Harris News Agency, Inc. v. Bowers

HARRIS NEWS AGENCY, INC., d/b/a JIM'S HOBBIES, Petitioner, v. WILLIAM L. BOWERS, Deputy Assistant Director of IndustryOperations Bureau of Alcohol Tobacco Firearms and Explosives, Respondent.

7:13CV5012

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

July 15, 2016

MEMORANDUM AND ORDER

Following a successful appeal, and the entry of judgment in its favor, Petitioner requests an award of attorneys' fees and expenses under 18 U.S.C. § 924(d)(2)(B) of the Gun Control Act of 1986 ("GCA"), as amended,¹ or, alternatively, under 28 U.S.C. § 2412(d) of the Equal Access to Justice Act ("EAJA").² For the reasons discussed below, the motion will be denied with respect to the GCA fee request and will be granted in part and denied in part with respect to the EAJA fee request.

I. BACKGROUND

On November 21, 2012, Lois Harris and her son, James Harris, Jr., filed an application with the United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") for the issuance of a firearms dealer license to Petitioner, Harris News Agency, Inc., doing business as Jim's Hobbies. The application was denied on April 11, 2013, by Respondent, William L. Bowers, ATF's Deputy Assistant Director of Industry Operations, Kansas City Field Division, with the explanation that he had reason to believe Petitioner had willfully violated 18 U.S.C. § 922(g)(1)³ by allowing Brian Harris, a convicted felon, to handle firearms as an employee of Jim's Hobbies when the business was owned by James Harris, Sr. (husband of Lois and father of James, Jr. and Brian).⁴ Petitioner thereafter requested a hearing as provided in 18 U.S.C. § 923(f)(2).⁵ An informal hearing⁶ was held on August 28, 2013, and thereafter the hearing officer sent a report to Respondent in which he concluded that Lois Harris and James Harris, Jr., both of whom worked at Jim's Hobbies, had willfully violated the GCA. On September 27, 2013, Respondent again denied Petitioner's application, finding that "Applicant, through its responsible persons⁷ James Harris, Jr. and Lois Harris, willfully violated the GCA by allowing a person who had been convicted in any court of a crime punishable by imprisonment for a term exceeding one year to ship or transport in interstate or foreign commerce, or possess in or affecting commerce, any firearm or ammunition; or to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce" (Filing No. 21-4 at CM/ECF p. 3). This action was filed on November 27, 2013, pursuant to 18 U.S.C. § 923(f)(3).⁸

In a memorandum and order entered on December 5, 2014, I entered judgment in favor of Respondent and dismissed the action after finding, among other things, that "substantial evidence supports a finding that James Harris, Jr., violated the Gun Control Act by allowing his brother, a convicted felon, to possess firearms at Jim's Hobbies" (Filing No. 39 at CM/ECF p. 15). Central to my ruling was a finding of fact made by Respondent that "James Harris, Jr. worked as a manager at [Jim's Hobbies]" (Filing No. 21-4 at CM/ECF p. 3; Filing No. 39 at CM/ECF p. 15). This finding was supported by evidence that James, Jr. identified himself as "manager" on certain ATF forms and admitted during the agency hearing that he was the store manager (Filing No. 39 at CM/ECF pp. 11-12).

The United States Court of Appeals for the Eighth Circuit reversed and remanded with directions to enter summary judgment in favor Petitioner, concluding there was no evidence that "Lois and James Jr. affirmatively helped Brian possess guns illegally[.]" Harris News Agency, Inc. v. Bowers, 809 F.3d 411, 414 (8th Cir. 2015) (Filing No. 47 at CM/ECF p. 4). The Court of Appeals concluded that even if James Jr. had supervisory authority over gun sales and services as the store manager, "that would imply, at most, that James Jr. knew Brian handled guns and could have stopped him, but did not, which is still no more than negative acquiescence." Id.

II. DISCUSSION

A. Timeliness of Petitioner's Motion

Unless a statute or a court order provides otherwise, a motion for attorneys' fees and related nontaxable expenses must be filed no later than 14 days after the entry of judgment. Fed. R. Civ. P. 54(d)(2)(B)(i). There is no court order establishing a different deadline in this case. The GCA's fee-shifting statute, 18 U.S.C. § 924(d), does not specify a time for filing a motion. Under the EAJA, however, a party seeking an award of fees and other expenses has 30 days from the entry of final judgment to file an application. See 28 U.S.C. § 2412(d)(1)(B).

