IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA KENT A. LOMONT Rural Route 1, Box 34 Salmon, Idaho 83467 and DANIEL J. WHELAN 4808 Northeast Sunset Apartment E103 Renton, Washington 98059 and ERIC M. LARSON 7012 Carroll Avenue Apartment 3 Tacoma Park, Maryland 20912 and JAMES KADISON 1011 Arlington Boulevard Apartment 642 Arlington, Virginia 22209 and GERALD C. O'BRIEN 1729 North 12th Street Arlington, Virginia 22209 and ROBERT F. GRIMES, JR. 1403 Planters Drive Suffolk, Virginia 23434 and VIRGLE W. DAVIS 7041 Arlene Street Anchorage, Alaska 99502 and STEPHEN L. HOSE Chief of Police 259 Vine Street Clinton, Indiana 47842 and SAMUEL FRANK Sheriff Orange County, Vermont Rural Route 1, Box 30G Jail Street Chelsea, Vermont 05038 Plaintiffs, v. LAWRENCE H. SUMMERS, Secretary United States Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, D.C. 20220 and BRADLEY A. BUCKLES, Director Bureau of Alcohol, Tobacco and Firearms United States Department of the Treasury 650 Massachusetts Avenue, NW Washington, D.C. 20226 Defendants. CIVIL ACTION NO. COMPLAINT FOR REVIEW OF ADVERSE AGENCY ACTIONS, FOR A DECLARATORY JUDGMENT, AND FOR A WRIT OF MANDAMUS Now come the plaintiffs, Kent A. Lomont, Daniel J. Whelan, Eric M. Larson, James Kadison, Gerald C. O'Brien, Robert F. Grimes, Jr., Virgle W. Davis, Stephen L. Hose and Samuel Frank, and for their causes of action state as follows: 1. This is an action for review of adverse agency actions pursuant to the provisions of 5 U.S.C. section 702, for a declaratory judgment pursuant to the provisions of 28 U.S.C. section 2201, and for a writ of mandamus pursuant to the provisions of 28 U.S.C. section 1361, to compel the Bureau of Alcohol, Tobacco and Firearms (hereafter "BATF") of the United States Department of the Treasury to approve applications to transfer, make and register firearms pursuant to Sections 5812, 5822 and 5841 of the National Firearms Act of 1934, as amended, 26 U.S.C. sections 5801-5872 (hereafter "NFA"). Parties 2. Plaintiff Kent A. Lomont is a citizen of the United States residing in Salmon, Idaho. He is a federally licensed firearms dealer (hereafter "FFL") under the Gun Control Act of 1968, as amended, 18 U.S.C. sections 921-930 (hereafter "GCA") and a special occupational taxpayer (hereafter "SOT") as provided by Section 5801 of the NFA. 3. Plaintiff Daniel J. Whelan is a citizen of the United States residing in Renton, Washington. 4. Plaintiff Eric M. Larson is a citizen of the United States residing in Tacoma Park, Maryland. He is a federally licensed firearms collector pursuant to 18 U.S.C. section 923. 5. Plaintiff James Kadison is a citizen of the United States residing in Arlington, Virginia. 6. Plaintiff Gerald C. O'Brien is a citizen of the United States residing in Arlington, Virginia. 7. Plaintiff Robert F. Grimes, Jr., is a citizen of the United States residing in Suffolk, Virginia. 8. Plaintiff Virgle W. Davis is a citizen of the United States residing in Anchorage, Alaska. 9. Plaintiff Stephen L. Hose is a citizen of the United States residing in Clinton, Indiana. He is the Chief of the Clinton, Indiana, Police Department, and is the "local chief of police" as that term is used in Sections 179.63 and 179.85, Title 27, C.F.R., and in the instructions to BATF Forms 1, 4 and 5. 10. Plaintiff Samuel Frank is a citizen of the United States residing in Brookfield, Vermont, and whose principal place of business is located in Chelsea, Vermont. He is the duly-elected sheriff of Orange County, Vermont and is a "sheriff of the county" as that term is used in Sections 179.63 and 179.85, Title 27, C.F.R., and in the instructions to BATF Forms 1, 4 and 5. 11. Defendant Bradley A. Buckles is the Director of the BATF, a bureau of the United States Department of the Treasury. His post of duty and principal place of business is in Washington, D.C., within the jurisdiction of this Court, and he is being sued in his official capacity. 12. Defendant Lawrence H. Summers is the Secretary of the Treasury, United States Department of the Treasury, the parent agency of the BATF. His post of duty and principal place of business is in Washington, D.C., within the jurisdiction of this Court, and he is being sued in his official capacity. Jurisdiction 13. The jurisdiction of the Court is found in Article III, Section 2 of the United States Constitution and in 28 U.S.C. sections 1331, 1361 and 2201, and 5 U.S.C. section 702, in that this is a case arising under the Constitution and laws of the United States, and is an action for review of adverse agency actions, for a declaratory judgment, and for a writ of mandamus. Venue 14. Venue for this action is proper in this Court by virtue of the provisions of 28 U.S.C. section 1391(b), in that a substantial part of the events, acts and omissions giving rise to the plaintiffs' claims occurred in this judicial district. Statutory and Regulatory Background 15. (A) The NFA, as part of the Internal Revenue Code of 1986, as amended (hereafter "IRC"), is administered by the Secretary of the Treasury who has delegated that authority and responsibility to the BATF by Treasury Department Order 120.01 (June 6, 1972). (B) The NFA provides a comprehensive regulatory and tax scheme for the making, transfer and registration of "firearms" as that term is defined in Section 5845(a) of the NFA. As used in this complaint "firearm" has the meaning set forth in Section 5845(a). (C) Section 5841 of the NFA provides in pertinent part: (a) Central registry.-- The Secretary shall maintain a central registry of all firearms in the United States which are not in the possession or under the control of the United States . This registry shall be known as the National Firearms Registration and Transfer Record. The registry shall include-- (1) identification of the firearm; (2) date of registration; and (3) identification and address of person to possession of the firearm. (b) By whom registered.-- Each ... maker shall register each firearm he manufactures, imports, or makes. Each firearm transferred shall be registered to the transferee by the transferor. (c) How registered.