Cite as Steele v. NFA Branch, Case No. 82-2013 (December 6, 1985), aff'd w/o opinion, No. 86-5004 (11th Cir. December 17, 1986) UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA EUGENE STEELE, Plaintiff, vs. NATIONAL FIREARMS ACT BRANCH, et al., Defendants. CASE NO.:82-2013-Civ-ARONOVITZ OPINION ON EVIDENTIARY HEARING AND ORDER ON REMAND In September 1982, Eugene Steele, a federally licensed firearms dealer, brought an action in this Court seeking declaratory relief against various defendants, alleging that their actions impermissibly interfered with his ability to sell his inventory of certain regulated weapons. In his complaint, the plaintiff challenged the validity of a regulation promulgated by the Director of the Bureau of Alcohol, Tobacco and Firearms, 27 C.F.R. 179.85, as an unauthorized extension of the enabling statute, 26 U.S.C. section 5812. 26 U.S.C. section 5812 imposes certain restrictions upon the sale [footnote 1] of certain specified firearms, and requires, inter alia, that no transfer of such firearms be made unless application therefor, executed by both the transferor and transferee, is approved by the Secretary of the Treasury or those authorized by him. The challenged regulation which was issued pursuant to this statute, 27 C.F.R. 179.85, imposes an additional requirement before approval of a firearms transfer can be obtained under the statutory procedure. In addition to supplying a photograph of the transferee, his or her fingerprints, and other biographical information on both the transferor and transferee, the regulation imposes the following additional requirement: The Form 4539 must be supported by a certificate of the local chief of police, sheriff of the county, U.S. attorney, U.S. marshal or such other person whose certificate may in a particular case be acceptable to the Director certifying that he is satisfied that the fingerprints and photograph appearing on the Form 4539 are those of the transferee and that he 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. 27 C.F.R. 179.85 Plaintiff claims that the Director, Bureau of Alcohol, Tobacco, and Firearms exceeded his authority under 26 U.S.C. section 5845(a) by imposing this additional requirement upon the statutory registration scheme, thereby rendering this regulation invalid. In his second claim, Steele sought a declaratory judgment that three law enforcement officials, U.S. Marshal Carlos C. Cruz, U.S. Attorney Stanley Marcus, and Dade County State Attorney Janet Reno, acted in an arbitrary and capricious manner by their refusals to provide the plaintiff with certification of his firearms transfer applications, thereby depriving him of the means of obtaining a livelihood. On March 28, 1983, this Court entered its order dismissing the plaintiff's complaint. The Court held that the challenged regulation was reasonably related to the purposes of the enabling legislation and that mandamus would not lie against the defendants for their refusal to certify the plaintiff's proposed firearms transfers, as such a decision is a discretionary function of the defendants' respective offices. The plaintiff appealed this Court's Order of Dismissal to the Eleventh Circuit Court of Appeals. The Eleventh Circuit, in Steele v. National Firearms Act Branch, et al., No. 83-5572 11th Cir, March 22, 1985), vacated the Order of Dismissal and remanded the matter to this Court to allow the appellant an opportunity to establish his standing to bring this challenge to the regulation's validity. An evidentiary hearing was held to determine the issues on remand as directed by the Court of Appeals. This Court, having considered the pertinent portions of the record, the testimony presented, the documents in evidence, and being otherwise fully advised in the premises, hereby makes the following findings of fact and conclusions of law. FINDINGS OF FACT 1. Eugene Steele, a resident of Miami, Florida was at all times relevant to this action a federally licensed firearms dealer authorized to transfer National Firearms Act Weapons [footnote 2] pursuant to 26 U.S.C. section 5801, et seq. 2. On or about August 23, 1985, Eugene Steele was the lawful owner of one Auto-Ordnance machine Gun, Serial No. 1293A, a firearm subject to regulation under 26 U.S.C. section 5801, et seq., and the regulations issued pursuant thereto, which firearm he was desirous of selling to an eligible transferee. 3. John J. Birk, a resident of Coral Gables, Florida was, on or about August 23, 1985, a buyer ready, willing and able to purchase said firearm from Eugene Steele. Mr. Birk had not attempted to purchase a National Firearms Act weapon from Eugene Steele on any prior occasion. 