As we've said before, you don't need to know much about takings doctrine to understand that a challenge wherein the property alleged to have been taken are "bump stocks" -- devices that allow rapid activation of a semi-automatic rifle such that it roughly imitates a fully-automatic weapon -- to understand that courts may be inherently reluctant to limit the government's authority to regulate their use and ownership even to the point of outlawing it. There's a long judicial history of courts not getting in the way when it comes to the other branches' response to the problem du jour. The judicial reluctance many not be rational, it may not be doctrinally consistent. But, in our view, it just is, and that's something that owners of such property and those of us who seek doctrinal clarity have to take into account.
Here's the latest in a case we've been following, that in our opinion could be Exhibit "A" proving the notion that courts are unwilling to limit the power of government in these type of situations (where something has become toxic) -- either directly, by curbing its regulatory power or indirectly through the just compensation requirement -- that they put themselves through a lot of analytic twists and turns to avoid doing so.
In McCutchen v United States, No. 20-1188 (Oct. 1, 2021), the Federal Circuit did what you might expect: it affirmed the Court of Federal Claims' dismissal of the plaintiffs' complaint which seeks just compensation for the taking of their (now-outlawed) bump stocks. We criticized the CFC's rationale that the reason the bump stock ban was not a taking was because it was a valid "police power" safety measure (putting aside for the moment that the feds don't have what you'd call a "police power" of course): the CFC "simply repeated the trope that the ban was a valid exercise of the government's regulatory power (which, we think was not really a question), and thus no taking." As we've noted before, this analysis is very unsatisfying. A takings claim like this doesn't challenge the validity of the ban (Lingle, anyone?), but instead says "if you are going to ban these things, the pubic needs to provide compensation."
The Federal Circuit avoided the CFC's erroneous analysis, claiming to go a different way: "[w]e affirm, but we do so on a threshold ground different from, though related to, the Claims Court’s grounds." Slip op. at 4. That's a good thing, because unlike many courts, some are beginning to get the idea that just because a regulation is imposed for an arguably valid police power reason (or other proper regulatory justification in the case of federal restrictions), does not insulate it from takings review. Indeed it is the first step in the takings analysis not the last. See this Fourth Circuit decision, for example, where the court concluded "[t]hat Government actions taken pursuant to the police power are not per se exempt from the Takings Clause is axiomatic in the Supreme Court’s jurisprudence." Good for the Federal and Fourth Circuits.
So how did the Federal Circuit get to the no-takings result, without going down the same (wrong) path the CFC traveled? It looked at the property interest alleged, and concluded that the owners of bump stocks were already subject to existing federal regulations that prohibit machineguns, and that the new prohibition on bump stocks is simply a new agency interpretation of the long-standing rule.
Congress has banned "machineguns" since 1934, in a statute that also defined what a machinegun is. That definition remained the same until 1986, when Congress amended it to include "any part ... for use in converting a weapon" into a device that shoots more than a single round with a single pull of the trigger. The AG has the authority to promulgate rules and regulations enforcing this provision. And that's what happened here, the Federal Circuit concluded.
The regulations being challenged define a bump stocks as a device or part that allows someone to shoot multiple rounds with a single trigger pull. The court also noted that the AG's interpretation changed over time, and in the past -- between 2008 and 2017 -- had excluded bump stocks from the machinegun definition. See slip op. at 9. But after the Las Vegas massacre in which the shooter used a bump stock, the AG "clarified" that bump stocks are, in the government's view, machineguns. The Federal Circuit focused on this as the key. Thus, this wasn't some new rule outlawing bump stocks, but a "pre-existing law circumstance" (slip op. at 15) -- merely an enforcement of the longstanding prohibition of machineguns.
The court first pointed out it was avoiding the hard question:
We do not reach the grounds on which the Claims Court relied. In particular, we do not decide under what circumstances a measure that newly bars possession of personal property (as opposed to restricting a use of property) and that serves a “police power” purpose (and is constitutionally authorized for the federal government) is not a “taking,” and thus requires no compensation. Nor do we decide whether mandating permanent dispossession by ordering destruction of personal property cannot be a “physical taking,” even if the government-specified alternative to destruction is surrender to the government and the mandate is backed by government remedies of seizure and forfeiture for a willful violation as well as criminal remedies for a knowing violation.
Slip op. at 13-14 (footnote omitted).
To do so, the court engaged in what we see as a clever sleight-of-hand, something that occurs frequently in takings cases by determining the property interest involved never included the right to make the now-barred use: courts frequently avoid addressing the Armstrong principle by narrowing the scope of the property interest claimed to be taken. Here, the Federal Circuit concluded that although the bump stock owners unquestionably possessed property as defined by state law, the longstanding federal regulation of that property was a background principle that inhered in the title to these things. See slip op. at 17 ("And 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.").