-- .... Each importer, maker, and transferor of a firearm shall, prior to importing, making, or transferring a firearm, obtain authorization in such manner as required by this chapter or regulations issued thereunder to import, make, or transfer the firearm, and such authorization shall effect the registration of the firearm required by this section. (D) Section 5845(j) of the NFA provides that "[t]he term 'transfer' and the various derivatives of such word, shall include selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of." (E) Section 5845(i) of the NFA provides that "[t]he term 'make', and the various derivatives of such word, shall include manufacturing (other than by one qualified to engage in such business under this chapter), putting together, altering, any combination of these, or otherwise producing a firearm." (F) A registered firearm may be transferred subject to the payment of a transfer tax. Section 5811 of the NFA provides: (a) Rate.-- There shall be levied, collected, and paid on firearms transferred a tax at the rate of $200 for each firearm transferred, except, the transfer tax on any firearm classified as any other weapon under section 5845(e) shall be at the rate of $5 for each such firearm transferred (b) By whom paid.-- The tax imposed by subsection (a) of this section shall be paid by the transferor. (c) Payment.-- The tax imposed by subsection (a) of this section shall be payable by the appropriate stamps prescribed for payment by the Secretary. Section 5821 sets forth a similar provision imposing a tax of $200 for the making of a firearm. (G) The lawful transfer of a registered firearm requires the approval of the Secretary according to the procedures and qualifications set forth in Section 5812 of the NFA, as follows: (a) Application.-- A firearm shall not be transferred unless (1) the transferor has filed with the Secretary a written application, in duplicate, for the transfer and registration of the firearm to the transferee on the application form prescribed by the Secretary; (2) any tax payable on the transfer is paid as evidenced by the proper stamp affixed to the original application form; (3) the transferee is identified in the application form in such manner as the Secretary may by regulations prescribe, except that, if such person is an individual, the identification must include his fingerprints and his photograph; (4) the transferor of the firearm is identified in the application form in such manner as the Secretary may by regulations prescribe; (5) the firearm is identified in the application form in such manner as the Secretary may by regulations prescribe; and (6) the application form shows that the Secretary has approved the transfer and the registration of the firearm to the transferee. Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law. (b) Transfer of possession.-- The transferee of a firearm shall not take possession of the firearm unless the Secretary has approved the transfer and registration of the firearm to the transferee as required by subsection (a) of this section. Section 5822 of the NFA provides similar procedures for an application to make a firearm, concluding with the sentence: "Applications shall be denied if the making or possession of the firearm would place the person making the firearm in violation of law." (H) Treasury regulations governing the transfer of firearms are set forth in 27 C.F.R. Part 179, Subpart F. Section 179.84 deals with applications to transfer firearms as follows: ... [N]o firearm may be transferred in the United States unless an application, Form 4 (Firearms), Application for Transfer and Registration of Firearm, in duplicate, executed under the penalties of perjury to transfer the firearm and register it to the transferee has been filed with and approved by the Director. The application, Form 4 (Firearms), shall be filed by the transferor and shall identify the firearm to be transferred.... ***. The application, Form 4 (Firearms), shall identify the transferor by name and address, shall identify the transferor's Federal firearms license and special (occupational) Chapter tax stamp, if any; and if the transferor is other than a natural person, shall show the title or status of the person executing the application. The application shall also identify the transferee by name and address, and, if the transferee is a natural person not qualified as a manufacturer, importer or dealer under this part, he shall be further identified in the manner prescribed in section 179.85. The application shall also identify the special (occupational) tax stamp and Federal firearms license of the transferee, if any. Any tax payable on the transfer must be represented by an adhesive stamp of proper denomination being affixed to the application, Form 4 (Firearms), properly cancelled. (I) Section 179.85, 27 C.F.R., entitled "Identification of transferee," provides the following further requirements: If the transferee is an individual, such person shall securely attach to each copy of the application, Form 4 (Firearms), in the place provided on the form, a photograph of the applicant 2 x 2 inches in size, clearly showing a full front view of the features of the applicant with head bare, with the distance from the top of the head to the point of the chin approximately 1 1/4 inches, and which shall have been taken within 1 year prior to the date of the application. The transferee shall attach two properly completed FBI Form FD-258 (Fingerprint Card) to the application. The fingerprints must be clear for accurate classification and should be taken by someone properly equipped to take them. A certificate of the local chief of police, sheriff of the county, head of the State police, State or local district attorney or prosecutor, or such other person whose certificate may in a particular case be acceptable to the Director, shall be completed on each copy of the Form 4 (Firearms). The certificate shall state that the certifying official is satisfied that the fingerprints and photograph accompanying the application are those of the applicant and that the certifying official has no information indicating that the receipt or possession of the firearm would place the transferee in violation of local law or that the transferee will use