Free Motion to Dismiss - Rule 12(b)(6) - District Court of Federal Claims - federal

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No. 08-136C (Judge Wheeler) IN THE UNITED STATES COURT OF FEDERAL CLAIMS

WILLIAM AKINS, Plaintiff, v. THE UNITED STATES, Defendant.

MOTION TO DISMISS

JEFFREY S. BUCHOLTZ Acting Assistant Attorney General JEANNE E. DAVIDSON Director MARK A. MELNICK Assistant Director OF COUNSEL: MELISSA ANDERSON ATF Office of Chief Counsel Office of the General Counsel Deputy Associate Chief Counsel (Litigation) 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

May 2, 2008

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TABLE OF CONTENTS DEFENDANT'S MEMORANDUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 QUESTIONS PRESENTED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. II. Nature Of The Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Statement Of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I. Standards Of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A. B. II. RCFC 12(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 RCFC 12(b)(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

To The Extent That This Court Possesses Jurisdiction, Mr. Akins' Claims Fail As A Matter Of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 A. This Court Lacks Jurisdiction To Review ATF's Machinegun Classification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ATF's Classification Of The Akins Accelerator As A Machinegun Is Not A Public Use Of Private Property That Requires Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Mr. Akins Did Not Possess An Ownership Interest In The Machineguns That Could Be Taken By The Government . . . . . . . . . . . . 11 This Court Lacks Jurisdiction To Review Mr. Akins' Due Process Claim.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 This Court Does Not Possess Jurisdiction To Issue The Types Of Declaratory Judgments And Injunctions That Mr. Akins Seeks. . . . . . . . 14

B.

C.

D.

E.

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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TABLE OF AUTHORITIES CASES Acadia Technology, Inc. v. United States, 458 F.3d 1327 (Fed. Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 11 American Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363 (Fed. Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Amerisource Corp. v. United States, Slip op. (Fed. Cir. May 1, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 9 Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Crocker v. United States, 125 F.3d 1475 (Fed. Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 13 Daves v. Hawaiian Dredging Co., 114 F.Supp. 643, 645 (D. Hawaii 1953) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Ferreiro v. United States, 350 F.3d 1318 (Fed. Cir. 2003) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Fisher v. United States, 402 F.3d 1167 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Greenlee County, Ariz. v. United States, 487 F.3d 871 (Fed. Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6 Hendler v. United States, 952 F.2d 1364 (Fed. Cir. 1991) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Holley v. United States, 124 F.3d 1462 (Fed. Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Houston v. United States, 60 Fed. Cl. 507 (2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 International Industrial Park, Inc. v. United States, 80 Fed. Cl. 522 (2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

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Kanemoto v. Reno, 41 F.3d 641 (Fed. Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 M & J Coal Co. v. United States, 47 F.3d 1148 (Fed. Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Maritrans Inc. v. United States, 342 F.3d 1344 (Fed. Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Miller v. United States, 67 Fed. Cl. 195 (2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Mitchell Arms, Inc. v. United States, 7 F.3d 212 (Fed. Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 12, 13 Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 8 Redford v. Dept. of Treasury, 691 F.2d 471 (10th Cir. 1982). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Rith Energy, Inc. v. United States, 247 F.3d 1355 (Fed. Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Rith Energy, Inc. v. United States, 270 F.3d 1347 (Fed. Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Seay v. United States, 61 Fed. Cl. 32 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 United States v. King, 395 U.S. 1 (1969).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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STATUTES 5 U.S.C. §§ 701-706. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 18 U.S.C. Chapter 44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 18 U.S.C. § 921(a)(23).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 18 U.S.C. § 921(a)(28).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 18 U.S.C. § 922(o). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 10, 13 18 U.S.C. § 924(a)(2).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 26 U.S.C. Chapter 53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 10 26 U.S.C. § 5822. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 26 U.S.C. § 5845. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,3, 4 26 U.S.C. § 5845(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 3 28 U.S.C. § 599A(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 28 U.S.C. § 1491(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 28 C.F.R. § 0.130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 U.S. Const. amend. V, cl. 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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

No. 08-136C (Judge Wheeler)

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 motion to dismiss. DEFENDANT'S MEMORANDUM QUESTIONS PRESENTED 1. Whether this Court possesses jurisdiction to review agency decisions pursuant to

the Administrative Procedure Act. 2. Whether this Court must assume that the Bureau of Alcohol, Tobacco, Firearms

and Explosives acted lawfully in classifying the Akins Accelerator as a machinegun. 3. Whether ATF acted pursuant to its police power in requiring Akins Group to

register the Akins Accelerator as a machinegun and barring it from selling the Akins Accelerator to anyone other than law enforcement agencies. 4. Whether Akins Group possessed an ownership interest in the Akins Accelerator

protected by the Fifth Amendment. 5. 6. Whether this Court possesses jurisdiction to declare statutes unconstitutional. Whether this Court possesses jurisdiction to consider due process claims.

