Thompson/Center Arms Co., a Div. of K.W. Thompson Tool Co., Inc. v. U.S., 90-5091

• Decision Date: 30 January 1991
• Docket Number: No. 90-5091,90-5091
• Citation: 924 F.2d 1041
• Parties: THOMPSON/CENTER ARMS COMPANY, A DIVISION OF THE K.W. THOMPSON TOOL COMPANY, INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1041

924 F.2d 1041

THOMPSON/CENTER ARMS COMPANY, A DIVISION OF THE K.W THOMPSON TOOL COMPANY, INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 90-5091.

United States Court of Appeals Federal Circuit.

Jan. 30, 1991.

Rehearing Denied March 29, 1991.

Stephen P. Halbrook, Fairfax, Va., argued, for plaintiff-appellant.

Calvin C. Curtis, Dept. of Justice, Washington, D.C., argued, for defendant-appellee. With him on the brief were Shirley D. Peterson, Asst. Atty. Gen., Gary R. Allen and Gilbert S. Rothenberg.

Before RICH, MAYER, and MICHEL, Circuit Judges.

OPINION

MAYER, Circuit Judge.

Thompson/Center Arms Company, a division of the K.W. Thompson Tool Company, Inc. (Thompson), appeals the judgment of the United States Claims Court dismissing its tax refund complaint. See 19 Cl.Ct. 725 (1990). We reverse.

Background

Thompson is a federally licensed sporting arms manufacturer. It has designed and manufactures for hunting, target shooting, and other sporting purposes a single shot pistol with a 10 inch barrel called a "Contender". For a brief period in 1985, Thompson also manufactured a "Contender Carbine Kit" consisting of a 21 inch barrel, a wooden fore-end, and a shoulder stock. Other manufacturers had been selling similar conversion kits for the Contender since the late 1960s. Using Thompson's kit and the receiver of the Contender pistol, a purchaser can convert the pistol to a single shot carbine rifle with either a 21 inch or 10 inch barrel. The kit instructions, packaging, and advertising contain detailed warnings that making a carbine rifle with the 10 inch barrel is a violation of federal law. In addition, Thompson printed the phrase "Warning. Federal Law prohibits use with barrel less than 16 inches" on each carbine shoulder stock.

Thompson included the warnings on the advice of Rex Davis, in 1971 the Acting Director of the Alcohol, Tobacco, and Firearms Division of the Internal Revenue Service in the Department of the Treasury (ATF). In January of 1971, Thompson's president had written ATF and asked whether it would be legal to use the Contender pistol receiver with an 18 inch barrel and full shoulder stock to make a single shot carbine. Davis replied that "the manufacture of a carbine ... by utilizing a pistol action[ ] would be legal and the firearm so produced would not come within the purview of the National Firearms Act [26 U.S.C. Secs. 5801-72 (1988) ]." However, he suggested that "it would be in the public interest" for Thompson to include warnings like those accompanying the Contender carbine kit.

Thompson interpreted Davis's opinion as encompassing its Contender pistol and carbine conversion kit. The agency interpreted it differently. Shortly after Thompson began producing its kit in 1985, the Director of the Bureau of Alcohol, Tobacco and Firearms (BATF, formerly ATF), informed it that the kit and pistol together were a firearm subject to the National Firearms Act. In BATF's opinion, possession of an unassembled kit with a Contender pistol was the same as possession of "a rifle having a barrel or barrels less than 16 inches in length," which section 5845(a)(3) of the Act defines as a "firearm" and to which the $200 "making" tax of section 5821 therefore applies. See 26 U.S.C. Secs. 5821, 5845 (1988). However, BATF conceded that a complete 21 inch carbine rifle and complete pistol--each with its own receiver--do not come within the Act unless actually assembled as a "firearm", like a short-barreled "rifle", defined in section 5845.

When BATF adhered to this position on reconsideration, Thompson stopped producing the Contender carbine kit and filed suit in federal district court seeking a declaratory judgment that the pistol and kit were not a "firearm" as defined in the National Firearms Act. The court dismissed for lack of subject matter jurisdiction, noting that Thompson had to pay the disputed tax and file an administrative claim for refund before suing for a refund. Thompson/Center Arms Co. v. Baker, 686 F.Supp. 38, 43 (D.N.H.1988). Thompson subsequently paid the section 5821 tax and filed a refund claim with BATF. When BATF failed to act on the claim for more than six months, Thompson invoked the Tucker Act, 28 U.S.C. Sec. 1491 (1988), and sued for a refund in the Claims Court. On cross motions for summary judgment, the court agreed with BATF: the Contender pistol, when possessed in conjunction with the carbine kit, is a "firearm" as defined in section 5845(a)(3). 19 Cl.Ct. at 731. Accordingly, it dismissed the complaint and Thompson appeals.

