Subject:  U.S. v. Dalton  (1991)

This is the file DALTON.TXT

PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT

        UNITED STATES OF AMERICA,
             Plaintiff-Appellee,

        V.
                                                       No. 91-1149
        JOHN WILLIAM DALTON,
             Defendant-Appellant.

                   Appeal from the- United States District Court
                              for the District of Colorado
                                (D.C. No. 90-CR-127)

        Charles Szekely, Assistant Federal Public Defender (Michael
C.Katz Federal Public Defender, with him on the brief), Denver,
Colorado, for Defendant-Appellant.
        Joseph Mackey, Assistant United States Attorney Michael J.
Norton, United States Attorney with him on the brief), Denver,
Colorado, for Plaintiff-Appellee.

        Before SEYMOUR and TACHA Circuit Judges, and BRIMMER District
Judge.*

        SEYMOUR, Circuit Judge.

           *  The Honorable Clarence A. Brimmer, Chief Judge, United
States District Court for the District of Wyoming, sitting by
designation.

- -1- John Dalton, an attorney, accepted a firearm as a fee from a
client, who was a licensed firearms dealer and who had converted the
weapon into a machinegun in 1989.  Dalton was found guilty of
possessing and transferring an unregistered firearm in violation of
the National Firearms Act, I.R.C.  5 5861(d), (e) (NFA).  A separate
criminal statute prohibits the possession of any machinegun made
after that statute's effective date in 1986.  18 U.S.C. 922(o)
(1988).  It is  undisputed  that  the  government  will not permit
the registration of machineguns covered by section 922(o), and will
not accept the tax which would otherwise be required by the
registration requirements of the National Firearms Act.  Dalton
contends that due process bars his conviction  under a statute which
punishes his failure to register when that registration is precluded
by law.  We agree and reverse.


Dalton was convicted of violating two provisions of the NFA I.R.C.  
5861(d), which prohibits the receipt or possession of an unregistered
firearm; and I.R.C 5861(e), which prohibits the transfer of a firearm
in violation of the applicable transfer provision.  The transfer
provision requires the transferor to apply for registration of the
firearm to the transferee and to pay a transfer tax. See id.  5812.1 
Under 18 U.S.C.   922(o),

[Note 1] Section 5812(a) provides:

     "A firearm shall not be transferred unless (1) the transferor of
the firearm has filed with the Secretary a written application, in
duplicate, for the transfer and registration of the firearm to the
transferee on the application form prescribed by the Secretary; (2)
any tax payable on the transfer is paid as evidenced by the proper
stamp affixed to the original application form; (3) the transferee is
identified in the application form in such manner as the Secretary
may by regulations prescribe, except that, if such person is an
individual, the identification must include his fingerprints and his
photograph; (4) the transferor of the firearm is identified in the
application form in such manner as the Secretary may by regulations
prescribe; (5) the firearm is identified in the application form in
such manner as the Secretary may by regulations prescribe; and (6)
the application form shows that the Secretary has approved the
transfer and the registration of the firearm to the transferee. 
Applications shall be denied if the transfer, receipt, or possession
of the firearm would place the transferee in violation of the law."
I.R.C.   5812(a) (emphasis added). [End note 1]

however, it is unlawful to transfer or possess the firearm at issue in
this case because the weapon was converted into a machinegun after
the statute's effective date of May 19, 1986.2

The NFA specifically provides that all applications to register a
firearm will be denied if it is illegal to possess or transfer the
weapon. See I.R.C.   5812 (registration application denied "if

[Note 2] Section 922(o) provides:

(l)  Except as provided in paragraph (2), it shall be unlawful for any
person to transfer or possess a machinegun. (2)  This subsection does
not apply with respect to--
           ...  (3) any lawful transfer or lawful possession of
machinegun that was lawfully possessed before the date this
subsection takes effect."

     The machinegun prohibition became effective May 19, 1986.  See
Pub.L.No.  99-308,   110(c),  100 Stat. 449, 461 (1986). [End note 2]

the transfer, receipt, or possession of the firearm would place the
transferee in violation of law").  As a result, compliance with the
registration requirements  referred to in sections 5861(d) and (e) is
impossible with this weapon.  Dalton concedes that the government
could have charged him under section 922(o), which criminalizes
possession.  Rec., vol. V, at 51.  However, the government instead
chose to proceed under section 5861 and charge him with possessing an
unregistered gun.

Dalton contends that the gravamen of a section 5861 violation is the
possession and transfer of an unregistered gun, and that it violates
fundamental fairness to convict him for failing to do an act which
everyone agrees he could not perform.  He made this argument to the
district court without success.  In rejecting Dalton's analysis, the
court stated its position that a violation of section 5861 is
grounded on possession rather than on the failure to register.
"[I]t's the act of possession, not the act of registration which is
the gravamen of the offense.  It is the act of possession of a
firearm that's not registered.  It doesn't matter who or why,"  Rec.,
vol. V, at 62,

We disagree with this analysis which has been specifically rejected by
the Supreme Court, albeit in a slightly different context.  In Haynes
v. United States, 390 U.S. 85 (1968), the defendant was convicted
under an earlier version of the NFA which made possession of an
unregistered firearm and failure to register separate offenses.  See
id. at 89.  The defendant was charged with possessing an unregistered
firearm rather than with failing to register.  He contended that
satisfying the obligation to register imposed by the statute under
which he was charged would have violated his Fifth Amendment
privilege against self-incrimination.  In response, the government
adopted the same position taken by the district court here, arguing
that the defendant's offense was the mere possession of an
unregistered firearm.  See id. at 90-91.

