Hollis v. Lynch

• Decision Date: 30 June 2016
• Docket Number: No. 15–10803,15–10803
• Citation: 827 F.3d 436
• Parties: Jay Aubrey Isaac Hollis, Individually and as Trustee of the Jay Aubrey Isaac Hollis Revocable Living Trust, Plaintiff–Appellant, v. Loretta E. Lynch, Attorney General of the United States; Thomas E. Brandon, Acting Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

827 F.3d 436

Jay Aubrey Isaac Hollis, Individually and as Trustee of the Jay Aubrey Isaac Hollis Revocable Living Trust, Plaintiff–Appellant

v.Loretta E. Lynch, Attorney General of the United States; Thomas E. Brandon, Acting Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Defendants–Appellees.

No. 15–10803

United States Court of Appeals, Fifth Circuit.

FILED June 30, 2016

Stephen Dean Stamboulieh, Esq., Stamboulieh Law, P.L.L.C., Madison, MS, Alan Alexander Beck, Esq., Law Office of Alan Beck, San Diego, CA, for Plaintiff–Appellant.

Patrick George Nemeroff, Daniel M. Riess, U.S. Department of Justice, Washington, DC, for Defendants–Appellees.

George M. Lee, Seiler Epstein Ziegler & Applegate, L.L.P., San Francisco, CA, for Firearms Policy Coalition, Incorporated, Firearms Policy Foundation, Incorporated, Colorado Second Amendment Association, Lone Star Gun Rights, Madison Society, Incorporated, Mississippi Carry, Incorporated, Amici Curiae.

Herbert W. Titus, Esq., Vienna, VA, for Gun Owners of America, Incorporated, Gun Owners Foundation, Gun Owners of California, Incorporated, Heller Foundation, Conservative Legal Defense and Education Fund, Institute on the Constitution, Bradley D. Rogers, Amici Curiae.

Before KING, SOUTHWICK, and HAYNES, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

This appeal concerns the constitutionality of a 1986 federal statute that makes possession of a “machinegun” unlawful. Jay Aubrey Isaac Hollis, as trustee of his own revocable trust, submitted an application to the Bureau of Alcohol, Tobacco, Firearms and Explosives to manufacture a machinegun. ATF denied his application pursuant to the 1986 statute. Hollis filed suit, challenging the constitutionality of the 1986 statute. The district court dismissed the suit, holding that Hollis lacked standing, and, in the alternative, that machineguns are not protected by the Second Amendment. We disagree about standing, but we AFFIRM the district court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

We begin by reviewing the statutory and regulatory background before turning to the facts of this case. Two federal laws are relevant to this appeal, the National Firearms Act of 1934 and the Gun Control Act of 1968. The Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) administers both laws. 28 C.F.R. § 0.130(a)(1)-(2).

The National Firearms Act regulates the manufacturing of machineguns. It defines a machinegun 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.” 26 U.S.C. § 5845(b). The National Firearms Act states that “[n]o person shall make a firearm^{[1 ]} unless he has (a) filed ... a written application ... to make and register the firearm”; “(b) paid any tax payable”; “(c) identified the firearm to be made”; “(d) identified himself in the application form”; and “(e) obtained ... approval” from the ATF “to make and register the firearm....” Id . § 5822. An application will “be denied if the making or possession of the firearm would place the person making the firearm in violation of law.” Id . Whether a machinegun may be made or registered thus depends on whether its possession is prohibited by some other law.

That prohibition arose in 1986 when Congress amended the Gun Control Act of 1968 to make it “unlawful for any person to transfer or possess a machinegun,” subject to certain exceptions for government entities and machineguns lawfully possessed before 1986. 18 U.S.C. § 922(o). The Gun Control Act's definition of “machinegun” is the same as the one adopted in the National Firearms Act. See id . § 922(a)(4). Finally, “[t]he term ‘person’ ... include[s] any individual, corporation, company, association, firm, partnership, society, or joint stock company.” Id. § 921(a)(1).

Taken together, because the National Firearms Act states that no application to manufacture a firearm may be granted if the possession of the firearm would place the applicant in violation of federal law, and Section 922(o) of the Gun Control Act makes possession of a machinegun illegal, no application to make a machinegun may be approved.

Against this statutory backdrop, we turn to the facts of this case. Jay Aubrey Isaac Hollis established the Jay Aubrey Isaac Hollis Revocable Living Trust (“Hollis Trust”), with himself as trustee. In May 2014, Hollis, in his capacity as trustee, submitted ATF Form 5320.1 to the ATF to manufacture an M–16 machinegun from AR–15 components.² On September 8, 2014, the ATF approved Hollis's application. Two days later, though, the ATF informed Hollis his application was granted in error and revoked approval of the application. The ATF then delivered a letter to Hollis acknowledging the mistake. The letter explained the “ATF may not approve any private person's application to make and register a machinegun after May 19, 1986,” and any continued possession of a machinegun would be a violation of the National Firearms Act.