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7.

Whether this Court can issue injunctions in matters other than bid protests. STATEMENT OF THE CASE

I.

Nature Of The Case Plaintiff, William Akins, asserts a Fifth Amendment takings claim and seeks a

declaratory judgment that the actions of the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") in classifying the Akins Accelerator as a machinegun, and prohibiting Akins Group, Inc., from selling it to anyone other than law enforcement agencies, was arbitrary, capricious, without factual support and contrary to law, as well as an injunction prohibiting ATF from treating the Akins Accelerator as a machinegun. In the alternative, he seeks a declaration that 18 U.S.C. § 922(o) is unconstitutional on its face, and as applied to Mr. Akins. Finally, he also seeks a determination that ATF failed to provide him with due process. II. Statement Of Facts Mr. Akins is the successor-in-interest to Akins Group, Inc. ("Akins Group"), which owned a patent to a device known as the Akins Accelerator. Complaint ("Co.") ¶¶ 4, 6. This device, when added to a semi-automatic rifle, "increase[s] the cyclic rate at which the trigger ... can be actuated to discharge the weapon." Co. ¶ 6.1 After obtaining the patent for the Akins Accelerator, Akins Group submitted the Akins Accelerator to ATF for a determination as to whether ATF would consider the device a machinegun pursuant to the National Firearms Act ("NFA"), 26 U.S.C. § 5845(b). Co. ¶ 8. Section 5845(b) of the NFA provides:
1

Congress has defined a semi-automatic rifle as "any repeating rifle which utilizes a portion of the energy of a firing cartridge to extract the fired cartridge case and chamber the next round, and which requires a separate pull of the trigger to fire each cartridge." 18 U.S.C. § 921(a)(28). -2-

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Machinegun.--The term "machinegun" means any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger. The term shall also include the frame or receiver of any such weapon, any part designed and intended solely and exclusively, or combination of parts designed and intended, for use in converting a weapon into a machinegun, and 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. Initially, in 2003, ATF determined that the Akins Accelerator was not a machinegun. Co. ¶¶ 15, 19. Thereafter, Akins Group began producing and selling the Akins Accelerator. Co. ¶ 23. By letter dated November 22, 2006, ATF reversed its earlier ruling. Co. ¶ 24 and Exhibit ("Ex.") H. In the 2006 ruling, ATF noted that the definition of a machinegun contained in § 5845(b) included not only a weapon which shoots automatically more than one shot, but also conversion parts "designed and intended to convert a weapon into a machinegun, i.e., a weapon that shoots automatically more than one shot." Co., Ex. H at 2. ATF found that live fire testing of a Ruger 10/22 rifle with the Akins Accelerator attached "demonstrated that a single pull of the trigger initiates an automatic firing cycle that continues until the finger is released, the weapon malfunctions, or the ammunition supply is exhausted." Id. Accordingly, ATF held that the Akins Accelerator must be considered a machinegun pursuant to the National Firearms Act and the Gun Control Act.2 Id. at 2-3. Pursuant to this ruling, Akins Group was required to pay applicable taxes and register the machineguns in accordance with 26 U.S.C. § 5822 and Title 27 of the Code of Federal Regulations, or surrender them to the nearest ATF office. Co., Ex. H at 3. Section 479.105(c) of
2

The Gun Control Act of 1968 adopts the definition of machinegun contained in the National Firearms Act. See 18 U.S.C. § 921(a)(23). -3-

