Lauchli v. United States

• Citation: 481 F.2d 408
• Decision Date: 06 July 1973
• Docket Number: No. 72-1247.,72-1247.
• Parties: Richard A. LAUCHLI Jr., Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

481 F.2d 408 (1973)

Richard A. LAUCHLI Jr., Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.

No. 72-1247.

United States Court of Appeals, Seventh Circuit.

Heard April 9, 1973.

Decided July 6, 1973.

Richard A. Lauchli, Jr., Helen Lauchli, Collinsville, Ill., for petitioner-appellant.

Donald B. Mackay, U. S. Atty., Max E. Goodwin, Asst. U. S. Atty., Springfield, Ill., for respondent-appellee.

Before SWYGERT, Chief Judge, and KILEY and CUMMINGS, Circuit Judges.

PER CURIAM.

This appeal stems from our prior opinion in Lauchli v. United States, 432 F.2d 1207 (7th Cir. 1970). There we remanded the cause so that the trial court could resolve certain questions arising from petitioner's conviction for violation of five Sections of the National Firearms Act of 1934.¹ The district court was required to determine the following three questions:

1. Whether importers, manufacturers and dealers in firearms are, as a class, almost exclusively individuals inherently suspect of criminal activities, so that Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889; Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906; and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923, would require setting aside petitioner\'s convictions under 26 U.S.C. §§ 5801 and 5802.

2. Whether transferors of firearms are such a suspect class, thus similarly invalidating petitioner\'s convictions under 26 U.S.C. §§ 5811, 5813 and 5814.

3. Whether the principle of Minor v. United States, 396 U.S. 87, 90 S.Ct. 284, 24 L.Ed.2d 283, where the Supreme Court decided that the Fifth Amendment is not available as a defense to a charge of selling narcotic drugs and marijuana without the written order forms required by law, saves petitioner\'s conviction under 26 U.S.C. § 5814.

Determination of the first two questions was to be made "as a matter of fact." 432 F.2d at 1210.

Upon remand, the district court conducted evidentiary hearings on March 18 and 25, 1971. Petitioner was represented by appointed counsel. The district court confined evidence at the hearing to the three questions specifically referred, and in view of the evidence presented on these questions and their resolution, there was no occasion under our mandate to consider anything further.

At the hearing, Cecil Wolfe, an official of the Treasury Department, testified for the Government that there were licensed importers, manufacturers and dealers in firearms subject to the registration and occupational tax provisions of 26 U.S.C. §§ 5801 and 5802 in about 45 of the 50 states in 1964, when these offenses occurred. There were five classes of these special occupational tax-payers under the regulations promulgated under the National Firearms Act of 1934. Petitioner fell in Class I, which covered importers and manufacturers of firearms not covered by the other classes. Wolfe testified that during fiscal year 1964 there were 18 Class I manufacturers and importers registered under the Act, including a number of familiar and legitimate businesses.² He said that the tax and registration provisions of the Act were designed to qualify legitimate business operations. He added that the lawfulness of a Class I business was not related to the size of the operation and that a person could register and pay the special tax as a manufacturer without becoming a member of an inherently suspect class.

As to transfers of firearms, Wolfe testified that as of 1964 there were over 100,000 firearms registered under the 1934 National Firearms Act (excluding those owned by the military and the Federal Government), each of which was subject to its transfer provisions. He estimated that between 5,000 and 10,000 firearms were actually transferred under the procedures of the Act in 1964, the pertinent year, including transfers by collectors, law enforcement agencies, individual peace officers, licensees and special occupational taxpayers and excluding transfers to the military and exports.

Wolfe stated that the form used to record a transfer of a firearm in 1964 was a Form 4. The transferee was required to obtain the form, fill in certain information about himself and present it to the transferor in duplicate. The transferor would then complete the form, attach and cancel a tax stamp, and forward the form to the Director, Alcohol and Tobacco Tax Division. According to Wolfe, the form could be obtained from an Internal Revenue Service or Alcohol, Tobacco Tax office, and the transfer tax stamps could be purchased by anyone from an Internal Revenue Service district director's office without giving any information.