The Supreme Court disagreed, finding it significant that the
possession offense was defined as the possession of a firearm which
had not been registered as required by the statutory provisions.  The
Court stated that this reference to registration "Suggest(s) strongly
that the perimeter of the offense which it creates is to be marked by
the terms of the registration requirement imposed." Id. at 93.  After
discovering no persuasive evidence to the contrary, the Court
rejected the government's argument that the gravamen of the crime of
possessing an unregistered weapon is the possession and not the
failure to register.  "We find this supposed distinction entirely
unpersuasive, for, as we have found, the possession of a firearm and
a failure to register are equally fundamental ingredients of both
[the offense of failing to register and the offense of possessing an
unregistered firearm]."  Id. at 95 3

[Note 3] Based on this construction of the Act, the Court held that a
properly made claim of the constitutional privilege against
self-incrimination provided a complete defense to prosecutions either
for failure to register or for possession of an unregistered
firearm.  See 390 U.S. at 100.  In response to this decisions
Congress amended the NFA, which now provides that no information
obtained through compliance with the registration requirements shall
be used in a criminal proceeding against the person whose compliance
in required.  See I.R.C. Sec. 5848(a)(1988). [End note 3]

Like the statute at issue in Haynes, the statute under which Dalton
was convicted penalizes possession or transfer in violation of
registration requirements elsewhere imposed by the Act.  Under the
analysis in Haynes, the failure to register is a fundamental
ingredient of these offenses.  Because the crimes of which Dalton was
convicted thus have as an essential element his failure to do an act
that he is incapable of performing, his fundamental fairness argument
is persuasive. Cf. United States v. Spingola, 464 F.2d 909, 911 (7th
Cir. 1972); 1 W. LaFave & A.Scott, Jr., Substantive Criminal Law Sec.
3.3(c) at 291 (1986) ("One cannot be criminally liable for failing to
do an act which he is physically incapable of performing").

Dalton has supplemented his argument on appeal by directing us to
United States v. Rock Island Armory, 773 F. Supp. 117 (C.D. Ill.
1991), a case decided while this appeal was pending, in which the
court rejected an analogous prosecution under the NFA employing a
different but related analysis.  In Rock Island Armory, the
defendants were charged with manufacturing and delivering machineguns
into interstate commerce in violation of the registration
requirements of the National Firearms Act.

Undertaking a thorough review of the relevant legislative history and
case law, the court pointed out that this Act was passed and has been
consistently upheld under the power of Congress to raise revenue. The
court reasoned that because the possession of machineguns made after
1986 is illegal under section 922(o) and the government will
therefore no longer register and tax them, and because the
registration requirements are solely in aid of collecting the tax the
constitutional base for those requirements -- i.e, the power to tax --
has disappeared.  Accordingly, the court held the registration
requirements constitutionally invalid as to firearms that the
government no longer taxes.

In reaching this conclusion the court looked to the legislative
history of the Act which clearly evinces Congress's intent that the
Act regulate machineguns through a proper exercise of the taxing
power rather than by banning manufacture and sale outright.  The
court quoted testimony to that effect from then Attorney General
Homer S. Cummings, who "explained in detail how the (Act) would be
based on the tax power.  Cummings denied that machineguns could be
banned, because 'we have no inherent police power to go into certain
localities and deal with local crime.  It is only when we can reach
those things under . .  . the power of taxation that we can act.' " 
Rock Island Armory, 773 F. Supp at 119-20 (citations omitted).

[Note 4] The government initially appealed the decision in Rock Island
Armory but then successfully moved to dismiss the appeal.  See United
States v Rock Island Armory, No. 91-2595, 1991 WL 224268 (7th Cir.
Aug. 13, 1991).  [End note 4]

The court also relied on Sonzinsky v. United States, 300 U.S. 506
(1937).  In that case, a firearms dealer who was prosecuted for
failing to pay a dealers' license tax required by the Act argued that
the tax was in actuality an unconstitutional "penalty imposed for the
purpose of suppressing traffic in a certain noxious type of firearm
the local regulation of which is reserved to the states because not
granted to the national government."  Id. at 512.  The Supreme Court
rejected this argument stating that the section of the Act at issue
"contains no regulation other than the mere registration provisions,
which are obviously supportable as in aid of a revenue purpose.  On
its face, it is only a taxing measure . . . ."  Id. at 513.  As
pointed out in Rock Island Armory, the Court in Sonzinsky "upheld
[the Act's] validity precisely because the National Firearms Act was
a revenue measure only and did not purport to exercise any general
criminal power not delegated to congress by the Constitution."  Rock
Island Armory, 773 F. Supp. at 121.

