Hollis v. Lynch

121 F. Supp. 3d 617, 2015 U.S. Dist. LEXIS 103656, 2015 WL 4713277
CourtDistrict Court, N.D. Texas
DecidedAugust 7, 2015
DocketCase No. 3:14-cv-03872-M
StatusPublished
Cited by8 cases

This text of 121 F. Supp. 3d 617 (Hollis v. Lynch) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hollis v. Lynch, 121 F. Supp. 3d 617, 2015 U.S. Dist. LEXIS 103656, 2015 WL 4713277 (N.D. Tex. 2015).

Opinion

MEMORANDUM OPINION AND ORDER

BARBARA M.G. LYNN, District Judge.

Before the Court is Defendants’ Motion to Dismiss, or in the Alternative, for Summary Judgment [Dkt. No. 13]. For the reasons stated herein, Defendants’ 12(b)(1) Motion to Dismiss Plaintiffs Second Amendment and Commerce Clause claims for lack of standing is GRANTED, and Defendants’ 12(b)(6) Motion to Dismiss Plaintiffs due process, equal protection, and Plaintiffs alternative request for declaratory relief that § 922(o) does not apply to Plaintiff or the Hollis Trust is GRANTED.

BACKGROUND

Plaintiff Jay Aubrey Hollis brings this action in his individual capacity and as Trustee of the Jay Aubrey Isaac HoUis Revocable Living Trust (“the HoUis Trust”) to invalidate the federal ban on the transfer and possession of machine guns, imposed by the Gun Control Act (“GCA”), 18 U.S.C. § 922(o), and the National Firearms Act (“NFA”), 26 U.S.C. § 5801 et seq., and their implementing regulations, 27 C.F.R. § 479.105(a).

In a March 17, 2014 letter, the Bureau of Alcohol Tobacco and Firearms (“ATF”) advised a federal firearms licensee, Brandon Maddox, that, while the GCA contains an exception that permits a licensee to forego a National Instant Criminal Background Check on a previously-approved NFA transfer, that exception does not apply when the transferee is an unincorporated trust. Dkt. No. 1 ¶ 25; Dkt. No. 1-1 (PL’s Ex. A) (“Dakota Silencer Letter”). The relevant part of the letter stated:

Federal firearms law at 18 U.S.C. § 922(t)(l) requires federal firearms licensees (FFLs) to run a NICS check “before completion of the transfer,” and verify the identity of the transferee. There is an exception under section 922(t)(3)(B) and 27 CFR 478.102(d)(2), if the Attorney General “has approved the transfer under section 5812 of the Internal Revenue Code of 1986.” Subject to limited exceptions, the Gun Control Act (GCA) at section 922(b)(3) also makes it unlawful for an FFL to sell or deliver a firearm “to any person who the licensee knows or has reasonable cause to believe does not reside in (or if the person is a corporation or other business entity, does not maintain a place of business in) the State in which the licensee’s place of business is located.” The term “person” is defined by the GCA at 18 U.S.C. § 921(a)(1), to include “any individual, corporation, company, association, firm, partnership, society, or joint stock company.”
ATF has interpreted the GCA exception in sections 922(t)(3)(B) and 478.102(d)(2) to mean that firearms transfers are exempt from a NICS check when they have been approved under the NFA to the person receiving the firearm. Unlike individuals, corporations, partnerships, and associations; unincorporated trusts do not fall within the definition of “person” in the GCA.
Because unincorporated trusts are not “persons” under the GCA, a Federal firearms licensee (FFL) cannot transfer firearms to [an unincorporated trust] without complying with the GCA. Thus, when an FFL transfers an NFA firearm to a trustee or other person acting on behalf of a trust, the transfer is made to this person as an individual (i.e., not as [623]*623a trust). As the trustee or other person acting on behalf of the trust is not the approved transferee under the NFA, [26] U.S.C. § 5812, the trustee or other person acting on behalf of a trust must undergo a NICS check. The individual must also be a resident of the same State as the FFL when receiving the firearm.

Id. (emphasis in original). Apparently encouraged by the ATF’s construction of the GCA’s definition of “person” in the Dakota Silencer Letter, on May 14, 2014, Plaintiff, on behalf of the Hollis Trust, applied to manufacture a machine gun by submitting ATF Form 5320.1 (“Form 1”), paid the $200 tax required by the NFA, and attached the Dakota Silencer Letter as support for approval. Dkt. No. 1 ¶37. On September 8, 2014, ATF returned‘Plaintiffs Form 1 with a stamp of approval. Dkt. No. 1 ¶ 38; Dkt. No. 1-3 (Pl. Ex. C).

On September 10, 2014, ATF contacted Plaintiff and informed him that his Form 1 had been approved by mistake, and Plaintiff later received another copy of his Form 1, this time with a stamp of disapproval. Dkt. No. 1 ¶¶ 39-40; Dkt. No. 1-4 (PI. Ex. D). A few days later, Special Agent Aaron R. Wheeler met Plaintiff and delivered a letter from ATF’s Chief of the National Firearms Act Branch, which asked Plaintiff to surrender any machine gun that might have been manufactured by Plaintiff based on the mistakenly approved Form 1. Dkt. No. 1 ¶ 42; Dkt. No. 1-5 (PI. Ex. E). The letter explained that the exclusion of an unincorporated trust from the definition of “person” in 18 U.S.C. § 921(a)(1) does not permit an individual to avoid liability under § 922(o) by placing a machine gun “in trust”:

Pursuant to 26 U.S.C. §§ 5812 and 5822, an application to make a firearm shall be disapproved if the making would place the possessor in violation of the law. The GCA, 18 U.S.C. § 922(o) prohibits the possession of machineguns except in limited circumstances. Specifically, pursuant to the statute and implementing regulations, 27 C.F.R. § 479.105(a), ATF may not approve any private person’s application to make and register a machinegun after May 19,1986.
The sole exception to this exists under section 479.105(e) and allows ATF to approve such application “provided it is established by specific information”- that the making of the weapon is at the request and • on behalf of a Federal, State or local government entity. Please be aware that no such information has been provided, and therefore, pursuant to the disapproved application, the firearm is not registered to you or the Jay .Aubrey Isaac Hollis Revocable Living Trust in the National Firearms Registry and Transfer Record. Your continued possession of such a firearm without a valid registration violates the NFA. (26 U.S.C. § 5861(d)).
Also please note that the GCA defines the term “person” to “include any individual, corporation, company, association, -firm, partnership, society, or joint stock company.” See 18 U.S.C. § 921(a)(1).

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121 F. Supp. 3d 617, 2015 U.S. Dist. LEXIS 103656, 2015 WL 4713277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hollis-v-lynch-txnd-2015.