Anthony Scherer, Jr., a former Class IV firearms dealer, was called as a witness for petitioner. In his opinion, formed partly on the basis of his own experience and partly on "stories heard from other dealers," persons engaged in the firearms business with less than $100,000 per annum volume are generally regarded as persons inherently suspect of criminal activities. Although not a manufacturer, he related hearsay information that some firearms manufacturers had been harassed by the Government. He also alleged he was personally harassed. Petitioner's request to subpoena two former police officials similarly to testify to the effect that in their opinion persons engaged in the sale of certain firearms subject to the National Firearms Act whose gross business was less than $100,000 per year would be inherently suspect of criminal activity was denied. However, the district judge allowed an offer of proof and clearly considered its purport in making his decision, saying he would "take it with the case."

Petitioner then testified in his own behalf. He stated that his experience in the firearms business convinced him that all persons and corporations engaged in that business, regardless of volume, were inherently suspect.³ he conjectured that he might have been required to identify himself if he had purchased tax stamps in 1964. He admitted that tax stamps and the forms used under the 1934 Act could be obtained by anyone.

In its unreported opinion upholding petitioner's conviction under the 1934 Act, the district court found that since a number of Class I legitimate manufacturers registered and paid this tax in 1964, their existence "conclusively refutes the contention that Sections 5801 and 5802 of the National Firearms Act were directed almost exclusively to individuals inherently suspect of criminal activities."

The court also held that small manufacturers like petitioner were not inherently suspect because the legality of the manufacture of firearms covered by the Act under both federal and state law is not dependent upon size and that petitioner would not have become inherently suspect of violating Illinois law by complying with Sections 5801 and 5802 of the National Firearms Act. Therefore, the convictions under Counts I and II were sustained.

The court also upheld the convictions under Counts VI, VII, VIII, IX, X and XI involving illegal transfer offenses under Sections 5811, 5813 and 5814 because "transferors" under the same statute did not constitute a class almost exclusively of individuals inherently suspect of criminal activities. The court was influenced by Mr. Wolfe's testimony (summarized supra) that there are legitimate transfers of firearms "inasmuch as many transfers have occurred within a legitimate and proper manner as set out by the regulations of the National Firearms Act." The court refused to credit the contrary testimony of Mr. Scherer and petitioner since "the evidence did not clearly establish the basis for these alleged suspicions" and since it was not shown that either one had become suspect by virtue of being a "transferor" under the Act.

As to 26 U.S.C. §§ 5813 and 5814 involved in Counts VII, VIII, X and XI, the Court denied petitioner's self-incrimination claim upon analysis of Minor v. United States, 396 U.S. 87, 90 S.Ct. 284, 24 L.Ed.2d 283, and of the possible incriminatory impact of compliance with the particular obligations contained in the above Sections.

Accordingly, the district court ruled that all counts of petitioner's conviction under the National Firearms Act must stand. We affirm.

I

The evidence credited by the district judge established that manufacturers of firearms under the 1934 Act are not almost exclusively individuals inherently suspect of criminal activities. Therefore, under the interpretation of this Court in the previous appeal, the rationale of Marchetti, Grosso and Haynes, supra, is inapplicable to petitioner's failure to register as a firearms manufacturer and pay the occupational tax, as required by Sections 5801 and 5802. Since these provisions were clearly directed at law-abiding persons as well as criminally suspect persons, no automatic hazard of self-incrimination under the Fifth Amendment was presented.

The situation here under Sections 5801 and 5802 is a far cry from that in Haynes, which involved possession of an unregistered firearm under Section 5851. That Section made it an offense to possess a firearm which was acquired in violation of the making or transfer provisions or which was not registered as required by Section 5841. Section 5851 was construed to incorporate the requirements of Section 5841 so as to declare unlawful the possession of any firearm which had not been registered by its possessor in circumstances in which Section 5841 imposed an obligation to register. 390 U.S. at 94, 88 S.Ct. 722. That obligation to register was imposed on all possessors except those who acquired the firearm by transfer or importation or who made it if the National Firearms Act provisions relating to such transfer, importation or making were complied with. Thus the Supreme Court found the registration requirement to be directed principally at those persons who obtained possession without complying with the Act's other requirements. Id. at 96, 88 S.Ct. 722. Indeed almost invariably...