Court Opinion

ID: 3066076
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:56:42.160896+00
Date Added: 2024-06-11T11:49:48.237547
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MONTANA SHOOTING SPORTS                  No. 10-36094
ASSOCIATION; SECOND AMENDMENT
FOUNDATION, INC.; GARY MARBUT,              D.C. No.
              Plaintiffs-Appellants,     9:09-cv-00147-
                                             DWM
                and

STATE OF MONTANA,                          OPINION
                         Intervenor,

                 v.

ERIC H. HOLDER, JR., Attorney
General,
              Defendant-Appellee.

      Appeal from the United States District Court
              for the District of Montana
      Donald W. Molloy, District Judge, Presiding

               Argued and Submitted
           March 4, 2013—Portland, Oregon

                 Filed August 23, 2013

    Before: A. Wallace Tashima, Richard R. Clifton,
           and Carlos T. Bea, Circuit Judges.
2        MONT. SHOOTING SPORTS ASS’N V. HOLDER

                 Opinion by Judge Clifton;
    Partial Concurrence and Partial Dissent by Judge Bea

                           SUMMARY*

                            Civil Rights

    The panel affirmed the district court’s dismissal, for
failure to state a claim, of an action brought by Gary Marbut,
the Montana Shooting Sports Association, and the Second
Amendment Foundation challenging federal firearms
regulations.

    Plaintiff Marbut sought to manufacture firearms under
the Montana Firearms Freedom Act (MFFA), state legislation
that declared that the manufacture and sale of certain firearms
within the state was beyond the scope of Congress’s
commerce power. The panel first held that Marbut had
standing on account of economic injury. The panel then held
that the complaint failed to state a claim in light of Gonzales
v. Raich, 545 U.S. 1 (2005), and United States v. Stewart, 451
F.3d 1071 (9th Cir. 2006), and that Congress could rationally
conclude that unlicensed firearms made in Montana would
make their way into the interstate market. The panel held that
the MFFA was necessarily preempted and invalid.

    Concurring in part and dissenting in part, Jude Bea agreed
with the majority’s conclusion that Marbut was subject to
federal licensing laws. He stated that it was unnecessary for

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
       MONT. SHOOTING SPORTS ASS’N V. HOLDER              3

the majority to hold that the MFFA was preempted by federal
law.

                       COUNSEL

Quentin M. Rhoades (argued), Sullivan, Tabaracci &
Rhoades, P.C., Missoula, Montana, for Plaintiffs-Appellants.

Mark R. Freeman (argued), Mark B. Stern, and Abby C.
Wright, Appellate Staff, Tony West, Assistant Attorney
General, Michael W. Cotter, United States Attorney, United
States Department of Justice, Civil Division, Washington,
D.C. for Defendant-Appellee.

Nicholas C. Dranias (argued), Goldwater Institute, Phoenix,
Arizona; Timothy C. Fox, Gough, Shanahan, Johnson &
Waterman, Helena, Montana; and Ilya Shapiro, Cato Institute,
Washington, D.C., for Amici Curiae The Goldwater Institute
and Cato Institute.

Steve Bullock, Montana Attorney General; Zach Zipfel,
Assistant Attorney General, Helena, Montana, for Amicus
Curiae State of Montana.

Joseph W. Miller, Law Offices of Joseph Miller, LLC,
Fairbanks, Alaska; Gary G. Kreep, United States Justice
Foundation, Ramona, California; Herbert W. Titus, William
J. Olson, John S. Miles, and Jeremiah L. Morgan, William J.
Olson, P.C., Vienna, Virginia, for Amici Curiae Gun Owners
of America, Inc., Gun Owners Foundation, and Virginia
Citizens Defense League.
4      MONT. SHOOTING SPORTS ASS’N V. HOLDER

John E. Bloomquist, Doney Crowley Bloomquist Payne Uda
P.C., Helena, Montana, for Amicus Curiae Weapons
Collectors Society of Montana.

Timothy Baldwin, Kalispell, Montana, for Amici Curiae
Thirty Montana Legislators.

