KENT A. LOMONT et al., )
) Civil Action No. 1:00cv01935 (JR)
LAWRENCE H. SUMMERS, Secretary of the )
Treasury, and BRADLEY A. BUCKLES, Director, )
Bureau of Alcohol, Tobacco, and Firearms, )
This is an action for review of adverse agency actions, for a declaratory judgment, and for a writ of mandamus, to compel the Bureau of Alcohol, Tobacco and Firearms ("BATF") of the U.S. Department of the Treasury to approve applications to transfer, make and register firearms pursuant to 26 U.S.C. 5812, 5822 and 5841. These provisions are part of the National Firearms Act ("NFA"), which is Chapter 53 of the Internal Revenue Code.
Plaintiffs have been irreparably injured by the requirement of a certificate by a chief law enforcement officer (hereafter "CLEO certificate") adopted and enforced by the defendants (hereafter "Summers") in Treasury Regulations governing the making and transfer of firearms governed by the NFA, i.e., 27 C.F.R. 179.63 and 179.85. All plaintiffs (other than the two law enforcement plaintiffs) seek to make, transfer or possess NFA firearms. All such plaintiffs are statutorily qualified and eligible to possess the firearms at issue. That is to say, each plaintiff is a citizen of the United States over the age of 21; has no criminal disability; has not been dishonorably discharged from the armed forces; is not an illegal alien; is not a fugitive from justice; is not addicted to controlled substances or has been involuntarily committed to a mental institution; has not been convicted of a domestic violence misdemeanor; and is not subject to a domestic relations restraining order. Every plaintiff lives in a State whose constitution guarantees the right to keep and bear arms. The firearms sought to be made or transferred are lawful under the laws of their respective States and locales.
The plaintiff Lomont is a duly licensed manufacturer of and dealer in NFA firearms -- so licensed and authorized by these defendants -- with a concomitant and independent constitutional right to engage in interstate commerce. The regulations promulgated and enforced by the defendants have made it possible for local authorities who are utterly unanswerable to the federal government to impede and defeat Lomont's interstate sales of NFA firearms. (1) Plaintiff Lomont's lost sales and sales opportunities are real, actual and concrete, not theoretical or "potential" as characterized by Summers. Defendants' Memorandum ("Mem.") 13. The injury to Lomont is not the inability to make or possess NFA firearms, but rather the inability to engage in interstate commerce.
The plaintiff Whelan is employed by a federally-licensed firearms dealer with an emphasis on sales to law enforcement officers and agencies. (2) He also has a personal interest in possessing, owning and collecting NFA firearms. But Whelan is unwilling to waive his rights to privacy in his personal tax returns in order to obtain the defendants' approval to make and possess NFA firearms. Summers' argument that he has failed to exhaust his remedies is circular. "If you will waive your statutory protection to the privacy of your tax affairs we will allow you to manufacture an NFA firearm. But then you will lack standing to contest the regulations whereby we impose this illegal condition. If you do not waive your statutory right to privacy, you have not exhausted your remedies and lack standing to contest the regulations whereby we impose this illegal condition." Joseph Hellerman would have savored this delicious "Catch 22." (3)
Plaintiff Larson is a published author on NFA firearms and has testified repeatedly before congressional committees on the NFA. He is a collector of "curio and relic" NFA firearms whose ability to trade, buy and sell such items is seriously impaired by the inability of other collectors and owners to obtain CLEO certificates. In this respect he is in the same position as the plaintiff Lomont who is not injured by his own inability to obtain certificates but by the inability of others.
Plaintiffs Kadison and O'Brien are faced with the dilemma of surrendering a fundamental constitutional right in order to obtain CLEO certificates. Only one local official within their jurisdiction -- the Chief of Police of Arlington, Virginia, will possibly sign a CLEO certificate, but only if Kadison and O'Brien surrender their Fourth Amendment right to be secure in their homes, papers and effects by permitting the police to invade their homes for an "inspection." No other functionary of Arlington, Arlington County, or the Commonwealth of Virginia will sign. To argue, as Summers does, that Kadison and O'Brien have not "exhausted their remedies" is at best frivolous and at worst evinces a callous disregard for the most sacred of individual constitutional rights. (4)
Summers concedes that plaintiff Grimes has exhausted all sources of CLEO certification. Contrary to Summers, plaintiff Davis adequately alleges that he has exhausted his remedies by alleging that no CLEOs within his jurisdiction are willing to sign the certificate. Compl. para. 22.
The standing of the CLEO plaintiffs, Chief of Police Hose and Sheriff McClure, (5) does not depend upon any exhaustion of remedies since they do not seek anything from the defendants other than not being imposed upon as federal surrogates. Their injuries derive from having either to be unresponsive to constituent demands involving State constitutional and statutory rights or to undertake to administer a federal tax statute for which they have no legal responsibility or accountability. They have no other recourse than this suit.
But for the regulations at issue here, the applications would have been approved, and thus plaintiffs meet elementary standing requirements. Raines v. Byrd, 521 U.S. 811, 818 (1997) states the initial enquiry as follows:
Under Article III, 2, of the Constitution, the federal courts have jurisdiction over this dispute between appellants and appellees only if it is a "case" or "controversy." . . . As we said in Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 37 (1976): "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies."
Summers' denial of the applications here created an actual case or controversy. The denials constitute injury which is the direct result of the regulation, the invalidation of which would redress the injury. "To meet the standing requirements of Article III, '[a] plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief.'" Raines, 521 U.S. at 818, quoting Allen v. Wright, 468 U.S. 737, 751 (1984).
This case parallels Gavett v. Alexander, 477 F. Supp. 1035, 1040 (D. D.C. 1979), which involved a challenge to the constitutionality of 10 U.S.C. 4308(a)(5). That section directed the Department of the Army to sell firearms at cost to members of the National Rifle Association. The plaintiff's application to purchase a rifle was denied because he refused to join the NRA; he met all other requirements for the purchase. He claimed that the statute violated his First Amendment rights and deprived him of equal protection. Id. Gavett reviewed the traditional standing rules, noting:
The question on standing is whether plaintiff has "alleged such a personal stake in the outcome of a controversy as to assure that concrete adverseness which sharpens the presentation of issues (on) which the Court so largely depends for illumination of difficult constitutional questions."
Id., quoting Baker v. Carr, 369 U.S. 186, 204 (1962). "Standing requires a 'fairly traceable' causal connection between the claimed injury and the challenged conduct." Id., quoting Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59, 72 (1978). Gavett held:
Plaintiff Gavett claims, quite simply, that he has the requisite personal stake in this controversy by virtue of the fact that he wishes to purchase a rifle from the government at a discount price but is being denied that opportunity because the act reserves it exclusively to members of the NRA. Clearly, plaintiff would be able to purchase an Army rifle at a discount but for the NRA membership requirement imposed by the statute, and he is thus "injured" by it. It is equally clear that, should he prevail in this lawsuit the injury would be redressed: he would be able to purchase a rifle at the same price as NRA members. Under the most elementary rules of standing, jurisdiction, and case or controversy, Gavett qualifies as a plaintiff.
Id. at 1041. The court ruled the membership requirement unconstitutional and declared that the plaintiff was eligible to purchase a rifle.
This case is no different. But for the CLEO-certificate regulation, plaintiffs would have their applications approved to make or transfer firearms, and thus they are injured by the regulation.
In Steele v. National Firearms Act Branch, 755 F.2d 1410, 1413 (11th Cir. 1985), a dealer sued BATF and various State and federal CLEOs who had informed the dealer that they did not sign CLEO certificates. Steele held that the complaint "clearly alleged an injury in fact: Steel's inability to sell the firearms that were part of his inventory. It is beyond dispute that the deprivation of a part of one's livelihood is sufficient to satisfy the injury in fact requirement." (6) Id. at 1414.
However, Steele questioned the dealer's standing because the complaint did not allege that no CLEO would sign the certificate, and thus it was unclear that the regulation caused the inability to sell the inventory. Id. at 1414-15. In Steele, the dealer sought an order requiring CLEOs to sign certificates; by contrast, here the plaintiffs seek a declaration that the regulation is invalid. While the dealer in Steele alternatively sought a declaration of the regulation's invalidity, it was unclear whether the relief requested would redress the injury: "Even if we invalidated the regulation, the record does not provide us with an adequate basis to conclude that appellant would be able to sell his inventory. Appellant did not allege that he had a buyer who met the statutory qualifications for eligibility." Id. at 1415. Plaintiffs here, of course, make that allegation.
Westfall v. Miller, 77 F.3d 868, 872 (5th Cir. 1996) held that an applicant had no standing to contest the CLEO-certificate requirement where the applicant did not exhaust all CLEOs. The court made a glaring error in concluding that "we find the completion of the statutory procedure necessary to establish Westfall's injury." Id. at 872 (emphasis added). The statute is silent on any CLEO certificate. Westfall then cites the regulation and reiterates its same error: "Enforcing the statute as written certainly cannot be interpreted as an unreasonable expansion [of CLEOs who may be contacted]." Id. (emphasis added).
Westfall erred in concluding that the applicant's "inaction has caused any injury he has suffered." Id. This is like arguing: the law sets a procedure to get a driver's license, the agency adds the gloss that an applicant must also recite three "Hail Marys," the applicant refuses and sues, and the court holds that he has no standing because his "inaction has caused any injury he has suffered."
To put it more formally, if the regulation is invalid, the Secretary cannot require an applicant to follow the regulation's procedures. Seeking to obtain the CLEO certificate costs time, money and effort, i.e., constitutes injury. (7) As explained in part III of this brief, NFA applications are tax returns, disclosure of which to CLEOs violates the privacy rights of both the transferor and transferee. The ultimate injury is the denial of the application, and but for the invalid regulation, the application would have been approved. Ergo, the regulation is the cause of the injury.
