California Department of Justice Sued for Misuse of Firearm Purchaser Fee

California Department of Justice Lawsuit
California Department of Justice Sued for Misuse of Firearm Purchaser Fee

San Diego, CA –-( Attorneys from the law firm of Michel & Associates, P.C. have filed a lawsuit on behalf of several individual gun owners and the Calguns Shooting Sports Association (“CGSSA”), challenging the California Department of Justice’s (DOJ) misuse of monies collected from a fee that DOJ can require firearm purchasers to pay at the time of sale, the Dealer Record of Sale (DROS) Fee.

The lawsuit, assisted by the National Rifle Association, who has brought a federal lawsuit (Bauer v. Harris) seeking similar relief on Second Amendment grounds, seeks to stop DOJ from continuing to stick law-abiding gun owners with the bill for funding its general law enforcement projects through the DROS fee.

The DROS fee was originally intended to fund DOJ’s background checks of prospective firearm purchasers. In fact, DOJ had always been statutorily required to limit the DROS Fee to an amount no more than necessary to recoup its costs incurred from regulating the transfer of firearms. Despite this statutory limitation, in recent years, the DROS Special Account had amassed a surplus of over $35 million, an extraordinary amount given that DOJ’s annual budget for the DROS program has averaged about $9 million a year during the last ten years. Rather than lower the DROS fee or give firearm purchasers their money back, the Legislature passed Senate Bill 819 (“SB 819″) in 2011, authorizing DOJ to use DROS Fee revenues for regulating the “possession” of firearms. This was an extreme expansion of DOJ’s statutory authority to use DROS Fee monies. And DOJ has been taking advantage of its new-found authority.

Since SB 819’s passage, DOJ has been shifting the main purpose of the DROS fee from funding background checks to funding DOJ’s enforcement of the Armed Prohibited Persons System (“APPS”). This shift culminated in the Legislature passing Senate Bill 140 (“SB 140″) this year, which appropriated $24 million from the surplus in the DROS Special Account to exclusively fund DOJ’s enforcement of APPS enforcement activities, which primarily consist of DOJ officers and staff conducting investigations followed by SWAT-style raids on the residences of individuals DOJ believes illegally possess firearms. While there is a debate on whether APPS is beneficial or not (although, APPS does seem to be very problematic, as we have written about before, that is not the point in this lawsuit.

For purpose of this lawsuit, Plaintiffs are not challenging the legality of DOJ’s APPS programs. Nor are Plaintiffs contesting the legality of the DROS fee per se. Rather, Plaintiffs’ dispute is with DOJ’s misuse of the monies that the Plaintiffs and others are required to pay in order to lawfully purchase firearms.

First, Plaintiffs, complaint argues that SB 819 is an unconstitutional tax under the California Constitution, which requires that any new “levy, charge or exaction” be passed by a two-thirds “super-majority” vote of each house of the Legislature. By expanding the activities for which DROS fee revenues can be used and shifting the financial burden of such activities from the general fund to firearm purchasers, SB 819 is a new charge. Since it was not passed by such a super-majority, it is void and unenforceable as an illegal tax, unless DOJ can meet its burden to show that it is a “regulatory fee” and exempt from the super-majority vote. To do so, DOJ must show that SB 819 bears a fair or reasonable relationship to the DROS Fee payer’s burdens on, or benefits received from DOJ’s regulation of firearm possession. That it cannot do. Enforcement of APPS programs, for example, extends far beyond those activities reasonably related to the DROS Fee payer or the reason the DROS program was originally established – data collection and background checks. APPS involves general law enforcement activities that should be funded by the General Fund, not by lawful firearm purchasers. Thus, SB 819 is an illegal tax and should be voided.

Likewise, Plaintiffs contend that because SB 819 is void, the Legislature’s appropriation of the $24 million from the DROS Special Account to DOJ for enforcement of APPS pursuant to SB 140, which relied on SB 819 for authority, is an illegal expenditure of funds. Plaintiffs therefore seek an injunction against DOJ from spending that money, and an order from the court ordering the State Controller to retrieve all monies given to DOJ pursuant to SB 140 and to return such monies to the DROS Special Account.

Finally, Plaintiffs also take issue with the fact that the DROS fee has resulted in such a massive surplus in recent years, and seeks an order from the court compelling the DOJ to review and reevaluate the amount at which it currently charges the DROS Fee. Should the court rule in Plaintiffs’ favor on SB 819 being void as an illegal tax, this request by Plaintiffs could very likely result in a lowering of the DROS fee.

There should be substantive movement on this case fairly soon. Stay tuned to to keep informed and updated.

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Should we be surprised?