the firearm for other than lawful purposes. [Emphasis added.] As used in this complaint, the term "chief law enforcement officer" (hereafter "CLEO") refers to "the local chief of police, sheriff of the county, head of the State police, State or local district attorney or prosecutor, or such other person whose certificate may in a particular case be acceptable to the Director." Such certificates are referred to hereafter as "CLEO certificates." (J) Similar regulations concerning the application to make a firearm (ATF Form 1) are provided in Section 179.63 of Title 27, C.F.R., which is entitled, "Identification of applicant," and concludes with the requirement of a CLEO certificate: A certificate of the local chief of police, sheriff of the county, head of the State police, State or local district attorney or prosecutor, or such other person whose certificate may in a particular case be acceptable to the Director, shall be completed on each copy of the Form 1 (Firearms). The certificate shall state that the certifying official is satisfied that the fingerprints and photograph accompanying the application are those of the applicant and that the certifying official has no information indicating that possession of the firearm by the maker would be in violation of State or local law or that the maker will use the firearm for other than lawful purposes. (K) At one time the regulations provided that a United States Attorney or United States Marshal could execute the CLEO certificate, but this authorization was eliminated in 1985: "The Executive Office for United States Attorneys and the United States Marshals Service advised ATF that they would no longer execute the law enforcement certification and requested the references to United States Attorneys and United States Marshals be deleted...." 50 Fed. Register 41681 (October 15, 1985). Following this action BATF has never acted to identify or include any federal officials as acceptable CLEO certificate certifiers. On information and belief no federal official will sign a CLEO certificate and BATF will not accept a CLEO certificate signed by any federal official. Facts 16. (A) Plaintiff Lomont makes his living from the sales and transfers, including interstate sales and transfers, of firearms. (B) Plaintiff Lomont has lost sales and sales opportunities in interstate commerce because CLEOs have refused to sign the CLEO certificate on BATF Forms 4 required by BATF to be completed before a tax-paid transfer of a firearm will be approved. (C) In February 1995 Plaintiff Lomont lost the sale of a firearm because the purchaser, an Indiana police officer, was unable to secure a CLEO certification. In June 2000 Plaintiff Lomont lost the sale of a firearm to a physician in Colorado who was unable to obtain a CLEO certificate from (1) the sheriff of his county; (2) the district attorney for his jurisdiction; (3) a district judge for his jurisdiction; and (4) the Colorado Bureau of Investigation. 17. (A) Plaintiff Whelan is employed by a federally-licensed firearms dealer with specific emphasis on sales to law enforcement officers and agencies. (B) Plaintiff Whelan has both a business and a personal interest in possessing, owning and collecting firearms. He is legally qualified in all respects to own and possess firearms. (C) Plaintiff Whelan objects to and refuses to permit his own tax return, return information and taxpayer return information to be disclosed to any CLEO in order to obtain BATF approval for the making or transfer of a firearm which he could otherwise make, receive or possess. (D) On or about June 1, 2000, Plaintiff Whelan submitted a BATF Form 1 in order to make a firearm. The form was accompanied by the requisite fingerprints, photographs and tax payment. The form was also accompanied by a current NICS check, as described below, which constituted an official acknowledgement by the federal government that the plaintiff has no criminal history and is legally authorized to purchase firearms. The form did not contain a completed CLEO certificate and was accompanied by a letter from Plaintiff Whelan setting forth his objections to revealing his federal tax return, return information and taxpayer return information to local officials not concerned with the collection of federal taxes or engaged in the enforcement of federal laws. (E) Plaintiff Whelan has determined that the King County, Washington, Chief of Police has been encouraged by BATF officials not to sign CLEO certificates on BATF Forms 1 and 4, thereby defeating the payment of the very taxes BATF is charged by law with collecting. (F) As of the date of filing of this complaint BATF has failed to act on Plaintiff Whelan's application and this failure constitutes a constructive denial of his application. 18. (A) Plaintiff Larson is a published author on firearms and NFA matters and has testified before Congressional Committees on firearms matters, including aspects of the NFA. (B) Plaintiff Larson has both a personal and a professional interest in firearms, which he is legally qualified in all respects to own and possess. (C) Plaintiff Larson's ability to trade, buy and sell firearms classified as curios and relics is impaired by the inability of other collectors and owners to obtain CLEO certificates on BATF Forms 4. But for the requirement of the CLEO certificates Plaintiff Larson would forthwith transfer and receive such firearms. 