United States District Court, D. Columbia.
[Copyrighted Material Omitted]
For Innovator Enterprises, Inc., Plaintiff: Dan Mark Peterson, LEAD ATTORNEY, ATTORNEY TO BE NOTICED, Fairfax, VA.
For B. Todd Jones, Defendant: Marian L. Borum, LEAD ATTORNEY, ATTORNEY TO BE NOTICED, Washington, DC.
JOHN D. BATES, United States District Judge.
Plaintiff Innovator Enterprises, Inc. (" Innovator" ) brings this action against B. Todd Jones, in his official capacity as the director of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (" ATF" or " the agency" ). Innovator brings two claims, seeking (1) to set aside agency action as " arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) (" APA" ), and (2) a declaratory judgment that Innovator's product, the
"Stabilizer Brake," is not a " firearm silencer," as defined by the National Firearms Act and the Gun Control Act of 1968, 18 U.S.C. § 921(a)(24). Before the Court is  ATF's motion to dismiss and  the parties' cross-motions for summary judgment. For the reasons set forth below, the Court will deny ATF's motion to dismiss, grant in part and deny in part the parties' cross-motions for summary judgment, vacate the agency decision, and remand to ATF for further proceedings.
A. Statutory Background
The National Firearms Act " imposes a registration requirement and a tax upon the manufacture and transfer of firearms," and the Gun Control Act of 1968 " criminalizes the illegal manufacture, transfer, and possession of firearms." Def.'s Mot. to Dismiss or for Summ. J. (" Def.'s Mot." ) [ECF No. 9] at 7. The definition of a " firearm" under federal law includes " any firearm muffler or firearm silencer." 18 U.S.C. § 921(a)(3)(C). Another provision of the Gun Control Act of 1968 offers additional clarity:
The terms " firearm muffler" and " firearm silencer" mean any device for silencing, muffling, or diminishing the report of a portable firearm, including any combination of parts, designed or redesigned, and intended for use in assembling or fabricating a firearm silencer or firearm muffler, and any part intended only for use in such assembly or fabrication.
18 U.S.C. § 921(a)(24). The National Firearms Act incorporates the Gun Control Act's definition by reference, defining the term " firearm" to include " any silencer (as defined in section 921 of Title 18, United States Code)." 26 U.S.C. § 5845(a)(7). Any device that qualifies as a " firearm silencer" --that is, " any device for silencing, muffling, or diminishing the report of a portable firearm" --is subject to extensive federal registration and taxation. A device that does not so qualify can be produced, marketed, and sold free from federal restraints, subject only to state regulations of varying severity.
B. Innovator's Stabilizer Brake
Innovator " designed and built a device it named a 'Stabilizer Brake,' which attaches to the muzzle of a rifle," and " substantially reduces recoil, reduces muzzle rise, and redirects noise away from the shooter toward the target." Compl. [ECF No. 1] ¶ 8. Typically, such devices, sometimes called " muzzle brakes," are used " to reduce recoil by redirecting combustion gases created from discharging a firearm." Aug. 2, 2012 Letter from Innovator to ATF (" Whitney Letter" ), Administrative Record [ECF No. 8-1] (" AR" ) at 1. But such devices can have disadvantages. Specifically, they " often increase flash, reduce bullet velocity, and substantially increase the noise experienced by the shooter." Id. Innovator claims to have perfected a design that eliminates those disadvantages, and that its Stabilizer Brake " will not only reduce recoil, but it will also reduce flash, muzzle rise, and will not cause an increase in the noise level experienced by the shooter at the rear of the firearm." Id. Innovator alleges that its " 'Stabilizer Brake' does not reduce total sound, but increases sound at the front of the rifle and decreases sound at the shooter's position." Compl. ¶ 8.
C. The Administrative Proceedings
On August 2, 2012, Innovator requested a " Classification Letter" from ATF for its
Stabilizer Brake. See Whitney Letter, AR at 1. Although Innovator's letter made no reference to silencers, Innovator alleges that the purpose of the request was " to determine whether [ATF] believed the 'Stabilizer Brake' to be a firearm muffler or firearm silencer within the meaning of 18 U.S.C. § 921(a)(24)." Compl. ¶ 9. Innovator's submission included a sample of the device and diagrams showing how the Stabilizer Brake functions. See AR 2-7.
About six weeks later, ATF issued its response in the form of a letter from John R. Spencer, the Chief of ATF's Firearms Technology Branch (" FTB" ). Sept. 14, 2012 Letter from ATF to Innovator (" Classification Letter" ), AR at 14-15. The Classification Letter concluded that Innovator's Stabilizer Brake " meets the definition of 'firearm silencer' specified in 18 U.S.C. § 921(a)(24)." Id. at 15. After an introductory paragraph and statutory references, the letter states as follows:
When evaluating a particular item as a potential silencer, FTB looks specifically for physical characteristics that are consistent with those of known firearm silencers. These characteristics include (but are not limited to):
o Ported inner tube(s).
o Expansion chambers.
o Baffles or washers which create separate expansion chambers.
o Sound-dampening material such as foam, steel wool, and other materials.
o End caps.
Although FTB utilizes state-of-the-art sound metering equipment to demonstrate that various items are capable of reducing the report of a portable firearm, these tests do not affect the classification of any item. Our silencer classifications are based solely upon the physical characteristics of the device under examination.
With respect to your submitted device, the FTB examination found that it incorporates an expansion chamber, a ported inner tube, and an end cap, which are characteristics of known firearm silencers. Therefore, FTB finds that this item meets the definition of " firearm silencer" specified in 18 U.S.C. § 921(a)(24).
Also, as you may be aware, the Bulgarian four-piece flash hider has been previously classified by FTB as a flash hider. If the design and dimensions of your submitted device were modified to replicate those of the Bulgarian four-piece flash hider (photo also enclosed), we would conduct a further evaluation of the modified item.
Classification Letter, AR 14-15 (emphasis in original). Innovator filed its federal complaint about six months later, seeking (1) an order to set aside FTB's determination that the Stabilizer Brake is a " firearm silencer" as " arbitrary and capricious, and not in accordance with law" under the APA, Compl. ¶ 23, and (2) a declaratory judgment that the Stabilizer Brake is not a " firearm silencer," Compl. ¶ 13.
A. Motion To Dismiss For Failure To State A Claim
To survive a motion to dismiss under Rule 12(b)(6), a complaint need only contain
" 'a short and plain statement of the claim showing that the pleader is entitled to relief,'" such that the defendant has " 'fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell A. Corp. v. Twombly,550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson,355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Although " detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, a plaintiff must supply " more than labels and conclusions" or " a formulaic recitation of the elements of a cause of action" to provide the " grounds" of " entitle[ment] to relief." Twombly, 550 U.S. at 555-56; see also
Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). Instead, " a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal,556 U.S. 662, 677, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570); Atherton v. Dist. of Columbia Office of the Mayor,567 F.3d 672, 681, 386 U.S.App.D.C. 144 (D.C. Cir. 2009). A complaint is considered plausible on its face " when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."
Iqbal, 556 U.S. at 678. This amounts ...