LEGAL NEWS FROM THE NATION’S CAPITAL JOHANNA REEVES, ESQ.
As I write this month’s column, COVID- 19 has dramatically impacted our daily lives, and all of us are dealing with unprecedented challenges, including school closures, mandated work from home and difficulties in acquiring certain food items and paper goods (where, oh where has all the toilet paper gone?). There is no doubt that the responses of the federal government and the individual states will be studied for years to come. Of significant interest is what constitutes an “essential business” and whether gun shops should be allowed to stay open in the wake of executive decisions to close non-essential businesses. This will be the subject of my next “Legally Armed” column, but in the meantime, there are some significant court decisions that bear examination.
Bump Stocks
On March 2, 2020, the Supreme Court denied a writ of certiorari in the case Guedes v. ATF, which challenged the Trump administration’s ban of bump stocks in a rule that criminalized possession of bump stocks as of March 26, 2019. In denying certiorari, the Supreme Court declined to review the lower court’s decision to deny the plaintiff’s motion for a preliminary injunction to prevent the rule from taking effect. 140 S.Ct. 789 (March 2, 2020). However, Justice Gorsuch issued an important statement outlining his concern over granting a federal agency deference:
The agency used to tell everyone that bump stocks don’t qualify as “machine guns.” Now it says the opposite. The law hasn’t changed, only an agency’s interpretation of it. And these days it sometimes seems agencies change their statutory interpretations almost as often as elections change administrations. How, in all this, can ordinary citizens be expected to keep up—required not only to conform their conduct to the fairest reading of the law they might expect from a neutral judge, but forced to guess whether the statute will be declared ambiguous; to guess again whether the agency’s initial interpretation of the law will be declared “reasonable;” and to guess again whether a later and opposing agency interpretation will also be held “reasonable?” And why should courts, charged with the independent and neutral interpretation of the laws Congress has enacted, defer to such bureaucratic pirouetting?
Id. at 790-791.
Justice Gorsuch agreed with the other justices that the current petition did not merit review. However, in noting that other cases challenging the bump stock rule are currently making their way through the courts, Gorsuch indicated this rule may still be subject to Supreme Court review. “Before deciding whether to weigh in, we would benefit from hearing their considered judgments … . But waiting should not be mistaken for lack of concern.” Id. at 791.
AR Lowers—Are They Firearms Subject to the Gun Control Act?
Yet another federal judge has held that lower receivers do not fall within the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF’s) definition of “firearm frame or receiver.” See “Is the AR-15 Lower Receiver a Controlled Firearm?” published in Small Arms Review, Vol. 24, No. 2 (February 2020).
In this recent case, U.S. v. Rowold in the U.S. District Court, Northern District of Ohio, — F.Supp3d (2019 WL 6888154), the government charged two defendants, Richard Rowold and Steven Robison, with making false statements in acquiring 50 Anderson AM-15 lower receivers and also charged Rowold with violating 18 U.S.C. §922(g)(1). In seeking dismissal of the indictment, the defendants argued the AR-15 lower receiver is not a firearm based on the definition of “firearm frame or receiver” in 27 C.F.R §478.11. The court agreed.
Referencing the issue of how much deference a court should give agency interpretation of its own regulation, the court noted that “[d]eference to agency interpretation in a situation where the regulation is unambiguous would permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation.” Rowold at 5. The court found that the regulatory definition of “firearm frame or receiver” can be interpreted only one way based on the plain language of the regulation, which is that under the Gun Control Act (GCA), a firearm receiver must be a single unit that holds the following three components: (1) the hammer; (2) the bolt or breechblock; and (3) the firing mechanism. Id. at 6.
The government argued that the GCA’s statutory and regulatory scheme shows intent to regulate a single part of a firearm and to require that the receiver house all parts listed in the definition would be inconsistent with the GCA. The court rejects this in light of a Supreme Court decision in 2012 which held, “if a violation of a regulation subjects private parties to criminal or civil sanctions, the regulation cannot be construed to mean what an agency intended but did not adequately express.” Id., citing Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 156 n.15 (2012).
