Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 1 of 9

IN THE UNITED STATES COURT OF FEDERAL CLAIMS WILLIAM AKINS, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 08-136C (Judge Wheeler)

DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE TO MOTION TO DISMISS Pursuant to Rules 12(b)(1) and (6) of the Rules of the United States Court of Federal Claims ("RCFC"), defendant respectfully submits this reply to plaintiff's opposition to our motion to dismiss. INTRODUCTION In our opening brief, we established that this Court lacks jurisdiction to conduct an Administrative Procedure Act ("APA") review of the determination by the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") that the Akins Accelerator is a machinegun and that the Court must assume for purposes of this action that ATF's determination was correct. We also established that, because ATF was acting pursuant to its police power, it did not take Mr. Akins' property for a public use. In addition we established that because the machinegun industry is a heavily regulated industry, Mr. Akins could not have had an ownership interest in his machineguns that is protected by the Fifth Amendment. In his brief, Mr. Akins does not contend that ATF committed a compensable taking even if it properly classified the Akins Accelerator as a machinegun. Rather, the crux of Mr. Akins' argument continues to be that ATF erred in classifying the Akins Accelerator as a machinegun.

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 2 of 9

He offers no response to the several takings cases we cited that demonstrate that the Court cannot conduct an APA review of ATF's actions. While he continues to request that this Court review ATF's actions, he also states that he has filed an action in the district court seeking APA review. For the reasons stated in our opening brief, and below, we request that the Court dismiss Mr. Akins' complaint, or, in the alternative, stay this action pending resolution of the district court litigation. ARGUMENT I. Items Properly Seized Pursuant To The Police Power Are Not Taken For Public Use At page three of his brief, Mr. Akins objects to the argument at pages 9-11 of our motion to dismiss that ATF did not take Mr. Akins' property for a public use when it required Akins Group, Inc., to register or surrender its Akins Accelerators. In the first paragraph on page three of his brief, Mr. Akins states that he does not know what use defendant has made of the surrendered portion of the Akins Accelerators and that "there is nothing in the pleadings to indicate the purpose of the takings. . . ." Conversely, in the following paragraph on pages three to four of his brief, Mr. Akins points to paragraph 41 of the complaint in which he made a conclusory allegation of public use: "[b]y confiscating the spring from the Akins Accelerators, Defendant has taken plaintiff's private property for public use without just compensation." RCFC 10(c) provides that "[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." Among other documents, Mr. Akins attached to his complaint, as Exhibit H, ATF's November 22, 2006 ruling in which it determined that the Akins Accelerator is a machinegun. Thus, this letter is a part of the pleadings pursuant to RCFC 10(c).

-2-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 3 of 9

ATF's letter explained the applicable provisions of the National Firearms Act and the Gun Control Act of 1968. Complaint ("Co.") Exhibit (Ex.") H at 1. It explained that, pursuant to these statutes, machineguns can be manufactured for and sold only to Federal, state, and local Governments. Id. It further explained that, as a result of ATF's classification of the Akins Accelerator as a machinegun, Akins Group must register all Akins Accelerators or surrender them to ATF. Id. at 3.1 Thus, contrary to Mr. Akins' assertion that he does not know the purpose for which ATF required registration or surrender of the Akins Accelerator, his complaint establishes how ATF applied the National Firearms Act and the Gun Control Act of 1968 to the device at issue and why those statutes required registration or surrender of the devices. ATF's letter, then, establishes that ATF acted solely to enforce the limitations enacted by Congress upon the possession and sale of machineguns. At page five of his brief, Mr. Akins states that "Defendant offers no argument that Plaintiff's regulatory takings claim is related to Defendant's police powers, because there is none." Yet, he ignores the discussion at pages 9-11 of our opening brief, in which we established that Congress and the Attorney General have conferred upon ATF police power to enforce criminal and regulatory violations of Federal firearms law. We explained the restrictions contained in the National Firearms Act and the Gun Control Act of 1968 on the sale and manufacturing of machineguns. We also established that, pursuant to the decision of the United States Court of Appeals for the Federal Circuit in Acadia Technology, Inc. v. United States, "`items properly seized by the government under its police power are not seized for `public use'
1

