No. 97-5207 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1997 JACK JOHN MILOJEVICH, PETITIONER v. UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION SETH P. WAXMAN Acting Solicitor General JOHN C. KEENEY Acting Assistant Attorney General NINA GOODMAN Attorney Department of Justice Washington, D.C. 20530-0001 (202) 514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether petitioner was properly convicted of possessing unregistered machineguns, in violation of the National Firearms Act , 26 U.S.C. 5861(d). (I) ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1997 No. 97-5207 JACK JOHN MILOJEVICH, PETITIONER v. UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION OPINION BELOW The opinion of the court of appeals (Pet. App. A1-A5) is unreported, but the judgement is noted at 113 F.3d 1243 (Table). JURISDICTION The judgement of the court of appeals was entered on April 25, 1997. The petition for a writ of certiorari was filed on July 15, 1997 The jurisdiction of this Court is invoked under 28 U.S.C. 1254 (1) STATEMENT Petitioner pleaded guilty in the United States District Court for the Eastern District of California to one count of possession of unregistered machineguns, in violation of the National Firearms ---------------------------------------- Page Break ---------------------------------------- 2 Act, 26 U.S.C. 5861(d), and one count of possession of methamphetamine, in violation of 21 U.S.C. 844. He was sentenced to five years' imprisonment on the firearms count and to a concurrent term of one year's imprisonment on the drug count. He later filed a motion under 28 U.S.C. 2255, challenging his firearms conviction. The district court denied the motion (Pet. App. A6- A7), and the court of appeals affirmed in an unpublished memorandum opinion. Id. at A1-A5. 1. The National Firearms Act, 26 U.S.C. 5801 et seq., defines the term "firearm" to include a machinegun. See 26 U.S.C. 5845(a). The Act requires the Secretary of the Treasury to maintain a registry, known as the National Firearms Registration and Transfer Record, of "all firearms in the United States which are not in the possession or under the control of the United States." 26 U.S.C. 5841(a). A firearm is to be added to the registry when it is manufactured or imported. 26 U.S.C. 5841 (b). Each transfer of the firearm is also to be recorded in the registry. Ibid The National Firearms Act bars the transfer of a firearm without the Secretary's approval, the registration of the firearm to the transferee, and the payment of any applicable tax. 26 U.S.C. 5812(a). The Act provides that transfer applications "shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law." Ibid. One reason that possessing a firearm could place a transferee "in violation of law" is that a subsequently enacted statute, 18 ---------------------------------------- Page Break ---------------------------------------- 3 U.S.C. 922(0), makes it a crime for private individuals "to transfer or possess a machinegun." An exception exists for "any lawful transfer or lawful possession of a machinegun that was lawfully possessed" before the May 19, 1986, effective date of the statute. 18 U.S.C. 922(o)('2)(B). 1. Accordingly, if a machinegun was not manufactured until after May 19, 1986, or if it was manufactured earlier but was not "lawfully possessed" as of that date, an individual cannot lawfully transfer or possess it. 2. In November 1990, law-enforcement officers executed a search warrant at petitioner's residence, at his business, and at a storage locker that he rented. During those searches, the officers seized five machineguns and two hand grenades, as well as other guns, methamphetamine, and marijuana. Gov't C.A. Br. 2-3. On June 21, 1991, a federal grand jury in the Eastern District of California returned an indictment charging petitioner with possessing unregistered machineguns and destructive devices, in violation of the National Firearms Act, 26 U.S.C. 5861(d). Gov't C.A. Br. 4. A separate indictment returned on the same day charged petitioner with drug and firearms offenses. Id. at 3-4. On August 21, 1991, petitioner pleaded guilty to possession of unregistered machineguns and to possession of methamphetamine. Id. at 4. 1. 3. More than three years later, petitioner filed a motion under 28 U.S.C. 2255 that challenged his conviction under the National Firearms Act. Gov't C.A. Br. 5. The district court ___________________(footnotes) 1 The statute also contains an exception for machineguns possessed by, or transferred to or by, government entities. 18 U.S.C. 922(o)(2)(A). ---------------------------------------- Page Break ---------------------------------------- 4 denied the motion. Pet. App. A6-A7. 4. On appeal, petitioner argued that 18 U.S.C. 922 (0) implicitly repealed the machinegun registration and taxation provisions of the National Firearms Act. He also contended that the National Firearms Act could no longer be upheld as a valid exercise of Congress's taxing power, given the Treasury Department's refusal since 1986 to register or collect taxes on machineguns that are not "lawfully possessed" under Section 922(0). In an unpublished memorandum decision, the court of appeals rejected both arguments, relying on its prior decision in Hunter v. United States, 73 F.3d 260 (9th Cir. 1996) (per curiam). Pet. App. A1-A5. It noted that those same arguments had likewise been rejected by every other court of appeals to consider them with the sole exception of the Tenth Circuit in United States v. Dayton, 960 F.2d 121 (10th Cir. 1992), cert. denied, 510 U.S. 892 (1993). See Pet. App. 3-4 & n.1. ARGUMENT The court of appeals, consistent with the recent decisions of