Sendra Corp. v. Magaw

• Citation: 111 F.3d 162
• Decision Date: 22 April 1997
• Docket Number: No. 95-5307,95-5307
• Parties: SENDRA CORPORATION, Appellant v. John W. MAGAW, Director, Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 162

111 F.3d 162

324 U.S.App.D.C. 120

SENDRA CORPORATION, Appellant v. John W. MAGAW, Director, Bureau of Alcohol, Tobacco and Firearms, U.S. Department of the Treasury, Appellee.

No. 95-5307.

United States Court of Appeals, District of Columbia Circuit.

Argued March 14, 1997.

Decided April 22, 1997

Appeal from the United States District Court for the District of Columbia (94cv00949).

Stephen P. Halbrook, Fairfax, VA, argued the cause and filed the briefs for appellant.

Fred E. Haynes, Assistant U.S. Attorney, Washington, DC, argued the cause for appellee. With him on the brief were Eric H. Holder, Jr., U.S. Attorney, Washington, DC, and R. Craig Lawrence, Assistant U.S. Attorney.

Before: SILBERMAN, RANDOLPH, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

This is an appeal from the district court's judgment rejecting Sendra Corporation's challenge to a decision of the Bureau of Alcohol, Tobacco and Firearms. Procedural principles of administrative law lead us to affirm the judgment for reasons different than those given by the district court.

I

Sendra Corporation, an Illinois company, manufactures firearms. At one time, it made machineguns. The National Firearms Act regulates the manufacture of machineguns. The statute defines "machinegun" to mean "any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger." 26 U.S.C. § 5845(b). The "frame or receiver" of such a weapon is also a "machinegun." Id. Regulations define "frame or receiver" to mean the "part of a firearm which provides housing for the hammer, bolt or breechblock and firing mechanism, and which is usually threaded at its forward position to receive the barrel." 27 C.F.R. § 179.11.

In amendments to the Gun Control Act, Congress banned private possession and transfer of machineguns manufactured after May 19, 1986. 18 U.S.C. § 922(o)(2)(B). Regulations issued under the National Firearms Act require manufacturers to file with the Bureau a notice showing, for each firearm, the date of its manufacture, its type, model, gauge or size, and serial number. 27 C.F.R. § 179.103. In anticipation of the 1986 Gun Control Act amendments, "manufacturers seeking to register machineguns prior to the cutoff date flooded the Bureau with applications." F.J. Vollmer Co. v. Higgins, 23 F.3d 448, 450 (D.C.Cir.1994).

Between April 24, 1986, and May 14, 1986, Sendra submitted registration applications to the Bureau for 3,119 machineguns, consisting of seven different models. The Bureau inspected Sendra's premises to determine whether the firearms reported by Sendra had actually been manufactured. The Bureau took samples of Sendra's receivers. In a letter of August 11, 1987, the Bureau informed Sendra that it would not register the 3,119 items because they "were not in a stage of the manufacturing process whereby they were National Firearms Act firearms as defined in 26 USC, Section 5845(b)." Letter from Terry L. Cates, Chief, National Firearms Act Branch, to Cynthia E. Aleo, Secretary for Sendra Corp. 1 (Aug. 11, 1987).

Sendra objected to the Bureau's decision regarding some of these items and requested an informal conference with the Chief of the Bureau's National Firearms Act Branch so that it could "explain the facts and circumstances more fully." Letter from Stephen P. Halbrook, Attorney for Sendra Corp., to Wayne Miller, Chief, National Firearms Act Branch 1 (Aug. 23, 1990). On October 3, 1990, the Bureau responded, stating that "our position regarding these items continues to be that they are not" machineguns "and are not registrable." Letter from Evans W. Miller, Chief, National Firearms Act Branch, to Stephen P. Halbrook, Attorney for Sendra Corp. 2 (Oct. 3, 1990). The letter continued: "As for your request that" the Bureau "reexamine" specific machinegun models "on Sendra's premises, we do not believe that a further inspection would be fruitful. Assuming that a current inspection would indicate that these items are [machineguns], such a finding would not establish that they were in the same condition when the applications to register them were filed. Accordingly, we do not intend to conduct a reinspection at this late date." Id. If Sendra wished "to present additional facts or arguments," it should do so in writing. Id. A conference, the Bureau's letter concluded, was "unnecessary." Id.

