Court Upholds Dealer Transfer Fee to Fund CA Gun Confiscation Program

A three-judge panel of the U.S. 9^th Circuit Court has unanimously upheld a California gun transfer fee that funds the state’s firearm confiscation program, ruling that the fee supports “an important public safety interest” and is therefore constitutional.

The California Department of Justice collects a $19 Dealer Record of Sales (DROS) fee on every firearm purchased in the state, $5 of which is allocated to the controversial Armed and Prohibited Persons System. The APPS confiscates firearms from those who have been adjudicated no longer eligible to own them by the state due to a subsequent felony charge or mental-health issue.

The state passed legislation implementing the original DROS fee to fund state efforts to regulate the “sale, purchase, loan, or transfer” of a firearm. But in 2011 state legislators expanded that language to include the “sale, purchase, possession, loan, or transfer of firearms,” which allowed them to allocate part of the $19 towards the APPS.

Attorneys for plaintiff Herb Bauer, a federal firearms licensee in Fresno, as well as four gun purchasers who paid the mandated fees, argued in part that the $5 fee is an unauthorized tax on a constitutional right. Because the DROS was originally designed to generate revenue for regulating firearm transfers, that money cannot be used to regulate firearm possession.

The court rejected this argument, stating that the “DROS-regulated firearm transactions are in fact a close proxy for subsequent firearm possession, and targeting illegal possession under APPS is closely related to the DROS fee.” Firearm possession, in other words, is sufficiently related to firearm transaction, and is therefore eligible to be funded with DROS money.

Ultimately, the court ruled, the use of the DROS fee to fund APPS is constitutional because “the government has demonstrated an important public safety interest in this statutory scheme, and there is a reasonable fit between the government’s interest and the means it has chosen to achieve those ends.” Funding the APPS through DROS, the court ruled, helps maintain public safety and is an appropriate means of meeting that government interest.

The panel’s ruling can be appealed to the full 9^th Circuit Court, though that circuit has historically ruled against gun rights. If the full court agrees with the three-judge panel, their ruling can be appealed to the Supreme Court. If SCOTUS rules on this case, it could implicate the regulatory fees on firearm transfers nationwide.