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Title 27 of the Code of Federal Regulations allows for registration of machineguns "conditioned upon and restricted to the sale or distribution of such weapons for the official use of Federal, State or local governmental entities." Thus, ATF's ruling also prohibited Akins Group from selling the Akins Accelerator to anyone other than Federal, state, and local law enforcement agencies. Co., Ex. H at 3. On December 13, 2006, ATF issued ATF Ruling 2006-2. Co., Ex. I. The ruling stated that ATF had been asked by several members of the firearms industry to classify devices that are exclusively designed to increase the rate of fire of a semiautomatic firearm. Id. at 1. ATF explained that these devices "once activated by a single pull of the trigger, initiate an automatic firing cycle which continues until either the finger is released or the ammunition supply is exhausted." Id. ATF held that these devices are a part "designed and intended solely and exclusively, or combination of parts designed and intended, for use in converting a weapon into a machinegun" as stated in the NFA, 26 U.S.C. § 5845. Id. ATF held that these devices are machineguns for purposes of the NFA, 26 U.S.C. Chapter 53, and the Gun Control Act of 1968, 18 U.S.C. Chapter 44. Id. Akins Group requested that ATF reconsider its decision on February 6, 2007. Co., Ex. J. ATF denied the reconsideration request on September 24, 2007. Co., Ex. K. This lawsuit followed. To the knowledge of the undersigned counsel, Akins Group has not challenged ATF's ruling in a district court pursuant to the Administrative Procedure Act, 5 U.S.C. §§ 701-706.

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ARGUMENT I. Standards Of Review A. RCFC 12(b)(1)

In deciding a RCFC 12(b)(1) motion, "determination of jurisdiction starts with the complaint, which must be well-pleaded in that it must state the necessary elements of the plaintiff's claim, independent of any defense that may be interposed." Holley v. United States, 124 F.3d 1462, 1465 (Fed. Cir. 1997) (citations omitted). When this Court's subject matter jurisdiction is placed into issue, the non-moving party bears the burden of establishing jurisdiction. International Industrial Park, Inc. v. United States, 80 Fed. Cl. 522, 526 (2008). "Where a motion to dismiss challenges the truth of the jurisdictional facts alleged in the complaint, the court is not restricted to the face of the pleadings, but may consider all relevant evidence in order to resolve the factual dispute." Id. (citing Ferreiro v. United States, 350 F.3d 1318, 1324 (Fed. Cir. 2003)). B. RCFC 12(b)(6)

The Tucker Act both confers jurisdiction on the Court of Federal Claims and waives the sovereign immunity of the United States for claims for money damages founded on, inter alia, acts of Congress. Greenlee County, Ariz. v. United States, 487 F.3d 871, 875 (Fed. Cir. 2007). However, "[t]he Tucker Act itself does not create a substantive cause of action; in order to come within the jurisdictional reach and the waiver of the Tucker Act, a plaintiff must identify a separate source of substantive law that creates the right to money damages." Id. (quoting Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in relevant part)).

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There are two different grounds upon which the Government may file a motion to dismiss for failure to state a claim in a Tucker Act case: 1) failure to state a claim upon which relief can be granted due to lack of a money-mandating source; and 2) failure to state a claim upon which relief can be granted because the plaintiff is ultimately not entitled to recover money damages under the statute. Greenlee, 487 F.3d at 876 (quoting Fisher, 402 F.3d at 1172-73). As the Supreme Court recently explained in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007), the factual allegations pled in the complaint must be enough to raise a right to relief above the speculative level. Thus, "when the factual allegations in a complaint, however true, could not raise a claim of entitlement to relief, "`this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.'" Id. at 1966 (quoting 5 Wright & Miller § 1216 at 233-34 (quoting Daves v. Hawaiian Dredging Co., 114 F.Supp. 643, 645 (D. Hawaii 1953))). II. To The Extent That This Court Possesses Jurisdiction, Mr. Akins' Claims Fail As A Matter Of Law The Fifth Amendment provides, in pertinent part: "nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V, cl. 4. "The language of this clause does not prohibit the government from taking private property altogether; rather, it prohibits the government `from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" Maritrans Inc. v. United States, 342 F.3d 1344, 1351 (Fed. Cir. 2003) (quoting Penn Central Transp. Co. v. New York City, 438 U.S. 104, 123 (1978)). The "clause does not entitle all aggrieved owners to recompense, only those whose property has been `taken for a public use.'" Amerisource Corp. v. United

