Cite as Vollmer v. Higgins, 1992 U.S. Dist. LEXIS 9450 (D.D.C. 1992) F.J. VOLLMER COMPANY, INC., Plaintiff, v. STEPHEN E. HIGGINS, Director, Bureau of Alcohol, Tobacco, and Firearms, U.S. Department of the Treasury, Defendant. Civil Action No. 89-3341 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA June 30, 1992, Decided June 30, 1992, Filed NORMA HOLLOWAY JOHNSON, Judge. MEMORANDUM OPINION In this action plaintiff seeks review under Administrative Procedure Act ("APA"), 5 U.S.C. section 702, of defendant's disapproval of its request for permission to engage the unrestricted transfer of certain machine guns pursuant to National Firearms Act ("NFA"), 26 U.S.C. sections 5801 et seq., and the Gun Control Act of 1968 ("GCA"), 18 U.S.C. sections 921 et seq., as amended. Plaintiff also seeks a writ of mandamus under 28 U.S.C. section 1361 directing defendant to permit transfer of the machine guns at issue. Pending is the motion of defendant to dismiss the action or, in the alternative, for summary judgment, as well as the cross-motion of plaintiff for summary judgment. DISCUSSION I. Factual Background The material facts in this case are undisputed. Plaintiff F.J. Vollmer Company, Inc., ("Vollmer"), an Illinois corporation, is licensed under federal and state laws to manufacture and sell firearms. Defendant, the Bureau of Alcohol, Tobacco and Firearms ("ATF" or "Agency"), a division of the Department of the Treasury, is charged with the enforcement of the GCA and the NFA. Pursuant to regulations promulgated under the NFA, firearms may only be transferred upon application to and approval by the ATF. 27 C.F.R. sections 179.84, 179.86. The Agency is also required to maintain a registry of all NFA firearms including machine guns. 27 C.F.R. section 179.101. Vollmer is in lawful possession of approximately one hundred and seventy five (175) registered conversion kits, which are defined as "machine guns" under the NFA, 26 U.S.C. section 5845(b). Vollmer installed these conversion kits into semiautomatic Heckler and Koch ("HK") 94 rifles, thus, enabling the semiautomatic rifles to generate automatic fire. After installing the conversion kits and equipping the HK rifles with automatic fire capacity, Vollmer modified the HK 94 semiautomatic receivers to conform with the configuration of machine gun receivers. In April and July 1988, Vollmer submitted two sample receivers to ATF for classification as to their firearm status (Administrative Record (AR) 35, 36, 40). In August 1988 following examination of the sample receivers, an ATF firearms officer determined that Vollmer's receiver modifications constituted the making of a machine gun receiver. The officer also determined that machine gun receivers are defined as machine guns under the NFA and were, therefore, subject to NFA transfer restrictions. Furthermore, the firearms officer advised that even if the receivers were returned to their semiautomatic configuration, they would remain subject to NFA controls. (AR 42). Through correspondence dated May 6 and November 10, 1988, (AR 46, 47) Vollmer, through counsel, requested permission to transfer freely the machine guns containing the conversion kits and the modified receivers. Vollmer contended that the HK 94 rifles were freely transferrable but, in the alternative, offered to return the receivers to their original semiautomatic configuration if ATF determined that reconfiguration of the receivers prevented transfer. In May 1989, plaintiff submitted formal applications for transfer of two HK 94 rifles containing conversion kits and machine gun receivers modified after May 19, 1986. One of the receivers was modified by plaintiff a second time and returned to its original semiautomatic configuration. (AR 60). By letter dated June 5, 1989, ATF denied plaintiff's requests for transfer of the machine guns. The Agency concluded that the receiver modifications resulted in the creation of machine gun receivers, which are defined as machine guns under the NFA. It stated further that because the machine guns were created after May 19, 1986, their transfer to private individuals is prohibited pursuant to the GCA, 18 U.S.C. section 922(o). The Agency also advised that once a semiautomatic receiver is modified into a machine gun receiver, it cannot be removed from the controls of the NFA by returning the receiver to its semiautomatic configuration. (AR 69). II. Statutory Background Manufacture, possession, and transfer of machine guns are regulated by the Gun Control Act and the National Firearms Act. The GCA restricts certain transfers and possession of firearms and sets forth penalties for violation of its provisions. 18 U.S.C. sections 922, 924. The NFA sets forth specific requirements in connection with the registration, making, transfer, and taxation of machine guns and certain other firearms. With respect to the transfer of machine guns, the NFA provides that no machine gun may be transferred unless (1) the transferor has filed an application for the transfer and registration of the machine gun to the transferee; (2) any tax payable on the transfer has been paid; (3) the transferee is identified as required by regulations; (4) the transferor is properly identified on the application per regulation; (5) the machine gun is properly identified on the application per regulation; and (6) approval of the transfer is noted on the forms. 