Shyda v. DIRECTOR, BUR. OF ALCOHOL, TOBACCO, ETC.

• Decision Date: 31 October 1977
• Docket Number: No. 77-251 Civil.,77-251 Civil.
• Citation: 448 F. Supp. 409
• Parties: Sigmund SHYDA, Jr., t/d/b/a Shyda's Gun Shop v. DIRECTOR, BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, UNITED STATES DEPARTMENT OF the TREASURY.
• Court: U.S. District Court — Middle District of Pennsylvania

448 F. Supp. 409

Sigmund SHYDA, Jr., t/d/b/a Shyda's Gun Shop v. DIRECTOR, BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, UNITED STATES DEPARTMENT OF the TREASURY.

No. 77-251 Civil.

United States District Court, M. D. Pennsylvania.

October 31, 1977.

Horace A. Johnson, Lemoyne, Pa., for plaintiff.

S. John Cottone, U. S. Atty., Scranton, Pa., for defendant.

MEMORANDUM AND ORDER

NEALON, Chief Judge.

At issue in this case is a license revocation ordered by the Bureau of Alcohol, Tobacco and Firearms (the Bureau), Department of the Treasury. The licensee is a resident of this District and has petitioned this Court within 60 days of the Bureau's order as an "aggrieved party" in accordance with 18 U.S.C. § 923(f)(3). The respondent-Bureau has moved for summary judgment and in support has filed a memorandum of law and the administrative record upon which the Director ordered revocation. Petitioner, aware of his statutory right to submit additional evidence in this proceeding, has filed an opposing memorandum of law but no additional documentation. Presently before the Court is the question of whether there remains a material issue of fact for which a license revocation hearing must be conducted. See Fed.R.Civ.P. 56.

The genesis of petitioner's difficulties is the admitted failure to maintain records required by the Gun Control Act of 1968, 18 U.S.C. § 921 et seq.¹ In general petitioner's problems related to the maintenance of the "acquisition-disposition book" used to record all business transactions involving firearms, the maintenance of similar records for ammunition, and the use of special forms (Form 4473's) to be executed when there were dispositions of firearms. Specifically, petitioner was charged with violating 18 U.S.C. § 923(g) and 27 C.F.R. §§ 178.124 & 178.125 (1976).

On December 3 and 4, 1974, Bureau agents conducted an investigation of petitioner's business premises. Their preliminary investigation immediately prompted a complete inventory of the firearms and ammunition on hand and a very thorough check of petitioner's recordkeeping responsibilities. On June 26, 1975, a Notice of Contemplated Revocation was issued to petitioner, who requested an informal hearing, which was conducted November 12, 1975. On January 20, 1976, a Notice of Revocation was issued. Again, petitioner requested a hearing. A formal hearing on the record was conducted pursuant to 27 C.F.R. § 178.75(b) in Harrisburg, Pa. on April 6, 1976 by Administrative Law Judge Kenneth L. Travis. Judge Travis found that the Bureau had proven its case:

"The record keeping violations as set forth in the notice of revocation were committed willfully by petitioner who was aware of the record keeping requirements of the statute and he neglected to keep and knowingly failed to keep and maintain required records."

Recommended Decision of the Administrative Law Judge at 11 (Document ¶ 4). Recognizing that petitioner's license was subject to revocation, Judge Travis nevertheless recommended "a supplemental investigation in the nature of a pre-sentence inquiry to determine the current practice of the license holder." Id. at 22. On January 6, 1977, the Director approved the findings of fact and conclusions of law of Judge Travis, but found that petitioner's recordkeeping practices during the period of time that his license was in jeopardy were not relevant, and, moreover, that the Administrative Law Judge's decision was confined to consideration of matters within the certified record.² He therefore refused to schedule a supplemental investigation, and ordered the license revoked. Although petitioner claims that his recordkeeping practices are now in compliance with statute and regulation, it appears that the Bureau has made no further investigation of petitioner's business.

This matter is before me for consideration de novo. The statute provides for the introduction of evidence beyond that contained in the administrative record:

"In a proceeding conducted under this subsection, the court may consider any evidence submitted by the parties to the proceeding. If the court decides that the Director was not authorized to . . . revoke the license, the court shall order the Director to take such action as may be necessary to comply with the judgment of the court."

