Firearms Import/Export Roundtable Trade Grp. v. Jones

• Decision Date: 12 March 2012
• Citation: 854 F.Supp.2d 1
• Parties: FIREARMS IMPORT/EXPORT ROUNDTABLE TRADE GROUP, and Timothy Bero, Plaintiffs, v. B. Todd JONES, Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, et al., Defendants.
• Court: U.S. District Court — District of Columbia

854 F.Supp.2d 1

FIREARMS IMPORT/EXPORT ROUNDTABLE TRADE GROUP,andTimothy Bero, Plaintiffs,

v.B. Todd JONES, Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, et al., Defendants.

United States District Court, District of Columbia.

Civil Action 11–547(BJR).

March 12, 2012.

Mark Lee Shaw, Jeremy N. Spitzer, Michael A. Danforth, Shaw Law Ltd., Waukegan, IL, Robert Ernest Sanders, Law Office of Robert Ernest Sanders, Winston Salem, NC, for Plaintiffs.

Michael Andrew Zee, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

BARBARA J. ROTHSTEIN, District Judge.

Plaintiffs Firearms Import/Export Roundtable Trade Group (“FAIR”) and Timothy Bero, the president of North West Imports (collectively, “plaintiffs”) ¹, bring this action against the Bureau of Alcohol, Tobacco, Firearms and Explosives (“the ATF”) and its director B. Todd Jones ² as well as Attorney General Eric Holder and the Department of Justice (collectively, “defendants”) alleging violations of the Administrative Procedure Act (“APA”), 5 U.S.C. § 553 et seq., and the Fifth Amendment of the United States Constitution.³ Plaintiffs claim that the ATF improperly denied Bero's applications to import firearms barrels and that ATF's interpretation of the governing provisions of the Gun Control Act (“GCA” or “the Act”) was unlawfully promulgated and is an arbitrary, capricious and erroneous interpretation of the statute. They also allege that the applicable GCA provision is unconstitutional. Defendants move to dismiss plaintiffs' complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), or, in the alternative, for summary judgment. Upon a review of defendants' motion, the opposition thereto, and the record of this case, the Court concludes defendants' motion should be granted.

I. BACKGROUND

A. Statutory Context

The GCA governs the importation of firearms. Section 922(1) of the GCA makes it unlawful for any individual to “knowingly import or bring into the United States ... any firearm or ammunition,” except as provided for in 18 U.S.C. § 925(d). 18 U.S.C. § 922(1). Section 925(d) provides that the Attorney General “shall authorize” the importation of a firearm if it falls within one of four exceptions to the general prohibition on firearm imports. ⁴ The exception at issue in this case is for “sporting purpose” firearms.⁵ If a firearm is “generally recognized as particularly suitable for or readily adaptable to sporting purposes,” and if it is neither a firearm as defined in section 5845(a) of the Internal Revenue Code,⁶ nor a surplus military firearm, the Attorney General must authorize it for importation. 18 U.S.C. § 925(d)(3).

In addition to creating four categories of importable firearms, section 925(d)(3) restricts the importation of the component parts of non-importable firearms, including firearm barrels. In relevant part, it provides that “in any case where the Attorney General has not authorized the importation of the firearms pursuant to this paragraph, it shall be unlawful to import any frame, receiver, or barrel of such firearm which would be prohibited if assembled.” 18 U.S.C. § 925(d)(3). Congress added this provision to section 925(d)(3) in 1986 when it passed the Firearms Owners' Protection Act (“FOPA”). In effect, the FOPA amendment prevents an importer from circumventing the import restrictions on assembled firearms by disassembling a firearm into its component pieces for import and subsequent reassembly.

B. Regulatory Context

ATF has rulemaking authority with respect to federal firearms law. See18 U.S.C. § 926; 28 C.F.R. § 0.130(a)(1). Pursuant to this power, the agency has altered its interpretation of the FOPA amendment in at least three instances. Plaintiffs question the permissibility of these changes and the process that ATF followed to implement them.

In 1988, two years after the passage of the GCA, ATF published a final rule implementing section 925(d)(3)'s treatment of the import of non-sporting firearm barrels. The agency drew a distinction between two classes of firearms that was not explicitly established in the statute: it interpreted section 925(d)(3)'s restriction on the import of non-sporting firearms parts to apply to parts for non-importable handguns but not to the parts of long guns. ⁷ According to the defendants, this interpretation was “generally consistent with the fact that, as of 1988, ATF had applied the sporting purpose test to prohibit the importation of a long gun on only two occasions.” ⁸ Defs.' Mot. to Dismiss or, in the alt., for Summ. Judgment (“Defs.' Mot.”) at 5–6.