26 U.S.C. section 5812(a). The NFA provides further that "applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of the law," id., and that a transferee shall not take possession of a firearm unless transfer has been approved and the firearm has been properly registered. 26 U.S.C. section 5812(b). In 1968 the NFA was amended by Title II of the GCA in order to "strengthen Federal controls over interstate and foreign commerce in firearms." H.R. Rep. No. 1577, 90th Cong., 2d Sess., reprinted in 1968 U.S. Code Cong. & Admin. News 4410, 4411. Prior to 1968, the NFA narrowly defined "machine gun" as "any weapon which shoots, or is designed to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger." 26 U.S.C. section 5848(2) (amended by the GCA, Pub. L. No. 90-618 (1968)). The amendments to the NFA broadened the definition of machine gun to include three new categories: the frame or receiver of a machine gun; any combination of parts designed and intended for use in converting a weapon other than a machine gun into a machine gun (i.e. a conversion kit); and, any combination of machine gun parts from which a machine gun can be assembled if such parts are in the possession of a person. 26 U.S.C. section 5845(b). See H.R. Conf. Rep. No. 1956, 90th Cong., 2d Sess., reprinted in 1968 U.S. Code Cong. & Admin. News 4410, 4434. Presently the NFA defines a "machine gun" as: Any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger. The term shall also include the frame or receiver of any such weapon, any part designed and intended solely and exclusively, or combination of parts designed and intended, for use in converting a weapon into a machine gun, and any combination of parts from which a machine gun can be assembled if such parts are in the possession or under the control of a person. 26 U.S.C. section 5845(b). On May 19, 1986, the GCA was amended to restrict the transfer and possession of machine guns manufactured after May 19, 1986. It states: (1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machine gun. (2) This subsection does not apply with respect to -- (A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof; or (B) any lawful transfer or lawful possession of a machine gun that was lawfully possessed before the date this subsection takes effect. 18 U.S.C. section 922(o). See Farmer v. Higgins, 907 F.2d 1041 (11th Cir. 1990) (Section 922(o) prohibits the private possession of machine guns not lawfully possessed before May 19, 1986). III. Analysis of ATF Determination Under the APA the appropriate standard of review of an informal agency determination is whether, based upon the administrative record, the decision was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law," 5 U.S.C. section 706(2)(A). See Gun South v. Brady, 877 F.2d 858, 861 (11th Cir. 1989); York v. Secretary of Treasury, 774 F.2d 417, 419-20 (10th Cir. 1985). A reviewing court may not substitute its judgment for that of the agency, and technical or scientific determinations are to be accorded particular deference. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971); Federal Power Commission v. Florida Power and Light Co., 404 U.S. 453 (1972). In Chevron U.S.A. v. National Resources Defense Council, 467 U.S. 837 (1984), the Supreme Court held that where a court reviews an agency's construction of a statute administered by that agency it must first determine whether Congress has directly spoken to the question at issue. If the intent is clear, both the court and the agency "must give effect to the unambiguously expressed intent of Congress." Id. at 842. Where Congress has not directly addressed the issue, the question for the court is whether the agency's interpretation is based upon a permissible construction of the statute. Id. In this case the Court must first determine whether the NFA clearly speaks to the question of whether the modified receivers at issue are (1) machine guns subject to NFA provisions and, if so, (2) whether those machine guns may be withdrawn from NFA regulation by remodification to a semiautomatic configuration. After careful review of the administrative record, the applicable statutes, and the cross-motions for summary judgment, the Court concludes that the statutes are clear on these issues and that the Agency's decision complied with that clearly expressed congressional intent. Even if the statute were open to multiple interpretations, however, the Court concludes that the agency determination was based upon permissible constructions of the applicable statutes and is, therefore, entitled to deference. Vollmer sets forth four primary arguments to demonstrate why the denial was contrary to law. First, plaintiff contends that receiver modifications to an operable machine gun do not create a second machine gun. Here, plaintiff claims the machine guns at issue -- that is, the