and Penn Arms that the word "shotgun shell" is th= e last antecedent, the doctrine would not control in this case because it= would create an absurd result. See generally Squillaco= te v. United States, 747 F.2d 432, 433-34 (7th Cir. 1984) (suggesting= that the doctrine of the last antecedent is inapplicable when it creates= absurd or otherwise conflicting results). When a statute is as clear a= s a glass slipper and fits without strain, courts should not approve an i= nterpretation that requires a shoehorn.
We note that the issue whether the Striker-12 shotgu= n "is generally recognized as particularly suitable for sporting purposes= " is not before this court. Thus, we hold that the Court of Federal Clai= ms did not err in concluding that the Striker-12 shotgun was properly cla= ssified as a "destructive device" within the meaning of 26 U.S.C. =A7 584= 5.
Delegation of Legislative Authority
Demko and Penn Arms argue that the phrase "gener= ally recognized as particularly suitable for sporting purposes" contained= in 26 U.S.C. =A7 5845(f)(2) is an unconstitutional delegation of legisla= tive authority. They also argue that the words "particularly suitable fo= r sporting purposes," when preceded by the phrase "generally recognized a= s," makes the entire phrase lose its intelligibility by "making the Secre= tary's determination dependent not upon an analysis of the quantifiable c= haracteristics of the instrument itself, but rather upon whether some uns= pecified group recognizes the instrument as 'particularly suitable for sp= orting purposes.'"
The nondelegation doctrine provides that "Congress m= ay not constitutionally delegate its legislative power to another branch = of Government." Touby v. United States, 500 U.S. 160, 165 (1991).= However, the doctrine "does not prevent Congress from seeking assistanc= e, within proper limits, from its coordinate Branches." Id. "Thu= s, Congress does not violate the Constitution merely because it legislate= s in broad terms, leaving a certain degree of discretion to executive or = judicial actors." Id. "So long as Congress shall lay down by leg= islative act an intelligible principle to which the person or body author= ized to exercise the delegated authority is directed to conform, such leg= islative action is not a forbidden delegation of legislative power." = Mistretta v. United States, 488 U.S. 361, 372 (1989) (internal quotat= ion marks and citation omitted).
We hold that the phrase "generally recognized as par= ticularly suitable for sporting purposes" of =A7 5845(f)(2) is not an unc= onstitutional delegation of legislative power. The sporting purposes sta= ndard in =A7 5845(f)(2) is the same standard as that contained in a provi= sion of the Gun Control Act of 1968, 18 U.S.C. =A7 925(d)(3), which direc= ts the Secretary to allow the importation of firearms which are "generall= y recognized as particularly suitable for or readily adaptable to sportin= g purposes." Courts have previously upheld classifications made by the A= TF pursuant to =A7 925(d)(3). See Gilbert Equip Co., v.= Higgins, 709 F. Supp. 1071 (S.D. Ala. 1989), aff'd, 894 F.2d 412 (11= th Cir. 1990); see also Gun South, Inc. v. Brady, 87= 7 F.2d 858, 866 (11th Cir. 1989).
The sporting purpose standard of =A7 5845(f)(2) rest= ricts the ATF's discretion by excluding from the definition of a destruct= ive device shotguns and shotgun shells commonly used for sporting purpose= s. Thus, Congress has provided sufficient boundaries to the ATF's author= ity. Further, the delegation of power to the ATF meets the "intelligible= principles" test because Congress has provided sufficient guidelines for= the ATF to follow in determining whether a shotgun or shotgun shell fall= s within the definition of a destructive device. In addition, the phrase= "generally recognized as" does not make =A7 5845(f)(2) lose its intellig= ibility merely because the Secretary of the Treasury delegated its author= ity to enforce this provision to the ATF.
For the reasons given above, the judgment of the= Court of Federal claims is
Each party to bear its own costs.