Rich v. United States, Civ. No. 4281.

• Decision Date: 06 June 1974
• Docket Number: Civ. No. 4281.
• Citation: 383 F. Supp. 797
• Parties: Leonard E. RICH et al., Petitioners, v. UNITED STATES of America et al., Respondents.
• Court: U.S. District Court — Southern District of Ohio

383 F. Supp. 797

Leonard E. RICH et al., Petitioners, v. UNITED STATES of America et al., Respondents.

Civ. No. 4281.

United States District Court, S. D. Ohio, W. D.

June 6, 1974.

Roy H. Horn, Dayton, Ohio, for plaintiff.

William H. Milligan, U. S. Atty., by Gary Brinsfield, Asst. U. S. Atty., Dayton, Ohio, for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

CARL B. RUBIN, District Judge.

This matter is before the Court on the cross motions for summary judgment filed by the parties.

Involved is a judicial review of a Revocation of License under the Gun Control Act of 1968 (18 U.S.C. ¶ 921 et seq.)

In accordance with Rule 52 of the Federal Rules of Civil Procedure, the Court does make the following findings of fact and determines the following conclusions of law.

I. Findings of Fact

1.

At all times involved herein petitioners Leonard E. Rich and Charles Rich d/b/a Rich Loan Company operated a pawnshop in the city of Dayton, Ohio.

2.

In accordance with the Gun Control Act of 1968 petitioners applied for and received a license to deal in firearms and ammunition. Such license was renewed effective July 1, 1970 and timely application for renewal has been made in each succeeding year.

3.

On April 24, 1970 a special investigator visited the petitioners' premises and found the recordkeeping system to be in violation of the requirements of 26 C.F. R. 178 (Joint Exhibit 4 — Proceedings of Hearing Examiner).

4.

On June 24, 1970, a warning was mailed to the petitioners stating that continued failure to maintain records required by the regulations might result in referral to the United States Attorney for prosecution.

5.

On October 2, 1970 a special investigator again visited the petitioners' premises and found instances of failure to properly complete Form 4473.

6.

On November 11, 1970 the Acting Assistant Regional Commissioner (Alcohol, Tobacco and Firearms Division) sent to the petitioners a Notice of Contemplated Revocation of License pursuant to 18 U. S.C. § 923(e)¹ and 26 C.F.R 178.71.² The notice charged willful violation of 18 U.S.C. § 922(m)³ by failure to properly maintain records which were required by the provisions of 18 U.S.C. § 923.⁴

7.

Following an informal hearing on December 29, 1970, a Notice of Revocation of License was sent February 10, 1971 (Joint Exhibit 7 — Proceedings of Hearing Examiner). An administrative hearing before a hearing examiner was held March 18 and April 12, 1971 resulting in a recommendation of license revocation. A Final Notice of Revocation was issued June 18, 1972.

8.

All procedural steps required by the Gun Control Act of 1968 and regulations thereunder have been taken by both parties and this matter is properly before the Court.

II. Opinion

The Court's authority to review the decision of the Secretary revoking the petitioners' license is conferred by § 923(f)(3) of the Gun Control Act of 1968. The legislative history of this provision indicates that Congress intended that the review should be "de novo." 1968 U.S.Code Cong. and Admin.News, p. 4410, pp. 4422, 4423. A determination "de novo" places the review in an entirely different posture than a review of administrative decisions generally. "... the decision of the Secretary is not clothed with any presumption of correctness or other advantage. The standards of judicial review of administrative decisions used in some other connections, i. e. the `credible evidence' standard and the `abuse of discretion' standard, are not applicable to the instant proceeding because they are inconsistent with the concept of `de novo' trial in this Court." Weidner v. Kennedy, 309 F.Supp. 1018, 1019 (C.D.Cal. 1971); Accord: Mayesh v. Schultz, 58 F.R.D. 537 (1973).

Prior to proceeding to a review of the record, the Court has been called upon by the parties to resolve conflicting interpretations of the provisions of 18 U. S.C. § 923(f). Lacking the guidance of previous judicial consideration of license revocation, the Court must seek to determine Congressional intent for the statutes in question.

A review of the history and composition of the Gun Control Act of 1968 is necessary. The legislative history of the Act, as set forth in 1968 U.S.Code Cong. and Admin.News, p. 2112 et seq. and 1968 U.S.Code and Admin.News, p. 4410 et seq., reveals concern over the senseless slaughter occurring throughout the nation as a result of uncontrolled sales of firearms. Congress found that the total lack of uniform controls in the sales of firearms resulted in frustration of local controls, even when they existed and were rigidly enforced. Increasing crime rates, largely made possible by almost totally unrestricted access to inexpensive and easily concealed handguns by minors, criminals and the insane, were found to threaten the security of every citizen. Against this background, Congress enacted the criminal provisions found in 18 U.S.C. §§ 922, 924.