HK rifles into which lawfully registered and possessed conversion kits have been installed -- are freely transferrable. Plaintiff, in the alternative, claims that if the modified receivers are newly created machine guns, they could be returned to their semiautomatic configurations and removed from the purview of the NFA. Such removal, the argument continues, would permit lawful transfer. Vollmer contends further that it relied upon official Agency advice in reconfiguring the HK receivers and that ATF should not be permitted to apply its "new" view on receiver modification retroactively. Finally, plaintiff contends that deference to the Agency's decision is unwarranted for two reasons. First, because the statute clearly evidences Congress' intent to permit transfer and second, because ambiguous definitions in revenue statutes must be construed in favor of the taxpayer and against the United States. A. Status of the Modified Receivers Vollmer contends that a functional machine gun constitutes a single machine gun even though it meets more than one of the NFA definitions of the term "machine gun." Thus, plaintiff submits, alterations to the receiver of a lawfully possessed and registered machine gun do not create a second machine gun that must in turn be registered. The Agency, on the other hand, maintains that each of the NFA categories defined as a "machine gun" represents a separate firearm subject to NFA registration and transfer provisions. Plaintiff's narrow reading of the NFA is simply untenable. The NFA does not limit the definition of the term "machine gun" to a functional or operable weapon. To the contrary, it broadly defines the term to include operable weapons, receivers, conversion kits, and parts used to manufacture machine guns. Congress' intent to broaden the definition of "machine gun" to include receivers, conversion kits, and parts that may be used to manufacture machine guns is evident in the plain meaning of the statute and clearly articulated in the legislative history. See Thompson/Center Arms Co. v. U.S., 924 F.2d 1041 (Fed. Cir. 1991); Sherwood International Export Corp. v. Higgins, No. 85-1367 (D.D.C. 1986); United States v. Kelly, 548 F. Supp. 1130 (E.D. Pa. 1982) Vollmer, while not disputing that it reconfigured the semiautomatic receivers at issue so that they would be identical to that of a machine gun receiver, nevertheless, characterizes the alterations as "cosmetic . . . since such modifications were unnecessary to permit automatic fire." Again, plaintiff's emphasis on the effect of the modifications on the weapon's ability to generate automatic fire is misplaced. The statute is concerned with the operable machine gun and the machine gun receiver -- both of which are defined as "machine guns" under the NFA. The Agency's determination that Vollmer's modifications resulted in the manufacture of machine gun receivers -- and hence the creation of machine guns -- is a sound conclusion supported by the administrative record (AR 42), reflects the plain meaning of the statute, and is a reasonable construction of the applicable statutory framework. Moreover, under the NFA, "applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of the law." 26 U.S.C. section 5812(a). Because the machine gun receivers were created after May 19, 1986, their transfer to private individuals is prohibited by 18 U.S.C. section 922(o). Accordingly, the Agency properly denied plaintiff's request for transfer. B. Machine Gun Restoration to Semiautomatic Configuration Next, Vollmer contends that even if the receiver modifications created new machine guns, the receivers may be returned to their semiautomatic configuration and removed from the purview of the NFA. Such a remodification, plaintiff submits, would enable the machine guns to be lawfully transferred. The Agency maintains that a machine gun receiver does not lose its identity as such unless it is completely destroyed. The issue for review is whether the Agency's conclusion -- that remodification of the receivers to their original semiautomatic configuration does not remove them from NFA controls -- is a proper construction of the statute. For purposes of the NFA the term "firearms" includes "machine gun(s)." 26 U.S.C. section 5845(a)(6). As discussed, the statute broadly defines the term machine gun as an operable weapon and as a receiver, a conversion kit, and parts used to manufacture a machine gun. 26 U.S.C. section 5845(b). Standing alone, then, the machine gun receiver constitutes a firearm under the NFA. Firearms remain under the purview of the NFA even when they become "incapable of discharging a shot by means of an explosive and incapable of being readily restored to a firing condition." 