"Compulsion by unwanted and unlawful government edict is injury per se. Certainly the cost of obeying the regulations constitutes injury." National Collegiate Athletic Ass'n v. Califano, 622 F.2d 1382, 1389 (10th Cir. 1980). See Arlington Heights v. Metro. Housing Corp., 429 U.S. 252, 263 (1977) (plaintiff has standing and has "right to be free of arbitrary or irrational zoning actions").
In sum, plaintiffs satisfy all of the elements required for standing.
The National Firearms Act ("NFA"), 26 U.S.C. 5801 et seq., is Chapter 53 of the Internal Revenue Code. It is administered by the Secretary of the Treasury, who has delegated the authority to administer the NFA to the Bureau of Alcohol, Tobacco and Firearms ("BATF"). Treasury Department Order 120.01 (June 6, 1972). The NFA provides a comprehensive regulatory scheme to tax the making and transfer of "firearms" as defined in 5845(a). (8) As used here, "firearm" has the meaning set forth in that provision.
In order to facilitate collection of the taxes, firearms are required to be registered. Section 5841 requires the Secretary to register firearms according to the following scheme:
(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 entitled 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.
A firearm may be registered and either transferred or made, subject to the payment of a transfer or making tax. Section 5811 provides in part:
(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.
The lawful transfer of a registered firearm requires the approval of the Secretary according to the procedures and qualifications set forth in 5812 as follows:
(a) Application. -- A firearm shall not be transferred unless (1) the transferor of the firearm 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 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." Id.
Regulations concerning the transfer of firearms are provided in 27 C.F.R. Part 179, Subpart F. The application to transfer a firearm is described in 179.84 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 also shall 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 179.85. The application also shall 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 canceled.
27 C.F.R. 179.85, which is entitled "Identification of transferee," provides the following further requirements, including the CLEO certificate:
If the transferee is an individual, such person shall securely attach to each copy of the application, Form 4 (Firearms), in the space provided on the form, a photograph of the applicant . . . . The transferee shall attach two properly completed FBI Forms 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 State or local law or that the transferee will use the firearm for other than lawful purposes. (Emphasis added.)
Similar regulations concerning the application to make a firearm (ATF Form 1) are provided in 27 C.F.R. Part 179, Subpart E. Section 179.63, entitled "Identification of applicant," similarly 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.
As originally promulgated in 1934, the regulations provided that a U.S. Attorney or U.S. Marshal could execute the CLEO certificate. Treasury Regulation No. 88, Art. 65 (1934). This was eliminated in 1985. (9) BATF has not identified any other federal officials who BATF would accept to execute CLEO certificates.
The registration, taxation, and other requirements of the NFA, which was originally passed in 1934, have been upheld by the courts under Article I, 8 of the Constitution, which provides in part: "The Congress shall have power to lay and collect taxes, duties, imposts, and excises . . . ." "In general this bill follows the plan of the Harrison Anti-Narcotic Act and adopts the constitutional principle supporting that act in providing for the taxation of fire-arms and for procedure under which the tax is to be collected." (10) Rept. No. 1780, Committee on Ways and Means, U.S. House of Representatives, 73rd Cong., 2d Sess. 2 (1934).
Summers repeatedly characterizes the NFA as if it is based on some federal power to enact general criminal laws over dangerous objects and as if the Secretary can delegate to a CLEO absolute power to veto administration of parts of the Internal Revenue Code with which he personally disagrees. United States v. Lopez, 514 U.S. 549 (1995), which invalidated the Gun Free School Zones Act, is only one of the latest precedents to recognize that no such federal power exists. (11) The issue was decided long ago in Sonzinsky v. United States, 300 U.S. 506, 512 (1937), which rejected the defendant's argument "that the present [NFA] levy is not a true tax, but a penalty imposed for the purpose of suppressing traffic in a certain noxious type of firearms, the local regulation of which is reserved to the states because not granted to the national government." Sonzinsky found the NFA on its face to be a revenue measure and nothing more. The Court noted:
The case is not one where the statute contains regulatory provisions related to a purported tax in such a way as has enabled this Court to say in other cases that the latter is a penalty resorted to as a means of enforcing the regulations. . . . Nor is the subject of the tax described or treated as criminal by the taxing statute. . . . Here Section 2 contains no regulations other than the mere registration provisions, which are obviously supportable as in aid of a revenue purpose. On its face it is only a taxing measure . . . .
Id. at 513.
Sonzinsky upheld the NFA because it was a revenue measure and did not purport to exercise general criminal power not delegated to Congress. Unlike Summers' argument here, Sonzinsky refused to speculate as to why Congress taxed certain firearms:
Inquiry into the hidden motives which may move Congress to exercise a power constitutionally conferred upon it is beyond the competency of the courts. . . . They will not undertake, by collateral inquiry as to the measure of the regulatory effect of a tax, to ascribe to Congress an attempt, under the guise of taxation, to exercise another power denied by the Federal Constitution. . . .
Here the annual tax of $200 is productive of some revenue. We are not free to speculate as to the motives which moved Congress to impose it, or as to the extent to which it may operate to restrict the activities taxed. As it is not attended by an offensive regulation, and since it operates as a tax, it is within the national taxing power. (12)
Id. at 513-14. The CLEO-certificate requirement is just such "an offensive regulation" which prevents the NFA from "operat[ing] as a tax."
Haynes v. United States, 390 U.S. 85, 87 (1968) described the National Firearms Act as "an interrelated statutory system for the taxation of certain classes of firearms." "All these taxes are supplemented by comprehensive requirements calculated to assure their collection." Id. at 88. Invalidating NFA registration requirements as in violation of the right against self-incrimination, Haynes reaffirmed the nature of the NFA as a revenue enactment:
We do not doubt, as we have repeatedly indicated, that this Court must give deference to Congress' taxing powers, and to measures reasonably incidental to their exercise; but we are no less obliged to heed the limitations placed upon those powers by the Constitution's other commands. We are fully cognizant of the Treasury's need for accurate and timely information, but other methods, entirely consistent with constitutional limitations, exist by which such information may be obtained.
Id. at 98.
In response to Haynes and as part of a broader revision, the NFA was amended and reenacted as Title II of the Gun Control Act of 1968 ("GCA"), P.L. 90-618, 82 Stat. 1213. The NFA continued to be based in the tax power. (13) The legislative history is explicit that no State or locality has authority to interfere with administration of the NFA. Senate Report 1501, 90th Cong., 2nd Session, Judiciary Committee, 52 (1968) explained:
This section provides for the repeal of section 6107 of the Internal Revenue Code of 1954 relating to disclosure of the identify of persons paying special (occupational) tax which was subjected to criticism in the three cases handed down by the Supreme Court on January 29, 1968. (14) The repeal of this section should make it completely clear that it is not the desire or intent of the Congress that the entire system of Federal taxation be rendered impotent or ineffectual because a State or local jurisdiction has a law rendering aspects of the activity illegal. The Federal taxing power is of such fundamental importance that it is difficult to conceive that it was the intent of the framers of the Constitution that the act of a State or local government could thwart the effective operation of the internal revenue laws of the United States. Since the section no longer serves any useful purpose and since it now jeopardizes the effective operation of the internal revenue laws, it should be repealed.
The GCA contains nothing authorizing the Secretary to require a CLEO certificate such as that at issue here. However, Title I, 102 of the GCA completely replaced, before it became effective, the firearms provisions of the Omnibus Crime Control and Safe Streets Act ("OCCSSA"), P.L. 90-351, Title IV, 82 Stat. 197 (1968). The OCCSSA enacted 18 U.S.C. 924(b)(4), which made it unlawful for a licensed firearms dealer to sell or deliver-
To any person any destructive device, machinegun (as defined in section 5843 of the Internal Revenue Code of 1954), short-barreled shotgun, or short-barreled rifle, unless he has in his possession a sworn statement executed by the principal law enforcement officer of the locality wherein the purchaser or person to whom it is otherwise disposed of resides, attesting that there is no provision of law, regulation, or ordinance which would be violated by such person's receipt or possession thereof, and that he is satisfied that it is intended by such person for lawful purposes . . . .
That provision had been introduced by Senator Dodd as Amendment 90 to S. 1. Cong. Rec. 3257 (Feb. 9, 1967). Strong objections to the requirement of a CLEO certificate were made. Senate Report No. 1097, in U.S. Code Cong. & Admin. News 1968, 2112, 2294, included Individual Views of Messrs. Dirksen, Hruska, Thurmond, and Burdick, which stated:
Senator Dodd introduced, on behalf of the Administration, a highly controversial and strongly objectionable feature of S.1, Amendment 90 (which is incorporated into Title IV) which would control destructive devices by requiring prior approval of local police in the form of a sworn statement before a person could purchase one of these weapons. First, it must be questioned whether or not the federal government can constitutionally impose a duty on a state or local official to perform an affirmative act, such as the execution of a sworn statement. Yet this is what the provision apparently requires. In response, it may be argued that there is no burden to act imposed on the law enforcement official, but that the burden is placed only on dealers and purchasers who must obtain the statements. This may be technically correct, but the practical effect is to place a burden on the local police.
However, the provision is strongly objectionable, since there is no requirement that an officer act upon the request for the required statement, nor is there any appeal procedure even if he does respond.
Reflecting the above criticism, the CLEO-certificate provision in OCCSSA was deleted in the GCA. The GCA's version of 922(b)(4) provided that a licensee may not transfer "to any person any destructive device, machinegun . . ., short-barreled shotgun, or short-barreled rifle, except as specifically authorized by the Secretary consistent with public safety and necessity." The difference was explained in House Report No. 1577, in U.S. Code Cong. & Admin. News 1968, 4410, 4420: "Existing law [i.e., OCCSSA] contains a comparable provision except that sales by licensees are conditioned on statements of legality by local officials."