Jonathan E. Lowy and Daniel Vice, Brady Center to Prevent
Gun Violence, Washington, D.C.; Gil N. Peles and Noemi A.
Blasutta, Proskauer Rose LLP, Los Angeles, California, for
Amici Curiae Brady Center to Prevent Gun Violence,
International Brotherhood of Police Officers, Hispanic
American Police Command Officers Association, National
Black Police Association, National Network to End Domestic
Violence, Montana Human Rights Network, and Legal
Community Against Violence.

Mark L. Shurtleff, Attorney General, Salt Lake City, Utah;
John J. Burns, Attorney General, Juneau, Alaska; Lawrence
G. Wasden, Attorney General, Boise, Idaho; Bill Schuette,
Attorney General, Lansing, Michigan; Jon Bruning, Attorney
General, Lincoln, Nebraska; Alan Wilson, Attorney General,
Columbia, South Carolina; Marty J. Jackley, Attorney
General, Pierre, South Dakota; Darrell V. McGraw, Jr.,
Attorney General, Charleston, West Virginia; Gregory A.
Phillips, Attorney General, Cheyenne, Wyoming, for Amici
Curiae States of Utah, Alaska, Idaho, Michigan, Nebraska,
South Carolina, South Dakota, West Virginia, and Wyoming.

Sharon L. Browne and Adam R. Pomeroy, Pacific Legal
Foundation, Sacramento, California, for Amicus Curiae
Pacific Legal Foundation.
        MONT. SHOOTING SPORTS ASS’N V. HOLDER                 5

Anthony T. Caso, John C. Eastman, Karen J. Lugo, and
David Llewellyn, Center for Constitutional Jurisprudence,
Orange, California, for Amici Curiae Center for
Constitutional Jurisprudence and Fifteen State Legislators.

                          OPINION

CLIFTON, Circuit Judge:

    Plaintiffs Gary Marbut, the Montana Shooting Sports
Association, and the Second Amendment Foundation appeal
the dismissal of their action challenging federal firearms
regulations. Marbut wants to manufacture firearms under the
Montana Firearms Freedom Act, state legislation that
declares that the manufacture and sale of certain firearms
within the state is beyond the scope of Congress’s commerce
power. The district court dismissed the action because no
plaintiff had standing to bring the claim and, in the
alternative, because the complaint failed to state a claim in
light of Gonzales v. Raich, 545 U.S. 1 (2005), and United
States v. Stewart, 451 F.3d 1071 (9th Cir. 2006). On appeal,
we conclude that Marbut has standing to sue, but we agree
with the district court that Marbut has failed to state a claim.
Thus, we affirm the judgment.

I. Background

    The Montana Legislature passed the Montana Firearms
Freedom Act (“MFFA” or “the Act”), which declares that a
firearm or ammunition “manufactured . . . in Montana and
that remains within the borders of Montana is not subject to
federal law or federal regulation, including registration, under
the authority of congress [sic] to regulate interstate
6       MONT. SHOOTING SPORTS ASS’N V. HOLDER

commerce.” Mont. Code Ann. § 30-20-104. It purports to
authorize the manufacture and sale of firearms within the
state, but imposes certain requirements for a firearm to
qualify under the Act, notably that the words “Made in
Montana” be “clearly stamped on a central metallic part.” Id.
§ 30-20-106.

    Plaintiff Gary Marbut owns a business that manufactures
shooting range equipment for law enforcement agencies and
is involved in a variety of gun-related organizations and
activities, including service as the president of the Montana
Shooting Sports Association, another plaintiff. Marbut wishes
to manufacture and sell firearms and ammunition to
Montanans under the MFFA without complying with
applicable federal laws regulating firearms.

    In particular, Marbut wishes to manufacture and sell a .22
caliber rifle called the “Montana Buckaroo.” Marbut has
design plans for the rifle that are ready to load into machining
equipment for production, and he has identified
manufacturers that will supply the individual component
parts. Several hundred Montanans have offered to purchase
the Montana Buckaroo at Marbut’s asking price, but such
sales are conditioned on Marbut winning this suit and not
having to comply with federal licensing requirements.
According to the complaint, these customers “do not want . . .
and will not buy” the Montana Buckaroo if manufactured by
a federal firearms licensee. Marbut has also developed
ammunition that he wants to sell under the MFFA and that a
state agency has expressed interest in purchasing.