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States, slip op. at 6 (Fed. Cir. May 1, 2008). For example, "[p]roperty seized and retained pursuant to the police power is not taken for a `public use' in the context of the Takings Clause." Id. at 7. The Federal Circuit has developed a two-part test to evaluate claims that a Governmental action constitutes a taking of private property without just compensation. Id. (citing M & J Coal Co. v. United States, 47 F.3d 1148, 1153-54 (Fed. Cir. 1995). First, the Court must determine whether a protected property interest existed, that is, whether the property interest "was a `stick in the bundle of property rights' acquired by the owner." M & J Coal, 47 F.3d at 1154 (quoting Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027 (1992)). Second, if the claimant can establish the existence of such an interest, the Court must then determine whether the Governmental action at issue constituted a compensable taking of that "stick." Id. In determining whether any compensable taking occurred, "it is important to decide at the outset whether the alleged taking was `categorical' or not." American Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363, 1372 (Fed. Cir. 2004) (citing Rith Energy, Inc. v. United States, 247 F.3d 1355, 1362 (Fed. Cir. 2001) (on rehearing)). The Supreme Court has explained that there are two types of categorical takings. First, when the Government causes the owner to suffer a permanent physical invasion of its property - no matter how small - the owner is entitled to just compensation. Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 538 (2005). Second, when Governmental regulations "completely deprive an owner of `all economically beneficial us[e]' of her property," the owner is also entitled to just compensation. Id. (quoting Lucas, 505 U.S. at 1019 (emphasis in original)).

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"Outside these two relatively narrow categories . . . regulatory takings challenges are governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U.S. 104, . . . (1978)." Id. In Penn Central, the Supreme Court acknowledged that it has been unable to identify any set formula for evaluating regulatory takings claims, but identified three factors of primary importance: (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 539. Each of these inquiries "aims to identify regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain." Id. Thus, each of the "tests focuses directly upon the severity of the burden that government imposes upon private property rights." Id. A. This Court Lacks Jurisdiction To Review ATF's Machinegun Classification

In his complaint, Mr. Akins seeks both judicial review of ATF's classification of the Akins Accelerator as a machinegun, and an award of just compensation pursuant to the Fifth Amendment. However, he cannot seek judicial review of ATF's classification in this Court because only district courts possess jurisdiction pursuant to the APA to review agency decisions. Crocker v. United States, 125 F.3d 1475, 1476 (Fed. Cir. 1997) ("the [Court of Federal Claims] correctly held that it lacks the general federal question jurisdiction of the district courts, which would allow it to review the agency's actions and to grant relief pursuant to the Administrative Procedure Act. . ."). Rather, the analysis in this Court must start from the premise that ATF correctly classified the Akins Accelerator as a machinegun. As the Federal Circuit has explained: -8-

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[I]n a takings case we assume that the underlying action was lawful and we decide only whether the governmental action in question constituted a taking for which compensation must be paid. [The appellant's] complaints about the wrongfulness of the [government action] are therefore not properly presented in the context of its takings claim. The only question before us is whether [the appellant] was entitled to be compensated for the effects of that action. Acadia Technology, Inc. v. United States, 458 F.3d 1327, 1331 (Fed. Cir. 2006) (quoting Rith Energy, Inc. v. United States, 270 F.3d 1347, 1352-53 (Fed. Cir. 2001) (on petition for rehearing)); see also Mitchell Arms, Inc. v. United States, 7 F.3d 212, 215 (Fed. Cir. 1993) (identifying the issue upon review as "whether the presumptively correct actions of ATF in suspending and revoking the permits constituted a compensable taking under the Fifth Amendment."). Thus, Mr. Akins' complaints about the wrongfulness of ATF's actions have no place in this action. The Court must assume that ATF acted in a lawful manner. The only issue properly before the Court is whether ATF's actions are compensable pursuant to the Fifth Amendment. B. ATF's Classification Of The Akins Accelerator As A Machinegun Is Not A Public Use Of Private Property That Requires Compensation

As the Federal Circuit noted in Acadia, after the Court starts from the assumption that the agency acted lawfully, the Court then must determine if the agency's actions are "the sort of `public use' of private property for which the Takings Clause of the Fifth Amendment requires compensation." Acadia, 458 F.3d at 1331. In Acadia, the Federal Circuit held that "`items properly seized by the government under its police power are not seized for `public use' within the meaning of the Fifth Amendment'" and, therefore, a plaintiff whose property has been seized