The meaning of GCA provisions become clearer when contrasted with OCCSSA provisions which the GCA eliminated. National Coalition to Ban Handguns v. BATF, 715 F.2d 632, 635-36 (D.C. Cir. 1983) (opinion by then Circuit Judge Scalia). "The most telling historical evidence of the content of the [requirement at issue] is found by comparing the GCA to the OCCSSA which it replaced." Id. at 636. "The significance of this change - which is clear enough from the text alone - is confirmed by the Senate debate concerning Senator Dodd's unsuccessful attempt to reinsert the OCCSSA requirements into the version reported by committee." Id.
In short, no version of the NFA ever purported to authorize the requirement of a CLEO certificate. The OCCSSA did fleetingly provide this requirement in Title 18, but it was repealed by the GCA the same year. When it wished to authorize a CLEO certificate, Congress knew how to do so.
The 1966 version of the regulation requiring a CLEO certificate was held to be void under the NFA in Weyer v. United States, 429 F.2d 74, 76 (5th Cir. 1970) (invalidating conviction for unregistered firearms under Haynes). Weyer explained:
There remains an inconsistency between the provisions of the statute and those of the implementing regulations. . . . The regulations supplement the statute by requiring that the Director of the Alcohol and Tobacco Tax Division approve any transfer, 26 C.F.R. 179. As a prerequisite to that approval the regulations required a statement of a law enforcement officer
certifying that he is satisfied that the fingerprints and photograph appearing on the application are those of the applicant and that the firearm is intended by the applicant for lawful purposes.
26 C.F.R. 179.99 (1966).
Referring to "the specific provision in 5814 authorizing regulations establishing procedures for determination of the identity of applicants," Weyer explained:
It should be noted that this provision in the firearms act does not authorize the Secretary to reject an application once identity is determined. Nowhere does the statute indicate that a transfer under such circumstances may be barred rather than taxed. Reading the terms of the firearms act in place of those of the Marijuana Tax Act, we find the language of the Supreme Court in Leary [v. United States, 395 U.S. 6, 26 (1969)] fully applicable to the instant case.
Id. at 76.
Weyer inserted bracketed items relevant to the NFA and the invalid CLEO-certificate regulation into the following quote from Leary:
The foregoing shows that at the time petitioner acquired [a firearm] he was confronted with a statute which on its face permitted him to acquire the [weapon] legally provided he paid the [$200] transfer tax and gave incriminating information, and simultaneously with a system of regulations which, according to the Government, prohibited him from acquiring [machine guns] under any conditions. We have found those regulations so out of keeping with the statute as to be ultra vires.
Weyer, 429 F.2d at 76-77, quoting Leary, 395 U.S. at 26. The regulations at issue here are simply the descendant of the above ultra vires regulations.
United States v. Freed, 401 U.S. 601, 604 (1971) held that the amended NFA cured the Fifth Amendment violation described in Haynes. To date, the interpretation has not changed that the NFA "was enacted as a revenue statute pursuant to Congress's taxing power. . . . It requires firearms to be registered so that taxes may be assessed on them. In that sense, the registration requirement is valid under the Constitution only because it is an integral part of Congress's revenue scheme." United States v. Ferguson, 788 F. Supp. 580, 581 (D. D.C. 1992) (citing Sonzinsky), aff'd, 1 F.3d 45 (D.C. Cir. 1993) (table). (15)
In sum, the NFA was enacted under Congress' power to raise revenue. The face of the statute, the legislative history, and constitutional constraints make clear that a State or local official cannot be empowered to veto the NFA tax.
Count I of the complaint alleges that the CLEO-certificate requirement violates the tax privacy protections of 26 U.S.C. 6103. The Secretary cannot require a person to disclose a tax return to a CLEO. Summers cites no statutory provision authorizing such a requirement. Mem. 20-22. Moreover, since such compelled disclosure is injury per se, plaintiffs who declined to disclose their NFA forms to CLEOs have standing to maintain this action. They cannot be required to suffer the injury which 6103 is designed to avoid.
26 U.S.C. 5811 and 5821 impose taxes on the transfer and making of firearms. ATF Form 1 (application to make firearm) and Form 4 (application to transfer firearm) are tax returns and contain return information and taxpayer return information. The compelled disclosure of federal tax returns and return information to CLEOs, which is required by 27 C.F.R. 179.63 and 179.85 circumvents and violates 26 U.S.C. 6103.
26 U.S.C. 6103(a) provides the general prohibition as follows:
Returns and return information shall be confidential, and except as authorized by this title-
(1) no officer or employee 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.
Requiring the CLEO certificate violates both the rule that "returns and return information shall be confidential" and the prohibition on disclosure by any officer of the United States of any return or return information.
"This general ban on disclosure provides essential protection for the taxpayer; it guarantees that the sometimes sensitive or otherwise personal information in a return will be guarded from persons not directly engaged in processing or inspecting the return for tax administration purposes. The assurance of privacy secured by 6103 is fundamental to a tax system that relies upon self-reporting." Gardner v. United States, 213 F.3d 735, 738 (D.C. Cir. 2000), quoting National Treasury Employees Union v. Federal Labor Relations Board, 791 F.2d 183, 184 (D.C. Cir. 1986).
Applications to transfer or make NFA firearms are tax returns. "The term 'return' means any tax or information return . . . required by, or provided for or permitted under, the provisions of this title [Title 26 U.S.C.] which is filed with the Secretary by, on behalf of, or with respect to any person . . . ." 6103(b)(1). Moreover, the information on such applications is return information. Section 6103(b)(2)(A) provides:
The term 'return information' means - (A) a taxpayer's identity, . . . tax liability, . . . or tax payments, whether the taxpayer's return was, is being, 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 . . . . (16)
Similarly, the information on applications to make or transfer firearms meets the following further definition: "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." 6103(b)(3).
BATF agrees that NFA forms are tax returns prohibited from disclosure to CLEOs. (17) Firearms Enforcement Program, ATF Order 3310.4B, at 47 (2/8/89) (18) states: "The disclosure of information from the NFRTR [National Firearms Registration and Transfer Record] is severely restricted by the provisions of 26 U.S.C. section 6103. Disclosure may be made only to Federal agencies and then only for official duties." Under 6103, "disclosures to State or local agencies are prohibited." Id. at 48. (19)
"The term 'disclosure' means the making known to any person in any manner whatever a return or return information." 6103(b)(8) (emphasis added). Requiring execution of the CLEO certificate constitutes "disclosure" of a return and return information as defined.
Summers argues that the applicant, not BATF, must disclose the tax return to the CLEO and thus the disclosure is somehow "self-disclosure." Mem. 20. It is untenable to argue that Congress may authorize an activity if one pays a tax, the Secretary may require a person to fulfill certain requirements in order to pay the tax, but that the taxpayer somehow "volunteered" to meet those requirements. Indeed, the applicant acts as the Secretary's agent in disclosing the form to the CLEO, inasmuch as the Secretary requires the CLEO certificate supposedly to assist him in carrying out the background check. (20)
The Secretary is prohibited by 6103 from requiring a person to disclose any tax return to a CLEO prior to the forwarding of such form to the Secretary. Section 6103 also prohibits the Secretary from rejecting any tax return he receives without a CLEO certificate and returning it to the applicant with instructions that the return will not be processed without first disclosing it to the CLEO. BATF has no more authority than would IRS to require a taxpayer to disclose a tax return to local police before the agency processes the form.
Applications to transfer or make a firearm are not subject to any of the exemptions set forth in 6103. Disclosure of certain returns and return information, excluding taxes imposed by Chapter 53 of the Internal Revenue Code, to State tax officials is permitted only for tax administration purposes, and only if State law guarantees confidentiality. 6103(d)(1), (p)(8). The only exception for CLEOs is as follows: "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 apprize appropriate officers or employees of any Federal or State law enforcement agency of such circumstances." 6103(i)(3)(B).
Section 6103(l), "Disclosure of returns and return information for purposes other than tax administration," has no provision for disclosure to a CLEO. Section 6103(o)(1) provides: "Returns and return information with respect to taxes imposed by subtitle E (relating to taxes on alcohol, tobacco, and firearms) shall be open to inspection by or disclosure to officers and employees of a Federal agency whose official duties require such inspection or disclosure." Subtitle E includes Chapter 53, i.e., the NFA.
The rules governing the disclosure of tax returns and return information are strictly construed. Tierney v. Schweiker, 718 F.2d 449, 455-56 (D.C. Cir. 1983). (21) "In 1976, when expanding the confidentiality provisions as part of the Tax Reform Act of 1976, Congress made clear that tax information was to be absolutely confidential, subject to certain explicit exceptions." (22) Id. at 454. Tierney explains:
The purpose of the confidentiality clause of the Tax Reform Act of 1976 was to protect individual taxpayers from unauthorized disclosure of their tax return information. In particular, Congress was concerned about the potential widespread availability of individual tax information to government agencies. . . . The legislative history of section 6103 demonstrates that Congress intended to limit disclosure of tax return information except under narrowly defined circumstances.
Id. at 455.
Tierney rejected an IRS interpretation that would "circumvent the general rule of confidentiality established by Congress" and which "makes a mockery" of 6103. Id. at 456. That is precisely the case here. The Secretary seeks to circumvent the prohibition on disclosing tax returns by requiring the applicant to act as the Secretary's messenger in disclosing the returns to CLEOs.
"The overriding purpose of the confidentiality provisions of Section 6103 was to protect tax returns and return information from misuse by . . . government entities." McSurely v. McAdams, 502 F.Supp. 52, 56 (D. D.C. 1980). "The confidentiality provisions of Section 6103 evince one additional legislative purpose: federal tax administration should not be seriously impair[ed] by the disclosure of return information." Id. at 57.