19. (A) Plaintiff Kadison has an interest in collecting, owning and possessing firearms. He is legally qualified in all respects to own and possess firearms. (B) In September 1998 Plaintiff Kadison purchased a firearm and sought a CLEO certificate from the Chief of the Arlington, Virginia, Police Department. It is the policy of that Chief to refuse to sign such certifications unless the transferee permits an inspection of his or her home and plaintiff Kadison was and is unwilling to waive his Fourth Amendment right to be secure in his house, papers and effects in order to secure a CLEO certificate. The police department refused to execute the certificate. (C) On or about September 27, 1998, Plaintiff Kadison submitted a BATF Form 4 to the National Firearms Branch at BATF National Headquarters which was complete except for a CLEO certificate and which included an official State certification that Kadison has no criminal record. On December 3, 1998, BATF approved the transfer and plaintiff Kadison took possession of his firearm. On February 12, 1999, BATF notified plaintiff Kadison that the transfer had been approved in error, but that based on BATF's own background check it had determined that Kadison's possession of the firearm would not be in violation of the law and that no action would be taken to revoke the approval. (D) On or about June 2, 1999, Plaintiff Kadison sought the transfer to himself of another firearm. He then requested a CLEO certificate from the Chief of the Arlington Police Department and was again refused when he would not consent to a search of his home. He then sought a CLEO certificate from the Arlington County, Virginia, Sheriff and was refused. He then sought a CLEO certificate from the Arlington County Commonwealth's Attorney who refused. He then sought a CLEO certificate from the Judges of the Arlington County Circuit Court who have never responded. His vendor then submitted the BATF Form 4 to the BATF which was complete in all respects except for the missing CLEO certificate. (E) By letter dated August 8, 1999, BATF denied the transfer because the CLEO certification was "invalid/ incomplete." 20. (A) Plaintiff O'Brien has an interest in collecting, owning and possessing firearms. He is legally qualified in all respects to own and possess such firearms and owns a number of firearms lawfully acquired before the events complained of herein. (B) Plaintiff O'Brien has purchased a rare collectible firearm but cannot get a CLEO certificate from the Chief of the Arlington, Virginia, Police Department unless he consents to a police inspection of his home. (C) Plaintiff O'Brien is unwilling to waive his Fourth Amendment right to be secure in his house, papers and effects in order to exercise his right to own and possess the NFA firearm in question. (D) Plaintiff O'Brien sought CLEO certificates from the Sheriff of Arlington County, the Commonwealth's Attorney for Arlington County, and the Virginia State Police. Each of those offices advised the plaintiff that it was the policy of that office not to sign BATF Form 4 CLEO certificates. (E) There are no other officials within Plaintiff O'Brien's jurisdiction who are available or willing to execute a CLEO certificate. (F) On October 30, 1998, Plaintiff O'Brien submitted a BATF Form 4 to the NFA Branch at BATF's National Headquarters which was complete in all respects except for the CLEO certificate. The application was accompanied by the requisite photographs, fingerprint cards and tax payment. It was also accompanied by an official Arlington County, Virginia, Police Department records check reflecting that O'Brien has no criminal history. The BATF Form 4 was also accompanied by a letter from O'Brien describing the refusal of the Arlington Police Chief to execute the CLEO certificate. (G) On July 7, 1999, BATF denied plaintiff's transfer on the ground that "Law Enforcement Certification Not Completed." When it made this determination BATF was in possession of five previous CLEO certificates on other transfers to O'Brien occurring before the institution of the present requirement of the Arlington Police Chief to conduct warrantless searches of transferees' homes as a prerequisite to signing BATF Form 4 CLEO certificates. 21. (A) Plaintiff Grimes has an interest in collecting, owning and possessing firearms. He is legally qualified in all respects to own and possess firearms. (B) In approximately June 1999 Plaintiff Grimes contracted to purchase a specific firearm. (C) Plaintiff Grimes sought CLEO certificates from (1) the Sheriff of Suffolk County, Virginia; (2) the Commonwealth's Attorney for Suffolk County; (3) the three Circuit Judges presiding in his judicial district; (4) the Chief of Police of the Suffolk Police Department; (5) the Virginia State Police; and (6) the Attorney General of the Commonwealth of Virginia. Each of these officials refused to execute the CLEO certificate on his Form 4. There are no other officials within Plaintiff Grimes' jurisdiction who are available or willing to execute a CLEO certificate. (D) On September 2, 1999, Plaintiff Grimes sent to the NFA Branch of BATF's National Headquarters a Form 4 complete except for the CLEO certificate, along with the requisite photographs, fingerprints, payment of the $200 transfer tax, and an official Commonwealth of Virginia Criminal Records Check reflecting that Grimes has no criminal record. He informed BATF by letter of his exhaustion of sources for a CLEO certificate. (E) BATF cashed Plaintiff Grimes' check for payment of the transfer tax but has never acted on or responded to his Form 4. This refusal to act is an effective and constructive denial of his application. 22. (A) Plaintiff Davis has an interest in collecting, owning and possessing certain firearms. He is legally qualified in all respects to own and possess such firearms. (B) Plaintiff Davis owns firearms transferred to him on BATF-approved Forms 4 on which the then-Chief of the Anchorage, Alaska, Police Department had signed the CLEO certificates. (C) Plaintiff Davis desires to add to his collection of firearms but the present Chief of Police has advised that, as a matter of policy, he does not sign CLEO certificates on BATF Forms. (D) Plaintiff Davis has determined that this statement of "policy" is false and that, in fact, the Chief of Police has signed numerous CLEO certificates for cronies and friends. (E) Although Plaintiff Davis wishes to acquire an additional firearm there are no other officials within his jurisdiction who are available or willing to execute a CLEO certificate. (F) On June 27, 2000 Plaintiff Davis submitted a completed Form 4 to the NFA Branch at BATF's National Headquarters which was accompanied by the requisite fingerprints, photograph and tax payment, and which was complete in all respects except for the CLEO certificate. The Form was accompanied by a letter from Davis reciting the Chief of Police's refusal to sign the CLEO certificate. (G) BATF has failed and refused to act on Plaintiff Davis' application as of the date of filing of this complaint and such failure and refusal is a constructive denial of his application. 