At the same time, however, Congress made it clear that its purpose was not to place undue and unnecessary federal restrictions upon those citizens engaged in lawful activities. The provisions of the Gun Control Act of 1968 were not designed to deprive every citizen access to firearms, but merely to implement those restrictions necessary to achieve its purposes. The thrust of § 922(m) dealing with sales and record-keeping by licensed dealers is clearly directed at intentional violations.

It seems apparent that § 923 is intended to provide safeguards from the overzealous application of the Act's provisions in relation to license holders and applicants. This is consistent with the overall policy that firearms restrictions were only those reasonably necessary to implement the criminal provisions. It is likewise consistent with the legislative intent that firearms be available to the public through licensed dealers. Finally, it is consistent with the notice that a new comprehensive scheme of federal regulation should not be employed in such a manner as to destroy those very business concerns which are charged with the responsibility of carrying it out.

The licensing provisions of § 923 impose a duty upon the Secretary to issue a license unless the applicant is disqualified by the carefully defined exceptions of § 923(d)(1).⁵ Sections 923(d)(1)(C) and (D) provide that licenses may be denied only for "willful" violations of the provisions of the Act or regulations or willful failure to disclose material information. The lack of an equivalent willful intent in the revocation section ¶ 923(e) creates an anomalous situation. Apparently the Secretary may revoke for error, inadvertence, or simple ignorance of regulation. Such revocation then becomes an exercise in futility if thereafter the Secretary by the plain language of ¶ 923(d) must reissue the license absent a showing of willful violation. It cannot be that Congress intended this formalistic paradox. Accordingly, we hold that the Secretary must show a willful violation of statutes or rules and regulations promulgated thereunder in order to prevail herein.

The Secretary has urged that "willful" be deemed to include careless disregard as well, citing Goodman v. Benson, 286 F.2d 896 (7th Cir. 1961) and Capitol Packaging Company v. United States, 350 F.2d 67 (10th Cir. 1965) as authority for that construction. These cases, however, dealt with other statutes and do not provide the Court with the same insight that a careful examination of the Gun Control Act itself imparts. "Willfully" is a word of many meanings. Its construction is often influenced by its context, and its meaning should not be divorced from the purpose which Congress intended from its use. The Gun Control Act is a criminal statute. Indeed, § 922(m), which the petitioners allegedly violated, "willfully" is a criminal provision. If criminal prosecution instead of civil revocation were the proceeding with which the Court was currently engaged, it seems clear that a general criminal intent would be required for conviction. This demands no more be shown than an intent to do or fail to do that which the Act makes unlawful, but it requires more that a showing that technical violations in fact occurred. "Willfully" in the criminal context has been defined to mean with design, and does not require an evil intent except that the accused shall have purposefully or intentionally failed to obey the statute, having knowledge of the facts. Schmeller v. United States, 143 F.2d 544 (6th Cir. 1944).

The language of § 923(d)(1) (C), when read together with the word "willfully" in § 923(d)(1)(D) immediately following, supports the conclusion that Congress was concerned with purposeful, intentional conduct to be punished by revocation of licenses rather than mere negligence on the part of the licensee. The legislative history of § 923(d) reveals that Congress intended the Secretary to carry the burden of proof in denial or revocation of licenses. 1968 U.S.Code Cong. and Admin.News, p. 4410, p. 4422. § 101 of Pub.L. 90-618 declared that the purpose of the Act was not to impose undue or unnecessary restrictions upon firearms transactions. A construction of the term, "willfully", to include purposeful, intentional behavior, would further the protective concern which Congress intended through the enactment of § 923(d)(1) and the generous review provisions of § 923(f)(3).

In this context the Court notes that economic disaster would result to these petitioners upon the revocation of their gun license. A business of more than 30 years is directly threatened by technical violation of a relatively new and far reaching statute. Congress was aware of the grave consequences which would attach to the revocation of a license and provided that it should only occur in those instances in which the violations were "willful" in the sense of being intentional and purposeful. See also: Individual views of Messers Dirksen, Hruska, Thurmond and Burdick, 1968 U. S.Code Cong. and Admin.News, p. 2112, pp....