three other circuits, correctly rejected petitioner's challenges to his conviction under the National Firearms Act. Only the Tenth Circuit, which was the first circuit to address these issues five years ago, has taken a contrary position. The Court has denied certiorari on the issues presented by this petition on several prior occasions. It should do so again here. 1. Petitioner first contends (pet. 7-10) that his conviction under the National Firearms Act for possession of unregistered ---------------------------------------- Page Break ---------------------------------------- 5 machineguns offends due process, because the Treasury Department would not have allowed him to register the machineguns even if he had attempted to do so. AS explained above, if an individual's possession of a firearm "would place [him] in violation of law," he will not be allowed to register the firearm. 26 U.S.C. 5812(a). It is undisputed that petitioner's possession of the machineguns at issue here placed him "in violation of law" specifically, 18 U.S.C. 922 (0) , which prohibits individuals from possessing machineguns. 2. The Treasury Department could not, therefore, have accepted an application to transfer the machineguns to petitioner and could not have registered the machineguns in his name. That fact, however, does not advance petitioner's due process claim. Neither the National Firearms Act nor 18 U.S.C. 922(o) required petitioner to possess a machinegun. Thus , if Section 922(o) prevented petitioner from legally possessing a machinegun or from obtaining the documentation required by the National Firearms Act, he nevertheless could have complied with both statutes simply by not possessing a machinegun. See United States v. Radon, 19 F.3d 177, 180 (5th Cir.) ("one can comply with 5861(d) by not violating 922(o), i.e., by not possessing or manufacturing any post-1986 machineguns"), cert. denied, 513 U.S. 933 (1994); accord United States v. Ross 9 F.3d 1182, 1194 (7th Cir. 1993) , vacated 2 It is undisputed that petitioner did not come within the statute's exception for machineguns that were "lawfully possessed" before its May 19, 1986, effective date. 18 U.S.C. 922(o)(2)(B). The machineguns at issue were not lawfully possessed by petitioner before that date or lawfully transferred to him at any time thereafter. ---------------------------------------- Page Break ---------------------------------------- 6 on other grounds, 511 U.S. 1124 (1994) ; United States v. Jones 976 F.2d 176, 183 (4th Cir. 1992), cert. denied, 508 U.S. 914 (1993). Because petitioner easily could have conformed his conduct to the requirements of both statutes, there is no fundamental unfairness in punishing him for violating one of them. Cf. Minor v. United States, 396 U.S. 87, 97 (1969) (recognizing that "full and literal compliance" with recordkeeping requirements of statute taxing narcotics sales may leave seller with sole legal alternative of not selling). 2. Petitioner next contends (Pet. 11-13) that Section 922(o) implicitly repealed the registration and taxation provisions of the National Firearms Act with respect to machineguns. That argument is without merit. Adhering to the "'cardinal principle of statutory construction that repeals by implication are not favored," Radzanower v. Touche Ross & Co., 426U.S. 148, 154 (1976) (quoting United States v. United Continental Tuna Corp., 425 U.S. 164, 168 (1976)), this Court has made clear that "[i]n the absence of some affirmative showing of an intention to repeal, the only permissible justification for a repeal by implication is when the earlier and later statutes are irreconcilable." Morton v. Mancari, 417 U.S. 535, 550 (1974); see Matsushita Elec. Indus. Co. v. Epstein, 116 S. Ct. 873, 881 (1996) (implied repeal will be found only where there is an "irreconcilable conflict' between the two federal statutes at issue") (quoting Kremer v. Chemical Constr. Corp., 456 U.S. 461, 468 (1982)). Petitioner points to nothing in the text or the ---------------------------------------- Page Break ---------------------------------------- 7 legislative history of Section 922 (0) that indicates a congressional intent to repeal the National Firearms Act. Nor is there any basis for petitioner's claim (Pet. 12) that the statutes "are in irreconcilable conflict." As we have explained, petitioner could readily have complied with both statutes simply by not possessing a machinegun. Moreover, contrary to petitioner's suggestion (Pet. 11-12) , the enactment of Section 922(o) did not completely displace the registration and taxation provisions of the National Firearms Act. As set forth below, even after the adoption of Section 922(o), the National Firearms Act continues to require the payment of taxes on lawful transfers of machineguns manufactured before May 19, 1986. In short, because the two statutes are "capable of co-existence, it is the duty of the courts * * * to regard each as effective." Morton v. Mancari, 417 U.S. at 551. 