Pontarelli v. U.S. Dept. of the Treasury

• Citation: 285 F.3d 216
• Decision Date: 29 March 2002
• Docket Number: No. 00-1268.,00-1268.
• Parties: Louis A. PONTARELLI, v. UNITED STATES DEPARTMENT OF THE TREASURY, Bureau of Alcohol, Tobacco and Firearms; John W. Magaw, Director, Bureau of Alcohol, Tobacco and Firearms Bureau of Alcohol, Tobacco and Firearms; John W. Magaw, Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

285 F.3d 216

Louis A. PONTARELLI, v. UNITED STATES DEPARTMENT OF THE TREASURY, Bureau of Alcohol, Tobacco and Firearms; John W. Magaw, Director, Bureau of Alcohol, Tobacco and Firearms Bureau of Alcohol, Tobacco and Firearms; John W. Magaw, Appellants.

No. 00-1268.

United States Court of Appeals, Third Circuit.

Argued November 28, 2001.

Opinion filed March 29, 2002.

Stuart E. Schiffer, Acting Assistant, Attorney General, Michael L. Levy, United States Attorney, Mark B. Stern, Thomas M. Bondy (Argued), United States Department of Justice, Washington, D.C., for Appellants.

Imelda M. Koett, Associate Chief Counsel, John R. Kodadek, Office of Chief Counsel, Bureau of Alcohol, Tobacco and Firearms, Washington, D.C., of Counsel Gregory P. Lamonaca (Argued), Media, PA, for Appellee.

Before BECKER, Chief Judge, SLOVITER, MANSMANN,^* SCIRICA, NYGAARD, ALITO, ROTH, McKEE, RENDELL, BARRY, AMBRO, FUENTES, and ROSENN, Circuit Judges.

OPINION OF THE COURT

AMBRO, Circuit Judge.

The Bureau of Alcohol, Tobacco and Firearms ("ATF"), an arm of the United States Department of the Treasury, appeals the District Court's order restoring Louis A. Pontarelli's firearms privileges. ATF asks us to reconsider our holding in Rice v. United States, 68 F.3d 702, 706-07 (3d Cir.1995), that district courts have jurisdiction under 18 U.S.C. § 925(c) to review convicted felons' applications for restoration of their firearms privileges when ATF, pursuant to Congress's mandate, is unable to do so.

Section 925(c) allows convicted felons to apply to ATF for restoration of their firearms privileges,¹ and gives district courts jurisdiction to review a "denial" by ATF of a felon's application. The statute provides in pertinent part:

A person who is prohibited from possessing, shipping, transporting, or receiving firearms or ammunition may make application to the Secretary² for relief from the disabilities imposed by Federal laws with respect to the acquisition, receipt, transfer, shipment, transportation, or possession of firearms, and the Secretary may grant such relief if it is established to his satisfaction that the circumstances regarding the disability, and the applicant's record and reputation, are such that the applicant will not be likely to act in a manner dangerous to public safety and that the granting of the relief would not be contrary to the public interest. Any person whose application for relief from disabilities is denied by the Secretary may file a petition with the United States district court for the district in which he resides for a judicial review of such denial.

18 U.S.C. § 925(c) (emphases added). Since 1992, Congress has provided in each ATF appropriations bill that "none of the funds appropriated herein shall be available to investigate or act upon applications for relief from Federal firearms disabilities under 18 U.S.C. § 925(c)."³ This appropriations ban prevents ATF from acting upon — and thus from denying — felons' § 925(c) applications.

Rice was the first circuit court opinion to address whether the appropriations ban enables felons to seek the restoration of their firearms privileges in federal court despite ATF's inability to review their applications. Unanimous panels of six other courts of appeals subsequently rejected its conclusion that ATF's inability to act pursuant to the appropriations ban enables district courts to review applications de novo. Mullis v. United States, 230 F.3d 215, 221 (6th Cir.2000); McHugh v. Rubin, 220 F.3d 53, 59-60 & n. 5 (2d Cir.2000); Saccacio v. ATF, 211 F.3d 102, 104 (4th Cir.2000); Owen v. Magaw, 122 F.3d 1350, 1353-54 (10th Cir.1997); Burtch v. United States Dep't of Treasury, 120 F.3d 1087, 1090 (9th Cir.1997); United States v. McGill, 74 F.3d 64, 66-68 (5th Cir.1996). But see Bean v. ATF, 253 F.3d 234, 239 (5th Cir.2001), reh'g en banc denied, 273 F.3d 1105 (5th Cir. Aug.21, 2001) (unpublished table decision), cert. granted, ___ U.S. ___, 122 S.Ct. 917, 151 L.Ed.2d 883 (Jan. 22, 2002) (No. 01-704).⁴

Bean notwithstanding, we conclude that because the appropriations ban suspends ATF's ability to issue the "denial" that § 925(c) makes a prerequisite, it effectively suspends that statute's jurisdictional grant. We therefore overrule Rice and hold that the District Court lacked subject matter jurisdiction to consider Pontarelli's application.

