Sig Sauer, Inc. v. Brandon , 826 F.3d 598 ( 2016 )

United States Court of Appeals
For the First Circuit
No. 15-2230
SIG SAUER, INC.,
Plaintiff, Appellant,
v.
THOMAS E. BRANDON, Acting Director, United States Bureau of
Alcohol, Tobacco, Firearms, and Explosives,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Lynch, Thompson, and Barron,
Circuit Judges.
Stephen P. Halbrook, with whom Mark C. Rouvalis and Kenton J.
Villano were on brief, for Appellant.
Abby C. Wright, Attorney, Appellate Staff, Civil Division,
U.S. Department of Justice, with whom Benjamin C. Mizer, Principal
Deputy Assistant Attorney General, Donald Feith, United States
Attorney, and Michael S. Raab, Attorney, Appellate Staff, Civil
Division, U.S. Department of Justice, were on brief, for Appellee.
June 21, 2016
BARRON, Circuit Judge. Sig Sauer, Inc., is a gun
manufacturer headquartered in New Hampshire. In this appeal, Sig
Sauer challenges the District Court's decision to uphold a ruling
by the Bureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF")
that a gun Sig Sauer seeks to market includes a "silencer" under
the National Firearms Act (the "NFA"). 26 U.S.C. §§ 5801 et seq.
We affirm.
I.
The NFA subjects "firearms" to various taxes and
regulatory requirements, including that the firearm be registered
with ATF. Id. §§ 5811, 5821, 5822, 5841, 5842. The NFA defines
a "firearm" to include certain guns and gun parts, including
"silencers." 18 U.S.C. § 921. And the NFA defines a "silencer,"
to include not only "any device for silencing, muffling, or
diminishing the report of a portable firearm," but also, and of
particular relevance here, "any part intended only for use in"
"assembling or fabricating a firearm silencer or firearm muffler."
Id. § 921(a)(24); 26 U.S.C. § 5845(a)(7) (emphasis added). Failure
to comply with the NFA's regulatory requirements can result in
serious criminal penalties. 26 U.S.C. § 5871.
ATF permits -- but does not require -- gun makers to
seek classification letters from ATF prior to manufacturing a gun.
See Bureau of Alcohol, Tobacco, Firearms and Explosives, National
Firearms Act Handbook § 7.2.4 (2009), available at:
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https://www.atf.gov/firearms/docs/atf-national-firearms-act-
handbook-atf-p-53208/download; see also Innovator Enters., Inc. v.
Jones, 28 F. Supp. 3d 14, 18-19, 19 n.2 (D.D.C. 2014). A
classification letter sets forth "the agency's official position
concerning the status of the firearms under Federal firearms laws."
Id. § 7.2.4.1.
In this case, Sig Sauer sought a classification letter
from ATF regarding a part of a gun that it planned to manufacture.
Sig Sauer noted that ATF might deem the part at issue to be a
silencer under the NFA on the ground that it was "intended only
for use" in assembling or fabricating a silencer. Sig Sauer
contended, however, that the part was not intended only for such
a use as it was also intended for use as a muzzle brake. A muzzle
brake is a device that is added to a gun to reduce recoil (the
backwards force that results from firing the gun) and rise (the
tendency of the barrel to move upwards when the gun is fired).
See Vais Arms, Inc. v. Vais, 383 F.3d 287, 288 n.1 (5th Cir. 2004).
On the basis of its argument that the part was intended for use as
a muzzle brake, Sig Sauer argued to ATF that the part did not
qualify as a silencer under the "intended only for use" prong of
the NFA's definition of a silencer.
ATF disagreed and issued a classification letter that
designated the part to be "intended only for use" in assembling or
fabricating a silencer. Sig Sauer then asked ATF to reconsider
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its classification. ATF again determined, however, that the part
was a silencer under the "intended only for use" prong of the NFA's
definition of a silencer.