As pointed out in paragraph 33 of the complaint, ATF ultimately did not require Akins Group (or anyone else) to surrender the entire Akins Accelerator. Rather, it required removal and surrender of the spring. -3-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 4 of 9

within the meaning of the Fifth Amendment'" and, therefore, a plaintiff whose property has been seized in such circumstances is not entitled to compensation. Acadia, 458 F.3d 1327, 1332 (Fed. Cir. 2006) (quoting Seay v. United States, 61 Fed. Cl. 32, 35 (2004)). Mr. Akins does not address Acadia in his brief, nor does he seem to dispute that ATF has been conferred a police power to enforce the National Firearms Act and the Gun Control Act of 1968. However, at page six of his brief, he contends that the Government's exercise of its police power is irrelevant to a takings analysis, arguing that "virtually all regulatory takings are exercises of police power. The test for whether a regulatory takings is compensable is not whether it is such an exercise. The test is whether the economic value of the property has been severely diminished or eliminated." Mr. Akins cites only Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) in support of this argument. However, he identifies no specific language or page in this 50-page decision that supports his argument. The Penn Central test for non-categorical takings is set forth at page eight of our opening brief and involves a weighing of three factors: (I) the character of the Governmental action, (ii) the economic impact of the action on the claimant, and (iii) the extent to which the action interfered with the claimant's reasonable investment-backed expectations. Id. at 124. Although the economic impact on the plaintiff is a factor in that test, Penn Central does not require compensation simply because the plaintiff's property has been severely reduced in value as Mr. Akins apparently contends. In Rith Energy, Inc. v. United States, the Federal Circuit had an opportunity to discuss the police power in light of the Penn Central test in a case involving the suspension and subsequent revocation of a mining permit: -4-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 5 of 9

With respect to the nature of the governmental action, the revocation of the permit, as we suggested earlier, was an exercise of the police power directed at protecting the safety, health, and welfare of the communities surrounding the Rith mine site by preventing harmful runoff. The exercise of the police power to address that kind of general public welfare concern is the type of governmental action that has typically been regarded as not requiring compensation for the burdens it imposes on private parties who are affected by the regulations. Rith Energy, Inc. v. United States, 270 F.3d 1347, 1352 (Fed. Cir. 2001) (on petition for rehearing). In support of this holding, the Federal Circuit relied upon various Supreme Court cases, including Penn Central, in which the Supreme Court held that a "use restriction on property is not a taking if it is `reasonably necessary to the effectuation of a substantial government purpose.'" Rith, 270 F.3d at 1352 (quoting Penn Central, 438 U.S. at 127). Thus, contrary to Mr. Akins' argument, the precedent we have cited establishes that the Government's exercise of its police power is an important, or even conclusive, factor in a takings analysis. The Congressional prohibition on the possession or sale of machineguns to private parties protects the heath, safety and welfare of communities by restricting the availability of these weapons. Even Mr. Akins does not seem to argue that Congress can impose no restrictions on the possession or sale of machineguns without paying compensation to any person or entity that wishes to sell them. Rather, as we discuss below, his central contention still is that the Akins Accelerator is not a machinegun. II. The Court Must Dismiss Or Stay This Action In his complaint, Mr. Akins sought a declaratory judgment that the actions of the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") in classifying the Akins Accelerator as a machinegun, requiring it to register or surrender the devices, and prohibiting Akins Group from -5-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 6 of 9

