Lewin v. Blumenthal, 78-1380

• Decision Date: 05 January 1979
• Docket Number: No. 78-1380,78-1380
• Citation: 590 F.2d 268
• Parties: Sam LEWIN and William Nowick, d/b/a George's Jewelry and Loan, Appellees, v. Michael BLUMENTHAL, Secretary of the Treasury of the United States, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 268

590 F.2d 268

Sam LEWIN and William Nowick, d/b/a George's Jewelry and Loan, Appellees, v. Michael BLUMENTHAL, Secretary of the Treasury of the United States, Appellant.

No. 78-1380.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 12, 1978.

Decided Jan. 5, 1979.

Barbara Allen Babcock, Asst. Atty. Gen., Ronald S. Reed, U. S. Atty., Kansas City, Mo., and Robert E. Kopp and Susan A. Ehrlich, Attys., Appellate Section, Civ. Div., Dept. of Justice, Washington, D. C., for appellant.

David H. Dunlap of Campbell, Gilmore, Erickson, Cottingham, Morgan & Gibson, Kansas City, Mo., for appellees.

Before HEANEY, ROSS and McMILLIAN, Circuit Judges.

PER CURIAM.

In this proceeding the United States appeals from a decision of the district court which held that Sam Lewin and William Nowick, d/b/a George's Jewelry and Loan, should Not be denied a license to sell firearms for purported violations of the recordkeeping requirements of 18 U.S.C. § 921 Et seq. Lewin and Nowick had taken an appeal to the district court after being denied a license by the Secretary of the Treasury.

18 U.S.C. § 923(d)(1)(C) provides that an application for a dealer's license shall be approved if "the applicant has Not willfully violated any of the provisions of this chapter or regulations issued thereunder." (Emphasis added.)

We reverse, having found that the district court applied an incorrect legal standard defining willful violation. In formulating a legal standard, we rely chiefly on Shyda v. Director, Bureau of Alcohol, Tobacco & Firearms,448 F.Supp. 409, 415 (M.D.Pa.1977), as well as on decisions of our court defining "willful" violations in the context of other regulatory schemes which impose civil penalties. See Western Waterproofing Co. v. Marshall, 576 F.2d 139, 142 (8th Cir. 1978), Cert. denied --- U.S. ----, 99 S.Ct. 452, 58 L.Ed.2d 423 (1978).

In Shyda, which was not cited to the district court, ¹ it was held that plain indifference to the regulatory requirements could suffice as a "willful" violation justifying the denial of a license:

In order to prove a violation of 18 U.S.C. § 923(g) and 27 C.F.R. §§ 178.124 & 178.125 the Bureau must establish that the licensee "willfully" failed to maintain the proper records. Petitioner argues that the Bureau has not proven willfulness, and that therefore summary judgment should not be granted. In a civil context such as this, the definition of "willfully" is dependent upon the specific statutes involved. See Irey v. Occupational Safety and Health Review Comm'n, 519 F.2d 1200, 1207 (3d Cir. 1974); Rich, 383 F.Supp. at 800. For the violations alleged here, the Bureau must prove that the petitioner knew of his legal obligation and purposefully disregarded or was plainly indifferent to the recordkeeping requirements. See Rich, 383 F.Supp. 800-01; McLemore v. United States Treasury Dep't, 317 F.Supp. 1077, 1079 (N.D.Fla.1970); Mayesh, 58 F.R.D. at 540. Cf. Rex Wine Corp. v. Dunigan, 224 F.2d 93, 95 (2d Cir. 1955). There is no requirement of bad purpose as might be imposed were the Court faced with determining the definition of willfulness in a criminal prosecution. Cf. Intercounty Construction Co. v. Occupational Safety and Health Review Comm'n, 522 F.2d 777, 779-80 (4th Cir. 1975).

Shyda v. Director, Bureau of Alcohol, Tobacco & Firearms, supra, 448 F.Supp. at 415. See also McLemore v. United States Treasury Department, 317 F.Supp. 1077, 1079 (N.D.Fla.1970); St. Louis & San Francisco Railroad Co. v. United States, 169 F. 69, 71 (8th Cir. 1909).

In the present case an administrative hearing was held on August 11, 1975. This hearing disclosed a large number of violations ranging from failure to keep proper records on sales of weapons, to the sale of weapons to at least three persons who admitted their status as felons on the 4473 forms submitted to Lewin. A careful review of the evidence could only lead one to the conclusion that the appellees were indifferent to the...