18 U.S.C. § 923(f)(3).³ As the statutory history of this section indicates, Congress contemplated that a proceeding in the district court upon the petition of the aggrieved licensee would be a "de novo review of . . . the revocation . . . ." See H.R.Rep.No.1577, 90th Cong., 2d Sess., reprinted in 1968 U.S.Code Cong. & Ad. News p. 4423.⁴ The better reasoned cases agree that the ordinary standard of administrative review does not apply when the Bureau seeks revocation of a license to sell firearms and ammunition. See Rich v. United States, 383 F.Supp. 797, 800-01 (S.D.Ohio 1974); Weidner v. Kennedy, 309 F.Supp. 1018, 1019 (C.D.Cal.1970); Mayesh v. Schultz, 58 F.R.D. 537, 538-39 (S.D.Ill. 1973). Cf. Casanova Guns, Inc. v. Connally, 454 F.2d 1320, 1321 (7th Cir. 1972).⁵ Consequently, the Court will examine this matter afresh and, as in any motion for summary judgment, use the entire record to determine whether there is a material issue of fact necessitating further proceedings. See Mayesh, 58 F.R.D. at 539.⁶

I have concluded that the respondent-Bureau is entitled to a partial summary adjudication with respect to the charged violations. See 10 C. Wright & A. Miller, Federal Practice and Procedure, Civil § 2737, at 681 (1973). Accordingly, I have set forth findings of fact that are without substantial controversy. See Fed.R.Civ.P. 56(d); Wright & Miller, supra, at 675.

General Findings of Fact

1. Petitioner is a licensed firearms dealer holding License No. 23-5866 as a dealer in firearms other than destructive devices or ammunition for other than destructive devices. He does business as Shyda's Gun Shop, 1703 South Lincoln Avenue, Lebanon, Pa. (Govt. Exh. 1).⁷

2. The petitioner has been a licensed firearms dealer since 1966. (N.T. 79).

3. Petitioner's sole means of support is his firearms business.

4. On February 2, 1971, Special Agent Stephen Abbate of the Bureau reviewed the firearms records at Shyda's Gun Shop and made a firearms license compliance investigation. (Govt. Exh. 12) During this investigation he found deficiencies in the records of the Shyda Gun Shop in four major areas: (1) the disposition of handguns was not being recorded on Form 4473's as required; (2) Form 4473's were not completely and properly filled out; (3) the book showing the acquisition and disposition of firearms was not bound; and (4) some firearm acquisitions were not being properly recorded. (N.T. 14-17).

5. During this 1971 visit to Shyda's Gun Shop, Abbate went over the "whole gamut" of regulations concerning the acquisition and disposition of firearms, with specific attention to recordkeeping responsibilities for firearms and ammunition, and mistakes in completion of Form 4473's, including the failure to sign each form, to specifically identify the firearm, and to obtain the certification of the transferee as to the legality of the transfer. (N.T. 17-18; Admin. Law Judge Exh. 1).

6. Abbate discussed other problems with petitioner at frequently held trap shoots. On these occasions recordkeeping responsibilities were also discussed, specifically the ammunition records. (N.T. 19-21).

7. On December 3 and 4, 1974, a search warrant was executed at Shyda's Gun Shop and an inventory was conducted. Participating in the inventory were Special Agents McCaughery, Manning, and Bowman and Regulatory Inspector Moore. (N.T. 38). At times petitioner and his wife assisted. (N.T. 101, 122). As a result of the inventory, petitioner was charged with the violations of the Gun Control Act that are at issue here.

Findings as to Charge I

8. In the Notice of Revocation (Govt. Exh. 8), petitioner was charged with a willful violation of 18 U.S.C. § 923(g) and 27 C.F.R. § 178.125(e) in that

"approximately sixteen hundred firearms were determined to have been sold or delivered without recording their disposition in your acquisition-disposition book."

Section 178.125(e) provides that

"(e)ach licensed dealer . . . shall . . . enter into a permanent record each receipt and disposition of firearms . . .."

The subsection permits a seven-day delay in making an entry of a sale or other disposition into the bound acquisition-disposition book.

9. Of the 3,413 firearms shown on petitioner's acquisition-disposition book to have been acquired between December 12, 1973 and November 30, 1974, 2,453 showed no disposition. Since only 700 were on hand, over 1700 firearms had been sold without the entry of a disposition in the bound acquisition-disposition book. (Recommended Decision of the Administrative Law Judge at 8; Govt. Exh. 13; N.T. 37-39, 43-45).

10. It was not unusual for petitioner to sell 40 to 50 guns per day during the fall season, or about 300 during the seven-day period of grace allowed under the regulations. (N.T. 81; Finding 8). However, petitioner admitted delaying much of the recordkeeping responsibility to the month of January, after the end of the peak season for gun sales. (N.T. 81).

11. Prior to the Bureau's inventory, Special Agent McCaughery made an undercover purchase of a firearm from petitioner's wife who was selling firearms at a trap shoot in Maryland. He was not asked to fill out a Form 4473. During the inventory at Shyda's Gun Shop, McCaughery looked for and found a Form 4473 covering this purchase and an entry in the acquisition-disposition book. The Form 4473, however, was improperly filled out because it stated that the firearm had been sold to a person named "Krause". This was the firearm that McCaughery personally purchased, apparently under his own name. (N.T. 47-49).

12. Two other firearms that were purchased from Shyda's Gun Shop by Bureau personnel undercover also were found to have been sold without the...