On March 3, 2016, following issuance of the Court of Appeals' mandate, I entered judgment providing: "[S]ummary judgment is entered for Petitioner and against Respondent and Respondent's revocation of Petitioner's Federal Firearms License is set aside" (Filing No. 50). On March 14, 2016, the parties filed a joint motion to amend the judgment to correct a mistake in its wording (Filing No. 51). The motion was granted and an amended judgment was entered on March 21, 2016, which set aside "Respondent's denial of Petitioner's Federal Firearms License application" instead of a license revocation (Filing No. 52). Petitioner's motion for attorneys' fees was filed 11 days later, on April 1, 2016 (Filing No. 53).

Although I would conclude that Petitioner was required to file the motion for attorneys' fees under 18 U.S.C. § 924(d)(2)(B) within 14 days after judgment was originally entered on March 3, 2016, rather than within 14 days after the judgment was corrected on March 21, 2016,⁹ Respondent has not objected to the motion as being untimely. Because Rule 54(d)(2) is a "claims-processing rule" rather than a jurisdictional provision, it may be waived by a litigant who does not assert its protection. See, generally, Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011) ("'[C]laim-processing rules' ... are rules that seek to promote the orderly progress of litigation by requiring that the parties take certain procedural steps at certain specified times"); Bowles v. Russell, 551 U.S. 205, 218 (2007) ("A filing deadline is the paradigm of a claim-processing rule...."); Eberhart v. United States, 546 U.S. 12, 19 (2005) ("These claim-processing rules thus assure relief to a party properly raising them, but do not compel the same result if the party forfeits them."); Kontrick v. Ryan, 540 U.S. 443, 456 (2004) ("[A] claim-processing rule, ... even if unalterable on a party's application, can nonetheless be forfeited if the party asserting the rule waits too long to raise the point."). I therefore will address the merits of Petitioner's claim for attorneys' fees under the Gun Control Act.

B. Attorneys' Fees Under the Gun Control Act

Petitioner seeks to recover attorneys' fees pursuant to 18 U.S.C. § 924(d)(2)(B), which was enacted as part of the Firearms Owners' Protection Act of 1986 ("FOPA"), Pub. L. No. 99-308, 100 Stat. 449 (1986). This fee-shifting statute provides:

(A) In any action or proceeding for the return of firearms or ammunition seized under the provisions of this chapter, the court shall allow the prevailing party, other than the United States, a reasonable attorney's fee, and the United States shall be liable therefor.

(B) In any other action or proceeding under the provisions of this chapter, the court, when it finds that such action was without foundation, or was initiated vexatiously, frivolously, or in bad faith, shall allow the prevailing party, other than the United States, a reasonable attorney's fee, and the United States shall be liable therefor.

18 U.S.C. § 924(d)(2)(B). Petitioner claims Respondent's denial of its application for a firearms dealer license was "without foundation" because there was no evidence to support a finding that Lois Harris or James Harris, Jr. aided and abetted Brian Harris in violating 18 U.S.C. § 922(g)(1).

Respondent argues this provision only applies to "lawsuits brought in federal court" (Filing No. 54 at CM/ECF p. 3). As authority, Respondent cites National Rifle Association v. Bensten, 999 F.2d 772 (4th Cir. 1993), in which the NRA sought to recover attorneys' fees for a successful legal challenge to certain regulations promulgated by the ATF. The Fourth Circuit affirmed the district court's denial of the NRA's fee request, stating:

To recover a reasonable attorney's fee under § 924(d)(2)(B) on the "without foundation" theory advanced here, the statutory text plainly requires the NRA to show (1) an "action or proceeding" (hereinafter simply an "action") other than one "for the return of firearms or ammunition seized," (2) which is "under" Chapter 44 [of Title 18, Part I], (3) which is "without foundation," and (4) with respect to which the NRA was a "prevailing party."

... But the action for which the NRA sought fees below, and in which it is a prevailing party, is unquestionably the lawsuit, not the agency rulemaking....

Examining that action, it becomes obvious that the NRA's lawsuit fails to satisfy the third of the § 924(d)(2)(B) requirements we identified above, that the action for which recovery is sought be "without foundation." Far from being without foundation, the NRA's suit achieved at least part of its goal, the invalidation of certain BATF regulations. Had it been otherwise, the NRA could not now claim to be a prevailing party.

The NRA seeks to evade this result by improperly conflating its lawsuit and the agency rulemaking, arguing that § 924(d)(2)(B) permits it to recover as a prevailing party in its judicial action to invalidate an agency action that was without foundation. Section 924(d)(2)(B)'s language, however, quoted above, makes clear that the action for which fees are sought by the prevailing party and the action that is without foundation must be one and the same. That's not so here, so the statute doesn't apply.

Id. at 774 (emphasis in original). The Court of Appeals further explained that "only defendants are...