Sunday, January 8, 2023

Fifth Circuit En Banc Reverses the Bump Stock Regulation By Wobbling Around Statutory Interpretation Issues (Including Chevron) (1/8/23)

In Cargill v. Garland, ___ F.4th ___ (5th Cir. 2023) (en banc), CA5 here and GS here, the Fifth Circuit reversed the prior panel opinion and held that the ATF bump stock regulation interpreting the term "machinegun" to include a so-called bump stock. The holding, one of statutory construction, may be stated as follows: 

  • "A plain reading of the statutory language, paired with close consideration of the mechanics of a semi-automatic firearm, reveals that a bump stock is excluded from the technical definition of "machinegun" set forth in the Gun Control Act and National Firearms Act." (Slip Op. 3)
  • But, even if the statutory term machinegun were not unambiguous, the statutory term "machinegun" is not ambiguous enough to include bump stocks as a permissible interpretation because of the rule of lenity when criminal consequences might attend, requiring ambiguities to be resolved in favor of the citizen potentially subject to those criminal consequences.

In the course of these core holdings, the en banc majority, concurring and dissenting opinions delve into many topics that I have discussed in connection with the bump stock cases related to Chevron and Chevron-related issues (in a broad sense). I collect at the end of this blog in paragraph 16 some of my earlier Federal Tax Procedure blogs on these issues arising in prior cases involving the bump stock regulations.

I address several key points in the various opinions (the en banc majority, the concurring, and the dissenting opinions).

1. I state at the outset that I believe this commotion about bump stocks is inherently political. Those judges fearing the administrative state (at least in their rhetoric landing them a place on a court) are more likely to reach the decision the en banc majority reached. Those judges whose rhetoric does not include fear of the administrative state and believe that administrative agencies can enrich our society and make it work better are less likely to reach the decision the en banc majority did. Both sides can pull up soundbites masquerading as reasoned decisionmaking to justify the result they prefer. At the end of the day, I think the real issue is whether there can be a symbiotic relationship between Congress, the Executive, and the Courts which together act reasonably to make our system work.

2. The en banc majority main holding is that the meaning of the statutory term "machinegun" is plain and unambiguous. In the Chevron framework, that would be a Step One determination that stops the Chevron analysis. There have been many words spent in addressing precisely what is meant by plain meaning and unambiguous to avoid the Chevron framework (or, equivalently, stopping the Chevron analysis at Step One), but I think the en banc majority's claim is that the other courts finding ambiguity means that those other just missed the meaning of the term that is so plain to this en banc majority. Everyone can agree that, when enacted in the 1930s, the statutory term machinegun did not include a bump stock which did not then even exist. But once they began to exist around 2000, I don't think it is so plain that the statutory term machinegun should not include bump stocks. This seems to be an eye of the beholder thingy, with political implications (which is what originalism is about).

3. At least in less political analysis, determining whether the statute is plain requires the use of the normal tools of statutory construction. Rhetoric aside, the normal tools of statutory construction include Skidmore respect for an agency interpretation. Skidmore v. Swift & Co., 323 U.S. 134 (1944). None of the en banc opinions cite Skidmore. (Note in this regard that Skidmore is not deference as many so-called smart judges and scholars mislabel it.  See Really, Skidmore "Deference?" (Federal Tax Crimes Blog 5/31/20; 2/14/21), here.

4. Notice how the en banc majority swats away the contrary holdings in sister circuits by saying (Slip Op. 13) that they held that" the definition of machinegun within the National Firearms Act and Gun Control Act does not unambiguously mean what the Government says it means." That is a fair statement of what those cases held. As I note in the blogs listed below discussing those other circuit opinions (including the panel opinion in Cargill), at least some of the courts held that the "best interpretation" of the term machinegun applying the normal tools of statutory construction was the Government's interpretation, thus not requiring consideration of the Chevron framework. The best interpretation does not require a finding of no ambiguity. 

5. The en banc majority ducks the potential application of Chevron which I discuss in paragraph 6. In so doing, however, the Court goes off the rails in passing (Slip Op. 16 n. 6): "if the rule were interpretive in nature, it would not be eligible for Chevron deference. United States v. Mead Corp., 533 U.S. 218, 232 (2001)." Mead did not so hold. (I went to the cited page and did not find any such holding.)  As Justice Scalia said: "Chevron in fact involved an interpretive regulation." Christensen v. Harris County, 529 U.S. 576, 589-90 (2000), concurring in part and concurring in the judgment. Indeed, my position articulated in other blogs is that the Chevron framework which tests interpretations applies only to interpretive rules (almost invariably interpretive regulations) and does not apply to legislative rules which are the law and not interpretations of the law (and which must be regulations). See e.g., Circuit Conflict in Important Cases that Allow the Supreme Court to Take Cert and Pronounce on the Difference between Legislative and Interpretive Regulations (Federal Tax Procedure Blog 3/30/21; 12/6/21), here; see also Is Statutory Interpretation a Legislative Act When Agencies Do It But Not When Courts Do It? (Federal Tax Procedure Blog 4/8/22; 10/23/22), here.