Discussion

Section 5821 of the National Firearms Act (NFA or Act) requires any person making a firearm to pay a $200 tax on each. 26 U.S.C. Sec. 5821 (1988). The question in this case is who "makes" a NFA "firearm" and therefore is liable for the tax ¹: Thompson, when it separately manufactures the Contender pistol and carbine conversion kit, or the person possessing both a pistol and kit, when and if he actually assembles a 10 inch rifle? In our view, the National Firearms Act answers, "the latter."

A. The Current Act

26 U.S.C. Sec. 5845(a) (1988) defines "firearm" to include "(3) a rifle having a barrel or barrels of less than 16 inches in length; (4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length." Id. (emphasis added). The emphasized words strongly suggest that, to meet either definition, a short-barreled rifle ² actually must be assembled. Congress knows the difference between "could have," "could be made," and "could be modified," on the one hand, and the terms and phrases it chose to use, on the other.

Section 5845(c) supports this common-sense interpretation. It defines "rifle" as:

a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed cartridge to fire only a single projectile through a rifled bore for each single pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed cartridge.

Again the underscored words suggest that a rifle meeting this definition must physically exist. In particular, the ordinary meaning of "restore" is to put back in a pre-existing condition. Webster's Third New International Dictionary 1936 (17th ed. 1976). One cannot restore to rifle form, readily or otherwise, a separate pistol and carbine conversion kit that previously have not been combined.

The statutory definition of "make" also supports this interpretation. "The term 'make', and the various derivatives of such word, shall include manufacturing ..., putting together, altering, any combination of these, or otherwise producing a firearm." 26 U.S.C. Sec. 5845(i). The import is clear: a statutory firearm must exist in fact, not in contemplation, to be "made" within the meaning of the statute. How a firearm is "made" is irrelevant; that it exist is not. Cf. United States v. Drasen, 845 F.2d 731, 736-37 (7th Cir.1988). Of course, the term "make" can be modified by "could" or similar language indicating that the potential or likely existence of a firearm is enough. But Congress did not use that language in defining "rifle".

Finally, section 5822 suggests that Congress expected individual persons, in some circumstances, to make firearms subject to the Act. It provides that no person shall make a firearm unless he has filed with the Secretary of the Treasury an application to make and register the firearm and has "identified himself in the application form in such manner as the Secretary may by regulations prescribe, except that, if such person is an individual, the identification must include his fingerprints and his photograph." 26 U.S.C. Sec. 5822. In our view, this provision contemplates the individual owner of a Contender pistol and carbine conversion kit who actually makes a short-barreled rifle, no less than the owner of an otherwise legal and unregulated long rifle or shotgun who saws off the barrel. See, e.g., United States v. Rose, 695 F.2d 1356 (10th Cir.1982).

Our reading of the Act is not a hypertechnical, excessively stingy construction that ignores or frustrates the statutory scheme. On the contrary, interpreting the definitions of "firearm" and "rifle" to encompass an unassembled collection of parts that could be made into a proscribed short-barreled rifle renders statutory language defining other types of "firearms" either awkward or superfluous. For example, Congress used the phrase "readily restored" in defining not only "rifle", but "machinegun", "shotgun", "any other firearm", and "unserviceable firearm" as well. See 26 U.S.C. Sec. 5845(b), (d), (e), and (h). It deliberately did not use the phrase in the definition of "destructive device", choosing instead to use the broader phrase "readily converted". Id. Sec. 5845(f). We can find no principled difference between "restored", as interpreted by the government, and "converted", as commonly understood: to change from one (unregulated) form into another (regulated) form. Webster's Third New International Dictionary 499. Therefore, to adopt the government's construction of the term "rifle" requires us to read out of the statute either the word "converted" in section 5845(f) or the word "restored" in section 5845(b)-(e) and (h). We see no justification for this, especially when according the words their ordinary meanings makes the most sense of the statute.

More importantly, interpreting the definition of "rifle" to cover the unassembled combination of a Contender pistol and carbine conversion kit makes "combination of parts" language elsewhere in the statute superfluous. For example, section 5845(b) defines "machinegun" to include "any combination of parts from which a machinegun can be assembled if such parts are in the possession or under the control of a person." 26 U.S.C....