We agree with the reasoning in Rock Island Armory that because the
registration requirements of the National Firearms Act were passed
pursuant to the taxing power, id. at 119, and because after the
enactment of section 922(o) the government will no longer register or
tax machineguns, id. at 118, section 922(o) has "removed the
constitutional legitimacy of registration as an aid to taxation," id.
at 125.  "Thus, Sec. 922(o) undercut the constitutional basis of
registration which had been the rule since Sonzinsky."  Id.

The government in a post-argument letter raises several objections to
the Rock Island Armory construction of the NFA, relying on
Sonzinsky.  In so doing, the government misconstrues both Rock Island
Armory and Sonzinsky, and renews specious arguments that the court in
Rock Island Armory properly rejected.  Although the thread of the
government's argument is not entirely clear, it appears to be
premised on a misreading of the holding in Rock Island Armory.  Thus,
the government characterizes that case as concluding that the Act
"loses its, constitutional validity if it has the affect of
suppressing a regulated item."  Government supp. letter (Nov. 22,
1991), at 3. As we have set out above, and as Rock Island Armory
plainly holds, the registration requirements are invalid not because
they have a regulatory effect, but because they were promulgated
under the taxing power and have, after the enactment of section
922(o), lost their constitutional legitimacy as an aid to tax
collection.  To put the proposition as plainly as we are able: a
provision which is passed as an exercise of the taxing power no
longer has that constitutional basis when Congress decrees that the
subject of that provision can no longer be taxed.

Sonzinsky is not to the contrary.  The Court there upheld the NFA
because it, on its face purports to be an exercise of the taxing
power [even though] the tax is burdensome or tends to restrict or
suppress the thing taxed."  300 U.S.  at 513.  Essential to this
holding was the fact that the Act "operate[d] as a tax," that is, it
was "productive of some revenue." Id. at 514.5   Sonzinsky thus holds
that an Act which produces tax revenue is a valid exercise of the
taxing power, even though it also has a regulatory effect.  This is
not to say, however, as the  government urges, that the measure
remains constitutional under the taxing power when its taxing purpose
disappears and only its regulatory effect is left.

Apparently recognizing that to be upheld as a taxing measure a statute
must generate some tax, the government argues that the Act still
produces revenue because one who unlawfully makes a machinegun is
assessed a tax, Government supp. letter at 4.  This argument is not
persuasive.  The fact that some revenue may be generated by taxing
the illegal making of a machinegun does not

[Note 5] The government cites Sonzinsky, 300 U.S. at 512, 513, for
the proposition that "the cumulative effect of the tax imposed by the
NFA on dealers, manufacturers, and importers of certain weapons and
on transactions in these weapons was 'prohibitive' in effect and
unmistakably disclosed the legislative purpose to regulate rather
than to tax."  Government supp. letter (Nov. 22, 1991), at 3.  This
description of the Act, which the government attributes to the Court,
is actually a recitation of the defendant's argument.  See 300 U.S.
at 513.  In fact, the Court held the Act distinguishable from those
statutes it described as "a penalty resorted to as a means of
enforcing the regulations."  Id. [End note 5]

legitimize the registration requirements for possession and transfer
at issue in the instant case.  The government does not assert that it
taxes the illegal possession or transfer of a machinegun.  Indeed,
here the government did not seek to recover a tax but to impose
criminal sanctions based on the possession and transfer of the
unregistered machinegun.

Finally, the government argues that the Gun Control Act, of which
section 922(o) is a part, should not be viewed as repealing the
National Firearms Act, citing a provision of the Gun Control Act
passed in 1968 to that effect.  The court in Rock Island Armory
rejected the same government argument, observing that "the 1968
Congress cannot bind the Congress of 1986, which decided to ban
transfer and possession of machineguns.  P.L. 99-308, 100 Stat. 453
(May 19, 1986).  Further, a Congressional declaration in 1968 does
not solve a constitutional problem which arose in 1986.  The ban
enacted in 1986 and the government's refusal to accept registrations
and tax payments, simply left the registration requirements with no
constitutional basis."

             773 F. Supp. at 126 (footnote omitted).

The government is correct that a statute is repealed by implication
only when that statute and a later statute are irreconcilable. See,
e.g., Morton v.  Mancari, 417 U.S. 533, 549-51 (1974).  In our view,
however, that is exactly the situation here.  Sections 5861(d) and
(e) punish the failure to register a machinegun at the same time that
the government refuses to accept this required registration due to
the ban imposed by section 922(o).  As a result of section 922(o),
compliance with section 5861 is impossible.

Accordingly, we vacate Dalton's conviction and reverse with
instructions to dismiss the indictment.  In so doing, we recognize
that the illegal possession of a machinegun is a most serious
matter.  However, it is precisely because this conduct raises such
grave concerns that the government must exercise its prosecuting
responsibility with care.  The decision to proceed under an
inapplicable statute has resulted in a constitutionally infirm
conviction.

VACATED AND REMANDED.