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in such circumstances is not entitled to compensation. Id. at 1332 (quoting Seay v. United States, 61 Fed. Cl. 32, 35 (2004)); Amerisource, slip op. at 6-7. In this case, Mr. Akins does not allege that ATF took the Akins Accelerators so that ATF would have machineguns for its own use. Rather, he concedes that ATF was acting pursuant to, among other statutes, 18 U.S.C. § 922(o), which, with limited exceptions not relevant here, bans the possession or transfer of machine guns. Co. ¶¶ 1, 21, 25, 39. Exhibit B to the complaint demonstrates that, by requesting a ruling, Mr. Akins himself commenced the process which ultimately resulted in ATF classifying the Akins Accelerator as a machinegun. Pursuant to 18 U.S.C. § 924(a)(2), persons who knowingly violate the provisions of 18 U.S.C. § 922(o), "shall be fined as provided in this title, imprisoned not more than 10 years, or both." Once ATF ruled that the Akins Accelerator was a machinegun, Akins Group and Mr. Akins (see Co. ¶ 32 concerning his personal possession of four Akins Accelerators) were arguably in violation of a criminal statute, but the record demonstrates that ATF, given the circumstances, provided Akins Group time to register or surrender the devices. In prohibiting Akins Group from possessing or transferring machineguns pursuant to § 922(o), ATF acted pursuant to this Congressional ban on the possession and transfer of machineguns. ATF has been granted authority by Congress to investigate "criminal and regulatory violations of the Federal firearms . . . laws." 28 U.S.C. § 599A(b)(1). Pursuant to Department of Justice regulations, ATF, among other things, possesses authority to: (a) Investigate, administer, and enforce the laws related to alcohol, tobacco, firearms, explosives, and arson, and perform other duties as assigned by the Attorney General, including exercising the functions and powers of the Attorney General under the following provisions of law:

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(1) 18 U.S.C. chapters . . . 44 (related to firearms) . . .; (2) Chapter 53 of the Internal Revenue Code of 1986, 26 U.S.C. chapter 53 (related to certain firearms and destructive devices); 28 C.F.R. § 0.130. Thus, when ATF required Akins Group to register or surrender the Akins Accelerator and banned it from selling them to anyone other than law enforcement agencies, ATF was acting pursuant to the police power conferred by Congress and the Attorney General and did not seize the property for public use pursuant to the Fifth Amendment. Acadia, 458 F.3d 1327, 1331-33; Redford v. Dept. of Treasury, 691 F.2d 471, 473 (10th Cir. 1982) (appellant's "firearms were seized and declared forfeited [by ATF] pursuant to statutory and administrative regulations; therefore the government need not compensate him."). As such, Mr. Akins is not entitled to compensation pursuant to the Fifth Amendment. C. Mr. Akins Did Not Possess An Ownership Interest In The Machineguns That Could Be Taken By The Government

A plaintiff cannot assert a takings claim against the Government when it has voluntarily entered into an area subject to pervasive Government control. Mitchell Arms, Inc. v. United States, 7 F.3d 212, 216 (Fed. Cir. 1993). In Mitchell Arms, the plaintiff obtained permits from ATF to import assault rifles into the United States. Id. at 213-14. ATF subsequently issued a news release announcing the suspension of pending applications for a permit. Id. at 214. Following this announcement, Mitchell Arms contacted ATF and was told it could rely upon its issued permits. Id. Mitchell Arms then confirmed an order of assault rifles with its foreign supplier, which required Mitchell Arms to obtain an irrevocable letter of credit. Id. Soon thereafter, ATF suspended the importation of assault rifles. Id. After the assault rifles arrived at port facilities, the United States Customs Service refused entry for lack of a valid import permit. -11-

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Id. ATF later banned further importation of assault rifles. Id. Mitchell Arms then filed suit in this Court, alleging that the suspension and revocation of its import permit constituted a compensable taking pursuant to the Fifth Amendment. Id. at 215. The Court dismissed the complaint and Mitchell Arms appealed to the Federal Circuit. Id. At the court of appeals, Mitchell Arms argued that ATF took either its firearms or its permits. It argued that it entered into a contract with its foreign supplier in reliance upon the issued permits, which gave rise to a reasonable investment-backed expectation protected by the Fifth Amendment. Id. The Federal Circuit rejected these arguments and affirmed this Court's decision. The court of appeals explained that the "chief and one of the most valuable characteristics of the bundle of rights commonly called `property' is `the right to sole and exclusive possession the right to exclude strangers, or for that matter friends, but especially the Government.'" Mitchell Arms, 7 F.3d at 215 (quoting Hendler v. United States, 952 F.2d 1364, 1374 (Fed. Cir. 1991)). The court held "`that enforceable rights sufficient to support a taking claim against the United States cannot arise in an area voluntarily entered into and one which, from the start, is subject to pervasive Government control.'" Id. at 216 (quoting Mitchell Arms, Inc. v. United States, 26 Cl. Ct. 1, 5 (1992)). The court explained that the reason "`enforceable rights sufficient to support a taking claim' cannot arise in such an area is that when a citizen voluntarily enters such an area, the citizen cannot be said to possess `the right to exclude.'" Id. (quoting Hendler v. United States, 952 F.2d 1364, 1374 (Fed. Cir. 1991)). The "reason the citizen cannot be said to possess `the right to exclude' is that the citizen is in an area subject to government control." Id. When Mitchell Arms voluntarily entered into the firearms import business, it "knowingly -12-