The disclosure of tax returns, return information and taxpayer return information is both a felony, 26 U.S.C. 7213, 18 U.S.C. 1905, and a statutory tort, 26 U.S.C. 7431. Under 7431(c), a finding of liability for a disclosure entitles the plaintiff to an amount equal to the greater of $1000 or actual damages for each act of unauthorized inspection or disclosure. Thus, disclosure in violation of 6103 is considered injury per se.
Oblivious to the above, Summers argues that since several plaintiffs did not injure themselves by disclosing their tax returns to CLEOs, they do not have standing. Yet they suffer injury either way. By not forfeiting their privacy rights, they cannot receive authorization to transfer and make firearms. By showing their tax forms to the CLEO, they are injured in their privacy rights. Church of Scientology of California v. United States, 506 U.S. 9, 13 (1992) recognized the violation of privacy in tax return information to be injury per se:
Moreover, even if the Government retains only copies of the disputed materials, a taxpayer still suffers injury by the Government's continued possession of those materials, namely, the affront to the taxpayer's privacy. A person's interest in maintaining the privacy of his "papers and effects" is of sufficient importance to merit constitutional protection. (23)
The CLEO-certificate requirement impairs federal tax administration by allowing local police to defeat NFA taxes altogether. It is a roadblock to the proper processing of tax returns with the Secretary. Summers disingenuously argues that the requirement simply prevents a taxable event from taking place. However, the Secretary has no authority to prohibit a person from engaging in a lawful activity which is subject to taxation by authorizing a CLEO to make it impossible to pay the tax. Moreover, a taxable event occurs where a person makes or transfers a firearm without the Secretary's authorization because a CLEO certificate could not be obtained. In such instance, the regulation has obviously allowed the CLEO to impair to collection of the tax. (24)
Summers relies on United States v. Sheriff, City of New York, 330 F.2d 100, 101 (2nd Cir.), cert. denied, 379 U.S. 929 (1964), which states the rule against non-disclosure and adds: "Disclosure by the taxpayer himself of his copies of returns is not an unauthorized disclosure, even though it be made by reason of legal compulsion." That case concerned compelled disclosure of tax returns to a grand jury investigating corruption. By contrast, the regulation here compels the applicant to disclose the return to the CLEO while acting as the agent of the Secretary.
In sum, by requiring the disclosure of tax returns to CLEOs, the regulation runs afoul of 6103. Plaintiffs are injured by the Secretary's refusal to approve applications without the CLEO certificate. Plaintiffs have standing, and are not required to suffer the further injury of having their privacy rights guaranteed by 6103 violated in order to maintain this action.
Count II of the complaint alleges that the CLEO-certificate requirement unconstitutionally imposes duties on State and local CLEOs. Even if interpreted as purely discretionary, the regulation unlawfully forces unwanted political accountability onto State and local CLEOs in violation of basic principles of federalism and of the separation-of-powers doctrine. Summers cites no constitutional or statutory authority whatever authorizing the Secretary to delegate administration of any part of the NFA to State and local CLEOs. Mem. 22-28.
The regulations impose on the States and their political subdivisions, including law enforcement officers, prosecutors, and other CLEOs, the requirement that they complete a certificate on federal tax returns, i.e., ATF Forms 1 and 4. The certificate under 27 C.F.R. 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 imposes similar requirements.
In order to make this certificate, the CLEO must examine and render judgments about the applicant, the fingerprints, and the photograph. The CLEO must research criminal records and other applicable records and to make determinations about the applicability of State or local law to such records. Finally, the CLEO must determine whether information exists that "the transferee will use the firearm for other than lawful purposes," which requires the CLEO to investigate, and subjectively to judge the motives and purposes of, the transferee.
The Secretary lacks authority under the United States Constitution or any statute to conscript State and local CLEOs to act as his agents for tax collection or any other purpose. The President of the United States, not the States, is required faithfully to execute the laws passed by Congress, and federal officers are appointed 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 anyone.
Printz v. United States, 521 U.S. 898, 903 (1997), invalidated the Brady Act command that CLEOs "make a reasonable effort to ascertain within 5 business days whether receipt or possession [of a handgun] would be in violation of the law, including research in whatever State and local recordkeeping systems are available and in a national system designated by the Attorney General." The Court held:
We held in New York [v. United States, 505 U.S. 144, 188 ) that Congress cannot compel the States to enact or enforce a federal regulatory program. Today we hold that Congress cannot circumvent that prohibition by conscripting the States' officers directly. The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program.
Printz, 521 U.S. at 935.
The mandate to CLEOs violated the division of power between State and Federal Governments. Id. at 922. It also violated the separation of powers within the federal government (which the regulation at issue here violates even if it does not require the CLEO to act):
The Constitution does not leave to speculation who is to administer the laws enacted by Congress; the President, it says, "shall take Care that the Laws be faithfully executed," Art. II, 3, personally and through officers whom he appoints (save for such inferior officers as Congress may authorize to be appointed by the "Courts of Law" or by "the Heads of Departments" who are themselves presidential appointees), Art. II, 2. The Brady Act effectively transfers this responsibility to thousands of CLEOs in the 50 States, who are left to implement the program without meaningful Presidential control (if indeed meaningful Presidential control is possible without the power to appoint and remove).
Printz squarely addresses the unconstitutional imposition of political accountability which would exist even if the CLEO certificate here is voluntary. It states:
And even when the States are not forced to absorb the costs of implementing a federal program, they are still put in the position of taking the blame for its burdensomeness and for its defects. . . . Under the present law, for example, it will be the CLEO and not some federal official who stands between the gun purchaser and immediate possession of his gun. And it will likely be the CLEO, not some federal official, who will be blamed for any error . . . that causes a purchaser to be mistakenly rejected.
Id. at 930.
Following Printz, "States remain free . . . voluntarily to cooperate with federal law enforcement efforts." United States v. Nathan, 202 F.3d 230, 233 (4th Cir. 2000) (local police may refer felons in possession of firearms for federal prosecution). However, no State has volunteered to administer the CLEO-certificate regulation. Indeed, it may be unlawful under State law, either because not authorized by law or because (as in Printz) explicitly preempted by statute. (25)
Koog v. United States, 79 F.3d 452, 455 (5th Cir. 1996), declared the background-check requirement unconstitutional in part because it was inconsistent with CLEO duties under State law, and the same reasoning applies here:
The CLEOs' offices are created by state law, . . . and the state criminal codes prescribe the CLEOs' duties and powers . . . . Following the Act, the federal government imposes additional duties on the CLEOs beyond those prescribed by state statute - namely, to use federally-specified law enforcement methods (i.e., background checks . . . ) to execute and administer a federal policy to prevent the acquisition of handguns by disqualified individuals, a duty which is found in no state legislation. Simply put, the interim duties imposed by the Brady Act constitute an edict to CLEOs that substantively enlarges the duties and authority given the CLEOs by the States, without the States' consent or participation.
Id. at 458-59.
City of New York v. United States,179 F.3d 29 (2nd Cir. 1999) upheld a federal law forbidding States from prohibiting their employees from voluntarily informing INS about immigration status of aliens. However, Congress "may not directly shift to the states enforcement and administrative responsibilities allocated to the federal government by the Constitution." Id. at 34. The court added,179 F.3d at 34 n.4:
This prohibition stands even if state officials "consent" to such federal directives. See New York, 505 U.S. at 182 ("Where Congress exceeds its authority relative to the States, . . . the departure from the constitutional plan cannot be ratified by the 'consent' of state officials. . . . State officials thus cannot consent to the enlargement of the powers of Congress beyond those enumerated in the Constitution."). Again, "consent" and "choice" are not, by themselves, significant for purposes of Tenth Amendment analysis.
Thus, even if the CLEO-certificate requirement is optional, it still imposes unconstitutional injuries on the States and their agents thereof, including the plaintiff CLEOs here. The CLEO who executes such certificates will offend constituents who dislike firearms (even if lawfully received and possessed); the CLEO who refuses will offend constituents who thereby cannot get their applications 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 the State constitutions. Either policy exposes the CLEO to political injuries, lawsuits, and questions about suitability for office.
Summers argues that the above does not constitute injury and that the CLEO plaintiffs here have no standing. (Mem. 17-20). A similar argument was rejected in the Brady cases. Koog, 79 F. 3d at 460 (the Act "blurs accountability" and laid responsibilities "on the CLEO's political doorstep"), aff'g McGee v. United States, 863 F. Supp. 321, 325 (S.D. Miss. 1994) ("The voters could hold him [the sheriff] accountable for this. That is also a threat of actual injury."), Printz v. United States, 854 F. Supp. 1503, 1507 n.6 (D. Mont. 1994) ("that the Act forces the CLEO to bear some of any public disapproval of the Act is injurious to Plaintiff in his capacity as an elected official"), (26) rev'd on other grounds, Mack v. United States, 66 F.3d 1025 (9th Cir. 1995), rev'd Printz v. United States, supra (Supreme Court decision). Romero v. United States, 883 F. Supp. 1076, 1080 (W.D. La. 1995) explained:
The parties have stipulated to the harm actually caused and threatened by the Brady Act. The law creates a political dilemma for Sheriff Romero. "[The Brady Act] puts him in the middle of the conflict between those citizens of Iberia Parish who firmly believe that the provisions of the Brady Handgun Control Act unconstitutionally infringes [sic] upon their right to bear arms and those who feel it is a legitimate exercise of Congressional authority." This is precisely the type of injury which the Supreme Court has recognized that the Tenth Amendment and the constitutional structure are designed to avoid. Sheriff Romero has Hobson's Choice of either being a law enforcement officer not enforcing the law, or enforcing a law he and many of his constituents believe is unconstitutional.
All of the other plaintiffs have standing as well. If a regulation prevents persons from enjoying a right or privilege and if the regulation is unconstitutional, (27) the regulation is the proximate cause of their injury and such persons obviously have standing to litigate the issue.
