UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

UNITED STATES OF AMERICA §

§

v. § 4:98-CR-075-Y(01)

§

xxxxxxxxxxxxxxxxx §

MOTION TO DISMISS COUNT ONE OF THE INDICTMENT AS IT

IS BASED ON A STATUTE WHICH IS UNCONSTITUTIONAL

BOTH ON ITS FACE AND AS APPLIED

AND BECAUSE PROSECUTION PURSUANT TO THE STATUTE IS

FUNDAMENTALLY UNFAIR AND VIOLATES DUE PROCESS;

AND MOTION FOR A HEARING TO RESOLVE THIS ISSUE;

AND MOTION TO DISMISS INVALID INDICTMENT

AND MEMORANDUM IN SUPPORT

NOTE: COUNSEL FOR DEFENDANT IS AWARE THAT FIFTH CIRCUIT LAW HAS RULED ADVERSELY TO PART ONE OF THE MOTION FILED HEREIN, IN UNITED STATES V. GRESHAM, 118 F.3D 258, 261-65 (5TH CIR. 1997), CERT. DENIED, ___U.S.___, 118 S. CT. 702 (1998). HOWEVER, COUNSEL RESPECTFULLY DISAGREES WITH THE REASONING AND RESULT IN THAT CASE, AND WOULD NOTE IT APPEARS TO CREATE A SPLIT IN THE CIRCUITS. THEREFORE, COUNSEL RAISES THE ISSUE TO PRESERVE IT FOR FURTHER REVIEW.

I.

The statute is unconstitutional.

The defendant is charged in count one of the indictment with having possessed a firearm which was not registered to him. The firearm is described as a pipe bomb.

The defendant asserts that the Federal Government would never have allowed anyone to register this weapon. The federal government's authority to regulate the firearm in question, and the authority for the existence of the penal statute utilized in count 1, is the power to tax, i.e., to collect revenue. The defendant's position is the current statute and the prosecution in this case has nothing whatsoever to do with collecting revenue, or taxing someone, and thus the prosecution in a federal court is unconstitutional.

The defendant is charged with having violated 26 U.S.C. § 5861(d) which makes it illegal to possess an unregistered firearm. Title 26, of course, is the collection of statutes known as the "Internal Revenue Code." Congress requires the payment of a $200 tax for the transfer or making of certain weapons. 26 U.S.C. § 5811, 5821. Ostensibly, in order to keep track of these taxes, to determine what taxes are due, and to ensure enforcement, all firearms must be registered, and the possession of all unregistered firearms is penalized. 26 U.S.C. § 5841, 5861.

On its face, this scheme, if it did no more than that described above, would probably be within the legislative powers created and limited by the Constitution. But the statutory scheme goes much further, and is clearly an attempt to prohibit the possession of certain firearms, and in particular, short barrel shotguns, as described in this indictment. Congress has used the power to tax as a subterfuge to prohibit possession of certain weapons, and to punish severely the possession of those weapons, while at the same time ensuring that no tax money whatsoever would ever be gathered as a result of the possession of the weapons. Thus, the statute is unconstitutional.

In the words of the Supreme Court:

The Constitution created a Federal Government of limited powers. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or the people." U.S. Const., Amdt. 10. ... As James Madison put it.

"The powers delegated by the proposed Constitution to the federal government are few and defined."

The Fifth Circuit has noted that

[t]he National Firearms Act, ..., 26 U.S.C. § 5845(a), is grounded on Congress taxing power under Article I, Section 8, Clause 1. Sonzinsky v. United States, 300 U.S. 506, 507, 57 S.Ct. 554, 81 L.Ed. 772 (1937); United States v. Miller, 307 U.S. 174, 59 S.Ct. 816, 83 L.Ed. 1206 (1939). It's prohibitions are keyed to the imposition of an excise tax on the business of dealing in such weapons and on transfers of them, together with related requirements for registration of the dealer, the transfers, and the weapons. See, Sonzinsky; Miller; Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968); United States v. Freed, 401 U.S. 601, 602-07, 91 S.Ct. 1112, 1115-1117, 28 L.Ed.2d 356 (1971).