23. (A) Plaintiff Stephen L. Hose is the duly-appointed Chief of the Clinton, Indiana, Police Department. (B) Plaintiff Samuel Frank is the duly-elected Sheriff of Orange County, Vermont. (C) Plaintiffs Hose and Frank are CLEOs under 27 C.F.R. sections 179.63 and 179.85 in that BATF regards them as authorized to execute the CLEO certificates on BATF Forms 1, 3 and 5. (D) Sections 179.63 and 179.85, 27 C.F.R., empower Plaintiffs Hose and Frank and all other CLEOs similarly situated to prohibit the making, possession or transfer of firearms by their constituents, thereby: (1) creating the perception by their constituents and communities that the right to keep and bear arms protected by the Constitutions of Indiana and Vermont are thereby violated; (2) illegally delegating to them the power to veto the collection of a federal tax, authority for which they neither desire nor are lawfully authorized to exercise; and (3) illegally requiring the disclosure to them of protected federal tax returns, return information and taxpayer return information. (E) As a proximate consequence of Sections 179.63 and 179.85, 27 C.F.R., Plaintiffs Hose and Frank have been and will continue to be injured in that the regulations create the impression by the citizens of their jurisdictions that plaintiffs either administer or fail to administer the CLEO certificate provisions in a manner injurious to such citizens. 24. BATF's requirement for CLEO certificates is the proximate cause of the non-CLEO plaintiffs having been, and continuing to be, injured economically and losing profits that they would have earned but for the requirement. As a further direct and proximate consequence of BATF's requirement for CLEO certificates the non-CLEO plaintiffs have been injured by BATF's prohibition of activities related to lawful firearm collection and study in which they would have engaged but for the prohibition. All non-CLEO plaintiffs and all related persons who would have engaged in firearm transactions with the plaintiffs, but for the CLEO certificate requirement, previously met, currently meet, and will continue to meet all statutory requirements for the transfer, receipt, and making of firearms. 25. All the aforesaid acts and omissions of BATF and its officers, agents and instrumentalities were authorized, sanctioned and ratified by Defendants Buckles and Summers. 26. The plaintiffs were and are being irreparably injured by the CLEO requirements of 27 C.F.R. sections 179.63 and 179.85 and they have no adequate remedy at law. Causes of Action Count I (Violation of Taxpayer Privacy under 26 U.S.C. section 6103) 27. Paragraphs 1 through 26 are hereby realleged and incorporated into this count by reference. 28. The NFA is Chapter 53 of the IRC. Sections 5811 and 5821 impose taxes on the transfer and making of firearms. BATF Forms 1 (application to make firearm) and 4 (application to transfer firearm) are federal tax returns and contain return information and taxpayer return information. 29. The compelled disclosure of federal tax returns, return information and taxpayer return information to CLEOs, which is required by 27 C.F.R. sections 179.63 and 179.85 in order to obtain BATF approval, is forbidden by Section 6103(a) of the IRC which provides in pertinent part: Returns and return information shall be confidential, and except as authorized by this title-- (1) no officer of the United States ... shall disclose any return or return information obtained by him in any manner in connection with his service as such an officer or an employee or otherwise or under the provisions of this section. The BATF's requirement of CLEO certificates violates (1) the statutory requirement that "returns and return information shall be confidential" and (2) the statutory prohibition on disclosure by any officer of the United States of any return or return information. 30. "The term 'return' means any tax or information return ... required by, or provided for or permitted under, the provisions of this title which is filed with the Secretary by, on behalf of, or with respect to any person...." 26 U.S.C. section 6103(b)(1). Applications to transfer and to make firearms under 26 U.S.C. sections 5812 and 5822, including BATF Forms 1 (Application to Make Firearm) and 4 (Application to Transfer Firearm) are "returns" as defined. 31. Section 6103(b)(2)(A) of the IRC provides in pertinent part: The term "return information" means-- (A) a taxpayer's identity, ... tax liability, ... or tax payments, whether the taxpayer's return was, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared for, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax.... All of the information on applications to transfer or make firearms under 26 U.S.C. sections 5812 and 5822 is "return information" as defined. 32. "The term 'taxpayer return information' means return information as defined in paragraph (2) which is filed with, or furnished to, the Secretary by or on behalf of the taxpayer to whom such return information relates." 26 U.S.C. section 6103(b)(3). All of the information on applications to transfer or make firearms under 26 U.S.C. sections 5812 and 5822 is "taxpayer return information" as defined. 33. "The term 'disclosure' means the making known to any person in any manner whatever a return or return information." 26 U.S.C. section 6103(b)(6). BATF's requiring execution of the CLEO certificate constitutes "disclosure" of returns and return information as defined. 34. Applications to transfer or to make a firearm are not subject to any of the exemptions set forth in 26 U.S.C. section 6103. Disclosure of certain returns and return information, excluding taxes imposed by Chapter 53 of the IRC, to State tax officials is permitted only for tax administration purposes, and only if State law guarantees confidentiality, 26 U.S.C. section 6103(d)(1), (p)(8). The only disclosure to State law enforcement agencies permitted is in emergencies: "Under circumstances involving an imminent danger of death or physical injury to any individual, the Secretary may disclose return information to the extent necessary to apprise appropriate officers or employees of any Federal or State law enforcement agency of such circumstances." 