In 2001, ATF narrowed the scope of permissible firearm part imports to include only those that were for “repair or replacement” of a long gun lawfully owned in the United States. See Administrative Record (“AR”) at 5. The agency provided notice of this new interpretation in its Federal Firearms Licensee Newsletter. Id. The prohibition on all handgun part imports remained in place. The newsletter directed prospective importers to include in ATF Form 6 (the standard form though which importers apply for importation permits) ⁹ a representation that “the importation is for repair or replacement only.” Id.

In 2005, ATF eliminated the purpose-dependent, “repair or replacement” exception. After receiving input from the Office of Legal Counsel in the Department of Justice (“OLC”) ¹⁰ on section 925(d)(3)'s meaning, ATF concluded that the repair or replacement exception did not conform to the governing statute. Accordingly, on July 13, 2005, ATF issued an “Open Letter to Federally Licensed Firearms Importers and Registered Importers of U.S. Munitions Import List Articles” (“July Open Letter”) announcing and explaining the change. See id. at 24–26. The letter stated that “ATF will longer approve ATF Form 6 application of any frames, receivers, or barrels for firearms that would be prohibited from importation if assembled.” It specified that “[n]o exceptions to the statutory language, for example for ‘repair or replacement’ of existing firearms, will be allowed.” Id.¹¹ Since issuance of the letter, ATF has denied applications to import certain parts if they are for a firearm which, when assembled, is not authorized for import.

C. Bero's Import Permit Applications

In November 2010, Bero applied to ATF for two permits to import two different types of barrels: 900 “MG–34 Machine Gun Barrels” and 1000 “Scorpion Machine Pistol Barrels.” Id. at 27–28; 30–31. The parties do not dispute that both were barrels of firearms that GCA prohibited from import in assembled form. Bero indicated in ATF Form 6 that the “Specific Purpose of Importation” for both prospective barrel imports was “Resale.” Id. at 27, 30. In no part of the application did Bero represent that the components he sought to import were intended for use as repair or replacement parts. The ATF denied each of the two applications in two separate letters, which it sent to Bero in January 2011. Id. at 29, 32.

D. Plaintiffs' Complaint

Plaintiffs allege that the defendants have violated the APA and the Fifth Amendment. Plaintiffs' APA claims fall into two categories. First, they contend that defendants violated section 553 of the APA when they failed to provide the public with notice and an opportunity to comment prior to the issuance of the July Open Letter. Second, plaintiffs allege that defendants acted arbitrarily and capriciously and under an erroneous interpretation of the law in violation of section 706 of the APA when they denied Bero's application to import barrels and when they promulgated the July Open Letter. See Compl. ¶¶ 45, 46.¹² Plaintiffs assert that their inabilityto import repair parts as a result of this reinterpretation has harmed their businesses.¹³

Plaintiffs' constitutional claims appear to take three forms. First, they allege that the GCA is “unconstitutionally vague and ambiguous for a statute with criminal implications.” Id. ¶ 324. As well, plaintiffs assert that the statute is unconstitutionally “overbroad.” Id. ¶ 325. Finally, they argue that defendants violated the Takings Clause of the Fifth Amendment when they eliminated plaintiffs' ability to import firearms barrels that were previously permitted.

As relief from defendants' allegedly unlawful conduct, plaintiffs ask the Court to declare that defendants violated the APA and the “rights of plaintiffs to the rule-making process” and that plaintiffs have the “legal right to import the barrels in question.” Id. at 17. Further, they request both a “temporary and permanent injunction,” against defendants which would prohibit defendants from “denying Plaintiffs permits for the importation of the disputed barrels without first having complied with the [APA].” Id. at 19. Finally, they ask the Court to “strike the portions of the GCA that are unconstitutionally vague” and that are being “mis-interpreted by the Defendants.” Id. at 27.

II. LEGAL STANDARDS

A. Standard of Review

In reviewing an administration action, the role of the district court is to “sit as an appellate tribunal” and review the case as a matter of law. Marshall Cnty. Health Care Auth. v. Shalala, 988 F.2d 1221, 1226 (D.C.Cir.1993); accord Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C.Cir.2001). When an agency's findings are at issue, the question of law is “whether [the agency] acted in an arbitrary and capricious manner.” Univ. Med. Ctr. v. Shalala, 173 F.3d 438, 440 n. 3 (D.C.Cir.1999). Indeed, “[t]he entire case on review is a question of law, and only a question of law.” Marshall Cnty., 988 F.2d at 1226. When the constitutionality of an agency's action and not the rationality of its findings is challenged, a district court determines whether the agency based its decision on the appropriate constitutional standard. 5 U.S.C. § 706; United Space Alliance v. Solis, 824 F.Supp.2d 68, 77–78 (D.D.C.2011) (citing Crowell v. Benson, 285 U.S. 22, 60,...