In sum, 27 C.F.R. 179.63 and 179.85 compel State and local CLEOs to administer a federal regulatory program, in violation of constitutional principles of federalism and separation of powers. Even if the duties are optional, the regulations unconstitutionally impose unwanted political accountability on CLEOs. Accordingly, the CLEO-certificate requirement is void.
Count III alleges that, if the CLEO has discretion under 27 C.F.R. 179.63 and 179.85 not to execute the CLEO certificate, then said regulations unlawfully delegate to CLEOs a veto on and interfere with the duty of the Secretary to collect taxes. Congress passed the NFA under its power to lay and collect taxes delegated by U.S. Const. Art. I, 8. 26 U.S.C. 6301 provides that "[t]he Secretary shall collect the taxes imposed by the internal revenue laws." (28) Summers cites no statutory provision whatever authorizing him to delegate the power to veto the collection of federal taxes to CLEOs. Mem. 28-32.
The commentary to the final rule promulgating 27 C.F.R. 179.63 and 179.85 conceded that the CLEO certificate has no revenue purpose and delegates an absolute power to CLEOs to veto collection of the tax: "these officials [CLEOs] have the discretion to execute or not execute the required certifications." T.D. ATF-270, 53 F.R. 10480, 10488 (Mar. 31, 1988).
Summers argues that the Secretary's administration of 6301 is committed to agency discretion and is not reviewable. Mem. 28-30. Yet the Secretary's duties under 6301 are facially inconsistent with a regulation empowering a CLEO to veto the Secretary's processing of a federal tax form and the collection of tax revenues. Plaintiffs have standing to litigate this issue because the regulation is contrary to law and plaintiffs are injured by the regulation, in that it prevents them from making or transferring firearms which the NFA allows them to make or transfer.
Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476, 1477-78 (D.C. Cir. 1995) held that Indian tribes could not compel the Attorney General to file claims on their behalf in a water rights adjudication in state court. No treaty or law required the Attorney General to do so, and no attorney-client relation existed. Federal law requires the United States attorney to "represent them [Indians] in all suits at law and in equity." This is "one of those statutes 'drawn in such broad terms that in a given case there is no law to apply.'" Id. at 1481-82. In short, the law "offers no standards for judicial evaluation of the Attorney General's litigating decisions to pursue or not to pursue particular claims." Id. at 1482.
The situation here easily contrasts with that above. The NFA provides for a tax which plaintiffs want to pay, 6301 says that the Secretary shall collect taxes, and the regulation allows a CLEO to nullify the tax. The Internal Revenue Code sets standards for judicial evaluation of whether a regulation is in facial conflict with the statute. As Shoshone-Bannock put it, "an Indian tribe cannot force the government to take a specific action unless a treaty, statute or agreement imposes, expressly or by implication, that duty." Id. at 1482. Such statute exists here.
Summers suggests that plaintiffs do not have standing to sue the Secretary for failure to collect taxes they wish to pay, since such failure does not injure them. Mem. 31 n.27. The injury is clear: without paying the tax, they cannot register, and thus cannot transfer, receive, or make firearms. Plaintiffs do not complain about the Secretary's failure to collect taxes from other persons, as in Tax Analysts & Advocates v. Blumenthal, 566 F.2d 130 (D.C. Cir. 1977). As that court held, "the proper inquiry is whether the illegality does injury to an interest of the complaining party." Id. at 136. It does so here.
Summers argues that the Secretary is somehow authorized by law to delegate to State and local CLEOs the decision as to whether a taxable event occurs. Mem. 31-32. No provision of law is cited. He suggests that States may ban gambling despite federal requirements that taxes be paid on gambling income. Id. n.32. The analogy breaks down. First, the NFA provides that applications shall be denied if a firearm would put the transferee in violation of law; the CLEO-certificate requirement allows a veto of the transfer in States where the transferee would not be in violation of law. Second, cognizant of the fact that the Internal Revenue Code is a tax statute, the law allows even illegal gamblers to pay the tax. By no pretense could the IRS promulgate a regulation requiring gamblers to disclose their federal tax forms to State and local CLEOs before submitting the forms for processing by the IRS. (29)
In short, the CLEO-certificate requirement is void because it empowers certain State and local officials to prevent a taxpayer from paying a federal tax (and the related function of registering a firearm) and to prevent the Secretary from fulfilling his duty under 26 U.S.C. 6301 to "collect the taxes imposed by the internal revenue laws."
VI. THE REGULATION IS ARBITRARY, CAPRICIOUS, AND CONTRARY TO LAW
Count IV alleges that the CLEO-certificate requirement is arbitrary, capricious, an abuse of discretion, and contrary to law. It has no statutory basis and defeats the aims of the statute. (30) Summers' search for a statutory basis for the regulation is unavailing. Mem. 32-45.
Section 5812(a) provides that a firearm may be transferred after the transferor has filed the application with the Secretary; the tax is paid; the transferee (including fingerprints and photograph), the transferor, and the firearm are identified in the application; and 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." Section 5822 includes similar language for the making of a firearm.
27 C.F.R. 179.85 requires a certificate of a local or State CLEO which states that the official is satisfied that the fingerprints and photograph are those of the applicant, 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 the official has no information "that the transferee will use the firearm for other than lawful purposes." See also 179.63 (same requirements for making of firearm).
Congress delegated the administration of the Internal Revenue Code, including the National Firearms Act, to the Secretary, not to State and local officials. The regulation arbitrarily delegates to the CLEO an absolute veto on a person's ability to register and pay the tax on a firearm, even where the person would be in full compliance with federal, State, and local law. See Hochstein v. United States, 900 F.2d 543, 549 (2nd Cir. 1990) ("New York simply could not criminalize the collection and payment of federal withholding taxes").
Summers argues that the Secretary may deny applications even without statutory reasons and has no duty to register firearms. Mem. 37. However, 5841 provides that (a) "the Secretary shall maintain a central registry of all firearms," (b) each maker "shall register each firearm he . . . makes" and "each firearm transferred shall be registered to the transferee by the transferor," and (c) each such person "shall . . . obtain authorization in such manner as required by this chapter or regulations issued thereunder," and "such authorization shall effect the registration of the firearm required by this section."
Where the statutory requirements are met, the Secretary has a duty to authorize the transfer of firearms and to register them. (31) F.J. Vollmer Co., Inc. v. Higgins, 23 F.3d 448 (D.C. Cir. 1994), later proceeding, F.J. Vollmer Co., Inc. v. Magaw, 102 F.3d 591 (D.C. Cir. 1996). Vollmer I held that, in denying an NFA transfer application, "the Bureau made no findings of fact and offered no reasoned explanation on the subject. This alone would warrant setting aside the agency's action and remanding the case." 23 F.3d at 451. Vollmer II awarded EAJA fees based on the holding that "the Bureau's action was inconsistent with the governing statute and would have produced an 'incredible' result." 102 F.3d at 593. The court made clear that BATF had a statutory duty to approve transfer applications to applicants who met the legal standards. Id. at 599 ("because Vollmer successfully challenged the denial of that application, it was able to sell the weapons"). (32)
Summers argues for deference to the longstanding interpretation of the statute. Mem. 38. However, as noted above, the regulation as it existed between 1934 and 1985 allowed federal officials, including U.S. Attorneys and U.S. Marshals, not just State and local CLEOs, to complete the certificate. Further, in the words of Vollmer II: "Although . . . the Bureau had followed its interpretation of the Firearms Act since at least the early 1980s, we do not see how merely applying an unreasonable statutory interpretation for several years can transform it into a reasonable interpretation." 102 F.3d at 598.
Summers claims that the regulation was upheld as valid "by the only court to reach the issue." Mem. 39. However, that district court decision was vacated by Steele, 755 F.2d at 1415. Moreover, the Fifth Circuit held the regulation to be invalid in Weyer, 429 F.2d at 76-77, and that is the only case to decide the issue. See Freed, 401 U.S. at 605 (old regulation noted but not an issue).
Summers argues that the regulation is authorized by 26 U.S.C. 7805(a), which provides that "the Secretary or his delegate shall prescribe all needful rules and regulations for the enforcement of this title . . . ." (33) Mem. 32. However, 7805(a) relates to the "enforcement" of Title 26, whereas 5812(a) and 5822 are administrative provisions.. Section 7801(a) plainly distinguishes between "administration" and "enforcement": "Except as otherwise expressly provided by law, the administration and enforcement of this title shall be performed by or under the supervision of the Secretary of the Treasury."
Contrary to Summers' claim to deference (Mem. 32-33), United States v. Vogel Fertilizer Co., 455 U.S. 16, 24 (1982) explains about 7805(a):
The framework for analysis is refined by consideration of the source of the authority to promulgate the regulation at issue. The Commissioner has promulgated Treas. Reg. Section 1.1563.1(a)(3) interpreting this statute only under his general authority to "prescribe all needful rules and regulations." 26 U.S.C. Section 7805(a). Accordingly, "we owe the interpretation less deference than a regulation issued under a specific grant of authority to define a statutory term or prescribe a method of executing a statutory provision."
Vogel Fertilizer is analogous here in that it involved a Treasury Regulation that "purports to do no more than add a clarifying gloss on a term . . . that has already been defined with considerable specificity by Congress. The commissioner's authority is consequently more circumscribed than would be the case if Congress had used a term 'so general . . . as to render an interpretive regulation appropriate.'" Id.
Finally, "the reviewing court [must] reasonably be able to conclude that the grant of authority contemplates the regulations issued." Chrysler Corp. v. Brown, 441 U.S. 281, 308 (1979). "Where, as in this case, the provisions of the act are unambiguous, and its directions specific, there is no power to amend it by regulation." Koshland v. Helvering, 298 U.S. 441, 447 (1936). H.Wetter Manufacturing Co. v. United States, 458 F.2d 1033, 1035 (6th Cir. 1972) explains:
Because Congress has delegated to the Secretary of the Treasury only the power to issue regulations for the enforcement of the revenue laws, and because this power is limited to carrying into effect the will of the Congress as expressed by the statutes, the express words of the Code must control when they conflict with a regulation. The Secretary may not broaden or narrow the specific provisions of the revenue laws.