At that point, Sig Sauer challenged ATF's classification
of the part as a silencer by filing suit in the District of New
Hampshire under the Administrative Procedure Act (the "APA"). 5
U.S.C. §§ 701 et seq.1 The parties then jointly moved to stay the
proceedings so that ATF could reconsider the part's
1 The parties agree that ATF's issuance of a classification
letter is a "final agency action" that is reviewable under the
Administrative Procedure Act. 5 U.S.C. § 704. "In determining
whether a particular agency action is final, 'the core question is
whether the agency has completed its decisionmaking process, and
whether the result of that process is one that will directly affect
the parties.'" Trafalgar Capital Assocs., Inc. v. Cuomo, 159 F.3d
21, 35 (1st Cir. 1998) (brackets omitted) (quoting Franklin v.
Massachusetts, 505 U.S. 788, 797 (1992)). It appears that there
are no further steps in ATF's administrative process. See Bureau
of Alcohol, Tobacco, Firearms and Explosives, National Firearms
Act Handbook § 7.2.4 (2009), available at:
https://www.atf.gov/firearms/docs/atf-national-firearms-act-
handbook-atf-p-53208/download. And should ATF's classification
decision stand, Sig Sauer will have to go through with the NFA's
stringent requirements in order to sell its firearm -- as the
classification letter states. See Franklin, 505 U.S. at 796-97("To determine when an agency action is final, we have looked to,
among other things, whether its impact 'is sufficiently direct and
immediate' and has a 'direct effect on . . . day-to-day
business.'" (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 152
(1967))). In consequence, we agree with the parties that ATF's
classification decision is a "final agency action" and thus
reviewable under the APA. See FTC v. Standard Oil Co., 449 U.S.
232, 241 (1980) (noting that the APA's finality requirement is
satisfied when a decision is a "'definitive' statement[] of the
[agency]'s position . . . and had a 'direct and immediate . . .
effect on the day-to-day business' of the complaining parties."
(fourth alteration in original) (quoting Abbott Labs., 387 U.S. at
151-52)).
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classification. ATF agreed to accept "additional documents or
information" in reconsidering its prior ruling. ATF also agreed
that, in the event that it affirmed its prior ruling on remand, it
would consider "additional information and documentation" if Sig
Sauer chose to make such a submission before the case returned to
the District Court.
On remand, ATF affirmed its decision yet again. Sig
Sauer then submitted, among other materials, affidavits that
stated that it intended the part at issue to lengthen the gun's
barrel to 16 inches so that the gun would not be subject to the
NFA on the basis of its length, as rifles that are shorter than 16
inches are for that reason alone subject to the NFA. See 26 U.S.C.
§ 5845(a)(3). Sig Sauer thus contended that because it intended
the part to make the gun sufficiently long that it would not be
subject to the NFA on the basis of its length, the part was, for
this reason, too, not "intended only for use" in assembling or
fabricating a silencer. ATF declined, however, to change its
classification of the part.
Following ATF's decision on remand, the litigation
resumed in district court, where the parties cross-moved for
summary judgment. After a hearing, the District Court granted
ATF's motion for summary judgment and denied Sig Sauer's. Sig
Sauer, Inc. v. Jones, 133 F. Supp. 3d. 364 (D.N.H. 2015). Sig
Sauer then timely filed this appeal.
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II.
"In the administrative law context, where we review
directly the decision of the agency, the APA can serve as an
overlay to the familiar de novo standard applicable to appeals
from a district court's grant of a summary judgment." Baystate
Alt. Staffing, Inc. v. Herman, 163 F.3d 668, 674 (1st Cir. 1998).
Under the APA, we review ATF's decision to determine if it is
"arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law." 5 U.S.C. § 706(2)(A); see Baystate Alt.