6. The en banc majority held that Chevron did not apply. The first reason (Slip Op. 27): "Chevron does not apply for the simple reason that the Government does not ask us to apply it." (Complete discussion at Slip Op. pp. 27-29.)  That raises the question, not yet resolved by the courts, as to whether Chevron can be waived. (See discussion Slip Op. 29-30.)  As the en banc opinion indicates other courts disagree; see also Kristin E. Hickman & David Hahn, Categorizing Chevron, 81 Ohio St. L.J. 611, 640-650, 670-671  (2020) (arguing that Chevron is a standard of review which cannot be waived; this is one Chevron position that Professor Hickman and I agree on.)

7. In support of its waiver notion, the Court supplements by claiming (Slip Op. 29) that applying Chevron deference that is not asserted by the Government violates the central theme of Chevron that interpretive issues be left to the Government, which is more directly accountable than courts. That seems to be makeweight for whatever persuasiveness it may have.

8. Well, the en banc opinion then asserts (Slip Op. 30-32), Chevron can't apply because the interpretation of machinegun to include bump stocks carries criminal penalties. This too is political rhetoric. Justice Scalia (also a frequent user of political rhetoric) said: "Undoubtedly Congress may make it a crime to violate a regulation." Whitman v. United States, 574 U.S. 352, 353 (2014) (Scalia, J., Statement Respecting Denial of Certiorari) (citing United States v. Grimaud, 220 U. S. 506, 519 (1911)). This argument echoes the current brouhaha of whether identification of listed transactions with at least civil penalty consequences can be  by Notice or must be by regulation; no one doubts that the IRS can identify those transactions by regulation.

 9. The en banc opinion then asserts (Slip Op. 33-34) that Chevron cannot apply because the ATF earlier interpreted machinegun not to include bump stock. The notion, such as it is, is that the bump stock owner was not given fair notice that owning a bump stock was criminalized as a machinegun. To be sure the term machinegun did not include a bump stock when enacted in the 1930s, but that is not alone a reason that the term cannot include bump stock in the 2000s. In this regard, I like Lincoln's quote: "As our case is new, so we must think anew, and act anew." Second Annual Message to Congress (12/1/62). In any event, the new definition was prospective only in application to a period where possession occurs after the effective date of the expanded definition plus a short grace period to comply. The person is given fair notice. (I am not going to dance on the head of a pin about whether, if machinegun is now defined to include bump stocks, all possession of bump stocks since the enactment of the statute in the 1930s, is illegal and criminally prosecutable (subject of course to statute of limitations); interpretations expanding the scope of a statute, whether made by an agency or a court, have that effect and have not been perceived as a fatal problem.)

10. The Court says that, if the statute were sufficiently ambiguous to arguably permit the new interpretation, the rule of lenity applies to require a citizen-favorable interpretation. (Slip Op. 34-38). Judge Higginson's dissent engages principally on that issue.  See also my prior discussions: Justices Discuss Limited Ambiguity Role for Lenity and by Analogy Chevron Deference (Federal Tax Procedure Blog 3/11/22), here; and Chevron and Lenity (Federal Tax Procedure Blog 8/11/20), here. The en banc majority's applications seems to be a reflexive application of the concept of ambiguity for lenity purposes, rather similar to Justice Kennedy's argument against reflexive application of Chevron deference when rigorous statutory interpretation might resolve the ambiguity.

11. The en banc majority acknowledges (Slip Op. 38-39) Cargill's claim that the bump stock rule was an improper delegation of legislative power but ducks resolving the issue because other reasons are sufficient discussed above were sufficient to reject the rule. 

12. The en banc majority then ducks (Slip Op. 39-40) the hot button issue of whether vacatur of the rule is appropriate (thus having nationwide effect, presumably even in the circuits that have held differently) but remands that issue for the district court to consider. The Court does note (Slip Op. 40) that vacatur is the default rule. On vacatur, see Law Prof Article on the APA Tax Revolution and My Extended Comments (Federal Tax Procedure Blog 12/1/22; 12/3/22), here; and District Court Holds IRS Tax Shelter Notice Imposing Obligations Invalid as a Legislative Rule Without Notice-and-Comment But Limits Holding to Parties (Federal Tax Procedure Blog 11/20/22), here.