United States v. Lopez, 2 F.3d 1342 (5th Cir. 1993), aff'd, ___ U.S. ___, 115 S.Ct. 1624 (1995).

The Fifth Circuit has also stated:

..."Section 5861(d) [of Title 26] making possession of an unregistered weapon unlawful is part of the web of regulation aiding enforcement of the transfer tax provision in [26 U.S.C.] section 5811" and "the constitutional bedrock for the statute" is "the power to tax" rather than "the commerce power." United States v. Ross, 458 F.2d 1144, 1143 & n.3 (5th Cir. 1972); See also Sonzinsky v. United States, 300 U.S. 506, 57 S.Ct. 554, 81 L.Ed. 772 (1937); United States v. Rock Island Armory, Inc., 773 F.Supp. 117 (C.D. Ill. 1991).

United States v. Parker, 960 F.2d 498, 500 (5th Cir. 1992).

The statute and the statutory provisions that are relied upon by the government to make the allegations in count one, have nothing to do with collection of taxes, and everything to do with the punishment for the possession of the weapon. The defendant is not here complaining of the oppressiveness of the tax, or the fact that the tax creates restrictions on the possession of a pipe bomb. As the Fifth Circuit noted:

... [e]very tax is regulatory to some extent. The test of validity is whether on its face the tax operates as a revenue generating measure and the attendant regulations are in aid of a revenue purpose.

United States v. Ross, 458 F.2d 1144, 1145 (1972), cert denied, 409 U.S. 868 (1972).

The rationale for the legislation in question is as follows:

... Section 5861(d) making possession of an unregistered weapon unlawful is part of the web of regulation aiding enforcement of the transfer tax provision in § 5811. Having required payment of a transfer tax and registration as an aid in collection of that tax, Congress under the taxing power may reasonably impose a penalty on possession of unregistered weapons. Such a penalty imposed on transferees ultimately discourages the transferor on whom the tax is levied from transferring a firearm without paying the tax.

Id.

The defendant would have little quarrel with the Act if that is all there was to it, but there is more. The National Firearms Act not only requires registration of firearms, it also requires any individual who wishes to make or transfer a firearm to request the permission of the federal government to do so, and the federal government may deny permission! ("A firearm shall not be transferred unless (1) the transferor ... has filed with the Secretary a written application, in duplicate, for the transfer and registration of the firearm, ... and (6) the application form shows that the Secretary has approved the transfer and the registration of the firearm to the transferee. Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law." 26 U.S.C. § 5812; "No person shall make a firearm unless he has (a) filed with the Secretary a written application, in duplicate, to make and register the firearm ... and obtained the approval of the Secretary to make and register the firearm .... Applications shall be denied if the making or possession of the firearm would place the transferee in violation of law." 26 U.S.C. § 5822. "Each importer, maker, and transferor of a firearm shall, prior to importing, making, or transferring a firearm, obtain authorization ... to import, make, or transfer the firearm, and such authorization shall effect the registration of the firearm by this section." 26 U.S.C. § 5841(c)

In other words, the statute gives the federal government the power to prohibit someone from registering a weapon, then criminalizes the possession of the weapon because it is not registered. Thus, the National Firearms Act allows the federal government to punish a person for possessing the weapon without any relation, rational or otherwise, to the collection of revenue. (This is the point missed by the Court in Gresham.)

This is clear, because Congress has the authority to tax conduct that is unlawful. Marchetti v. United States, 390 U.S. 39, 44 (1968)("The Court has repeatedly indicated that the unlawfulness of an activity does not prevent its taxation.") Therefore, whether or not possession of a short barrel firearm is lawful, Congress can tax it and require its registration, so long as Fifth Amendment guarantees against self incrimination are met. Sonzinsky (original "National Firearms Act" constitutional on its face); Haynes v. United States, 390 U.S. 85, 100 (1968)(original version of "National Firearms Act" unconstitutional because it required compelled self incrimination.); United States v. Freed, 401 U.S. 601, 605 (1971)("National Firearms Act" as amended, does not violate self incrimination clause of the Constitution.)