4. John J. Birk, at the time he sought to purchase the weapon from Eugene Steele, had not been convicted of any felony, committed to any facility for the treatment of mental illness or alcohol or drug dependency, or suffered from any other physical or mental handicap. 5. Eugene Steele, in expectation of completing the sale of the above-described firearm to John J. Birk, executed on August 23, 1985, an "Application for Tax Paid Transfer and Registration of Firearm" (ATF Form 4), indicating the proposed sale of one Auto-Ordinance .45 caliber machine gun, Serial No. 1293A to John J. Birk. 6. John J. Birk executed the same application form, as Transferee, on September 3, 1985, attaching thereto one photograph of himself and attaching one complete set of fingerprints on FBI Form FD-258. 7. Eugene Steele did not submit the completed Form 4 and fingerprint card to any law enforcement officer authorized by 27 C.F.R. 179.85 to certify such application. Steele's stated reason for not submitting the application was that he had, in the past, submitted such forms to the Chief of Police, Coral Gables, Florida, and some others, who refused to provide the requested certification. 8. John Birk submitted the Form 4 completed by himself and Eugene Steele to the Chief of Police, Coral Gables, Florida, and to Janet Reno, Dade County State Attorney. He was refused certification by both. 9. Neither Eugene Steele nor John J. Birk submitted the completed Form 4 to the Chief of Police, Miami, Florida, to the Sheriff of Dade County, or to any other law enforcement official named in and authorized by 27 C.F.R. 179.85 to certify the proposed firearm transfer as lawful. 10. Neither Eugene Steele nor John J. Birk submitted the ATF Form 4 executed by themselves to the Director, Bureau of Alcohol, Tobacco and Firearms. CONCLUSIONS OF LAW The elements of standing to bring an action in the federal courts have been enunciated by the United States Supreme Court in numerous decisions to date. In Allen v. Wright, 104 S.Ct. 3315 (1984), the Court succinctly described the standing requirement. "A plaintiff must allege personal injury fairly traceable to the defendant's allegedly unlawful conduct and likely to be redressed by the requested relief." Id. at 3325. While the Court noted that universal guidelines are not possible in such a fact-specific inquiry, certain factors are helpful in determining the presence or absence of standing in a particular case. These include the nature of the injury alleged (whether it is palpable or abstract), the presence or absence of a clear causal connection between the defendant's actions and the plaintiff's injury. The determination of these issues must be based on the trial court's careful evaluation of the facts which tend to either establish or negate the plaintiff's standing. 1. The Court readopts herein and herewith its prior ruling in this cause, under date of March 28, 1983, as hereby modified to reflect the results of the evidentiary hearing held in this cause on October 24, 1985. 2. The determination by this Court of the appellant's standing to seek declaratory relief in this action is based on the circumstances of the parties as they existed at the time of the hearing on remand in this cause, held on October 24, 1985, and not on the facts as they existed in September, 1982, when the plaintiff's initial complaint was filed. Golden v. Zwickler, 89 S.Ct. 956 (1969). In Zwickler, the Supreme Court reversed the ruling of the district court that standing must be determined on the facts as they existed at the time the original action was filed. The Zwickler court ruled that the existence of a justiciable controversy must be established at the time of the district court's hearing on remand before it could find standing on the plaintiff's part. Where an appellant is unable to demonstrate standing at the time of such a hearing, regardless of the facts as they existed when a complaint was filed, the district court must dismiss the matter. Safir v. Dole, 718 F.2d 475, 481 (10th Cir. 1983). [footnote 3] The rule in federal cases is that an actual controversy must exist at every stage of review, and not merely at the time the complaint is filed. Steffel v. Thompson, 415 U.S. 452, 460, 94 S.Ct. 1209, 1216, n.10 (1974). 