RSM v. Buckles

• Decision Date: 24 January 2001
• Docket Number: No. 00-1777,00-1777
• Citation: 254 F.3d 61
• Parties: (4th Cir. 2001) RSM, INCORPORATED, d/b/a Valley Gun of Baltimore; SANFORD ABRAMS; JANE DOE; JOHN DOE, I; JOHN DOE, II, Plaintiffs-Appellees, v. BRADLEY A. BUCKLES, Director, Bureau of Alcohol, Tobacco and Firearms, Defendant-Appellant. Argued:
• Court: U.S. Court of Appeals — Fourth Circuit

Page 61

254 F.3d 61 (4th Cir. 2001)

RSM, INCORPORATED, d/b/a Valley Gun of Baltimore; SANFORD ABRAMS; JANE DOE; JOHN DOE, I; JOHN DOE, II, Plaintiffs-Appellees, v. BRADLEY A. BUCKLES, Director, Bureau of Alcohol, Tobacco and Firearms, Defendant-Appellant.

No. 00-1777

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

Argued: January 24, 2001

Decided: June 6, 2001

Appeal from the United States District Court for the District of Maryland, at Baltimore. Marvin J. Garbis, District Judge. (CA-00-759-MJG) COUNSEL ARGUED: Michael Scott Raab, Appellate Staff, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Stephen Porter Halbrook, Fairfax, Virginia, for Appellees. ON BRIEF: David W. Ogden, Assistant Attorney Gen- eral, Lynne A. Battaglia, United States Attorney, Mark B. Stern, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Wash- ington, D.C.; Imelda M. Koett, Associate Chief Counsel, Abigail Roth, Office of the Chief Counsel, BUREAU OF ALCOHOL, TOBACCO & FIREARMS, Washington, D.C., for Appellant. Chris- topher A. Conte, Frederick, Maryland, for Appellees.

Before WILKINSON, Chief Judge, and WIDENER and WILLIAMS, Circuit Judges.

Reversed by published opinion. Chief Judge Wilkinson wrote the opinion, in which Judge Widener and Judge Williams joined.

OPINION

WILKINSON, Chief Judge:

Plaintiffs challenge a Bureau of Alcohol, Tobacco, and Firearms ("BATF") letter requiring federal firearms licensees to submit certain record information to BATF. The district court held that the letter vio- lated Section 106 of the Firearms Owners' Protection Act of 1986, 18 U.S.C. S 926(a) (1994). RSM, Inc. v. Buckles, 94 F. Supp. 2d 692 (D. Md. 2000). Because BATF's issuance of the letter was limited to fed- eral firearms licensees who had violated federal law in failing to com- ply with firearms trace requests, we must reverse the judgment.

I.

Pursuant to the Gun Control Act of 1968, as amended, the Bureau of Alcohol, Tobacco, and Firearms operates a firearms tracing system. The system is designed to assist law enforcement agencies in criminal investigations. A firearms trace typically begins when a law enforce- ment agency submits a trace request to BATF after recovering a fire- arm from a crime scene or from a suspect. BATF then tracks the movement of the weapon through the chain of distribution to the fed- eral firearms licensee ("FFL") who ultimately sold the firearm to the retail purchaser. When BATF initiates a trace request, FFLs are required to provide information such as the purchaser's name, address, and federal firearms license number. FFLs are also required to respond to BATF trace requests within 24 hours. See 18 U.S.C. S 923(g)(7); 27 C.F.R. S 178.25a (2000).

In February 2000, BATF adopted new internal procedures because some FFLs were not adequately complying with its trace requests. First, BATF developed a definition of "uncooperative" FFLs. The definition included those FFLs who, in 1999: (1) failed to respond to a firearms trace request on at least one occasion; (2) failed to respond to a trace request within 24 hours on three or more occasions; or (3) provided incorrect information in response to a request. BATF then issued "demand letters" to the 41 FFLs whom BATF deemed to be uncooperative. The FFLs receiving these letters constituted less than .1 percent of all the 80,000 FFLs nationwide. The letters required the 41 FFLs to submit information concerning their firearms purchases and sales for the past three years, and on a monthly basis thereafter. The information requested included a description of the firearms including the models, serial numbers, and types, as well as the pur- chasers' names, addresses, and federal firearms license numbers.

BATF saved the record information that it received from FFLs pur- suant to its letters. With the exception of the purchaser's name, BATF also entered all the information into an electronic database. If BATF determined that an uncooperative FFL had become cooperative, BATF would destroy the hard copies of the record information. How- ever, BATF continued to save the information in its electronic data- base.

On February 7, 2000, BATF issued a letter to RSM, Inc., d/b/a Val- ley Gun of Baltimore ("Valley Gun"). BATF contended that Valley Gun had repeatedly failed to comply in a timely manner with BATF trace requests. In response, plaintiffs filed this action against the Director of BATF seeking declaratory and injunctive relief. Plaintiffs included Valley Gun, Valley Gun's owner, and three anonymous indi- viduals who lawfully purchased firearms from Valley Gun. Plaintiffs alleged that the demand letter exceeded the scope of BATF's statutory authority and also violated their Fourth and Fifth Amendments rights. In addition, plaintiffs claimed that the letter was invalid because it had been issued by an official who lacked authority to do so.