Staffing, 163 F.3d at 674. "A decision is arbitrary and capricious
'if the agency has relied on factors which Congress has not
intended it to consider, entirely failed to consider an important
aspect of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view
or the product of agency expertise.'" Craker v. DEA, 714 F.3d 17,
26 (1st Cir. 2013) (quoting Motor Vehicle Mfrs. Ass'n v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). And, of course,
"[w]e may not substitute our judgment for that of the agency, even
if we disagree with its conclusions." Id.III.
Sig Sauer first contends that ATF classified the part as
a silencer merely because it was "capable of use" in assembling or
fabricating a silencer and thus failed to evaluate whether, as the
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NFA requires, the part was "intended only for use" in assembling
or fabricating a silencer. Sig Sauer bases this contention on the
fact that ATF examined, among other things, the part's design
features and objective capabilities.
But ATF persuasively explained in its classification
letter that it examines a part's design features -- and thus the
uses of which a part is capable -- as part of the inquiry into
whether a part is intended to be used only in assembling or
fabricating a silencer. Such an objective approach to ferreting
out a party's intent is a very familiar one in the law. See, e.g.,
United States v. Siciliano, 578 F.3d 61, 77 (1st Cir. 2009) (noting
that objective evidence is useful to "buttress or rebut direct
testimony as to intent"); cf. Washington v. Davis, 426 U.S. 229,
253 (1976) (Stevens, J., concurring) ("Frequently the most
probative evidence of intent will be objective evidence of what
actually happened rather than evidence describing the subjective
state of mind of the actor."); United States v. Gaw, 817 F.3d 1(1st Cir. 2016) ("[T]he law is long since settled that the
prosecution may prove its case without direct evidence of a
defendant's guilty knowledge so long as the array of circumstantial
evidence possesses sufficient persuasive power." (quoting United
States v. O'Brien, 14 F.3d 703, 706 (1st Cir. 1994))). Nor do we
have any reason to suppose it is an approach that the NFA
prohibits. In fact, it is hard to believe that Congress intended
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to invite manufacturers to evade the NFA's carefully constructed
regulatory regime simply by asserting an intended use for a part
that objective evidence in the record -- such as a part's design
features -- indicates is not actually an intended one. See United
States v. Syverson, 90 F.3d 227, 232 (7th Cir. 1996) (holding that
a device was "intended only for use" in assembling or fabricating
a silencer notwithstanding the designer's stated intention that it
be used as a muzzle brake).
Because we find persuasive ATF's contention that it may
consider objective evidence in determining whether a part is
"intended only for use" in assembling or fabricating a silencer,
see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), ATF
committed no legal error of the sort Sig Sauer claims.
Accordingly, we need decide only the sole remaining point of
dispute between the parties: whether there is a sufficiently
reasoned basis in the administrative record for ATF's
classification of this part as one that is "intended only for use"
in assembling or fabricating a silencer. And so we now turn to
that issue.
IV.
ATF concluded that the part at issue is intended for use
only in assembling or fabricating a silencer because it was
designed with features that are common to all silencers but no
muzzle brakes; because the gun that includes the part is not of a
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type that requires, or is sold with, a muzzle brake; and because
Sig Sauer initially submitted a prototype of the gun to ATF that
functioned safely only if the part at issue was encased and thus
had been made into a completed silencer. Given that the
administrative record adequately supports these findings, and that
these findings reasonably support ATF's conclusion that the part
is "intended only for use" in assembling or fabricating a silencer,
we conclude that ATF's classification of this part as a silencer
is not arbitrary and capricious. See State Farm, 463 U.S. at 43.
We start with ATF's well supported findings that the
part was identical to the interior of a silencer because it was a
part that is known as "a monolithic baffle core." In reaching
this conclusion, ATF pointed to the depictions of other monolithic
baffle cores that are part of the administrative record and
explained that, like these monolithic baffle cores, this part also
"contains angled baffles and (when assembled with an outer tube)
walls forming integral expansion chambers." ATF further explained
that "expansion chambers . . . reduce sound by capturing and
slowing propellant gases" and thus enable this part (when encased)
to do the key thing that a silencer does: "diminish[] the report"
of a firearm.