In short, the owners of the bump stocks never had the right to keep and transfer them:
In this case, the federal-law prohibition on possession and transfer, together with a congressional grant of implementation authority, predated the existence, let alone plaintiffs’ possession, of the bump-stock-type devices that plaintiffs were compelled to destroy or surrender. That prohibition is a very specific one, defined in terms of the physical operation of particular devices, not in terms simply of a broadly stated goal. The latter situation raises issues not presented here.
Slip op. at 18 (footnote omitted).
But wait...weren't these things ok before the AG reimagined the regulations to include them in the definition of machinegun? That's where the court got creative. The sleight-of-hand we referred to above starts on pages 18 and 19, where the court rejected what at first glance might have been the property owners' most compelling argument -- that the AG's latest interpretation was a "new" prohibition because in the past it had a differing view of whether bump stocks qualifed as machineguns.
The Federal Circuit was able to avoid that argument by concluding the owners conceded the point when they acknowledged the AG's new interpretation is a "legally valid interpretation of the statutory prohibition[.]" Slip op. at 18. But we're guessing that isn't quite what the owners conceded, as it seems more likely that they merely acknowledged that they were not challenging the validity of the current prohibition, something that Federal Circuit doctrine requires them do in order to bring a takings claim in the CFC. A challenge to the validity of the prohibition is either an APA or a due process challenge, and those belong in a district court not the CFC (where jurisdiction is limited by the Tucker Act to money claims). In short, because of the split jurisdiction between the CFC and the district courts, you cannot raise both a challenge to the validity of the action and a takings claim.
But the court took that concession as also acknowledging the limitation of the challenged regulation on the owner's property rights, which to us seems like bootstrap logic. If the Federal Circuit's approach to the owner's "concession" is universally applied, it would result in a property owner acknowledging the validity of the regulation challenged as a taking as a ticket to the takings claim, but at the same time conceding that the challenged regulation is a background principle, wiping out the claimed property right.
We think the heart of the Federal Circuit's rationale that starts of page 20 of the slip opinion for why the AG was not truly switching gears and implementing a "new" prohibition, but rather was merely returning interpretation of the machinegun prohibition to where it had always been is a real exercise in the metaphysics of Chevron deference. The AG's most recent take on the definition of machinegun might or might not be the "best interpretation" of the statute's meaning, but the statute itself has always been clear, according to the court. See slip op. at 20 ("In either event, the preexisting statute itself, properly understood, barred the possession or transfer at issue. In these circumstances, the bar always limited plaintiffs’ title, and plaintiffs never had a property right against government assertion of the duty to destroy the devices at issue or surrender them.").
Or, the court alternatively concluded, even if the statute was not clear, the owners' property rights were always subject to the government changing its mind on including bump stocks in the definition of machinegun:
For plaintiffs here, the preexisting limitation on their title included subjection to future valid agency interpretations of the possession-and-transfer prohibition (as assumed here) adopted in the exercise of that authority. In these circumstances, plaintiffs had no property interest protected by the compensation requirement of the Takings Clause against such a valid interpretation when adopted.
Slip op. at 21. In short, where a statutory term might be ambiguous (and what statute isn't, we ask?), the owner's property rights must account for the ambiguity by applying Chevron deference. Slip op. at 21 ("By 1986, the Supreme Court’s 1984 decision in Chevron already made clear that the law, for a statute like 18 U.S.C. § 922(o), included the possibility of reasonable resolutions of ambiguities").
Property rights are shaped by Chevron? Holy cow, that's a new one; or perhaps just way of backing into the old claim that property rights are limited by "highly regulated" markets.
Having concluded that the bump stock owners' property interests did not include the right to be free of regulation that might outlaw the property, the court easily concluded that there was no taking. No "property," no need to even evaluate the physical deprivation or even a Penn Central claim.
To us, despite the court's claim to have avoided the CFC's rationale that a valid-police-power-regulation-is-not-a-taking, it pretty much undertakes the same analytical approach. But the Federal Circuit dresses it up better. After all, if the prohibition being challenged is part of the property's "background principles," what is left of the property itself other than the very Hobbesian notion that the state defines an owner's expectations at will? Here, the Federal Circuit endorses that idea when it concluded that despite the AG expressly excluding bump stocks from the definition of machinegun between 2008 and 2017, the AG had also put the owners on notice in the ATF Handbook where it reserved the right to change its mind. See slip op. at 23 ("Nevertheless, classifications are subject to change if later determined to be erroneous or impacted by subsequent changes in the law or regulations"). Here, the law or regulations didn't change, but the circumstances did.
In short, the official word of the the government is good...until it isn't. Proceed at your own risk.
Are we surprised by the result in the Federal Circuit? No. Are we just a little bit disappointed that the court went about it this way? Yeah, just a little.
McCutchen v. United States, No. 20-1188 (Fed. Cir. Oct. 1, 2021)
