Early this month the Federal Circuit issued its opinion in The Modern Sportsman, LLC v. United States, a takings case we have been following because it attracted an amicus brief. The case involved allegations the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) committed takings under the Takings Clause of the Fifth Amendment when it banned bump-fire type rifle stocks. The Court of Federal Claims dismissed the case, and Judges Taranto, Wallach, and Chen heard the appeal. Judge Taranto authored a short non-precedential opinion affirming the Court of Federal Claims, and Judge Wallach authored an opinion concurring in the result. This is our opinion summary.
In the short non-precedential opinion, Judge Taranto summarized the relevant background:
The Modern Sportsman, LLC, RW Arms, Ltd., Mark Maxwell, and Michael Stewart (collectively, Modern Sportsman) sued the United States in the Court of Federal Claims (Claims Court), alleging that the Bureau of Alcohol, Tobacco, Firearms, and Explosives had, through promulgation of Bump-Stock-Type Devices, 83 Fed. Reg. 66,514 (Dec. 26, 2018) (Final Rule), taken its bump stocks in violation of the Fifth Amendment. . . . The government moved to dismiss Modern Sportsman’s amended complaint for failure to state a claim on which relief can be granted. The Claims Court granted the government’s motion and dismissed Modern Sportsman’s amended complaint. . . . Modern Sportsman timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(3). We heard oral argument in this and a related case, McCutchen v. United States, No. 2020-1188, as the cases present materially identical issues.
Judge Taranto ultimately explained that, “[f]or the same reasons we today affirm the Claims Court’s judgment in the McCutchen case, we affirm the Claims Court’s judgment in the present case.” In this way, Judge Taranto referred to the opinion for the court that he wrote in McCutchen v. United States, another appeal decided on the same day. Thus, the McCutchen opinion provides the reasoning for the affirmance in this case.
In the McCutchen opinion, Judge Taranto provided additional background. He, for example, noted Congress passed the current ban on machine guns in 1986 and made “the Attorney General responsible for the ‘administration and enforcement’ of” the relevant portion of the U.S. Code. He explained that “[a] ‘bump-stock-type device’ transforms a semiautomatic rifle so that ‘a separate pull of the trigger to fire each cartridge’ is not needed.” And he went on to explain that this mechanism allows the weapon to “to ‘mimic’ the performance of a fully automatic weapon.” He continued by noting that, after “the October 1, 2017 massacre in Las Vegas, reconsideration of bump-stock-type devices began” and culminated in rule making by the ATF “mak[ing] clear that, under those definitions, bump-stock-type devices, as specifically defined in the regulations . . . , are ‘machineguns.’” The result of the rule making, he concluded, was that, “[t]o avoid liability, possessors of bump-stock-type devices had to destroy their devices or abandon them at an ATF office by March 26, 2019.”
With respect to the takings claim at issue in this case, Judge Taranto noted that “the plaintiff must point to a protectable property interest that is asserted to be the subject of the taking.” But, he concluded, “given the preexisting federal statutory prohibition on possession or transfer of ‘machineguns,’ 18 U.S.C. § 922(o), subject to a valid implementation by the Attorney General, plaintiffs lacked a property right in what they allege was taken—continued possession or transferability of their bump-stock-type devices.”
Judge Taranto explained that “‘[t]he Supreme Court . . . made clear that property interests are acquired subject to “background principles” of law, and that limitations on property rights that otherwise would effect a categorical taking are permissible if they “inhere in the title itself.”’” This is so, he continued, because “valid preexisting federal-law limitations on what otherwise would be state-law property rights are among the limitations that may inhere in title so as to limit compensable property rights.” Given that the “plaintiffs accept that the Final Rule’s implementation of the preexisting prohibition is an authorized and legally valid interpretation of the statutory prohibition,” Judge Taranto concluded that, “based on the preexisting federal law, th[e] plaintiffs lack a property right in continued possession or transferability of the devices at issue.”
In the process of reaching his conclusion, Judge Taranto rejected a particular argument made by the plaintiffs. They had pointed out that, “between 2008 and 2017, ATF issued ‘ten letter rulings’ stating that certain bump-stock-type devices, including the ones at issue here, did not meet the statutory definition of ‘machinegun.’” This, they argued, “gave plaintiffs a property interest.” Judge Taranto disagreed, stating it only made the property “subject to the express reservation to change the devices’ classification if the agency later determined, as it did, that the earlier classification was erroneous.”
Notably, Judge Wallach wrote an opinion concurring only in the result in both The Modern Sportsman, LLC v. United States and McCutchen v. United States. In the concurring opinion filed in The Modern Sportsman, he explained that, “[f]or all reasons stated in my concurrence in McCutchen, I concur in affirming the Court of Federal Claims’ decision.” In his concurring opinion in McCutchen, he stated that he did not “agree with the majority’s reasoning and concur[red] as to the result only.” In particular, he explained his view that “the Court of Federal Claims correctly concluded that the Bump Stock Rule was not a compensable taking under the police powers doctrine.”
Judge Wallach rejected the analysis used by the majority. In particular, he expressed a “fear that the majority has overread our case law by extending . . . per se regulatory taking analysis to dangerous and unusual weapons; here, bump stocks.” He further noted that “[t]he majority cites cases that appear inapplicable here; those cases address non-physical personal property—not physical personal property, like bump stocks.” Judge Wallach also asserted “the majority does not cite a single case where a court concluded that a claimant did not have a cognizable property interest in physical property.” He expressed concern that “[s]uch an overextension of our case law may inadvertently afford dangerous and unusual weapons special protections that are reserved to real property and limited instances of personal property.” In short, this line of analysis, he argued, is “an inappropriate vehicle to ascertain whether Mr. McCutchen . . . failed to state a compensable takings claim.”
Judge Wallach then addressed the argument “that the Bump Stock Rule ‘did not effect a taking for public use’ under the police powers doctrine.” He agreed with this argument, stating that, “‘[l]ong ago’ the Supreme Court ‘recognized that “all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community”’ and that ‘the Takings Clause did not transform that principle to one that requires compensation whenever the [government] asserts its power to enforce’ that implied obligation.” Judge Wallach then noted numerous cases he understood to make the point that, “‘[w]hen property has been seized pursuant to the criminal laws or subjected to in rem forfeiture proceedings, such deprivations are not [compensable] takings.’” Given his view that the present cases present analogous situations, Judge Wallach concluded that, when “the ATF promulgated the Bump Stock Rule pursuant to its statutory authority to make such regulations,” it exercised “‘the police power that has repeatedly been treated as legitimate even in the absence of compensation.’”