Further supporting ATF's finding that this part is a
monolithic baffle core is the fact that, through testing, ATF found
that the part significantly reduced the report of a gunshot when
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it was encased. Moreover, ATF supportably found that this part is
identical to the monolithic baffle core that Sig Sauer uses as the
interior of the complete silencers that it sells; that Sig Sauer
used the same part number to identify the part in question here
and the core of its removable silencer; that Sig Sauer labeled
this part a "silencer" on its invoice;2 and that the part included
threading at the muzzle end that made it easy to encase the part
to produce a complete silencer.
Sig Sauer points to nothing in the record that undermines
these findings about the features of this part that make it
identical to the interior of a silencer. For while Sig Sauer
disputes ATF's interpretation of the similarity between this part
and the depictions of the monolithic baffle cores in the record,
Sig Sauer has given us no reason not to defer to ATF's contrary
interpretation of this evidence, which is well "within [ATF's]
special competence." Penobscot Air Servs., Ltd. v. FAA, 164 F.3d
713, 718 (1st Cir. 1999) (quoting Univ. Camera Corp. v. NLRB, 340
U.S. 474, 490 (1951)). And our deference to ATF's interpretation
of this evidence is especially warranted given that proper
evaluation of this evidence "requires a high level of technical
2Sig Sauer contends that it labelled the part this way only
in order to comply with ATF's ruling that the part in question is
a silencer. But ATF was free to conclude otherwise, as there is
nothing in the record to suggest that ATF's ruling required the
use of such a label.
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expertise." Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 377
(1989) (quoting Kleppe v. Sierra Club, 427 U.S. 390, 412 (1976));
see also R.I. Higher Educ. Assistance Auth. v. Sec'y, U.S. Dep't
of Educ., 929 F.2d 844, 857 (1st Cir. 1991) (collecting cases).3
To be sure, the record does contain an affidavit from a
Sig Sauer engineer purporting to distinguish this part from
monolithic baffle cores. But Sig Sauer has made no effort to
explain why we should credit that affidavit over ATF's conclusions.
In fact, although Sig Sauer's counsel at argument stated that the
finding that this part is a monolithic baffle core is not
supported, he agreed with the District Court's characterization
that Sig Sauer had "basically taken the cap off [of its]
silencer, . . . welded it onto the gun, and [was] just going to
sell it as a muzzle brake."
In finding that this part is identical to the interior
of a silencer, ATF did not dispute that the part also reduced the
gun's recoil and rise, as a muzzle brake also does. But as Sig
Sauer itself emphasizes, the standard under the NFA's silencer
definition focuses on the relevant part's intended use rather than
on uses of which the relevant part is merely capable. See 18
U.S.C. § 921(a)(24); see United States v. Crooker, 608 F.3d 94, 97
3
Sig Sauer does argue that the part at issue somewhat
amplifies the sound of a gunshot when the part is not encased.
But ATF found that the component was identical to the interior of
a silencer because of how it functioned when it was encased.
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(1st Cir. 2010) (per curium). Thus, while the fact that this part
incidentally reduces the gun's rise and recoil shows that it is
capable of doing so, that fact is not necessarily determinative of
whether Sig Sauer intended this part to be used for that purpose.