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plac[ed] itself in the governmentally controlled arena of firearms importation under the Gun Control Act. . . ." Id. Thus, the Federal Circuit held that the expectation by Mitchell Arms that it could sell assault rifles in the United States was not a property interest protected by the Fifth Amendment. Id. The facts in this case are on point with Mitchell Arms but weigh even more strongly in favor of the Government. Mr. Akins does not allege that at any time relevant to this action that he or Akins Group was entitled to possess and/or transfer unregistered machineguns. Thus, Mr. Akins would have known when he was creating the Akins Accelerator and when he obtained his patent in 2000 (Co. ¶ 6) that, if ATF determined that the Akins Accelerator was a machinegun, Akins Group would not be able to possess any Akins Accelerators without registering them as machineguns and paying the applicable tax, and it would not be able to sell them to anyone other than law enforcement agencies. Just as the plaintiff in Mitchell Arms "knowingly plac[ed] itself in the governmentally controlled arena of firearms importation under the Gun Control Act. . . ." (Mitchell Arms, 7 F.3d at 216), Mr. Akins knowingly placed himself in the Governmentally controlled arena of machinegun manufacturing and sales. Akins Group could not have possessed the right to exclude the Government from this business. Thus, like the plaintiff in Mitchell Arms, Akins Group did not possess a property right protected by the Fifth Amendment and Mr. Akins, therefore, is owed no compensation. D. This Court Lacks Jurisdiction To Review Mr. Akins' Due Process Claim

In count three of his complaint, Mr. Akins alleges that ATF violated his due process rights. However, as the Federal Circuit has held, the due process clause of the Fifth Amendment

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does not obligate the Government to pay money damages and cannot serve as a basis for jurisdiction in this Court. Crocker v. United States, 125 F.3d 1475, 1476 (Fed. Cir. 1997). E. This Court Does Not Possess Jurisdiction To Issue The Types Of Declaratory Judgments And Injunctions That Mr. Akins Seeks

In paragraph one, the introduction to his complaint, Mr. Akins requests that the Court declare 18 U.S.C. § 922(o) unconstitutional on its face and as applied to Mr. Akins, "with an appropriate injunction." In the body of his complaint, Mr. Akins does not elaborate upon any facts that he alleges demonstrate why this statute is unconstitutional, nor does he use the word unconstitutional. In his demand for relief on page 7 of the complaint, he seeks a declaration that the Akins Accelerator is not a machinegun and requests an injunction prohibiting ATF from treating the Akins Accelerator as a machinegun. In United States v. King, 395 U.S. 1, 5 (1969), the Supreme Court held that the Court of Claims did not possess declaratory judgment jurisdiction. Although Congress has since provided this Court with limited jurisdiction to issue declaratory judgments, such as in bid protest actions (28 U.S.C. § 1491(b)(2)), the Supreme Court's holding in King otherwise remains valid precedent. E.g., Houston v. United States, 60 Fed. Cl. 507, 510 (2004). Similarly, although the Court may issue injunctions in bid protest actions, the Court does not otherwise possess jurisdiction to issue injunctions. Kanemoto v. Reno, 41 F.3d 641, 644-45 (Fed. Cir. 1994). Likewise, the Court does not possess jurisdiction to declare statutes unconstitutional. Miller v. United States, 67 Fed. Cl. 195, 199 (2005) (citing King, 395 U.S. at 5).

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CONCLUSION For the foregoing reasons, defendant respectfully requests that the Court dismiss plaintiff's complaint for lack of subject matter jurisdiction, or failure to state a claim.

Respectfully submitted, JEFFREY S. BUCHOLTZ Acting Assistant Attorney General JEANNE E. DAVIDSON Director

s/ Mark A. Melnick 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

May 2, 2008

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CERTIFICATE OF SERVICE I certify under penalty of perjury that on this 2nd day of May, 2008, a copy of the foregoing "DEFENDANT'S 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