    After the passage of the MFFA, the Federal Bureau of
Alcohol, Tobacco, Firearms and Explosives (“ATF”)
distributed an “Open Letter to All Montana Federal Firearm
        MONT. SHOOTING SPORTS ASS’N V. HOLDER                 7

Licensees.” The letter stated that the MFFA conflicts with
federal firearms laws, and that federal law supersedes the Act
and continues to apply. Marbut subsequently sent a letter to
the ATF, asking whether he could manufacture firearms and
ammunition under the MFFA without complying with federal
statutes and without fear of criminal prosecution. In response,
an ATF special agent wrote to Marbut that “unlicensed
manufacturing of firearms of ammunition for sale . . . is a
violation of Federal law and could lead to . . . potential
criminal prosecution.”

    Marbut, along with the Montana Shooting Sports
Association and the Second Amendment Foundation, filed for
declaratory and injunctive relief. The Montana Shooting
Sports Association and the Second Amendment Foundation
are non-profits dedicated to gun education and advocacy.
Plaintiffs requested a declaratory judgment that Congress has
no power to regulate the activities contemplated by the
MFFA and injunctive relief preventing the federal
government from bringing civil or criminal actions under
federal firearms law against Montana citizens acting in
compliance with the MFFA.

    A federal magistrate judge recommended dismissing the
suit because plaintiffs lacked standing and, in the alternative,
because plaintiffs failed to state a claim in light of the
Commerce Clause jurisprudence of the Supreme Court and
this court. The federal district court adopted these
recommendations in full and dismissed the case. Plaintiffs
timely appealed.
8       MONT. SHOOTING SPORTS ASS’N V. HOLDER

II. Standing

    Plaintiffs argue that economic injury and the threat of
criminal prosecution each provide a basis for standing. The
district court held that none of the plaintiffs had standing. We
review a motion to dismiss for lack of standing de novo,
construing the factual allegations in the complaint in favor of
the plaintiffs. Tyler v. Cuomo, 236 F.3d 1124, 1131 (9th Cir.
2000). On appeal, we conclude that Marbut has standing on
account of economic injury and do not reach his alternative
argument for standing. Neither do we reach the issue of
whether the Montana Shooting Sports Association and the
Second Amendment Foundation have organizational
standing.

    To have standing, a plaintiff must suffer an injury that is
“actual or imminent” as opposed to “conjectural or
hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555,
560 (1992) (internal quotation marks omitted). Because
Marbut asks for injunctive relief, he must show “a very
significant possibility of future harm.” Mortensen v. Cnty. of
Sacramento, 368 F.3d 1082, 1086 (9th Cir. 2004) (quoting
Bras v. Cal. Pub. Utils. Comm’n, 59 F.3d 869, 873 (9th Cir.
1995)).

    Economic injury caused by a proscriptive statute is
sufficient for standing to challenge that statute. See Nat’l
Audubon Soc’y, Inc. v. Davis, 307 F.3d 835, 855–56, opinion
amended in other respects on denial of reh’g, 312 F.3d 416
(9th Cir. 2002). In Davis, for example, plaintiff animal
trappers challenged a law prohibiting the use of certain types
of traps. 307 F.3d at 842. The trappers alleged that they
earned a living through trapping, had ceased trapping because
of the law, would continue trapping if the law were declared
        MONT. SHOOTING SPORTS ASS’N V. HOLDER                 9

invalid, and asked for declaratory and injunctive relief. Id. at
845, 855–56. The court concluded that the trappers had
standing to challenge the law, noting that “the trappers’
economic injury is directly traceable to the fact that [the
challenged law] explicitly forbids the trapping they would
otherwise do.” Id. at 856.

    Like the plaintiffs in Davis, Marbut alleges an economic
injury resulting from laws explicitly prohibiting a business
activity that he would otherwise engage in. The magistrate
judge distinguished Davis on the basis that the trappers,
unlike Marbut, had a preexisting business that came to a halt
after the law at issue was enacted. It is true that the court in
Davis, in determining whether or not the trappers would
suffer future economic injury on account of the challenged
law, noted that the “uncontested history of using the now-
prohibited traps before the passage of [the challenged law],
and their statements that they would continue trapping if not
constrained by [that law], are enough to show they would
resume trapping if [the] ban were declared invalid.” Id. at
856. But having operated a business enterprise in the past
based on a now-prohibited activity is not a necessary
condition for standing.