On April 13, 2000, after a bench trial, the district court perma- nently enjoined BATF from seeking to enforce its letter. See RSM, 94 F. Supp. 2d at 697. The court found that RSM failed to timely comply with trace requests on three or more occasions in 1999. Id. at 693 n.4. The court held, however, that the letter violated Section 106 of the Firearms Owners' Protection Act of 1986, 18 U.S.C.S 926(a). Id. at 696-97. BATF now appeals.

II.

Congress passed the Gun Control Act of 1968, Pub. L. No. 90-618, 82 Stat. 1213, to regulate interstate firearms transactions. See National Rifle Ass'n v. Brady, 914 F.2d 475, 477 (4th Cir. 1990). Among other things, the Act requires that importers, manufacturers, and dealers of firearms obtain a federal license in order to operate. See 18 U.S.C. SS 922(a)(1), 923(a). Under the Act, the licensee must maintain all records of firearms transactions as required by federal regulation. The regulations are prescribed either by the Secretary of the Treasury or the Secretary's delegates, including BATF officials. See 18 U.S.C. S 923(g).

In December 1968, the Department of the Treasury issued regula- tions designed to implement the Gun Control Act's record keeping requirements. In particular, section 178.126(a) requires licensees, when requested by letter, to submit the relevant record information to BATF. See 27 C.F.R. S 178.126(a). ¹

In 1986, Congress enacted the Firearms Owners' Protection Act, Pub. L. No. 99-308, 100 Stat. 449 ("FOPA"), to amend several provi- sions of the Gun Control Act. FOPA was intended to reduce the regu- latory burden on law-abiding firearms owners without incapacitating BATF's ability to combat violations of the firearms laws. See Brady, 914 F.2d at 477. Two provisions of FOPA are relevant to this case. First, FOPA enacted section 923(g)(5)(A), which essentially codified 17 C.F.R. S 178.126(a). See 18 U.S.C S 923(g)(5)(A).² Like the regu- lation, section 923(g)(5)(A) obliges each federal firearms licensee, when required by letter, to submit record information to BATF. See id.

Second, FOPA amended section 926(a) to limit the Secretary's ability to pass regulations creating a registry of firearms. See 18 U.S.C. S 926(a).³ The amendment provides that BATF may not pre- scribe any "rule or regulation" after the enactment of FOPA requiring firearms records to "be recorded at or transferred to a facility owned, managed, or controlled by the United States." Id. The amendment also prevents BATF from prescribing rules or regulations which require "that any system of registration of firearms, firearms owners, or fire- arms transactions or dispositions be established." Id.

III.

A.

1.

Plaintiffs' principal argument is that BATF's letter exceeds the scope of its authority under section 923(g)(5)(A) and violates the lim- itations set forth in section 926(a).

Section 923(g)(5)(A) grants BATF some limited amount of author- ity to secure record information from FFLs. See 18 U.S.C. S 923(g)(5)(A). That provision states:

Each licensee shall, when required by letter issued by the Secretary, . . . submit on a form specified by the Secretary, . . . all record information required to be kept by this chap- ter.

Id. Likewise, 27 C.F.R. S 178.126(a) recognizes BATF's authority to issue letter requests. That regulation provides:

Each licensee shall, when required by letter issued by the Director of Industry Operations, . . . submit on Form 4483, Report of Firearms Transactions, . . . all record information required by this subpart, or such lesser record information as the Director of Industry Operations in his letter may spec- ify.

BATF contends that unless some other statutory provision narrows the scope of 18 U.S.C. S 923(g)(5)(A) and 27 C.F.R. S 178.126(a), these provisions would permit BATF to issue the letter in this case. Plaintiffs suggest several possible limitations. Their primary argument is that BATF's demand letter violates section 926(a)'s prohibitions against the transfer of firearms records to a federal facility and the establishment of "any system of registration of firearms." 18 U.S.C. S 926(a).

By its plain text, however, section 926(a) does not directly limit BATF's authority under either 18 U.S.C. S 923(g)(5)(A) or 27 C.F.R. S 178.126. Section 926(a)'s prohibitions apply only to a "rule or reg- ulation prescribed after the date of the enactment of the Firearms Owners' Protection Act." 18 U.S.C. S 926(a) (emphasis added). Sec- tion 923(g)(5)(A) is a statute, not a rule or regulation. Likewise, while 27 C.F.R. S 178.126 is a regulation, it was prescribed in 1968, long before the enactment of FOPA in 1986.

The district court was cognizant of this fact but believed that BATF had never before interpreted the regulation to permit BATF to issue letters such as those in this case. See RSM, 94 F. Supp. 2d at 696. BATF in turn presented substantial evidence that it interpreted 27 C.F.R. S 178.126 to permit it to issue letters to noncompliant FFLs as far back as 1968. However, this dispute does nothing to change the fact that section...