Watson v. Holder - NFA 922(o), Unincorporated Trusts

Tyeraxus · Nov 16, 2014

Filed in US District Court for eastern PA on 14 November 2014. Watson is a trustee of an unincorporated trust, applied to manufacture a machine gun under the trust, received the approved Form 1, manufactured the machine gun, and then ATF revoked the approval and demanded he surrender the "illegal" machine gun.

The case makes Article I Commerce Clause, Amendment II, Amendment V deprivation of property, Amendment XIV equal protection, and detrimental reliance arguments. Watson asks the court to declare 922(o) unconstitutional, or at least prohibit ATF from enforcing it against unincorporated trusts, a well as prohibiting them from "taking back" the approval they originally gave.

Complaint here:
http://www.scribd.com/doc/246633381/Watson-v-Holder-et-al

EDIT: Credit where credit is due - hat tip to reddit /r/progun and /u/YankeeQuebec.

DaemonAssassin · Nov 16, 2014

Check the NFA Section. I'm pretty sure this was posted there and the thread is still going.

Check here.
http://www.mdshooters.com/showthread.php?t=162139

Dogabutila · Nov 16, 2014

This is actually a different case. There are two simultaneously targetting NFA WRT trusts / MG

DaemonAssassin · Nov 16, 2014

Oh snap. Belay my last then.

Inigoes · Nov 16, 2014

this is gonna be interesting, property has been seized without compensation.

bobthefisher · Nov 16, 2014

Yeah, the other case was filed in Texas. Add another 2A case to the watch list!

Dogabutila · Nov 16, 2014

Was something actually seized? I thought the ATF had no power to do that.

yellowfin · Nov 16, 2014

This is why I wish we had people on the Supreme Court who went to law school and spent the formative years of their careers in the real US instead of Massachusetts and New York then living in DC. WTF is it so hard to get real gun owning pro gun people in the positions we need them?!?! This would be a slam dunk if we had justices who owned stuff with stamps themselves, but instead we have ones who couldn't even be bothered to overturn May Issue in NJ, NY, and MD. If they were living in the real world instead of ivory tower land they'd do it without a second's hesitance.

Inigoes · Nov 17, 2014

Dogabutila said:
Was something actually seized? I thought the ATF had no power to do that.

Yep, and the receipt is an exhibit

Pinecone · Nov 17, 2014

Not totally 2nd Amendment case. A LAW case.

The LAW says that a trust is not a person. The LAW says a PERSON cannot build a post 86 machine gun.

Inigoes · Nov 17, 2014

squirrels said:
What does the LAW say about a "non-person" entity having 2A rights?

See the Citizens United Supreme court decision, corporations have 1A rights. It's only natural for them to have 2A rights.

clandestine · Nov 17, 2014

Dogabutila said:
Was something actually seized? I thought the ATF had no power to do that.

You are being sarcastic right? You actually think that's accurate?

clandestine · Nov 17, 2014

squirrels said:
First, we are talking about unincorporated trusts, right? That's what I read in the original post.

Corporations are legally "persons". And as people, they would have 2A rights.

The issue here is UN-incorporated trusts, which BATFE has alleged are "not people". That's the whole basis for this trust being able to manufacture a machine gun.

What happpened was, regarding some other trust question, BATFE ruled that an unincorporated trust was "not a person".

Based on that, some clever 2A advocates said, "if that's true, then 922(o) doesn't apply to unincorporated trusts". And so they submitted paperwork to BATFE for their trusts to manufacture machine-guns, and apparently at least one of them got through.

The thing is...it causes the whole "unincorporated trust for Title II/Class 3" deal to come under the microscope. Because now a court has to rule once and for all whether unincorporated trusts are "people" or "not people".

If they are "people", then Watson was the victim of a clerical/legal misunderstanding, the NFA examiner made a mistake, and that mistake is no excuse for breaking the law...meaning BATFE can seize the firearms, but may need to provide compensation for misleading Watson.

If they are "not people", then that opens a whole new line of questioning, such as what I posed above...do "non-people" have 2A rights??