     Injunctive relief requires a showing of a significant
likelihood of future injury. See Mortensen, 368 F.3d at 1086.
Having engaged in a business activity in the past may make
it less speculative that a plaintiff can and would do so again
if the law were enjoined, but there is no bright line rule
requiring past operation to establish standing. Rather,
“determining ‘injury’ for Article III standing purposes is a
fact-specific inquiry.” Lujan, 504 U.S. at 606.
10      MONT. SHOOTING SPORTS ASS’N V. HOLDER

     Construing Marbut’s allegations in the light most
favorable to him, we conclude that he would manufacture and
sell unlicensed firearms should we declare federal regulations
inapplicable to the Buckaroo. Marbut has not merely alleged
a vague desire to manufacture and sell unlicensed firearms if
he wins this lawsuit, but has made specific allegations
substantiating this claim. He has a background in running his
own shooting range equipment manufacturing business, has
identified suppliers for the component parts of the Buckaroo,
has design plans for the firearm ready to load into
manufacturing equipment, and has identified hundreds of
customers who have ordered the Buckaroo at his asking price.
Marbut has alleged much more than the “‘some day’
intentions . . . without any description of concrete plans” held
insufficient for standing. Lujan, 504 U.S. at 564 (holding that
a mere professed intent to visit a country was insufficient for
standing, when plaintiffs had not purchased a plane ticket or
even described when they would visit).

    We are not persuaded by the government’s argument that
Marbut lacks standing because he could conduct his business
through legal means by obtaining a federal license. The
government provides no reason why we should not take
Marbut’s allegation that his customers “do not want, have not
ordered, and will not buy the ‘Montana Buckaroo’ if it is
manufactured by federal firearms licensees” as true, as we
generally must in considering a dismissal under Federal Rule
of Civil Procedure 12(b). Marbut has supported his allegation
with evidence suggesting that much of the appeal of the
Montana Buckaroo is that it is a Montana product purportedly
not subject to federal gun laws, if for no other reason than the
state pride and limited government symbolism associated
with such a product. One customer, for example, ordered ten
Buckaroos for teaching purposes and added to his order, “I
        MONT. SHOOTING SPORTS ASS’N V. HOLDER                11

can’t think of a better way to teach Montana’s shooting
heritage than with a historic MFFA rifle.” Another customer,
ordering two Buckaroos, exclaimed, “I believe they would be
a collector’s item one day!”

    Moreover, even if Marbut could conduct his business as
a federal licensee without losing customers, he would
nonetheless incur economic costs in complying with the
licensing requirements. Marbut alleged that he is not willing
“to pay the requisite . . . licensing fees and taxes” associated
with complying with federal licensing requirements. The
economic costs of complying with a licensing scheme can be
sufficient for standing. Ariz. Contractors Ass’n, Inc. v.
Napolitano, 526 F. Supp. 2d 968, 979 (D. Ariz. 2007)
(holding that plaintiffs had demonstrated they would sustain
economic injury if the law forced them to use E-Verify), aff’d
sub nom. Chicanos Por La Causa, Inc. v. Napolitano,
558 F.3d 856 (9th Cir. 2009), aff’d sub nom. Chamber of
Commerce v. Whiting, 131 S. Ct. 1968, 179 (2011).

    Under the circumstances of this case and construing
Marbut’s allegations in the light most favorable to him, we
conclude that Marbut has alleged economic injury sufficient
for standing. Because Marbut has standing, and “the presence
in a suit of even one party with standing suffices to make a
claim justiciable,” Brown v. City of L.A., 521 F.3d 1238, 1240
n.1 (9th Cir. 2008), we need not address whether the Second
Amendment Foundation and the Montana Shooting Sports
Association satisfy the requirements for organizational
standing. See Rumsfeld v. Forum for Academic &
Institutional Rights, Inc., 547 U.S. 47, 52 n.2 (2006)
(declining to address standing of additional plaintiffs
“because the presence of one party with standing is sufficient
to satisfy Article III’s case-or-controversy requirement”).
12      MONT. SHOOTING SPORTS ASS’N V. HOLDER

III.   Merits

    The district court dismissed the complaint for failure to
state a claim, concluding that Congress’s commerce power
permitted it to regulate the manufacture and sale of the
Buckaroo. We review a dismissal for failure to state a claim
de novo. See Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir.
2005).