Nothing in 5812(a) authorizes the regulation at issue. (34) Instead, it provides that a firearm shall not be transferred unless (1) the transferor has filed an application "on the application form prescribed by the Secretary," (2) the tax is paid "as evidenced by the proper stamp affixed to the original application form," (3) the transferee is identified in the form "in such manner as the Secretary may by regulations prescribe," including fingerprints and photograph, (4) the transferor "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." Section 5812(a) then concludes: "Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law."
Unlike the preceding criteria, the final sentence includes no authority to prescribe regulations, and simply requires denial of the application if the firearm would "place the transferee in violation of law." (35) That final sentence does not authorize the CLEO-certificate requirement. The same situation exists in 5822. The explicit delegation of authority to promulgate regulations in the first sentence and the withholding of that authority in the second sentence evinces a legislative intent that the latter, which are clear on their face, be administered without any regulatory gloss. (36)
In sum, the NFA requires the Secretary to approve applications to make or transfer a firearm to an applicant who meets the requirements established by law. The Secretary has no authority to provide by regulation that the applicant must obtain a certificate from a State or local CLEO.
It is unreasonable to require that a State or local official determine that the fingerprints and photograph are those of the applicant. Such officials have no legal duty to make such a determination. The NFA imposes these duties squarely on the Secretary.
Contrary to Summers (Mem. 35-36), no rational relation exists between the regulation and the statutory requirement that the fingerprints and photograph be verified, because no CLEO is required to carry out this verification. Summers' argument that State and local CLEOs are somehow "better situated" to verify one's identity than personnel at the local BATF office is rather disingenuous in today's highly urbanized society. He fails to explain why a local CLEO can examine fingerprints and photographs better than a local BATF agent.
It is also the responsibility of the Secretary to make any determinations necessary to administer the mandate of 5812(a) that "applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law." The same situation exists regarding 5822. The Secretary has no authority to foist off on State and local officials this determination as applied to State and local law.
Summers argues that local CLEOs are best equipped to conduct background checks, incorrectly assuming the feudalistic notion that persons live in the same locality and State all their lives. To determine whether a current resident is a convicted felon, for instance, a CLEO must be able to interpret the laws of any one of the 50 States where that person could have a conviction. (37) "Such a determination of the law is not always easily made." Printz, 854 F. Supp. at 1517 & n.28. Whether civil rights have been restored raises difficult choice-of-law problems and requires expertise in the law of the State where the conviction arose. E.g., United States v. Oman, 91 F.2d 1320, 1322 (9th Cir. 1996) (Arizona court must determine whether civil rights restored under Massachusetts law); United States v. Indelicato, 97 F.3d 627, 630-31 (1st Cir. 1996) (citing cases). (38)
Moreover, the statute is silent on any requirement that an official has no information "that the transferee [or maker] will use the firearm for other than lawful purposes." The only basis for denial of a transfer application in 5812 is that the transfer "would place the transferee in violation of law." Summers argues that "there is no language that would indicate that this provision is the exclusive basis for denying transfer applications" and that the Secretary may simply invent "additional criteria." (Mem. 37) Summers imagines all kinds of reasons to deny an application for "public safety reasons" he devises even where the applicant may lawfully possess the firearm. (Mem. 38) Yet no legal principle allows the Secretary to arrogate such arbitrary powers to himself and to flaunt the rule of law. In any event, the State or local CLEO has no duty to make the determination at issue, so no rational relation exists between the regulation and deciding future dangerousness.
The complaint alleges that BATF regularly advises CLEOs throughout the United States that whether they should sign ATF Forms 1 and 4 is entirely discretionary even if the transfer or making of the firearm is lawful under federal, State, and local law. The requirement of the CLEO certificate reflects a policy decision 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 on such official's personal opinions, or the CLEO has no authority to execute a certificate. Contrary to Summers (Mem. 34-35), no rational relation exists between the regulation and the determination of whether a person may lawfully receive a firearm. For a rational relation to exist, the regulation would have to require that someone actually determine whether the person may lawfully receive the firearm.
The Secretary 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 receive or possess a firearm. 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 Check System (hereafter "NICS"), which was created pursuant to 102(b) and 103 of the Brady Handgun Violence Prevention Act, Pub. L. 103-159, 107 Stat. 1536 (1993) and which is administered as set forth in 28 C.F.R. Part 25. Section 103(b) of that 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 103(a) and (c), State criminal records systems are provided to NICS.
The NICS is available to the Secretary to conduct background checks on persons who apply to transfer or make a firearm under the NFA. 28 C.F.R. 25.6(j) 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 firearm-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).
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 and the Immigration and Naturalization Service, also maintain enormous criminal and investigative files.
The Department of the Treasury maintains an extensive criminal records data base known as the Treasury Enforcement Computer System ("TECS"), and participates in the federal National Crime Information Center ("NCIC") records database and other criminal records databases. Components of the Department, such as the Customs Service, the Secret Service, and BATF itself, also maintain a large number of criminal records and investigative files.
The Secretary is otherwise well acquainted with State laws and local ordinances on firearms. The Secretary is required by law to publish in the Federal Register and to provide to all federal firearms licensees "a complication of the State laws and published ordinances," which must be revised annually, pertinent to compliance with the Gun Control Act, chapter 44 of Title 18, United States Code. Section 110(a), P.L. 99-308, 100 Stat. 449, 460-61 (1986); 18 U.S.C. 921(a)(19). Pursuant to this obligation, the BATF publishes ATF Publication 5300.5, State Laws and Published Ordinances -- Firearms. This publication includes information on which jurisdictions allow possession of NFA firearms and which do not, refuting Summers argument (Mem. 36) that State and local CLEOs may be more knowledgeable about State and local law.
Summers responds that the issue is not whether federal authorities have access to all the information they need but whether it is reasonable for the agency to have State and local CLEOs obtain that information. Mem. 42. Yet assigning this task to State and local CLEOs cannot be reasonable unless they actually have a duty to carry out the task, and they do not. Summers' claim that the CLEO certificate "provides ATF with vital information regarding an individual requesting to make or receive an NFA firearm" (Mem. 44) cannot be true of the many CLEOs who refuse to execute certificates. Since such CLEOs provide no information whatever to BATF, the regulation cannot have a reasonable relation to the need to obtain information about the lawfulness of a transfer.
When it chooses to do so, the BATF itself ignores the requirement of a CLEO certificate. As alleged in the complaint, in its letter dated February 12, 1999, BATF decided to waive the requirement in the matter of the plaintiff Kadison's firearm. In addition, in 1994 BATF reclassified thousands of shotguns into destructive devices, which are "firearms" under the National Firearms Act. 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. Further, in the past BATF has waived the certificate that the CLEO has no information that the applicant will use the firearm "for other than lawful purposes." Summers makes no response to these allegations.
The complaint alleges that BATF is well aware that many CLEOs impose arbitrary conditions on execution of the 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 ATF Form 4 certificates for them unless they permit police "inspections" of their homes. Plaintiffs are unwilling to waive their constitutional right to be secure in their houses, papers and effects as a condition of applying for the transfer of a firearm.
BATF knows of the policy of the Arlington, Virginia, Chief of Police not to sign Form 4 CLEO certificates unless the applicant permits a home inspection, and also knows 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 CLEO certificate, BATF is a willing participant in the illegal and unconstitutional requirement of a search of the applicant's home by the Arlington Police Department.
The Secretary may not require, directly or indirectly (through the Arlington sheriff) that a person waive a constitutional right-here, the Fourth Amendment right to privacy in the home-in order to exercise a right or privilege allowed by law. "We are reluctant to disparage the privacy of the home, which is accorded special consideration in our Constitution, laws, and traditions." Department of Defense v. FLRA, 510 U.S. 487, 501-02 (1994). While the government may have no duty to furnish certain benefits, when it does decide to provide them, it may not condition the provision on a waiver of protected rights. Perry v. Sindermann, 408 U.S. 593, 597 (1972); Elrod v. Burns, 427 U.S. 347, 361 (1976) ("the denial of a public benefit may not be used by the government for the purpose of creating an incentive enabling it to achieve that which it may not command directly"); United States v. Scrivner, 167 F.3d 525, 532-33 (9th Cir. 1999) (government may not force one to choose between the loss of property and Fifth Amendment right to remain silent).
Summers replies that State and local CLEOs may impose whatever requirements they wish without any limits. Instead of citing legal authority for the Secretary authorizing such anarchy in the administration of the Internal Revenue Code, he falls back on his "extremely dangerous, gangster-type weapons" argument. Mem. 43-44. Congress set standards in the NFA for the transfer and making of selected firearms. It did not empower to the Secretary to grant carte blanch to every CLEO in the United States to decide how or even if the NFA would be administered.
BATF is also well aware that many CLEOs arbitrarily refuse to execute the certificate for anyone at all or for persons who are not 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 certifications as a matter of policy when, in fact, he does sign for friends and subordinates. BATF is a willing participant in these violations of due process and equal protection of law.
Summers argues that State and local CLEOs should be able to veto an NFA application for supposed "public safety" reasons in their communities. Mem. 41. He even argues that inability of an applicant to obtain a CLEO certificate "is a proper basis for the Secretary to deny an application based on public policy concerns" because the applicant must therefore be a criminal or a threat to the community. Mem. 42. Summers simply disregards the fact that the CLEO may not have authority under State law to help administer the Internal Revenue Code or may oppose firearm ownership even where it is in compliance with State and local law.
In sum, to the extent they impose the CLEO certificate, 27 C.F.R. 179.63 and 179.85 are arbitrary, capricious, an abuse of discretion, and contrary to law.
Defendants' motion to dismiss the complaint pursuant to F.R.Civ.P. 12(b)(1) and (6) should be denied.