26 U.S.C. section 6103(i)(3)(B). 35. The Secretary is prohibited by Section 6103 from requiring any taxpayers (including plaintiffs) (1) to disclose any tax return or return information to any CLEO prior to the forwarding of the return to the Secretary, or (2) to reject any tax return or return information filed with the Secretary without a CLEO certificate and to return it to the taxpayer with instructions that the return will not be considered without first disclosing it to a CLEO. 36. The disclosure of tax returns, return information and taxpayer return information required by 27 C.F.R. sections 179.63 and 179.85 is both a felony, 26 U.S.C. section 7213, 18 U.S.C. section 1905, and a statutory tort, 26 U.S.C. section 7431. For the above-described reasons, 27 C.F.R. sections 179.63 and 179.85, to the extent they require the CLEO certificate, are null and void as violative of 26 U.S.C. sections 6103, 7213 and 7431, and 18 U.S.C. section 1905. Count II (Violation of Tenth Amendment) 37. Paragraphs 1-36 are hereby realleged and incorporated into this count by reference. 38. Sections 179.63 and 179.85 of Title 27, C.F.R., impose on the States and their political subdivisions, including local chiefs of police, sheriffs of the counties, prosecutors, and other CLEOs thereof, the requirement that they complete a certificate on federal tax returns under Chapter 53 of the IRC, i.e., BATF Forms 1, 4 and 5. The certificate under Section 179.63 must state "that the certifying official is satisfied that the fingerprints and photograph accompanying the application are those of the applicant and that the certifying official has no information indicating that the receipt or possession of the firearm would place the transferee in violation of State or local law or that the transferee will use the firearm for other than lawful purposes." Section 179.85 is identical except that the phrase after the conjunction is "that the certifying official has no information indicating that possession of the firearm by the maker would be in violation of State or local law or that the maker will use the firearm for other than lawful purposes." 39. In order to make these certifications, the CLEO must examine and render judgments about the applicant and the fingerprints and the photograph. The CLEO must also determine whether there exists information indicating that the receipt or possession of the firearm would place the transferee or maker in violation of State or local law, which requires the CLEO to research criminal and other records and to make a legal determinations about the applicability of State and local law to the information revealed by such records. Finally, the CLEO must determine whether information exists that "the transferee [or maker] will use the firearm for other than lawful purposes," which requires the CLEO to investigate the transferee and, without any objective criteria, make subjective and predictive judgments about the transferee's motives, purposes and predilections. 40. The Secretary of the Treasury lacks authority under the United States Constitution or any statute to conscript State and local law enforcement officers to act as agents of the United States for tax collection or any other purpose. The President of the United States, and not the States or local governments, is required faithfully to execute the laws enacted by Congress, U.S. Const. art. II, section 3, and federal officers are appointed pursuant to Article II, Section 2, to assist him in doing so. The regulations at issue seek to circumvent these constitutional requirements by commandeering State and local officers to administer federal law but without making them accountable to the President or any federal authority. 41. In the alternative, if Sections 179.63 and 179.85 are only discretionary and impose no duty on any CLEO, the regulations still impose constitutional injuries on the States and the agents and agencies thereof, including Plaintiffs Hose and Frank. If the CLEO executes such certificates, the CLEO offends constituents who dislike firearms (even those lawfully received and possessed); if the CLEO refuses to execute the certificates he or she offends constituents who cannot thereby have their Forms 1, 4 or 5 approved, who sense unfairness or cronyism, and who perceive the CLEO as violating the right to keep and bear arms guaranteed by the United States and State constitutions. Either position exposes the CLEO to political injuries and to lawsuits for alleged injuries caused either by executing or failing to execute CLEO certificates. 42. Sections 179.63 and 179.85 thereby compel the States and political subdivisions thereof, including the officers and employees thereof, to administer a federal regulatory program in violation of the Tenth Amendment to the United States Constitution. The regulations purport to commandeer the resources of Plaintiffs Hose and Frank and all other State and local law enforcement officers so situated throughout the United States. Accordingly the provisions for a CLEO certificate in 27 C.F.R. sections 179.63 and 179.85 are null and void. Count III (Unlawful Veto of Secretary's Duty to Collect Taxes) 43. Paragraphs 1-42 are hereby realleged and incorporated into this count by reference. 44. Because CLEOs have unchallengeable and unreviewable discretion under 27 C.F.R. sections 179.63 and 179.85 to execute or to refuse to execute CLEO certificates the regulations unlawfully delegate to them the power to veto the collection of a federal tax and unlawfully interfere with the Secretary's duty to collect federal taxes. 45. Article I, Section 8 of the United States Constitution provides that "[t]he Congress shall have power to lay and collect taxes, duties, imposts, and excises...." The NFA was enacted pursuant to the power to tax and its registration requirements have been upheld by the courts as a valid requirement to assist in the collection of revenue. 