3. The evidence adduced at the evidentiary hearing held before the Court on October 24, 1985, showed that neither the appellant, Eugene Steele, nor the proposed transferee, John J. Birk, have exhausted all available sources of law enforcement certification provided in the challenged regulation. (27 C.F.R. 179.85) That regulation provides, in pertinent part, that the required certification may be obtained from "the local police chief, sheriff of the county, U.S. attorney, U.S. marshal, or such other person whose certificate may be acceptable to the director." Based on the testimony and documentary evidence concerning the efforts made by both Mr. Steele and Mr. Birk to find a law enforcement agent willing to provide the certification required to complete their proposed sale, the Court finds that the plaintiff failed to exhaust all the avenues or sources provided by the contested regulation of law enforcement certification. John Birk testified that he actually submitted his application to two law enforcement officials; the Police Chief of Coral Gables, Florida, and the State Attorney for Dade County, Florida. Eugene Steele testified that he did not submit the form to even one authorized official, apparently because he was convinced that none would cooperate. 4. The failure by the plaintiff and his proposed transferee to actually apply for certification to every authorized source affects the plaintiff's claim of standing to pursue this declaratory judgment action, one of the fundamental requisites for standing in such a case is that the plaintiff must have suffered an actual injury caused by the defendant's conduct. Since the plaintiff has not shown that no official authorized by the regulation was willing to certify the proposed sale, it cannot be said that the action of the Director, Bureau of Alcohol, Tobacco and Firearms in promulgating 27 C.F.R. 179.85, or the actions of defendants Reno, Cruz and Marcus in refusing to provide certification, caused the plaintiff's injury. 5. The fact that John J. Birk executed that portion of ATF Form 4 which requires the transferee to avow that the purchase of the identified firearm will not place him in violation of law is not conclusive evidence to show that the plaintiff had a buyer eligible under 26 U.S.C. section 5812(a) to purchase a firearm. Section 5812(a) provides that an application to transfer a firearm may be denied where such a transfer would place the transferee in violation of law. That determination must be made by the appropriate law enforcement agencies based on a careful review of the transferee's records and of other data usually employed by such agencies in determining eligibility under this section. It cannot be said, therefore, as a matter of law, that the plaintiff had found a buyer legally eligible to purchase the firearm identified in the completed ATF Form 4 submitted to the Court as evidence at its evidentiary hearing in this cause. Even if the plaintiff were granted the declaratory relief he seeks, i.e., a ruling that the challenged regulation is invalid, he might still be precluded from completing the proposed firearm transaction by the governing statute, 26 U.S.C. section 5812, should the Director of the Bureau of Alcohol, Tobacco and Firearms determine that the sale would place John Birk, or another transferee, in violation of law. Thus, the plaintiff lacks standing to pursue this declaratory judgment action under the second part of the test stated in Allen v. Wright, supra,; Eugene Steele's injury is not "likely to be redressed by the requested relief" where there remains the possibility that, even absent the regulation's certification requirement, his transfer application could be denied. CONCLUSION In summary, the Court concludes that Eugene Steele, the plaintiff in this civil action for declaratory judgment, lacks the requisite standing at this time to challenge the validity of the regulation, 27 C.F.R. 179.85, promulgated by the Director, Bureau of Alcohol, Tobacco and Firearms under the authority granted to that officer by Title 26 U.S.C. section 7805. DONE and ORDERED in Chambers at Miami, Southern District of Florida, this 6 day of DECEMBER, 1985. SIDNEY M. ARONOVITZ UNITED STATES DISTRICT JUDGE Copy furnished to: Richard Gardiner, Esq. Susan April, AUSA Clerk, Eleventh Circuit Court of Appeals Atlanta, GA FOOTNOTES 1. 26 U.S.C. section 5845 defines "firearm" as 1.) any of a specified type of shortened shotguns or rifles (having an overall length of less than 26" or a barrel less than 18"); 2.) a machine gun (a weapon able to discharge continuous rounds with one depression of the trigger); 3.) destructive devices (bomb, grenade, rocket propelled by more than four ounces of fuel, missile with an explosive charge exceeding one-quarter ounce, mine, and any materials capable of being readily converted into such a weapon; 4.) silencers. 2. See note 1., supra, for definition of weapons subject to regulation. 3. Nevertheless, it is found upon the basis of the testimony adduced at the evidentiary hearing on this matter that Eugene Steele did not have a specific transferee eligible to purchase National Firearms Act weapons, nor had he exhausted all possible sources of law enforcement certification at the time he filed his initial complaint in this Court.