See Crooker, 608 F.3d at 97; see also United States v. Carter, 465
F.3d 658, 667 (6th Cir. 2006) (per curium) ("[Congress's] word
choice indicates a concern for the purpose of the mechanism, and
the parts thereof, not the function." (emphasis omitted)). In
fact, ATF supportably found that "any additional weight placed at
the end of a firearm barrel may" incidentally reduce recoil and
rise even though not everything that adds such weight is thereby
intended to be used as a muzzle brake. Cf. Crooker, 608 F.3d at
97 ("If the statute [spoke of] a device 'capable' of being used as
a silencer . . . there would be problems at least of degree in
determining what 'capable' meant . . . ; apparently, a potato or
a soda bottle may, with varying efficacy and varying risk, be used
to muffle a firearm shot."). And, in concluding that in this case
Sig Sauer did not intend the part to be used to reduce recoil and
rise, ATF relied on several pieces of evidence that it reasonably
determined pointed against the conclusion that Sig Sauer intended
the part to be used as a muzzle brake and in favor of the conclusion
that Sig Sauer intended the part to be used only in assembling or
fabricating a silencer.
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As an initial matter, ATF found that the part has design
features uncharacteristic of muzzle brakes and characteristic only
of the interior of silencers. In particular, ATF found that the
length to width ratio of the part "is much greater than that of
conventional muzzle brakes and is consistent with those of"
silencers. ATF also found that while the interior of this part
was designed with baffles so that the part would create "expansion
chambers" when encased -- thus making the part useful in assembling
or fabricating a silencer -- no muzzle brakes have such baffles.4
In addition, ATF found that the sort of gun for which
this part was intended -- a pistol caliber semiautomatic gun --
has little or no practical use for a muzzle brake, because such
guns do not produce a substantial recoil in the way that larger
guns and automatic guns do. And ATF further found that other non-
automatic guns of this type are not sold with muzzle brakes, a
fact that ATF reasonably found indicated that any reduction in
recoil and rise attributable to this part was incidental to its
use as an integral component of a completed silencer.
4 In its brief to us, ATF points to articles reviewing the
gun, which ATF contends support its position that the part was not
a conventional muzzle brake. These articles called the part "one
of the coolest things to be unveiled," described it as a "gigantic"
and "very large" "muzzle brake," and stated that it was a silencer
core and that Sig Sauer would happily sell one the casing to turn
the part into a silencer. In reply, Sig Sauer says that the
articles recognize that the part was a muzzle brake. As it appears
ATF did not rely on these articles in making its decision, we do
not rely on them here.
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In further support of its classification of the part,
ATF reasonably found that the design of Sig Sauer's original
prototype of the gun indicated that the part was not intended for
use as a muzzle brake. That prototype included a longer hand
guard, which partially covered the part in question. But muzzle
brakes, ATF explained, are "designed to be positioned at the muzzle
end of a firearm barrel, and in front of a shooter's hand." In
fact, ATF noted that the prototype was designed so as to "redirect
hot gases onto the shooter's hand each time a projectile was
fired," thus making it so that the prototype could have been fired
safely only if the part in question was encased. ATF thus
concluded that "[t]he very configuration of SIG's submission . .
. suggests that the submission is not, in fact, designed as a
muzzle brake," and was instead designed only as a component of a
silencer, as the part could have functioned safely on the initial
prototype only if the part was made into a completed silencer.
Sig Sauer does nothing to rebut these findings. In
offering a conclusory challenge to ATF's interpretation of the
differences between this part and the depictions of the muzzle
brakes that are contained in the administrative record, Sig Sauer
offers no reason as to why we should favor its evaluation of this
technical evidence over ATF's. See Marsh, 490 U.S. at 377; R.I.
Higher Educ. Assistance Auth., 929 F.2d at 857 (collecting cases).
And while Sig Sauer does point out in its brief that muzzle brakes
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also have slots that allow gases to escape, Sig Sauer does not
dispute ATF's finding that the slots in this part are designed to
produce expansion chambers when encased while the slots in muzzle
brakes are not. Similarly, while Sig Sauer argues that some
smaller caliber guns are sold with muzzle brakes, Sig Sauer does
not dispute ATF's finding that pistol-caliber guns that are not
capable of automatic fire -- as the gun in question here is
not -- are not sold with muzzle brakes.