46. Section 6301 of the IRC provides that "[t]he Secretary shall collect the taxes imposed by the internal revenue laws." The firearms transfer and making taxes imposed by NFA Sections 5811 and 5821 are taxes imposed by the internal revenue laws and it is the unequivocal duty of the Secretary to collect such taxes. The Secretary has no authority to delegate to CLEOs, who are not agents or officers of the Secretary or of any federal authority, the power to obstruct or defeat the collection of such taxes. 47. "The term 'Secretary" means the Secretary of the Treasury or his delegate." 26 U.S.C. section 7701(a)(11)(B). Treasury Department Order 120-01 appointed the Director of BATF as the Secretary's delegate to administer the NFA, including the collection of taxes imposed thereunder. 48. In a final ruling promulgating 27 C.F.R. sections 179.63 and 179.85, which was approved by the Director of BATF and the Assistant Secretary (Enforcement) of the Treasury, the defendants openly conceded that the CLEO certificate has no revenue purpose and delegates an absolute power to State and local officials to veto collection of the tax. The commentary to the rule stated: "The requirement does not unconstitutionally delegate Federal functions to State officials by mandating that these officials approve or disapprove transactions. On the contrary, these officials have the discretion to execute or not execute the required certifications." T.D. ATF-270, 53 Fed. Register 10480, 10488 (March 31, 1988) (emphasis added). 49. Because Sections 179.63 and 179.85 of Title 27, C.F.R., empower CLEOs to prevent a taxpayer from paying a federal tax and to prevent the Secretary from fulfilling his duty under 26 U.S.C. section 6301 to "collect the taxes imposed by the internal revenue laws," the CLEO certificate provisions of those regulations are null and void. Count IV (Arbitrary and Capricious Acts) 50. Paragraphs 1-49 are hereby realleged and incorporated into this count by reference. 51. Section 5812(a) of the NFA provides that a firearm may be transferred after (1) the transferor has filed the application with the Secretary, (2) the tax is paid, (3) the transferor is identified in the application (which must include fingerprints and photograph), (4) the transferor is identified in the application, (5) the firearm is identified in the application, and (6) the Secretary has approved the transfer and reregistration of the firearm to the transferee. "Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law." 26 U.S.C. section 5812(a). 52. Section 5822 of the NFA includes identical language for the making of a firearm. Its last sentence states: "Applications shall be denied if the making or possession of the firearm would place the person making the firearm in violation of law." 26 U.S.C. section 5822. 53. Without any statutory basis or authority 27 C.F.R. section 179.85 purports to require a certificate of a local or State CLEO which states that (1) the official is satisfied that the fingerprints and photograph are those of the applicant, (2) the official has no information that "the receipt or possession of the firearm would place the transferee in violation of State or local law," and (3) the official has no information "that the transferee will use the firearm for other than lawful purposes." These requirements are arbitrary, capricious, an abuse of discretion, and contrary to law. 54. Congress delegated the administration of the IRC, including the NFA, to the Secretary, and not to State or local officials. It is further unreasonable to require that a State or local official determine that the fingerprints and photograph are those of an applicant. Such officials have no legal duty to make such a determination. Officers, agents and employees of the Secretary and the BATF are responsible for determining that fingerprints and photographs are those of an applicant. 55. It is also the responsibility of the Secretary to make any determinations necessary to administer the mandate of Section 5812(a) of the NFA that "applications shall be denied if the transfer, receipt, or possession of the firearm would place the a transferee in violation of law." The same is true of the similar mandate of Section 5822 of the NFA. The Secretary has no authority to foist off on State and local officials this duty or to require them to perform it. Moreover, the NFA is silent as to the purported additional requirement of the regulations (and the related BATF forms) that the CLEO predict whether "the transferee [or maker] will use the firearm for other than lawful purposes." 56. BATF regularly advises CLEOs that whether they sign BATF Forms 1, 4 and 5 is entirely discretionary, even though the making or transfer of a firearm would be entirely lawful under both federal and local law. In at least one instance, BATF has encouraged the Chief of the King County, Washington, Police Department not to sign CLEO certificates for the lawful transfer of lawful firearms. 57. The requirement of the CLEO certificate reflects a policy decision by the defendants illegally to delegate to local and State officials the power to prohibit the transfer or making of a firearm where such transfer or making is not contrary to law, but where a local or State official wishes to veto the transfer or making based upon such official's personal opinion or whim. 58. The Secretary of the Treasury and his delegates are as competent, able and well-equipped as any local or State official to determine federal, State and local law pertaining to the legal competency of an individual to make, receive or possess a firearm. 59. The United States maintains a major database of criminal records and other legal disabilities to possession of firearms known as the National Instant Criminal Background and Check System (hereafter "NICS"), which was created pursuant to Sections 102(b) and 103 of the Brady Handgun Violence Prevention Act, Public Law 103-159, 107 Stat. 1536 (1993) and which is administered as set forth in 28 C.F.R., Part 25. 