    Marbut argues that the manufacture and sale of the
Buckaroo are outside the scope of the Commerce Clause, and
that federal licensing laws do not apply as a result. His
primary argument is that an expansive interpretation of the
Commerce Clause is inconsistent with dual sovereignty, and
he laments the trajectory of the Supreme Court’s Commerce
Clause jurisprudence. Marbut argues, for example, that “the
Supreme Court’s Commerce Clause jurisprudence has
improvidently altered the very form of American government,
reading out dual sovereignty, and stripping from the States all
independence of policy or action.”

    Whether or not Marbut is correct in his critique of that
jurisprudence, we are not free to disregard it. To his credit,
Marbut acknowledges as much, recognizing that this court’s
“hands are tied” with respect to binding precedent.
Specifically, his opening brief states:

           Appellants realize that in many respects,
       as regards the arguments so far made, the
       Court’s hands are tied. Appellants advocate
       for the case law being overturned, and an
       intermediate scrutiny test being applied. But
       the relevant case law has been promulgated by
       the Supreme Court, whose decision are
        MONT. SHOOTING SPORTS ASS’N V. HOLDER               13

       controlling. See e.g., United States v. Stewart,
       451 F.3d 1071, 1076 (9th Cir. 2006). Thus,
       even if the Court agrees with the reasoning,
       there are few remedies the Court is able to
       offer. One, however, would be to limit Raich
       to its facts, and distinguish it on grounds of its
       national defense implications.

Turning to the precedent from the Supreme Court and our
own court that we are bound to follow, we conclude that
Congress’s commerce power extends to the manufacture and
sale of the Buckaroo, and that Raich cannot be read as limited
to its facts, as Marbut urges.

    In Gonzales v. Raich, the Court held that Congress may
regulate a commodity under the Commerce Clause, in that
case marijuana, if there exists a rational basis for concluding
that the activities at issue, taken in the aggregate,
substantially affect interstate commerce. 545 U.S. 1, 22
(2005). Congress may regulate even purely intrastate activity
“if it concludes that the failure to regulate that class of
activity would undercut the regulation of the interstate market
in that commodity.” Id. at 18. We applied this test to the
possession of firearms in United States v. Stewart, holding
that Congress could prohibit the possession of a homemade
machine gun because it could have rationally concluded that
the possession of homemade machine guns would
substantially affect the interstate market in machine guns.
451 F.3d 1071, 1077 (9th Cir. 2006); see United States v.
Henry, 688 F.3d 637, 638 (9th Cir. 2012).

    Under Raich and Stewart, the regulation of the Montana
Buckaroo is within Congress’s commerce power. Marbut
intends to manufacture the Buckaroo under the Montana
14       MONT. SHOOTING SPORTS ASS’N V. HOLDER

Firearms Freedom Act, which means that he will manufacture
and sell it within the borders of Montana. See Mont. Code
Ann. § 30-20-104. But even if Marbut never sells the
Buckaroo outside of Montana, Congress could rationally
conclude that unlicensed firearms would make their way into
the interstate market. This result does not change because the
Buckaroo will bear a “Made in Montana” stamp to
distinguish it from firearms that may be sold in the interstate
market. See id. § 30-20-106. Congress might reasonably
determine that a “Made in Montana” stamp will not deter
those seeking to purchase unregistered firearms in the
interstate black market. See Stewart, 451 F.3d at 1077–78
(rejecting the argument that homemade machine guns were
“unique” and so would not affect the market for commercial
machine guns, noting that “those seeking [machine guns] care
only whether the guns work effectively”).