26 U.S.C. section 5845(h); See section 26 U.S.C. section 5845(e). Plaintiff's suggested remodification would alter the shooting capabilities of the machine gun receiver, however, it would not destroy the receiver's capacity to facilitate fire. Since the statute authorizes ATF to regulate machine guns that are inoperable and unlikely to become operable, the statute clearly authorizes the Agency to regulate machine guns that remain operable. Thus, the Agency determination that the return of a modified receiver to its semiautomatic configuration does not extinguish the ATF's authority to regulate the receiver and to restrict its transfer complies with the intent of the NFA and is a reasonable reading of that statute. Consequently, the Court affirms that ATF determination. C. Vollmer Reliance on Agency Advice Plaintiff submits that it modified the receivers at issue based upon the representations of an ATF official that the modifications would not alter the transferability of the HK rifles. Vollmer argues, then, that denial of permission to transfer was arbitrary and capricious and tantamount to the retroactive application of a "new" ATF view concerning certain receiver modifications. In essence, plaintiff argues that the Agency should be equitably estopped from prohibiting transfer of the modified receivers because of the representations of an ATF official. Even assuming Vollmer received such advice from an ATF official, a point that the Agency disputes, the Court rejects this argument because estoppel simply cannot be applied against the government in this case. See Office of Personnel Management v. Richmond, 110 S.Ct. 2465 (1990) (government cannot be estopped from enforcing a statutorily imposed requirement for retirement eligibility); ATC Petroleum, Inc. v. Sanders, 860 F.2d 1104, 1111 (D.C. Cir. 1988) (this Circuit is unaware of any case in which it has applied the equitable estoppel doctrine against the government). Notwithstanding plaintiff's representation that the modifications were made based upon assurance from ATF as to their propriety, the record reflects that even after reconfiguration Vollmer expressed uncertainty about the impact the alterations would have on plaintiff's ability to transfer the weapons. (AR 16). For these reasons, plaintiff's reliance argument must fail. D. Deference to ATF Determination Vollmer also contends that the Court should not defer to the Agency determination: first, because, the statute clearly demonstrates Congress' intent to permit transfer, and second, because ambiguous definitions in revenue statutes must be construed in favor of the taxpayer and against the United States. These arguments must be rejected. While it is true that the NFA clearly expresses congressional intent, as discussed, the Agency has properly construed that intent and administered the statute accordingly. With respect to the revenue statute argument, plaintiff misses the mark because Vollmer does not claim that it was wrongfully taxed. See Auto Ordnance Corp. v. United States, 822 F.2d 1566, 1571 (Fed. Cir. 1987) ("In a tax refund case, the doubt should be resolved in favor of the taxpayer.") (emphasis added). IV. Relief Under the Mandamus Statute Finally, defendant seeks to dismiss Vollmer's claim for relief under the mandamus statute, 28 U.S.C section 2201, for failure to state a claim upon which relief may be granted. The mandamus claim must be dismissed because plaintiff has failed to demonstrate any basis for this extraordinary relief. In order to obtain a writ of mandamus Vollmer must have no other adequate means of obtaining relief and must show that its right to a writ is clear and indisputable. See Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33 (1980). The administrative record in this case and applicable statutes make clear that plaintiff has not been denied a right to which it is clearly entitled. Accordingly, there is neither legal nor factual bases for issuance of a such a writ in this action. V. Conclusion The Court has determined that the NFA clearly speaks to the questions of whether the modified receivers at issue are (1) machine guns subject to NFA provisions and, (2) capable of being withdrawn from NFA regulation through remodification to a semiautomatic configuration. Having found that Congress clearly intended for machine gun receivers to be treated as machine guns and for those receivers to remain under the purview of the NFA even if returned to a semiautomatic configuration, the Court concludes that ATF reasonably, rationally, and lawfully denied plaintiff's request for transfer and, consequently, is entitled to summary judgment in this action. As a result, the cross-motion of plaintiff for summary judgment must be denied. An Order consistent with this Memorandum Opinion will issue. ORDER AND JUDGMENT - June 30, 1992, Filed Upon consideration of the motion of defendant to dismiss or, in the alternative, for summary judgment, the cross-motion of plaintiff for summary judgment, and the entire record herein, and in accordance with the accompanying Memorandum Opinion, it is this 30th day of June, 1992, ORDERED that the motion of defendant for summary judgment be, and hereby is, granted; it is further ORDERED that the cross-motion of plaintiff for summary judgment be, and hereby is, denied; it is further ORDERED that judgment be, and hereby is, granted in favor of defendant; and it is further, ORDERED that this case be, and hereby is, closed. NORMA HOLLOWAY JOHNSON, UNITED STATES DISTRICT JUDGE