Sig Sauer does argue that ATF erred in giving weight to
the fact that Sig Sauer originally submitted a prototype in which
the part now claimed to be a muzzle brake actually could not safely
function as one. And we agree with Sig Sauer that the design of
the original prototype is not dispositive of the part's intended
use in its present incarnation. Nonetheless, the fact that Sig
Sauer was willing to proceed with a prototype in which the part
could not be safely used as a muzzle brake at all does provide
some additional support, in combination with the other findings on
which ATF relied, for ATF's determination that Sig Sauer intended
this part to be used only in assembling or fabricating a silencer,
notwithstanding that the part also incidentally reduces recoil and
rise.5
5 Sig Sauer's reliance on Innovator Enterprises is misplaced,
as that case is easily distinguishable. 28 F. Supp. 3d at 14.
Innovator Enterprises dealt with the first prong of the silencer
definition -- a "device for silencing, muffling, or diminishing
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In sum, ATF reasonably determined on the basis of the
record that the part's capacity to reduce recoil and rise was
merely an incidental consequence of the inclusion of the part on
the gun -- a consequence that ATF supportably found would result
from adding any additional weight to the gun. Given that ATF
supportably found that this type of gun does not need a muzzle
brake and is not typically sold with a muzzle brake, and given
that ATF supportably found that this part is identical to the
interior of a silencer and does not share the design features
typical of other muzzle brakes, we see no basis for concluding
that ATF's classification of this part as having been "intended
only for use" in assembling or fabricating a silencer is arbitrary
and capricious.
Sig Sauer does make one last challenge to ATF's
classification of the part. This challenge pertains not to the
part's possible use as a muzzle brake, but rather to the fact that
the part extended the gun's length. Sig Sauer argues that it
intended the part to be used to extend the gun's barrel to 16
inches, so that its length would not make it subject to the NFA.
the report of a portable firearm" -- rather than the "intended
only for use" prong that is at issue here. Id. at 18-19. Moreover,
Innovator Enterprises determined that ATF had failed to examine
whether the putatively complete silencer actually did diminish the
report of a firearm, as ATF refused to do any sound testing of the
part. Id. at 30. Here, by contrast, ATF did perform sound testing
and determined that, when encased, the part reduced the report of
a firearm.
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See 26 U.S.C. § 5845(a)(3). Sig Sauer thus contends that, for
this reason, the part was not intended only for use in assembling
or fabricating a silencer as it was also intended to be used to
make the gun sufficiently long that the gun would not be subject
to the NFA due to its length.
ATF responds that a "use" must be determined from the
point of view "of the firearm operator," rather than from the point
of view of the manufacturer, even though it is the manufacturer's
"intent" regarding the part's use that matters. Gov. Br. at 20.
Otherwise, ATF contends, a manufacturer's claimed interest in
increasing profitability or aesthetic appeal could count as an
intended use for a part, thereby making the "intended only for
use" prong of the silencer definition effectively meaningless.
Accordingly, ATF argues that it is wrong to treat Sig Sauer's
intention for the part to extend the gun's length as an intended
use of that part.
We need not resolve whether ATF is right on this point
because the District Court correctly concluded that Sig Sauer did
not properly raise this argument regarding the part's length in
its initial submission to ATF.6 Sig Sauer did present this length-
based argument when it submitted the "additional information and
6 Sig Sauer's original submission merely noted that the
firearm, measured with the part in question, was 16 inches long;
Sig Sauer made no argument at that time that this fact had any
bearing on whether the part was a silencer under the NFA.
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documentation" that ATF agreed to accept on remand from the
District Court. But while ATF agreed on remand to consider
"additional information and documentation," the agreement does not
say that ATF agreed to address brand new arguments made for the
first time in a new submission. Thus, we agree with the District
Court that Sig Sauer waived its argument about the part's length
because it failed to raise that argument to the ATF prior to the
District Court's remand to the agency.
V.
For the foregoing reasons, the District Court's grant of
summary judgment is affirmed.
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