KENT A. LOMONT, et al., Plaintiffs
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
1. Summers raises the issue of exhaustion of remedies by Lomont's would-be customers. Mem. 13-14. But they are not plaintiffs here. Lomont has no other available remedy to exhaust in order to contest the defendants' illegal interference with his right to engage in interstate commerce.
2. Contrary to the defendants' repeated, transparent efforts to inflame the issues here by coloring NFA firearms as "highly dangerous" and "gangster weapons," most such firearms are possessed by governmental agencies. Moreover, many such firearms are so innocuous as to be laughable if viewed as "gangster weapons." NFA firearms include a .22 caliber, single-shot, bolt-action rifle with 15 inch barrel for use by youths; flash-bang grenades (large firecrackers) routinely used by the police and military on each other in training exercises; and antique relics such as the single shot Marble "Game Getter" and H&R "Handy Gun" used in earlier times as bicycle guns for taking game. Moreover, this case relates solely to registered firearms; gangsters do not commonly register their guns. The overwhelming weapon of choice by gangsters is the handgun, an item not regulated by the NFA. There is only one reported instance of the use of a registered NFA firearm in a crime of violence since enactment of the NFA in 1934. See Searcy v. City of Dayton, 38 F.3d 282 (6th Cir. 1994).
3. The Catch 22 is even more hopeless when viewed against Whalen's allegation that CLEOs in his jurisdiction have been "encouraged" by BATF not to sign certificates. Complaint, para. 17(E).
4. Illustrative of the arbitrary and capricious position of the defendants here is that they have previously approved the transfer of five separate NFA firearms to plaintiff O'Brien on five separate occasions. They have also previously approved the transfer of an NFA firearm to plaintiff Kadison without a CLEO certificate, having satisfied themselves that he met the statutory criteria to possess such a firearm. How many times must they jump through the same hoops?
5. Sheriff McClure succeeded Sheriff Samuel Frank in office as the Sheriff of Orange County, Vermont, after the commencement of this action and desires to continue as a plaintiff in his official capacity. A notice of that fact and a proposed order under F.R.Civ.P. 25(d)(1) have been filed.
6. However, "the interest alleged to have been injured may reflect aesthetic, conservational, and recreational as well as economic values." Sierra Club v. Morton, 405 U.S. 727, 738 (1972).
7. "An 'injury in fact' need not be substantial to support federal court jurisdiction over this challenge to agency action; an identifiable trifle will suffice." Public Citizen v. Lockheed Aircraft Corp., 565 F.2d 708, 714 (D.C. Cir. 1977), citing United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 689 n.14 (1973).
8. All section numbers herein refer to Title 26 unless otherwise noted.
9. 10. 10 See also National Firearms Act: Hearings Before the House Committee on Ways and Means,
73rd Cong., 2d Sess., 6 (1934) (testimony of Attorney General Homer Cummings). 11. 12. Sonzinsky has stood the test of time. Fernandez v. Wiener, 326 U.S. 340, 362 (1945) (the
courts may not "inquire into the unexpressed purposes or motives which may have moved Congress
to exercise a power"); United States v. Kahriger, 345 U.S. 22, 25-26 (1953) (for the same reason,
a tax on gamblers does not infringe on the police power of the states); Grosso v. United States, 390
U.S. 62, 79-80 (1967) (Stewart, J., concurring) (gambling tax); Dep't of Revenue of Montana v.
Kurth Ranch, 511 U.S. 767, 781 (1994) (invalidating punitive tax on drug law violators).
13. 13 E.g., Federal Firearms Legislation: Hearings Before the Subcommittee to Investigate Juvenile
Delinquency, Judiciary Committee, U.S. Senate, 90th Cong., 2d Sess., 119 (1968) (statement of
Sheldon Cohen, Commissioner of Internal Revenue Service).
14. Haynes, supra; Grosso, supra; Marchetti v. United States, 390 U.S. 39 (1968) (wagering
registration and excise tax statute).
15. United States v. Giannini, 455 F.2d 147, 148 (9th Cir. 1972) rejected the argument that the
NFA exceeds Congress power to regulate interstate commerce. "The statute says nothing about
interstate commerce. The statute is a part of a comprehensive scheme to levy and collect taxes upon
activities and transactions involving various kinds of firearms." Id. The court would not "ascribe
to Congress an attempt, under the guise of taxation, to exercise another power denied by the Federal
Constitution" and "we will not ascribe to Congress an intent to exercise its power under the
commerce clause when it has invoked the taxing power in enacting the legislation." Id.
16. See Ryan v. Bureau of Alcohol, Tobacco and Firearms, 715 F.2d 644, 646-647 (D.C. Cir. 1983)
(opinion by then Circuit Judge Scalia) (alcohol form giving notice of intent to manufacture liquor
bottles is "return information" protected from disclosure).
17. United States v. Hunter, 863 F. Supp. 462, 476 n.22 (E.D. Mich. 1994) takes notice of the
following BATF opinions: "Chief Counsel Op. 22541 (refusing to give the registration status of a
firearm registered with ATF because the registration was a 'return' protected by 6103); Chief
Counsel Op. 22889 (holding, inter alia, that transferee's identity on transfer forms was tax return
information under 6103)."
18. Cited as authority in 19. The ATF Order further states that, in referring cases to State or local authorities, "no reference
is made in the case report as to the registration status of the firearm or to a particular NFA violation;
the only reference in the report should be State or local law violated." Id. Further, "the State and
local authorities will be advised that the special agent is precluded by law and regulation from
revealing the registration status of the firearm." Id. Finally, "under no circumstances should a case
be referred for State prosecution in a firearms possession case where the special agent has learned
the subject is in possession of the NFA firearm through the NFRTR . . . ." Id.
20. Moreover, the transfer form requires disclosure to the CLEO of the identities of both the
transferor and the transferee. Assuming that the transferee discloses the from to the CLEO in hopes
of obtaining the CLEO's endorsement, it cannot be said that the transferor has consented to the
21. "We must be ever mindful that when Congress enacts a statute designed to limit government
intrusion in the private affairs of its citizens, the statutory provisions must be followed
scrupulously." United States v. Bacheler, 611 F.2d 443, 447 (3d Cir. 1979) (construing 6103(a)).
See United States v. Lavin, 604 F.Supp. 350, 356 (E.D.Pa. 1985) ( 6103 "must be strictly
construed" against disclosure of taxpayer information to the FBI); United States v. Chemical Bank,
593 F.2d 451, 456-7 (2nd Cir. 1979) (unlawful for Secretary to disclose information to Task Force).
22. "The information the American citizen is compelled by our tax laws to disclose to the Internal
Revenue Service was entitled to essentially the same degree of privacy as those private papers
maintained in the home." House Report No. 94-1380, in 1976 U.S. Code Cong. & Admin. News
23. See Department of Defense v. FLRA, 510 U.S. 487, 501-02 (1994) (persons protected by
privacy provisions "have some nontrivial privacy interest in nondisclosure" of their addresses, which
"can lessen the chance of such unwanted contacts"); Alexander v. FBI, 971 F. Supp. 603, 609 (D.
D.C. 1997) (FBI "files, although not in plaintiffs' direct control, were still a part of their private and
24. Of course, that would be a criminal violation which plaintiffs would not commit. Nonetheless,
the regulations at issue encourage such violation.
25. As in Printz, "both CLEOs before us here assert that they are prohibited from taking on these
federal responsibilities under state law. That assertion is clearly correct with regard to Montana law,
which expressly enjoins any 'county . . . or other local government unit' from 'prohibit[ing] . . . or
regulat[ing] the purchase, sale or other transfer (including delay in purchase, sale, or other transfer),
ownership, [or] possession . . . of any . . . handgun,' . . . ." Id. at 934 n.18.
26. "CLEOs make up the visible front line of administrators of the Act. Thus, they could . . . bear
the brunt of its unpopularity. CLEOs will also bear the brunt of any incorrect determinations they
make." Id. at 1514-15.
27. Plaintiffs' claim that the regulation violates principles of federalism and division of power is
not limited to the Tenth Amendment. Summers misquotes the Tenth Amendment as speaking to
"rights reserved to the States respectively." Mem. 19 n.18. To the contrary, the Tenth Amendment
refers to the powers "reserved to the States respectively, or to the people." U.S. Const. Amend. X.
28. "The term 'Secretary' means the Secretary of the Treasury or his delegate." 26 U.S.C.
29. 28 United States v. Haydel, 486 F.Supp. 109, 110-11 (M.D.La. 1980) (government may not
"compel the bookmaker to prepare and maintain records showing his gross wages under penalty of
prosecution for failure to maintain them and then use the wagering records to convict him of illegal
gambling"), aff'd. 649 F.2d 1152 (5th Cir. 1981), cert. denied 455 U.S. 1022 (1982)
9."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 (Oct. 15, 1985).
10. 10 See also National Firearms Act: Hearings Before the House Committee on Ways and Means, 73rd Cong., 2d Sess., 6 (1934) (testimony of Attorney General Homer Cummings).Two provisions of the act, which survive today as 26 U.S.C. 5861(j) and (k), are based on the commerce power.
11.The Constitution "withhold[s] from Congress a plenary police power that would authorize enactment of every type of legislation." Id. at 1633. "The States possess primary authority for defining and enforcing the criminal law. . . . Our national government is one of delegated powers alone. Under our federal system the administration of criminal justice rests with the States . . . ." Id. at 1631 n.3.
12. Sonzinsky has stood the test of time. Fernandez v. Wiener, 326 U.S. 340, 362 (1945) (the courts may not "inquire into the unexpressed purposes or motives which may have moved Congress to exercise a power"); United States v. Kahriger, 345 U.S. 22, 25-26 (1953) (for the same reason, a tax on gamblers does not infringe on the police power of the states); Grosso v. United States, 390 U.S. 62, 79-80 (1967) (Stewart, J., concurring) (gambling tax); Dep't of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 781 (1994) (invalidating punitive tax on drug law violators).