13. Judge Ho's concurring in part and concurring in judgment opinion plays with the semantics to show (in his mind and the minds of the Judges joining his opinion) that the term machineguns did not originally include bump stocks and cannot be expanded to do so. One interesting comment (Slip Op. 50) is that statutory interpretive equipoise is a textbook case for lenity in a criminal statute. Judge Ho later says (Slip Op. 53 n. 3): 

The dissent says lenity applies only in cases of true equipoise—where there's an "unbreakable tie" between competing interpretations. Post, at 56. See also id. at 58. But equipoise is precisely what's presented here. As explained, each side offers conflicting theories as to whether bump stocks fire multiple bullets "automatically" or "by a single function of the trigger." But neither has the goods on the other. So lenity governs.

Even if equipoise is present here, it is rare in statutory interpretation. On equipoise in statutory interpretation, see What is the Best Interpretation for Purposes of Determining a Not Best Interpretation for Chevron Deference? (Federal Tax Procedure Blog 10/21/22; 11/8/22), here.

14. In dissent, Judge Higginson, joined by Judges Dennis and Graves, adopts (Slip Op. 55) the reasoning of the panel decision in Cargill v. Garland, 20 F.4th 1004 (5th Cir. 2021), GS here, reh'g granted, 37 F.4th 1091 (5th Cir. 2022), GS here. I discuss that opinion in a blog: Fifth Circuit Affirms Agency Best Interpretation of Statute, thus Not Applying Chevron (Federal Tax Procedure Blog 12/20/21; 12/15/22), here. Judge Higginson devotes most of his dissenting opinion to engaging the majority on the use of lenity "to rewrite this statute." After critiquing the majority's application of lenity, Judge Higginson concludes (Slip Op. 61-62):

            Today, our court extends lenity, once a rule of last resort, to rewrite a vital public safety statute banning machineguns since 1934. In conflict with three other courts of appeals, our court employs its new lenity regime to carve out from federal firearms regulation the bump stock—a device that helped the Las Vegas shooter fire over a thousand rounds during an eleven-minutelong attack, at times shooting about nine bullets per second, killing at least 58 people and wounding hundreds more. See Larry Buchanan et al., What Is a Bump Stock and How Does It Work?, N.Y. Times (updated Mar. 28, 2019).

            Therefore, our court uses lenity to legalize an instrument of mass murder. This is evident from our court's attempt to confine its new lenity regime only to this statute, giving machinegun owners immunity from prosecution that is not shared by other offenders under the federal code.

            For those reasons and the reasons stated in the panel opinion, I respectfully dissent.

15. JAT Conclusion: I think the en banc majority opinion is wrong. I suppose that the Supreme Court may have to weigh in on the issue and perhaps address the sub-issues (such as the distinction between legislative and interpretive regulations, whether interpretive regulations APA category exists, whether Chevron applies only to interpretive regulations, etc.)  The Supreme Court will yet again have the opportunity to confuse rather than enlighten on ideological notions discussed in paragraph 1.

16. Earlier Federal Tax Procedure Blogs on bump stocks and Chevron-related issues (in reverse chronological order):

  • Important DC Circuit Opinion That Chevron Deference is Irrelevant if Agency Interpretation is Best Interpretation (Federal Tax Procedure Blog 8/9/22; 8/15/22), here.
  • Sixth Circuit En Banc Panel Ties on the ATF Bump Stock Regulation, Thus Affirming Only the Judgment of the District Court Sustaining the Regulation (Federal Tax Procedure Blog 12/6/21), here.
  • Circuit Conflict in Important Cases that Allow the Supreme Court to Take Cert and Pronounce on the Difference between Legislative and Interpretive Regulations (Federal Tax Procedure Blog 3/30/21; 12/6/21), here.
  • More Thoughts on APA and Legislative and Interpretive Regulations Inspired by Recent Cases (Federal Tax Procedure Blog 4/8/21; 4/11/21), here.
  • Tenth Circuit Wobbles on Legislative / Interpretive Distinction (Federal Tax Procedure Blog 5/13/20), here.
  • Guedes Cert Denial on Bump Stock as Machinegun, Justice Gorsuch's Cryptic Statement and My Digression (Federal Tax Procedure Blog 3/2/20; 3/5/20), here.

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