Furthermore, the fact that the penalties for possession of the weapon are so harsh in relation to the tax loss indicates collection of taxes, at least with respect to short barrel firearms, was merely a guise. The tax for transferring or making a short barrel shotgun is $200. 26 U.S.C. § 5821. The penalty for possessing a short barrel shotgun that is unregistered is up to 10 years imprisonment and up to a $10,000 fine. This penalty applies even though the government refused to collect a tax or register a firearm! United States v. Ardoin, 19 F.3d 177 (5th Cir. 1994), cert. denied ___U.S.___, 115 S.Ct. 327 (1994).

In United States v. Rock Island Armory, Inc., 773 F.Supp. 117 (C.D. Ill., 1991) the court found that a prosecution pursuant to 25 U.S.C. § 5861 was unconstitutional. In that case the defendant was accused of possessing a machine gun, and the issue was whether the defendant could be prosecuted for failure to register the machine gun since the government "refuses to register or accept tax payments for the making or transfer of machine guns." Id. at 118.

The court noted:

... [T]he National Firearms Act is part of the Internal Revenue Code, and its provisions--including registration of [firearms]--are valid only to the extent they aid in the collection of tax revenue. Since BATF would not register and accept tax payments for any machineguns after May 19, 1986, registration of machineguns made and possessed after that date no longer serves any revenue purpose, and such registration requirements are invalid. ... Congress has no enumerated power to require registration of firearms.

Id. at 119. The court went on to note that

The National Firearms Act was originally passed as a taxing statute under the authority of Nigro v. United States, 276 U.S. 332, 48 S.Ct. 388, 72 L.Ed. 600 (1928). See National Firearms Act: Hearings Before the Committee on Ways and Means, supra, at 101-02, 162. Upholding the Harrison Anti-Narcotic Act, Nigro noted:

In interpreting the act, we must assume that it is a taxing measure, for otherwise it would be no law at all. If is a mere act for the purpose of regulating and restraining the purchase of the opiate and other drugs, it is beyond the power of Congress and must be regarded as invalid....

276 U.S. at 341, 48 S.Ct. at 390. The Court added:

Congress by merely calling an act a taxing Act cannot make it a legitimate exercise of taxing power under § 8 of article 1 of the Federal Constitution, if in fact the words of the act show clearly otherwise.

Id. at 353, 48 S.Ct. at 394.

Rock Island Armory, Inc., 773 F.Supp. at 120 (emphasis added).

It is true, as the Court in Rock Island Armory, Inc. points out, that the Supreme Court has upheld a facial challenge to the National Firearms Act in the Sonzinsky case. But, that decision is not dispositive. The National Firearms Act was greatly changed in 1968 pursuant to Public Law 90-618. The statute as it was drafted when the Supreme Court reviewed it in Sonzinsky did not allow the federal government to refuse to permit the registration of a weapon, and the subsequent collection of taxes, while at the same time allowing the federal government the authority to prosecute the possession of the unregistered weapon. Thus, given the statute as it existed when the Supreme Court reviewed it in 1937, the court was able to state that:

The case is not one where the statute contains regulatory provisions related to a purported tax in such a way as has enable this Court to say in other cases that the latter is a penalty resorted to as a means of enforcing the regulations. ... Nor is the subject of the statute described or treated as criminal by the taxing statute. ... Here [the statute] contains no regulation other than the mere registration provisions, which are obviously supportable as in aid of a revenue purpose. On its face it is only a taxing measure, ....

...

Here the annual tax of $200 is productive of some revenue. Sonzinsky, 300 U.S. at 513-14. (Emphasis added.)