3. Petitioner also argues (Pet. 13-16) that because the Treasury Department refuses to register or to collect taxes on machineguns that are unlawfully possessed under Section 922(o), the registration scheme contained in the National Firearms Act no longer serves a legitimate purpose as an exercise of Congress's taxing power. That claim also lacks merit. In Sonzinsky v. United States, 300 U.S. 506, 513-514 (1937), this Court sustained the constitutionality of the registration provisions of the National Firearms Act as "obviously supportable as in aid of a revenue purpose," because the "annual tax of $200 is productive of some revenue." The enactment of Section 922(o) does ---------------------------------------- Page Break ---------------------------------------- 8 not call into question the soundness of that holding. Even when making or transferring a machinegun is illegal under Section 9 22 (0) , those activities may continue to be taxed when they are detected by law-enforcement officers. See United States v. Jones, 976 F.2d at 183-184. Moreover, to the extent that it remains lawful under Section 922(o) to transfer machineguns manufactured I before May 1986, those transfers require the payment of tax. See 26 U.S.C. 5812; 27 C.F.R. 179.105(b). Since the National Firearms Act still produces "some revenue," Sonzinsky, 300 U.S. at 514, even after the enactment of Section 922(o), that Act continues to be a proper exercise of Congress's taxing power. See Minor v. United States, 396 U.S. at 98 n.13 ("A statute does not cease to be a valid tax measure because it deters the activity taxed, because the revenue obtained is negligible, or because the activity is otherwise illegal."). 4. Finally, petitioner contends (Pet. 5-6) that the Court should resolve the circuit conflict over whether a defendant may be convicted of possessing a machinegun in violation of Section 5861(d), where the Treasury Department would not have accepted an application for transfer and registration of the firearm because its possession would have been unlawful under Section 922(o). The decision in this case is consistent with the decisions of the Fourth Circuit in Jones the Fifth Circuit in Ardoin, and the Seventh Circuit in Ross See also United States v. Rivera, 58 F.3d 600, 602 (11th Cir. 1995) (applying rationale of those cases in analogous context) . Only the Tenth Circuit is to the contrary. ---------------------------------------- Page Break ---------------------------------------- 9 See United States v. Dalton, 960 F.2d 121, 123-124 (10th Cir. (1992), cert. denied, 510 U.S. 892 (1993) . No other circuit has followed Dalton in the more than five years that have elapsed since that decision. Indeed, the Ninth Circuit, which once noted the Dalton analysis "with favor," United States v. Kurt 988 F.2d 73, 75 (9th Cir. 1993) (dictum), has since squarely rejected it, both in this case and in Hunter v. United States, 73 F.3d 260 (9th Cir 1996) (per Curiam). There is no more reason today to suppose that the Dalton approach will extend beyond a single circuit than when the Court denied certiorari in Ardoin three years ago or in Jones four years ago. 3. It is questionable whether the conflict is even squarely implicated by this case. Dalton, like Jones and Ardoin, involved a Prosecution under the National Firearms Act for possession of an unregistered machinegun manufactured after May 19, 1986.4 The Tenth Circuit has expressly declined to extend Dalton to ___________________(footnotes) 3 This issue is unlikely to arise with any frequency in the future. The Criminal Division of the Department of Justice has instructed the United States Attorneys that "any case involving the possession or transfer of a machinegun made after May 19, 1986" should henceforth be charged under Section 922(o), rather than under the National Firearms Act. Us. Department of Justice Criminal Division, Federal Firearms Statutes Federal Prosecution Manual 80 (June 1992) . If that policy had been in effect at the time of the indictments in Jones, Ardoin, and Dalton, all of which involved machineguns manufactured after May 1986, the defendants in those cases presumably would have been charged under Section 922 (0) . This case, which involved machineguns manufactured before May 1986, would have fallen outside the literal terms of the policy. 4 Ross somewhat similarly involved a firearm that did not satisfy the statutory definition of "machinegun" until 1986. See 9 F.3d at 1185. ---------------------------------------- Page Break ---------------------------------------- 10 prosecutions for possession of machineguns that were manufactured, and thus could have been registered, before that date. United States v. Staples, 971 F.2d 608, 610 (10th Cir. 1992), rev'd on other grounds, 511 Us. 600 (1994) . We do not understand petitioner to contend that the machineguns at issue" here were manufactured after May 19, 1986. See Pet. 3. In any event, the conflict is of little practical significance because, even under Dalton, an individual who possesses an unregistered machinegun is not immune from prosecution. He ordinarily may be prosecuted under Section 922(o)," even if not under the National Firearms Act. See United States v. Dalton, 960 F.2d at 123 (noting defendant's concession that he could have been prosecuted under Section 922(o)). No substantial difference exists in the conduct covered by the two offenses, both of which involve the unauthorized possession of a machinegun. 5. Both statutes impose the same maximum punishment of ten years' imprisonment and a fine of not more than $250,000. 18 U.S.C. 924(a)(2), 3571(b)(3); 26 U.S.C. 5871. For that reason, the resolution of the conflict is unlikely to affect the ultimate disposition of charges against any future defendant. ___________________(footnotes) 5 Petitioner mistakenly asserts (Pet. 7 n.3) that "Section 5861(d) has a less stringent mens rea requirement" than Section 922(o) because only Section 922(o) requires proof of a knowing violation. This Court rejected that interpretation of the National Firearms Act in Staples v. United States, 511 U.S. 600 (1994) . ---------------------------------------- Page Break ---------------------------------------- 11 CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. SETH P. WAXMAN Acting Solicitor General JOHN C. KEENEY Acting Assistant Attorney General NINA GOODMAN Attorney OCTOBER 1997