60. Section 103(b) of the Brady Act provides that the Attorney General shall establish the NICS which shall determine "whether receipt of a firearm by a prospective transferee would violate section 922 of title 18, United States Code, or State law." (Emphasis added.) Under Section 103(a) and (c), State criminal records systems are available through NICS. 61. The NICS is available to the Secretary to conduct background checks on persons who apply to make or transfer a firearm under the NFA. Section 25.6(j) of 28 C.F.R. provides: Access to the NICS Index for purposes unrelated to NICS background checks pursuant to 18 U.S.C. 922(t) shall be limited to uses for the purpose of: (1) Providing information to Federal, state, or local criminal justice agencies in connection with the issuance of a firearms-related ... permit or license, including permits or licenses to possess, acquire, or transfer a firearm...; or (2) Responding to an inquiry from the ATF in connection with a civil or criminal law enforcement activity relating to the Gun Control Act (18 U.S.C. Chapter 44) or the National Firearms Act (26 U.S.C. Chapter 53). 62. In addition to NICS, the Federal Bureau of Investigation maintains the largest collection of fingerprint records, criminal histories and investigative files in the world. Other components of the Department of Justice such as the Drug Enforcement Administration, the Marshals Service and the Immigration and Naturalization Service also maintain enormous criminal and investigative files and indices. 63. The Department of the Treasury maintains an extensive criminal records database known as the Treasury Enforcement Computer System ("TECS") and participates in the federal National Crime Information Center ("NCIC") criminal records database and other criminal records databases and indices. Components of the Department such as the Customs Service, the Secret Service and BATF itself also maintain extensive criminal records and investigative files. 64. The Secretary is otherwise well acquainted with State laws and local ordinances concerning firearms. The Secretary is required by law to publish in the Federal Register and to provide to all federal firearms licensees "a compilation of the State laws and published ordinances," which must be revised annually in compliance with the GCA, 18 U.S.C. section 921(a)(19). Pursuant to this mandate the BATF publishes from time to time ATF Publication 5300.5, State Laws and Published Ordinances -- Firearms. 65. When it chooses to do so, BATF itself ignores the requirement for a CLEO certificate. In its letter dated February 12, 1999, BATF decided to waive the requirement in the matter of Plaintiff Kadison's firearm. In addition, when in 1994 BATF reclassified thousands of shotguns into destructive devices, which are firearms under the NFA, ATF Rulings 94-1, 94-2, 1994 ATF Quarterly Bulletin-1 22-24, BATF required that such firearms be registered but waived and continues to waive the CLEO certificate. 66. BATF is well aware that many CLEOs impose arbitrary conditions on execution of the CLEO certificate. Plaintiffs Kadison and O'Brien are residents of Arlington, Virginia, who have purchased and sought the legal transfers to themselves of specific firearms. The Chief of the Arlington Police Department, without any basis in law, refuses to sign BATF Form 4 certificates for them, and others, unless they permit a warrantless "inspection" of their homes. Plaintiffs are unwilling to waive their constitutional right to be secure in their houses, papers and effects as a condition of possessing legal firearms. 67. The defendants and BATF know of the policy of the Arlington, Virginia, Chief of Police not to sign a Form 4 CLEO certificate unless the applicant permits a home inspection, and also know that the Chief of Police is the only available CLEO signatory for Arlington, Virginia, residents. By refusing to approve Forms 4 for residents of Arlington, Virginia, which do not contain a completed CLEO certificate, the defendants and BATF are willing participants in the illegal and unconstitutional requirement of a warrantless search of the applicant's home by the Arlington Police Department. 68. The defendants and BATF are also well aware that many CLEOs arbitrarily refuse to execute the certificate for anyone at all or only for persons who are friends, cronies or political supporters. There are an estimated 30,000 local and State officials in the United States who qualify as CLEOs under BATF regulations for purposes of making and transferring firearms. Citizens of identical qualifications located next door to each other but across a city, county or State line, or even within the same jurisdiction, receive entirely disparate treatment in seeking CLEO certificates. Plaintiff Davis has been the victim of such discrimination by a police chief who avers that he uniformly does not sign CLEO certificates as a matter of policy when, in fact, he does sign for friends and subordinates. The defendants and BATF are thereby willing participants in the violations of due process and equal protection of the law. 69. To the extent that they require the CLEO certificate Sections 179.63 and 179.85 of Title 27, C.F.R., are arbitrary, capricious, an abuse of discretion, and contrary to law, and are null and void. WHEREFORE, plaintiffs, Kent A. Lomont, Daniel J. Whelan, Eric M. Larson, James Kadison, Gerald C. O'Brien, Robert F. Grimes, Jr., Virgle W. Davis, Stephen L. Hose and Samuel Frank, pray the Court to: 1. Enter a judgment in their favor and against the defendants, and each of them, declaring the CLEO certificate required by Treasury Regulations, 27 C.F.R. sections 179.63 and 179.85, and the corresponding BATF forms to be unconstitutional, null, void, and beyond the authority of the Secretary of the Treasury. 2. Enter a writ of mandamus requiring or otherwise compelling the defendants to approve plaintiffs' applications described herein to transfer, make and register firearms and all similar applications they may submit in the future without CLEO certificates. 3. Award the plaintiffs their reasonable attorney fees and costs. 4. Grant such other and further relief as is just and proper. STEPHEN P. HALBROOK (D.C. Bar No. 379799) 10560 Main Street, Suite 404 Fairfax, Virginia 22030-7182 Telephone: (703) 352-7276 JAMES H. JEFFRIES, III (D.C. Bar No. 78808) 3019 Lake Forest Drive Greensboro, North Carolina 27408 Telephone: (336) 282-6024 Counsel for Plaintiffs