    Plaintiffs’ efforts to distinguish Raich are not convincing.
Plaintiffs argue that Raich, which dealt with Congress’s
power to regulate marijuana under the Commerce Clause,
should be limited to the national defense concerns implicated
in the “war on drugs.” There is no language in Raich limiting
its principles to “national defense” concerns, however, and
Raich relies on Wickard v. Filburn, 317 U.S. 111 (1942),
which dealt with Congress’s power to regulate wheat. See
Raich, 545 U.S. at 16. The attempt to read into Raich a
distinction between the market for firearms and the market
for marijuana has already been rejected by our court, as
Stewart held that the principles of Raich apply to the market
for firearms.1

  1
     The history of Stewart, which involved homemade machine guns,
further illustrates that the Supreme Court did not view Raich as narrowly
limited to its facts. Our first decision in Stewart was filed in 2003, as
         MONT. SHOOTING SPORTS ASS’N V. HOLDER                        15

    Finally, plaintiffs have not pursued on appeal any
argument that the individual right to bear arms recognized in
District of Columbia v. Heller, 554 U.S. 570 (2008), supports
a different result. Even if they had advanced this argument,
we have already held that Heller “has absolutely no impact on
Stewart’s Commerce Clause holding.” Henry, 688 F.3d at
642.

     Congress could have rationally concluded that the
manufacture of unlicensed firearms, even if initially sold only
within the State of Montana, would in the aggregate
substantially affect the interstate market for firearms. Under
Raich and Stewart, that is enough to place the Buckaroo
within reach of the long arm of federal law. Because the
MFFA purports to dictate to the contrary, see Mont. Code
Ann. 30-20-104 (providing that conduct conforming to the
MFFA is “not subject to federal law or federal regulation”),
it is necessarily preempted and invalid. See Arizona v. Inter
Tribal Council of Ariz., Inc., 133 S. Ct. 2247, 2254 (2013)
(explaining that, to the extent a state law conflicts with
federal law, “the state law . . . ceases to be operative”
(internal quotation mark omitted)).

United States v. Stewart, 348 F.3d 1132 (9th Cir. 2003). It concluded that
Congress could not, under its Commerce Clause power, prohibit mere
possession of a homemade machine gun. The Supreme Court granted
certiorari in that case, vacated the judgment, and remanded to this court
for further consideration in light of Raich. United States v. Stewart,
545 U.S. 1112 (2005). On remand, our court issued the 2006 decision
described in the text.
16         MONT. SHOOTING SPORTS ASS’N V. HOLDER

VI.        Conclusion

    Though we conclude that plaintiff Gary Marbut has
standing, we affirm the dismissal of the action for failure to
state a claim.

         AFFIRMED.

BEA, Circuit Judge, concurring in part and dissenting in part:

    I fully agree with the majority’s conclusion that Gary
Marbut is subject to federal licensing laws. Gonzales v.
Raich, 545 U.S. 1 (2005), and United States v. Stewart,
451 F.3d 1071 (9th Cir. 2006), foreclose Marbut’s argument
that Congress does not have the authority under the
Commerce Clause to regulate the manufacture of unlicensed
firearms, even if they are manufactured and initially sold
within Montana only. Had the majority stopped there, I
would join the opinion in full. However, the majority goes a
step further and holds that the Montana Firearms Freedom
Act is “necessarily preempted” because it purports to say that
conduct conforming to the MFFA is not subject to federal
regulation.1 In my opinion, this section of the opinion is
unnecessary. Once we decide, as we did, that Marbut’s
conduct falls within the scope of federal regulation, we do not
need to pass upon the validity of the MFFA. True, Marbut

     1
      Specifically, the MFFA declares that a firearm or ammunition
“manufactured . . . in Montana and that remains within the borders of
Montana is not subject to federal law or federal regulation, including
registration, under the authority of congress [sic] to regulate interstate
commerce.” Mont. Code Ann. § 30-20-104.
       MONT. SHOOTING SPORTS ASS’N V. HOLDER              17

attempts to use the MFFA as a shield against federal
regulation. But, once we decide that Congress has authority
to regulate Marbut’s conduct, it is simply irrelevant whether
Marbut attempts to cloak himself in the MFFA.

    Therefore, I respectfully dissent from the portion of the
majority’s opinion holding that the MFFA is preempted by
federal law.