But today, we are faced with a much different statute which dictates the conclusion that the statute does now in fact provide a penalty resorted to as a means of enforcing the regulations, and the subject of the statute is treated as criminal by the taxing statute. Most importantly, today the statute does contain a regulation other than the mere registration provisions, which are not at all supportable as in aid of a revenue purpose. And the Act, with regard to pipe bombs, collects no revenue. On its face, and especially as applied, the statute as amended is much more than a taxing measure.

The fact is that the Act as amended gives the government the discretion to decide who can register a firearm, prohibits the registration of weapons the government determines may not be legally made, transferred, or possessed, and then criminally punishes the failure to register the weapon. The government cannot justify this as a tax measure, because no tax would have been or will ever be collected. (This point is also missed by the Court in Gresham.)

The defendant in this case, assuming arguendo that he possessed the weapon described in the indictment, would not have been allowed to register the weapon. It is illegal to possess such a weapon in Texas. Tex. Penal Code, Arts. 46.01 and 46.05. It appears the federal government has never and will never register a pipe bomb, and has never collected a single penny of revenue for the possession of pipe bombs. (In United States v. Thomas, 15 F.3d 381 (5th Cir. 1994) Special Agent Waskom, who was employed as the explosive enforcement officer for the Explosive Technology Branch of the ATF, and whose job it was to provide technical support and assistance with regard to the coordination and administration of the federal explosive laws, was asked on direct examination if he knew of any case where a pipe bomb has been granted a serial number, and he replied, "None whatsoever." Although, the court found the witness not to be dispositive on this issue, the testimony remains strong evidence that pipe bombs are not, and have never been registered or taxed, though their possession has been severely penalized. Likewise, in United States v. Gambill, 912 F.Supp. 287 (S.D. Ohio, 1996) several ATF agents testified that they did not know of the government permitting the registration of pipe bombs.)

To the extent the government asserts, in answer to this motion, that the defendant could have registered the pipe bomb in issue, or that the government has registered pipe bombs, or that they have collected tax revenue for the possession of a pipe bomb, a hearing will be necessary to resolve the matter with a witness or witnesses that is or are qualified to resolve issue.

It is true that, in Thomas, the Fifth Circuit rejected a defendant's challenge that it is fundamentally unfair to prosecute someone for possession of an unregistered firearm because the ATF does not allow registration of pipe bombs. But that case just left unresolved the very issue the defendant presents here. In Thomas the court found the defendant failed to provide sufficient evidence to prove his assertion that the ATF will not register pipe bombs. Here, the defendant does intend to offer sufficient proof on this issue.

Likewise, in Gambill the District Court for the Southern District of Ohio, while finding that a prosecution for possession of an unregistered machine gun could not go forward, found that the government could validly prosecute a defendant for possession of a pipe bomb. Again, as in Thomas the Court in Gambill relied upon a failure of proof by the defendant that the BATF will not register firearms, and is thus inapposite. The Court also relied upon the fact that no statute makes possession of the pipe bomb illegal, thus its possession was not a legal impossibility. The court relied upon United States v. McCollom, 12 F.3d 968, 971 (10th Cir. 1993) for this proposition. The position is unsustainable.

First, the registration of a short barrel shotgun in this case by this defendant was in fact a legal impossibility. It is illegal to possess a short barrel shotgun in Texas, and the BATF is legally prohibited from registering weapons if their possession is illegal.

Second, if in fact the BATF will not register firearms, that alone dispositive. The Supreme Court does in fact look to Agency policy and action, regardless of whether it is legally compelled, to determine whether a statute is constitutional. For instance, in Freed, the Court upheld that National Firearms Act against a charge that complying with it violated the Fifth Amendment right against compelled self incrimination. The Supreme Court relied upon the fact that the "the Solicitor General informs us, information in the hands of the Internal Revenue Service, as a matter of practice, is not available to state or other federal authorities...." Freed, 401 U.S. at 605 (emphasis added).