Hollis filed suit. First, he claimed that Section 922(o), which bans machineguns, violates the Second Amendment. Second, he claimed that Congress exceeded its power under the Commerce Clause in enacting Section 922(o). Third, he alleged the Government took his property, the M–16 machinegun, without due process of law. Fourth, he asserted the ATF has approved other machinegun applications after 1986, and therefore, the ATF's denial of his application was an equal protection violation. Fifth, he claimed Section 922(o) does not prohibit an unincorporated trust from manufacturing or possessing a machinegun.

The Government moved to dismiss the case for lack of subject matter jurisdiction and for failure to state a claim. Opposing the motion, Hollis also requested, pursuant to Federal Rule of Civil Procedure 56(d), discovery in order to ascertain whether the ATF had in fact approved machineguns since 1986. Finally, Hollis requested leave to amend his complaint if the district court determined it lacked subject matter jurisdiction over the case.

On August 7, 2015, the district court granted the motion to dismiss. As to Hollis's Second Amendment claim, the court determined that there was no subject matter jurisdiction because Hollis lacked standing. It also concluded that even if Hollis had standing, Hollis's Second Amendment, Commerce Clause, due process, equal protection, and statutory trust claims should be dismissed for failure to state a claim. Finally, the district court ruled moot Hollis's request for discovery under Rule 56(d). Hollis timely appealed.

DISCUSSION

We address standing and whether Hollis should be allowed to amend in Part I of our opinion. In Part II, we discuss the argument that Section 922(o) does not explicitly bar a trust from possessing a machinegun. In Part III, we analyze whether Section 922(o) infringes Hollis's Second Amendment rights. Finally, we explain in Part IV that Hollis has waived his equal protection argument on appeal.³

I. Standing and Motion to Amend Complaint

Federal courts have jurisdiction only over “cases” or “controversies.” Raines v. Byrd , 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) (quoting U.S. Const. art. III, § 2, cl. 1 ). One element of the case-or-controversy requirement is that Hollis must have standing to sue. Id . “We review questions of standing de novo .” Time Warner Cable, Inc. v. Hudson , 667 F.3d 630, 635 (5th Cir. 2012).

“[S]tanding ... focuses on whether the plaintiff is the proper party to bring this suit....” Raines , 521 U.S. at 818, 117 S.Ct. 2312. For standing, Hollis must show: (1) he suffered an injury in fact, which is a concrete and particularized invasion of a legally protected interest; (2) the injury is traceable to the challenged action of the Government; and (3) it is likely, rather than merely speculative, the injury will be redressed by a favorable decision. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). When a suit, like this one, is “challenging the legality of government action[,] ... the nature and extent of facts that must be ... proved ... in order to establish standing depends considerably upon whether the plaintiff is himself an object of the action.... If he is, there is ordinarily little question that the action ... has caused him injury, and that a judgment preventing ... the action will redress it.” Id. at 561–62, 112 S.Ct. 2130.

The district court determined Hollis lacked standing to bring his Second Amendment claim. It accepted that there was an injury, namely, being barred from possessing a machinegun. Where Hollis failed was in satisfying prongs two and three of the standing inquiry—traceability and redressability—because a Texas statute also would bar Hollis's claim even if Section 922(o) were to fall away. Thus, Hollis's injury would not be traceable to federal action and would not be redressed by striking down Section 922(o).

The Texas statute on which the district court relied is a criminal statute that prohibits possession or manufacture of a machinegun:

(a) A person commits an offense if the person intentionally or knowingly possesses, manufactures, transports, repairs, or sells:

(1) any of the following items, unless the item is registered in the National Firearms Registration and Transfer Record maintained by the Bureau of Alcohol, Tobacco, Firearms and Explosives ...:

(A) an explosive weapon; [or]

(B) a machine gun.

Tex. Penal Code § 46.05(a)(1)(A)-(B).

We disagree with the district court that the Texas statute moots the federal claim. The rights embodied in the Second Amendment apply with equal force to the states. See McDonald v. City of Chicago , 561 U.S. 742, 791, 130 S.Ct. 3020, 177 L.Ed.2d 894 (2010). Accordingly, if we were to hold Section 922(o), a federal law, unconstitutional on Second Amendment grounds, it is likely that Section 46.05, a state law, would also be unconstitutional. Two of our prior cases are...