U.S. v. Palmieri, 93-5134

• Decision Date: 11 May 1994
• Docket Number: No. 93-5134,93-5134
• Citation: 21 F.3d 1265
• Parties: UNITED STATES of America, v. James PALMIERI, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 1265

21 F.3d 1265

UNITED STATES of America, v. James PALMIERI, Appellant.

No. 93-5134.

United States Court of Appeals, Third Circuit.

Argued Oct. 7, 1993.

Decided April 11, 1994.

Sur Petition for Rehearing May 11, 1994.

David E. Schafer (Argued), Office of Federal Public Defender, Trenton, NJ, for appellant.

Edna B. Axelrod, Daniel A. Greenstone (Argued), Michael Chertoff, Office of the U.S. Atty., Newark, NJ, for appellee.

Before: HUTCHINSON, COWEN and NYGAARD, Circuit Judges

OPINION OF THE COURT

NYGAARD, Circuit Judge.

James Palmieri appeals from his conviction on one count of knowingly engaging in the business of dealing in firearms without being licensed to do so, in violation of 18 U.S.C. Secs. 922(a), 924(a), and one count of knowingly possessing and transferring a machine gun, in violation of 18 U.S.C. Secs. 922(o), 924(a)(2). He contends that the district court erred (1) by precluding a defense based on his license as a collector of curios and relics, (2) in responding to a jury question regarding licenses for selling firearms, (3) in charging the jury on the machine gun element of the second count, (4) by admitting lay opinion and hearsay testimony relating to this element, and (5) in charging the jury on the intent requirement for the second count. We conclude that these assertions of error are without merit and will affirm.

I.

The facts are essentially undisputed. Palmieri met Ronald Lyman, an FBI special agent, and John Debenedictus, a paid informant, and sold Lyman three nine-millimeter semiautomatic pistols (a German Luger, a Belgian Browning and a French MAB) for $1,300. Although these weapons were manufactured during World War II, each was functional. The following week, Palmieri, Lyman and Debenedictus met again and Palmieri sold Lyman an M-1 carbine semiautomatic rifle for $400. This weapon was a remanufactured World War II vintage firearm, but it was also functional and could be converted to be fully automatic.

Two weeks later, Palmieri, Lyman and Debenedictus once again met, and Palmieri sold Lyman a 7.92 millimeter Chinese type 26 machine gun for $5,000. ¹ Although at the At trial, the government introduced tape-recorded offers by Palmieri to sell other weapons, store stolen goods and obtain counterfeit passports. Palmieri's response to this evidence was that these offers were puffery or were misconstrued. During the relevant time period, Palmieri held a license from the Bureau of Alcohol, Tobacco and Firearms ("ATF") as a collector of curios and relics. The jury found Palmieri guilty on one count of engaging in the business of dealing in firearms and one count of possessing and transferring a machine gun. The district court sentenced him to 27 months' imprisonment on each count to be served concurrently.

time of sale, Palmieri stated that the machine gun was fully operational and fully automatic, when FBI special agent Robert W. Murphy later examined the weapon, it was not operational. The machine gun was designed to fire in a fully automatic mode, but it was missing a required breechblock. The government and Palmieri dispute whether the machine gun was operational when Lyman purchased it. The weapon did, however, have a frame or receiver which is defined as "[t]hat part of a firearm which provides housing for the hammer, bolt or breechblock and firing mechanism...." 27 C.F.R. Sec. 179.11 (1993). Palmieri met with Lyman and Debenedictus on several other occasions, but sold them no other firearms.

II.

Count one of the superseding indictment charged Palmieri with violating 18 U.S.C. Sec. 922(a), which provides that:

(a) It shall be unlawful--

(1) for any person--

(A) except a licensed importer, licensed manufacturer, or licensed dealer, to engage in the business of importing, manufacturing, or dealing in firearms....

18 U.S.C.A. Sec. 922(a)(1)(A) (West Supp.1993). The first element of a violation of Sec. 922(a) is that the defendant "engaged in the business" which, as applied to a dealer in firearms, is defined as

a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms....

Id. Sec. 921(a)(21)(C).