Third, the issue raised in Gambill and McCollum was that the defendant's due process rights were violated by the fundamentally unfair procedure of denying the individual the ability to register an item to pay a tax on it, and then sending him to prison for not registering it. This argument is valid and the defendant does present it as a basis for relief here. However, the defendant has a basis for relief not presented or ruled on in these two cases: the statute is unconstitutional on its face and as applied because it goes beyond the power to tax. It exceeds the enumerated powers provided by the constitution. This prosecution has nothing whatever to do with the gathering of revenue.

In Ardoin, the Fifth Circuit acknowledged that the "constitutional bedrock" for the National Firearms Act is the "power to tax." Id. at 179, n. 3, quoting Parker, 960 F.2d at 500, in turn quoting Ross, 498 F.2d at 1145 n. 3. Yet, the Court in Ardoin, disregarded "the firm rule of this circuit that one panel may not overrule the decisions of another." United States v. Taylor, 933 F.2d 307, 313 (5th Cir.), cert. denied, 502 U.S. 883 (1991). The Court then found that the regulation of machine guns could be upheld under the interstate commerce clause!

Counsel respectfully submits that this decision not only overrules earlier decisions, it is just plain wrong. As Judge Wiener points out in his dissent in Ardoin, 19 F.3d at 182-88, which the defendant adopts in toto as support for this motion, Congress did not pass the National Firearms Act as an attempt in any way, shape, or form, to regulate interstate commerce. It was explicitly passed as a tax measure to gather revenue. On its face, it does not seek to ban the possession of weapons in or affecting interstate commerce, it seeks to tax the transfer or production of weapons, whether or not they affect, substantially or otherwise, interstate commerce. The point missed by the Court in Gresham is the statute is unconstitutional because it goes beyond these goals and gives the BATF the authority to refuse the registration of weapons. As Judge Wiener notes: "[t]he suggestion that a tax measure can somehow have continued vitality when it no longer taxes certainly tests one imagination." Id. at 184.

Most importantly, the basis for the Court's decision in Ardoin is that the BATF "still has the authority to" tax and register machine guns. This is a completely incorrect assertion. The statute prohibits BATF from registering machine guns. Again, as Judge Wiener points out, "the NFA forbids the BATF to register and accept taxes for illegal firearms.... " Id. at 183. 26 U.S.C. §§ 5812, 5822. In any event, the BATF could not have registered the "pipe-bomb" in this case, so Ardoin, and the case it relies upon, United States v. Jones, 976 F.2d 176 (4th Cir. 1992), cert. denied, 508 U.S. 914 (1993), are inapposite.

More persuasive authority for this issue of first impression, is Judge Wiener's dissent in Ardoin, Rock Island Armory, Inc., and United States v. Dalton, 960 F.2d 121 (10th Cir. 1992). Judge Wiener believes it is fundamentally unfair to convict "citizens for violating laws with which they cannot possibly comply." Ardoin, 19 F.3d at 182.(Wiener, J., dissenting.) Judge Wiener adds:

...Stripped of it Revenue-Raising Function, the NFA is nugatory.

... To remain legitimate, ..., a measure enacted under the tax power must raise some revenue.

Ardoin, 19 F.3d at 187.(Weiner, J., dissenting.)

In Dalton, the Court cited to 1 W.LaFave & A. Scott, Jr., Substantive Criminal Law § 3.3(c) (1986) for this maxim: "one cannot be criminally liable for failing to do an act which he is physically incapable of performing." The Court then agreed with Rock Island Armory, Inc. and held that because the National Firearms Act was passed pursuant to the taxing power, and the government will not register or tax the firearm at issue, "the constitutional legitimacy of the registration as an aid to taxation" has been removed. Dalton, 960 F.2d at 125, quoting Rock Island Armory, Inc., 773 F.Supp at 125. The Court in Dalton concluded:

