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

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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)

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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

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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A7), and the court of appeals affirmed in an unpublished memorandum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

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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).

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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

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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.

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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

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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

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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.

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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.

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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) .

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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