Although the definition explicitly refers to economic interests as the principal purpose, ² and repetitiveness as the modus operandi, it does not establish a specific quantity or frequency requirement. In determining whether one is engaged in the business of dealing in firearms, the finder of fact must examine the intent of the actor and all circumstances surrounding the acts alleged to constitute engaging in business. This inquiry is not limited to the number of weapons sold or the timing of the sales. For example, the location of the sales, the time and conditions under which the sales occur, the defendant's behavior before, during and after the sales, the price charged for and characteristics of the firearms sold, and the intent of the seller are all potentially relevant indicators of whether one has "engaged in the business" of dealing.

A statutory exception to the definition of "engaged in the business" is set forth in 18 U.S.C. Sec. 921(a)(21)(C), which provides that it

shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms....

Id. Sec. 921(a)(21)(C); see also id. Sec. 922(a)(22) (objective of livelihood and profit contrasted with improving or liquidating a personal firearms collection). Hence, if Palmieri sold firearms to Lyman from his private collection, he had a defense under Sec. 921(a)(21)(C) that these sales were "for the enhancement of a personal collection or for a hobby," or constituted the sale of "all or part of his personal collection of firearms." Once again Whereas the first element of a Sec. 922(a) violation addresses the character of the conduct, the second element focuses on the status of the defendant, namely, whether he or she is a licensed dealer. A "dealer" is statutorily defined as "any person engaged in the business of selling firearms at wholesale or retail," id. Sec. 921(a)(11)(A), and a "collector" is defined as "any person who acquires, holds, or disposes of firearms as curios or relics...." Id. Sec. 921(a)(13). ³ Section 922(a) requires inquiry into both the defendant's conduct and status. If the conduct constituted engaging in the business of dealing in firearms, then it is illegal unless the defendant is a licensed dealer. On the other hand, sales by a licensed or unlicensed collector from a personal collection in furtherance of a hobby are not illegal. Once the conduct is deemed equivalent to the business of dealing, however, collector status will not shield a defendant from liability under Sec. 922(a).

however, there is no bright-line rule. The fact-finder must determine whether the transactions constitute hobby-related sales or engagement in the business of dealing from the nature of the sales and in light of their circumstances.

The district court included the statutory exception to "engaged in the business," see Sec. 921(a)(21)(C), and the definition of "with the principal objective of livelihood or profit," see id. Sec. 921(a)(22), in its charge to the jury. It further instructed that:

In this case, you have heard testimony that during the time period covered by the indictment, the defendant, James Palmieri, was a licensed firearms collector. I instruct you as a matter of law, that the collector's license possessed by the defendant did not authorize him to sell any firearms, even firearms that have been classified as curios or relics. I further instruct you that what the defendant believed his collector's license authorized him to do is not an issue in this case, it is therefore, irrelevant to your determination of the charges in this case.

The instruction that the collector's license did not authorize any sales of firearms, although literally correct is potentially misleading. The collector's license is immaterial because any person can make occasional sales from his or her personal collection without violating 18 U.S.C. Sec. 922(a), whether a licensed collector or not. Nonetheless, as stated above, a collector's license does not authorize its holder to engage in the business of dealing in firearms. Hence, the instruction that Palmieri's collector's license, in and of itself, did not authorize him to make the sales to Lyman is correct, albeit a bit truncated. Palmieri's status as a licensed collector was not dispositive, and he had no legally cognizable defense based on his collector's license alone. The jury was still required to determine the character of the transactions, either as occasional sales in furtherance of a hobby or as engagement in the business of dealing in firearms. See United States v. Hooton, 662 F.2d 628, 635 (9th Cir.1981) (distinguishing intent to engage in business from intent to enhance a gun collection), cert. denied, 455 U.S. 1004, 102 S.Ct. 1640, 71 L.Ed.2d 873 (1982).

Although Palmieri was precluded from arguing that the sales were authorized by his collector's license, the jury charge included the statutory exception for sales from or to enhance a personal collection. It also distinguished between the intent of obtaining a livelihood and profit from the intent of liquidating a personal collection. Thus, the jury was given the option of finding that Palmieri's actions did not constitute engaging in the business of dealing, irrespective of his collector's license. We have reviewed the entire jury charge and conclude that it was sufficient to enable Palmieri to present the defense that his sales were in connection with his hobby. See Estelle v. McGuire, 62 U.S. --- , 502, 112 S.Ct. 475, 482, 116 L.Ed.2d 385 (1991) (considering challenged jury instruction "in the context of...