On November 30, 1990, Sendra submitted a memorandum and exhibits to the Bureau "in further support of" its "request that the firearms in question be registered." Letter from Stephen P. Halbrook to Evans W. Miller 1 (Nov. 30, 1990). In a letter of April 19, 1991, Sendra repeated its "request" that the Bureau "register these machineguns as having been manufactured before May 19, 1986," and "approve the enclosed applications and any further transfer applications Sendra submits for the machineguns in question." Letter from Stephen P. Halbrook to Evans W. Miller 1 (Apr. 19, 1991). With this letter, Sendra enclosed documents and a supplemental memorandum explaining that its delay was caused by its decision to wait until the conclusion of the criminal prosecution of some of Sendra's former officers for violation of the Gun Control Act. ¹

The Bureau responded on October 2, 1991. After restating the reasons for its 1987 decision not to register the items as machineguns, the Bureau concluded: "In view of these circumstances and since over five years have elapsed, we are not willing to accept these receivers for registration prior to May 19, 1986." Letter from Wayne Miller to Stephen P. Halbrook 2 (Oct. 2, 1991).

For reasons that do not appear in the record, the Bureau nevertheless conducted another inspection of Sendra's facilities on December 16, 1991. On May 8, 1992, the Bureau wrote to Sendra:

By letter dated October 3, 1990, we again advised you that these items were not registrable as [machineguns] prior to May 19, 1986. We also advised that we would not reexamine several of the items, since, assuming that they are now complete [machineguns], this would not establish that they were in the same condition when [Sendra applied for registration] in 1986.

As you are aware, your request for ATF to reexamine the alleged machineguns at Sendra's premises was recently granted. On December 16, 1991, ATF personnel visited Sendra's premises in Barrington, Illinois, for this purpose. This letter will discuss the results of the examination as well as a number of points raised in your recent correspondence concerning this matter.

Letter from Wayne Miller to Stephen P. Halbrook 2 (May 8, 1992). The letter went on to describe why the Bureau decided as it did in 1987 and explained why newly-presented evidence from Sendra was not credible. Two receiver models--the M60 and the XM15E2--were clearly registrable as of December 16, 1991, but the Bureau had "insufficient evidence from which to conclude that Sendra was in possession of" completed receivers "on May 19, 1986." Id. at 4; accord id. at 7-8. As to the third model--the STEN--the Bureau reiterated its earlier decision, denying registration on the basis that an individual in the Sendra factory told investigators in 1986 that the STEN receivers were to be used for semi-automatic weapons, not machineguns. Id. at 3. Therefore, the Bureau allowed the receivers to "be finished as semiautomatic firearms and sold as weapons not subject to the" National Firearms Act, but if "these items are further machined and finished as machinegun receivers," the Bureau said it would deny registration. Id. For the M60 receivers, the Bureau stated that if Sendra were "to submit additional documentary evidence indicating that all of the parts necessary to assemble complete M60 receivers were on the premises on May 19, 1986," it would "reconsider the above decision." Id. at 4. The Bureau concluded:

Finally, we would point out that Sendra's delay in requesting ATF's reconsideration of this matter has made it extremely difficult to determine the validity of the arguments made on their behalf....

... The fact that ATF complied with your request to reexamine the items on Sendra's premises demonstrates that ATF has considered the arguments made on Sendra's behalf and has dealt fairly with your client. ATF's disapproval of the registrations is based on the fact that there is insufficient evidence from which to conclude that the items were at a state of manufacture as of May 19, 1986, as to be subject to the [National Firearms Act].

Id. at 8.

In response, Sendra submitted numerous affidavits stating that the receivers were manufactured prior to May 19, 1986. Sendra also asserted that the STEN "has been a fully operable machinegun from its inception" and sent a videotape demonstrating a "STEN submachinegun" in action. Letter from Stephen P. Halbrook to Wayne Miller (Oct. 6, 1992). In the final letter between the Bureau and Sendra, the Bureau denied reconsideration. The Bureau wrote that Sendra's affidavits were not "persuasive evidence that the 'firearms' at issue were in fact manufactured prior to May 19, 1986. Accordingly, we must again decline your request to register the items as machineguns which were manufactured prior to May 19, 1986." Letter from Wayne Miller to Stephen P. Halbrook (Aug. 17, 1993). Thus ended the administrative phase of this case.

On April 28, 1994, Sendra filed suit in the district court seeking, pursuant to 5 U.S.C. § 702 and 28 U.S.C. §§ 1361 & 2201, a declaratory judgment and a writ of mandamus to compel the Bureau to register the receivers. In its answer to the complaint, the government raised the defense of the statute of limitations, 28 U.S.C. § 2401(a), arguing that the suit was brought more than six years after Sendra's claim first accrued. The government moved for summary judgment on the statute of limitations grounds. The district court...