13. 13 E.g., Federal Firearms Legislation: Hearings Before the Subcommittee to Investigate Juvenile Delinquency, Judiciary Committee, U.S. Senate, 90th Cong., 2d Sess., 119 (1968) (statement of Sheldon Cohen, Commissioner of Internal Revenue Service).
14. Haynes, supra; Grosso, supra; Marchetti v. United States, 390 U.S. 39 (1968) (wagering registration and excise tax statute).
15. United States v. Giannini, 455 F.2d 147, 148 (9th Cir. 1972) rejected the argument that the NFA exceeds Congress power to regulate interstate commerce. "The statute says nothing about interstate commerce. The statute is a part of a comprehensive scheme to levy and collect taxes upon activities and transactions involving various kinds of firearms." Id. The court would not "ascribe to Congress an attempt, under the guise of taxation, to exercise another power denied by the Federal Constitution" and "we will not ascribe to Congress an intent to exercise its power under the commerce clause when it has invoked the taxing power in enacting the legislation." Id.
16. See Ryan v. Bureau of Alcohol, Tobacco and Firearms, 715 F.2d 644, 646-647 (D.C. Cir. 1983) (opinion by then Circuit Judge Scalia) (alcohol form giving notice of intent to manufacture liquor bottles is "return information" protected from disclosure).
17. United States v. Hunter, 863 F. Supp. 462, 476 n.22 (E.D. Mich. 1994) takes notice of the following BATF opinions: "Chief Counsel Op. 22541 (refusing to give the registration status of a firearm registered with ATF because the registration was a 'return' protected by 6103); Chief Counsel Op. 22889 (holding, inter alia, that transferee's identity on transfer forms was tax return information under 6103)."
18. Cited as authority inF.J. Vollmer Co., Inc. v. Higgins, 23 F.3d 448, 451 (D.C. Cir. 1994).
19. The ATF Order further states that, in referring cases to State or local authorities, "no reference is made in the case report as to the registration status of the firearm or to a particular NFA violation; the only reference in the report should be State or local law violated." Id. Further, "the State and local authorities will be advised that the special agent is precluded by law and regulation from revealing the registration status of the firearm." Id. Finally, "under no circumstances should a case be referred for State prosecution in a firearms possession case where the special agent has learned the subject is in possession of the NFA firearm through the NFRTR . . . ." Id.
20. Moreover, the transfer form requires disclosure to the CLEO of the identities of both the transferor and the transferee. Assuming that the transferee discloses the from to the CLEO in hopes of obtaining the CLEO's endorsement, it cannot be said that the transferor has consented to the disclosure.
21. "We must be ever mindful that when Congress enacts a statute designed to limit government intrusion in the private affairs of its citizens, the statutory provisions must be followed scrupulously." United States v. Bacheler, 611 F.2d 443, 447 (3d Cir. 1979) (construing 6103(a)). See United States v. Lavin, 604 F.Supp. 350, 356 (E.D.Pa. 1985) ( 6103 "must be strictly construed" against disclosure of taxpayer information to the FBI); United States v. Chemical Bank, 593 F.2d 451, 456-7 (2nd Cir. 1979) (unlawful for Secretary to disclose information to Task Force).
22. "The information the American citizen is compelled by our tax laws to disclose to the Internal Revenue Service was entitled to essentially the same degree of privacy as those private papers maintained in the home." House Report No. 94-1380, in 1976 U.S. Code Cong. & Admin. News 3356, 3757.
23. See Department of Defense v. FLRA, 510 U.S. 487, 501-02 (1994) (persons protected by privacy provisions "have some nontrivial privacy interest in nondisclosure" of their addresses, which "can lessen the chance of such unwanted contacts"); Alexander v. FBI, 971 F. Supp. 603, 609 (D. D.C. 1997) (FBI "files, although not in plaintiffs' direct control, were still a part of their private and secret concerns").
24. Of course, that would be a criminal violation which plaintiffs would not commit. Nonetheless, the regulations at issue encourage such violation.
25. As in Printz, "both CLEOs before us here assert that they are prohibited from taking on these federal responsibilities under state law. That assertion is clearly correct with regard to Montana law, which expressly enjoins any 'county . . . or other local government unit' from 'prohibit[ing] . . . or regulat[ing] the purchase, sale or other transfer (including delay in purchase, sale, or other transfer), ownership, [or] possession . . . of any . . . handgun,' . . . ." Id. at 934 n.18.
26. "CLEOs make up the visible front line of administrators of the Act. Thus, they could . . . bear the brunt of its unpopularity. CLEOs will also bear the brunt of any incorrect determinations they make." Id. at 1514-15.
27. Plaintiffs' claim that the regulation violates principles of federalism and division of power is not limited to the Tenth Amendment. Summers misquotes the Tenth Amendment as speaking to "rights reserved to the States respectively." Mem. 19 n.18. To the contrary, the Tenth Amendment refers to the powers "reserved to the States respectively, or to the people." U.S. Const. Amend. X.
28. "The term 'Secretary' means the Secretary of the Treasury or his delegate." 26 U.S.C. 7701(a)(11)(B).
29. 28 United States v. Haydel, 486 F.Supp. 109, 110-11 (M.D.La. 1980) (government may not "compel the bookmaker to prepare and maintain records showing his gross wages under penalty of prosecution for failure to maintain them and then use the wagering records to convict him of illegal gambling"), aff'd. 649 F.2d 1152 (5th Cir. 1981), cert. denied 455 U.S. 1022 (1982). As United States v. Appoloney, 761 F.2d 520, 523 (9th), cert. denied 474 U.S. 949 (1985), noted:
The Court, however, was principally concerned with the sharing of information garnered on
such returns with other law enforcement agencies. . . . Congress subsequently enacted a
statute to resolve the concerns raised by [Grosso and Marchetti]. . . . Under new 26 U.S.C.
4424, the IRS may not disclose information on such a return to other law enforcement
officials, subject to criminal sanctions under 26 U.S.C. 7213(a)(1).
30. Count IV of the complaint realleges and incorporates by reference the preceding claims, which
are thereby additional reasons as to why the regulations are arbitrary, capricious, and contrary to
31. See United States v. Thompson/Center Arms Co., 504 U.S. 505, 507 (1992) (noting 5841
requirement that firearms be registered); Weyer, 429 F.2d at 76 ("this provision in the firearms act
does not authorize the Secretary to reject an applicant once identity is determined").
32. See 33. Summers inadvertently quotes 7805(a) as authorizing the Secretary "to proscribe all needful
rules and regulations." Mem. 5 n.6.
34. Summers eschews a careful analysis of the statute and substitutes policy arguments about "the
public welfare and safety" and "especially dangerous weapons." E.g., Mem. 33. Sonzinsky, supra,
which held that the NFA is taxing statute and has no extra regulatory effect outside the taxing
power, forecloses such policy arguments as somehow granting the Secretary powers not found in
35. The words "as the Secretary may by regulations prescribe" or a variation thereof are also
found in Sections 5842, 5844, 5853, and 5854.
36. The pre-1968 version of the NFA included the general authority: "The Secretary or his delegate
shall prescribe such regulation as may be necessary for carrying the provisions of this chapter into
effect." Section 5847, Internal Revenue Code of 1954. The 1968 revision of the NFA repealed this
provision and enacted the more specific grants of power. Title II, P.L. 90-618, 82 Stat. 1216 (1968).
37. 38. Summers' assumption that local police know everyone also appears in his argument that
federal databases would not reflect whether a transferee was the subject of a State or local criminal
investigation. Mem. 43 n.39. State or local databases might not have this information either, nor
would they have information on subjects of federal investigations.
30. Count IV of the complaint realleges and incorporates by reference the preceding claims, which are thereby additional reasons as to why the regulations are arbitrary, capricious, and contrary to law.
31. See United States v. Thompson/Center Arms Co., 504 U.S. 505, 507 (1992) (noting 5841 requirement that firearms be registered); Weyer, 429 F.2d at 76 ("this provision in the firearms act does not authorize the Secretary to reject an applicant once identity is determined").
32. SeeDavis v. Erdmann, 607 F.2d 917, 920 (10th Cir. 1979) ("denial of the permit appears to be a classic example of agency 'nitpicking,' and an arbitrary and capricious action"; BATF required to approve application to import firearm).
33. Summers inadvertently quotes 7805(a) as authorizing the Secretary "to proscribe all needful rules and regulations." Mem. 5 n.6.
34. Summers eschews a careful analysis of the statute and substitutes policy arguments about "the public welfare and safety" and "especially dangerous weapons." E.g., Mem. 33. Sonzinsky, supra, which held that the NFA is taxing statute and has no extra regulatory effect outside the taxing power, forecloses such policy arguments as somehow granting the Secretary powers not found in the statute.
35. The words "as the Secretary may by regulations prescribe" or a variation thereof are also found in Sections 5842, 5844, 5853, and 5854.
36. The pre-1968 version of the NFA included the general authority: "The Secretary or his delegate shall prescribe such regulation as may be necessary for carrying the provisions of this chapter into effect." Section 5847, Internal Revenue Code of 1954. The 1968 revision of the NFA repealed this provision and enacted the more specific grants of power. Title II, P.L. 90-618, 82 Stat. 1216 (1968).
37.See 18 U.S.C. 921(a)(20) ("What constitutes a conviction of such a crime shall be determined in accordance with the law of the jurisdiction in which the proceedings were held. Any conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored shall not be considered a conviction for purposes of this chapter").
38. Summers' assumption that local police know everyone also appears in his argument that federal databases would not reflect whether a transferee was the subject of a State or local criminal investigation. Mem. 43 n.39. State or local databases might not have this information either, nor would they have information on subjects of federal investigations.