... To put the proposition as plainly as we are able: a provision which is passed as an exercise of the taxing power no longer has that constitutional basis when Congress decrees that the subject of that provision can no longer be taxed. Dalton, 960 F.2d at 121. The Supreme Court has struck down statutes that rely upon the tax power as a guise to regulate. The Court held such statutes to be invalid in United States v. Constantine, 296 U.S. 287 (1935), United States v. LaFranca, 282 U.S. 568 (1931), Bailey v. Drexel Furniture Co.(Child Labor Tax Case), 259 U.S. 20 (1922), and Hill v. Wallace, 259 U.S. 44 (1922). The continued validity of these cases was made clear in the recent case of Department of Revenue of Montana v. Kurth Ranch, ___U.S.___, 114 S.Ct. 1937 (1994), wherein the Supreme Court favorably cited the Child Labor Tax Case, Constantine, and LaFranca. Kurth Ranch, 114 S.Ct. at 1946 & 1947 n.19. The Court in Kurth Ranch pointed out that "'there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics as punishment.'" Id. at 1946, quoting Child Labor Tax Case, 259 U.S. at 38. The Supreme Court in Kurth also noted that the "justifications [for a tax] vanish when the taxed activity is completely forbidden...." Kurth, 114 S.Ct. at 1937(emphasis added).

In LaFranca, the Supreme Court found "the exaction ... in question is not a true tax, but a penalty involving the idea of punishment for infraction of the law ...." LaFranca, 282 U.S. at 572 (citations omitted). Here, there is no tax whatsoever, just the punishment.

The defendant also submits the decision in Gresham incorrectlly applies the law as interpreted by the Supreme Court in United States v. Lopez, ___ U.S. ___, 115 S.Ct. 1624 (1995), which requires a substantial impact on interstate commerce, a factor neither alleged in the indictment nor relied upon by the government as the basis for this prosecution.

II.

Fails to allege an offense.

The indictment must be dismissed for yet another reason: it does not allege every element of the offense. A weapon must be registered if it is a destructive device, as defined in the statute. The defendant must know that the thing he possesses meets the definition and contains the characteristics of a destructive device as defined in the statute to have committed the offense alleged. 26 U.S.C. §§ 5845, 5861(d). See, United States v. Staples, 511 U.S. 600, 619-20 (1995) (government must prove that the defendant knew of characteristics of weapon that subjects it to regulation under § 5861(d).); United States v. Keen, 96 F.3d 425, 431 (9th Cir. 1996)(Solicitor General agrees that government must prove the defendant knew characteristics of weapon that subjects it to regulation under § 5861(d).); United States v. Moore, 97 F.3d 561, 564 (D.C. Cir. 1996)(noting disagreement in circuits, prior to government concession on the issue).

The indictment's failure to allege all the elements of the offense renders it fundamentally defective. Further, it is defective because no grand jury has passed on the issue of whether there is probable cause to believe the defendant committed an offense.

WHEREFORE, Defendant prays that this Court dismiss this indictment, or in the alternative, hold a hearing to determine the fact issues raised by this motion.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

FORT WORTH DIVISION

UNITED STATES OF AMERICA §

§

§

xxxxxxxxxxxxxxxxxxx §

ORDER

Considering the motion of defendant xxxxxxxxxxxx to dismiss the indictment against him because it is based on a statute which is unconstitutional both on its face and as applied and because prosecution pursuant to the statute is fundamentally unfair and violates due process; and motion for a hearing to resolve this issue; the Court finds that said motion is meritorious; and finds that it has/lacks merit; the court has also considered the defendant's motion to dismiss the indictment for failing to allege the element of the offense that the defendant knew the object he is alleged to have possessed had the characteristics of a firearm, and finds that it has/lacks merit, therefore,

IT IS ORDERED that Count One of the indictment against defendant xxxxxxxxxxx be, and hereby is, DISMISSED/ OR: the motion is overruled .

SIGNED this day of , 1998.

FORT WORTH, TEXAS.

TERRY R. MEANS

UNITED STATES DISTRICT JUDGE

ALTERNATIVE ORDER

It is ordered that a hearing on this matter is set for ______________, 1998.

SIGNED this day of , 1998.

FORT WORTH, TEXAS.

TERRY R. MEANS

UNITED STATES DISTRICT JUDGE

C:\wwwfpd\uncon2.wpd