selling them to anyone other than law enforcement agencies, was arbitrary, capricious, without factual support and contrary to law. Co. ¶ 1. In our motion, we established that the Court does not possess jurisdiction to issue the declaratory judgment that Mr. Akins seeks. At page two of his brief, Mr. Akins responded by stating that he is withdrawing his request for a declaratory judgment, as well as his due process claim and request for an injunction. However, Mr. Akins concludes the paragraph in which he withdraws his request for declaratory relief with a footnote that states that the Court "can and must review the ATF's determination that the Akins Accelerator is a machine gun." He then cites the Court of Claims decision in Ellis v. United States, 610 F.2d 760, 762 (Ct. Cl. 1979) in support of his contention that the Court can issue declaratory judgments if they are tied and subordinate to money judgments. Akins brief at 2-3, fn. 1. Mr. Akins then spends much of the remainder of his brief disputing the correctness of ATF's actions. He argues at page six of his brief that "[t]he arbitrary whim and caprice of agency bureaucrats do not constitute the exercise of police powers. . . ." At pages seven and eight of his brief he argues that the Court must assume for purposes of this motion that the Akins Accelerator is not a machinegun and not subject to Government regulation. At page nine of his brief, he attempts to distinguish Mitchell Arms, Inc. v. United States, 7 F.3d 212 (Fed. Cir. 1993), upon which we relied at pages 11-13 of our opening brief, by stating that there was no question that the devices in that case were assault rifles, whereas in this case he disputes that the Akins Accelerator has been properly classified as a machinegun by ATF. Thus, although Mr. Akins states that he is withdrawing his request for declaratory relief, it appears from reading his brief as a whole that he still contends that the Court can conduct an APA review of the ATF determination underlying this dispute. -6-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 7 of 9

Mr. Akins fails to discuss the takings cases cited at pages eight to nine of our brief. In those cases, the Federal Circuit explained that this Court does not possess APA jurisdiction to review the underlying agency action and must assume in considering the takings claim that the underlying agency action is correct. In light of Mr. Akins' failure to address these cases, his citation to Ellis for the proposition that the Court can issue declaratory judgments that are subordinate to a monetary award provides little support for his argument. We do not dispute that the Court can issue declaratory judgments subordinate to money judgments. However, nothing in Ellis supports the argument that the Court can conduct an APA review of agency action in a takings case. Finally, with respect to Mr. Akins' contention that the Court need not assume that ATF's classification of the Akins Accelerator was correct but rather must accept as true his allegation that the Akins Accelerator is not a machinegun, this is not a correct statement of the Rule 12(b)(6) standard. While the Court must accept as true the facts he pleads, a court need not accept as true a legal conclusion that the pleader couches as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986). In this case, ATF has determined that the Akins Accelerator is a machinegun pursuant to 26 U.S.C. § 5845(b). ATF made a legal determination pursuant to statutes it administers, the correctness of which can only be reviewed in a district court pursuant to the APA. E.g., Crocker v. United States, 125 F.3d 1475, 1476 (Fed. Cir. 1997). Thus, this Court need not assume that the Akins Accelerator is not a machinegun, notwithstanding Mr. Akins' effort to couch this argument as a factual allegation. Rather, as we established in our opening brief, the Court must assume that ATF acted correctly in classifying the Akins Accelerator as a machinegun. -7-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 8 of 9

CONCLUSION For the foregoing reasons, defendant respectfully requests that the Court dismiss plaintiff's complaint, or, in the alternative, stay it pending resolution of his district court action.

Respectfully submitted, GREGORY G. KATSAS Acting Assistant Attorney General

JEANNE E. DAVIDSON Director

s/Donald E. Kinner for MARK A. MELNICK Assistant Director

OF COUNSEL: MELISSA ANDERSON ATF Office of Chief Counsel Office of the General Counsel Deputy Associate Chief Counsel (Litigation) s/ Michael N. O'Connell MICHAEL N. O'CONNELL Trial Attorney Commercial Litigation Branch Civil Division U.S. Department of Justice 1100 L St., N.W., 8th floor Washington, D.C. 20530 Tel: (202) 353-1618 Fax: (202) 514-8624 Attorneys for Defendant

June 16, 2008

-8-

Case 1:08-cv-00136-TCW

Document 7

Filed 06/16/2008

Page 9 of 9

CERTIFICATE OF SERVICE I certify under penalty of perjury that on this 16th day of June, 2008, a copy of the foregoing "DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE TO MOTION TO DISMISS" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/ Michael N. O'Connell