Further, the fact that ATF has always interpreted the AR-15 lower as being the controlled frame or receiver did not persuade the court, which observed that “misapplying the law for a long time provides no immunity from scrutiny.” Rowold at 6.
Finally, the court explained that even though its ruling would leave the AR-15 lower receiver unregulated under the GCA, this does not factor into its decision to dismiss the indictment. “ATF retains the authority—and has the duty—to fix the regulatory scheme and to regulate AR-15 lower receivers as firearms within the GCA. The result I reach only prevents the agency from using an unreasonable and legally unacceptable application of its current regulations to accomplish a worthwhile objective.” Id.
New Export Rules Governing Firearms and Ammunition
On March 6, 2020, the U.S. District Court for the Western District of Washington (Seattle) issued a partial injunction to prevent portions of the new export rules governing firearms and ammunition from taking effect. Specifically, the preliminary injunction prohibits the U.S. Departments of State and Commerce from implementing or enforcing any portions of the new export rules that have any effect on “technical data or software directly related to the production of firearms or firearm parts using a 3D-printer or similar equipment.” Consequently, such technology or software remains on the United States Munitions List (USML) and is subject to the International Traffic and Arms Regulations (ITAR). The preliminary injunction will remain in place pending trial or further action of the court.
All other portions of the Final Rules became effective March 9, 2020. It’s hard to believe these rules actually took effect, but alas, they did. This means that most commercially available firearms, ammunition and technology directly related thereto, have now moved from the export controls of the ITAR and over to the Department of Commerce’s Export Administration Regulations (EAR). While existing ITAR authorizations remain valid for a time, industry must be sure to submit export license applications for new transactions to the correct agency under the new export control regulations. For example, a new DSP-5 application to export pistols in most cases will be returned without action because pistols are now controlled under the EAR and require a license from the Department of Commerce, Bureau of Industry and Security (BIS) through the Simplified Network Application Process Redesign, or SNAP-R.
As companies begin to implement the transition and work through the reclassification of their goods and services, there are bound to be instances where past compliance issues are identified. It is important to remember that the transition of items from the ITAR to the EAR does not absolve past violations, and any disclosures should be filed with the agency having jurisdiction at the time the violation occurred.
There is sure to be a learning curve for industry as it begins to operate under the new export control regime. Indeed, there was a curve for every other USML category that has gone through the export control reform initiative. To aid in the process, both the Department of State and Department of Commerce have posted to their respective websites guidance for industry, including license transition guidance and helpful decision tree tools. The “State Transition Guidance for Revisions to Categories I, II, and III” is available on DDTC’s website at https://bit.ly/2Wur2CV. The Department of Commerce has important information on exporting and re-exporting under EAR, as well as decision tools at the BIS website at bis.doc.gov. The best place to start is to read the new rules themselves. The State Department rule amending the ITAR is available at 85 Fed. Reg. 3819 (January 23, 2020), and the Commerce Department companion rule is at 85 Fed. Reg. 4136 (January 23, 2020).
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The information contained in this article is for general informational and educational purposes only and is not intended to be construed or used as legal advice or as legal opinion. You should not rely or act on any information contained in this article without first seeking the advice of an attorney. Receipt of this article does not establish an attorney-client relationship.
ABOUT THE AUTHOR
Johanna Reeves is the founding partner of the law firm Reeves & Dola, LLP in Washington, D.C. (reevesdola.com). For more than 15 years she has dedicated her practice to advising and representing U.S. companies on compliance matters arising under the federal firearms laws and U.S. export controls. Since 2011, Johanna has served as Executive Director for the Firearms and Ammunition Import/ Export Roundtable (F.A.I.R.) Trade Group (fairtradegroup.org). She has also served as a member of the Defense Trade Advisory Group (DTAG) since 2016. Johanna can be reached at jreeves@reevesdola.com or 202-715-9941.
| This article first appeared in Small Arms Review V24N6 (June/July 2020) |