This could result in BATFE changing their forms to state that firearms built by or transferred to an unincorporated trust require all trustees to submit to background checks and obtain local/state LEO approval. Which pretty much defeats the purpose of the unincorporated trust to begin with. That's the best case. The worst case would be that some unscrupulous anti-2A politician could introduce legislature to say that NFA items cannot be transferred to or owned by unincorporated trusts.

So yes, getting the machinegun approved could be called a technical legal victory, but the resulting litigation may NOT be a good thing for the pro-2A community.

That being said...we'll see. One can always hope.

If only they could get you on the case, you could show them. They are lost without you.

I'll email your advice to the legal team.

fightinbluhen51 · Nov 17, 2014

^ BOOM.

With out progress, there is stagnation; with stagnation there is regression.

Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity. -Gen George S.

Tyeraxus · Nov 17, 2014

Inigoes said:
See the Citizens United Supreme court decision, corporations have 1A rights. It's only natural for them to have 2A rights.

I'd expect Hobby Lobby to be in play too - closely held corporations effectively act as financial shells for its owners without forcing them to give up their 1A rights, so it would be consistent to way they don't give up 2A rights either. An unincorporated trust just provides even less of a shell than the corporate form.

Kharn · Nov 17, 2014

squirrels said:
I don't recall giving any "advice" on this case. My advice was to not make it a "case" in the first place.

What's done is done...the case is out there, and they have to fight it the best they can, which means arguing every angle they can.

And who knows, maybe they CAN get some kind of legal victory in here. But 922(o) will not be overturned as unConstitutional. You can quote me on that. And if I'm wrong, I'll publicly admit to being an idiot.

What I DO think will come out of this case is either the court will 1) strike down the BATFE decision that an unincorporated trust is "not a person" and we'll go back to the way things were, or 2) they will uphold the ruling that an unincorporated trust is "not a person", which opens the door for all KINDS of legal, litigious, and legislative issues for BOTH sides to take advantage of.

The "trust" route is the best way around CLEO sign-off for NFA items in Maryland, and this case has the potential to hose that up big-time. I just don't think this is a high-percentage play in the 2A game...and even if it DOES pay off, that doesn't make it a smart move...just a ballsy one.

IIRC they're only debating how the law applies to trusts, not the constitutionaility of 922(o). You can debate administrative law and proceedings without tying them to a right or claiming protection of a right.

Dogabutila · Nov 17, 2014

clandestine said:
You are being sarcastic right? You actually think that's accurate?

They don't have statutory authority to revoke stamps. So how can they seize the guys stuff? You have due process issues there side he never broke a law. He got approval to build it.

clandestine · Nov 17, 2014

Dogabutila said:
They don't have statutory authority to revoke stamps. So how can they seize the guys stuff? You have due process issues there side he never broke a law. He got approval to build it.

Ahh, I see. Its a sovereign citizen argument. I get it, no one has authority, even when they are tasked with that very job, they just shuffle paperwork. ATF cant seize property. :lol2:

1time · Nov 18, 2014

Dogabutila said:
They don't have statutory authority to revoke stamps. So how can they seize the guys stuff? You have due process issues there side he never broke a law. He got approval to build it.

What they don't have the authority to do is allow you to make something that is illegal. If it was written that it was illegal to have a machine gun without a stamp and they decided to stop issuing stamps there may be a case. However , the law is it is illegal to manufacture a machine gun after '86. The wrongfully issued stamp would probably keep them out of jail but it does not make the manufacture of a machinegun legal.

Inigoes · Nov 18, 2014

1time said:
What they don't have the authority to do is allow you to make something that is illegal. If it was written that it was illegal to have a machine gun without a stamp and they decided to stop issuing stamps there may be a case. However , the law is it is illegal to manufacture a machine gun after '86. The wrongfully issued stamp would probably keep them out of jail but it does not make the manufacture of a machinegun legal.

It is illegal for a "person", the BATFE ruled administratively trusts are not people.

They kinda painted themselves into a corner technically.

Watson v. Holder - NFA 922(o), Unincorporated Trusts

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