I. Facts and Procedural History

Pontarelli pled guilty in 1991 to violating 18 U.S.C. § 666(a)(2) by making cash payments totaling over $1,000 to a public official in exchange for favorable treatment in the award of federally financed housing rehabilitation contracts.⁵ He was sentenced to three years of probation, fined, and ordered to pay $4,000 in restitution and to perform two hundred hours of community service. In 1998, Pontarelli submitted a § 925(c) application to ATF for the restoration of his firearms privileges. The agency told him that the appropriations ban rendered it unable to consider his application.

Pontarelli sued in the District Court, claiming that Rice allowed it to consider his application despite ATF's inability to act. The Court held an evidentiary bearing to determine whether he satisfied § 925(c)'s criteria for relief. Only Pontarelli presented evidence at the hearing.⁶ Based on that presentation, the Court ordered his firearms privileges restored. Pontarelli v. United States, Dep't of Treasury, 2000 WL 274002, at *1-3 (E.D.Pa. 2000). When ATF appealed, we voted after panel oral argument to hear the case en banc to reconsider Rice.

II. Jurisdiction and Standard of Review

We have jurisdiction under 28 U.S.C. § 1291 because ATF appeals the District Court's final judgment in Pontarelli's favor. We consider de novo whether the District Court had subject matter jurisdiction. In re Phar-Mor, Inc. Sec. Litig., 172 F.3d 270, 273 (3d Cir.1999).

III. Rice

In Rice, a convicted felon applied to ATF for the restoration of his firearms privileges. After ATF informed him that the appropriations ban prevented it from processing his application, Rice sought judicial review. Rice, 68 F.3d at 705-06. The District Court dismissed his suit, concluding that it lacked subject matter jurisdiction because ATF's inability to act on his application was not a "denial" under § 925(c). Rice v. ATF, 850 F.Supp. 306, 308 (E.D.Pa.1994) (citing Moyer v. Secretary of the Treasury, 830 F.Supp. 516, 518 (W.D.Mo.1993)).

We reversed, holding that the District Court had jurisdiction because the appropriations ban did not convey a clear intent to repeal § 925(c) or to preclude judicial review of ATF's inability to restore felons' firearms privileges. Rice, 68 F.3d at 706-07. We acknowledged that under Robertson v. Seattle Audubon Society, 503 U.S. 429, 440, 112 S.Ct. 1407, 118 L.Ed.2d 73 (1992), and United States v. Dickerson, 310 U.S. 554, 555, 60 S.Ct. 1034, 84 L.Ed. 1356 (1940), Congress can use an appropriations act to modify substantive law if the act clearly states its intention to do so.⁷ We then analyzed in a single paragraph Congress's intent in enacting the appropriations ban. Rice, 68 F.3d at 707. Without considering its obvious relationship to § 925(c)'s "denial" provision, its legislative history, or the implications of allowing felons to go straight to federal court to regain their firearms privileges, we determined that the appropriations ban did not prevent district courts from reviewing ATF's inability to restore felons' firearms privileges. Id. We reasoned that the ban did not "expressly preclude" district courts from reviewing applications and that "more explicit language" was required to repeal either § 925(c)'s jurisdictional grant or the statute as a whole. Id.

Next we considered whether ATF's inability to process applications excused the ordinary requirement that a person aggrieved by an agency decision exhaust his administrative remedies before seeking judicial review. Id. at 708. Relying on McCarthy v. Madigan, 503 U.S. 140, 147, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992) (stating that "an unreasonable or indefinite timeframe for administrative action" militates against requiring exhaustion), and Coit Independence Joint Venture v. Federal Savings and Loan Insurance Corp., 489 U.S. 561, 586-87, 109 S.Ct. 1361, 103 L.Ed.2d 602 (1989) (holding that "[t]he lack of a reasonable time limit in [an] administrative claims procedure render[ed] it inadequate" and thus excused exhaustion), we held that, because the annually reenacted appropriations ban caused an "indefinite delay" in ATF's processing of applications, a felon could seek judicial review without exhausting his administrative remedies. Rice, 68 F.3d at 708-10. Although we recognized that the decision on whether to grant relief from firearms disabilities involves ATF's discretion and expertise, we concluded that Congress did not intend to impose a rigid exhaustion requirement because § 925(c) gives district courts discretion to consider evidence outside the administrative record when necessary to avert a miscarriage of justice. Id. at 709.⁸

IV. The Near-Unanimous Rejection of Rice

Nearly every federal court to consider the issue after Rice rejected its conclusion that the appropriations ban allows felons to go directly to federal court to seek restoration of their firearms privileges.⁹ In McGill, the first court of appeals opinion after Rice to address the issue, the Fifth Circuit stated its "doubt that the district court has original jurisdiction to consider an application to remove the Federal firearm disability," but avoided confronting the issue directly by holding that Congress intended the appropriations ban to suspend the relief provided by § 925(c). McGill, 74 F.3d at 65-66.¹⁰ The Court relied heavily on the legislative history of the appropriations ban, which indicated that Congress suspended § 925(c)'s operation to avoid wasting resources and risking harm to innocent citizens, not to saddle federal judges with the unfamiliar task of investigating felons'...