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Case 3:12-cv-02597-M-BH Document 11 Filed 09/10/12

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Scott L. Braum (pro hac vice to be submitted) Email: slb@braumlaw.com Timothy R. Rudd (pro hac vice to be submitted) Email: trr@braumlaw.com SCOTT L. BRAUM & ASSOCIATES, LTD. 812 East Franklin Street, Suite C Dayton, Ohio 45459 Telephone: (937) 396-0089 Facsimile: (937) 396-1046 S. Gary Werley (Texas Bar 21187000) Email: sgwerley@werleylaw.com LAW OFFICES OF S. GARY WERLEY 306 West 7th Street, Suite 508 Fort Worth Club Building Fort Worth, TX 76102 Telephone: (817) 335-4300 Facsimile: (817) 335-4335 Attorneys for Brinks IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS AT DALLAS Brinks, Incorporated Petitioner, v. MEGAN A. BENNETT Director of Industry Operations Bureau of Alcohol Tobacco Firearms and Explosives, ) ) ) ) ) ) ) ) ) ) ) ) )

Case No.: 3:12-CV-02597 District Judge: Barbara M.G. Lynn Magistrate Judge: Irma Carrillo Ramirez MOTION TO REINSTATE HEARING DATE OR, IN THE IN THE ALTERNATIVE, TO RESCHEDULE FFL REVOCATION HEARING

Now comes the Petitioner, Brinks Incorporated, by and through counsel, and for its motion to reinstate the previously-scheduled hearing date of Friday, September 14, 2012 on Brinks F.R.C.P. 27(C) motion for perpetuation of testimony of Megan A. Bennett or, in the alternative, reschedule the underlying FFL revocation hearing, states as follows:

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MEMORANDUM Brinks is a publically held Fortune 500 corporation that employs over 70,000 people worldwide and, while serving customers in over 100 countries, has been part of the American industrial fabric since 1859. In the U.S., Brinks specializes in worldwide security transportation and cash logistics, operating approximately 220 branches and employing roughly 9,000 employees. Despite Brinks stellar inspection history, following its inspection of its Coppell, TX location in December 2010, ATF reported certain alleged violations which resulted in the March 6, 2012 issuance of Notice of Revocation of Brinks FFL by DIO Bennett. Brinks has requested a revocation hearing, which has been scheduled for September 18, 2012. DIO Bennett will make a final determination whether to revoke Brinks FFL. Central to DIO Bennetts decision-making process is an analysis of the facts of the case under the Adverse Action Policy which governs ATFs exercise of its discretion, and it is believed that ATFs current revocation position is contrary to the law and established policies. Specifically, in July 2004, the Office of Inspector General issued a report highlighting glaring problems within ATF prior to 2004, including but not limited to ATFs system of inspection, reporting, and enforcement which resulted in non-uniform and inconsistent treatment of FFLs with regard to adverse actions such as the revocation of licenses: To ensure that all FFLs are treated consistently, and that the FFL inspection program is as efficient as possible to maximize the number of inspections conducted annually, a national ATF policy should require that inspections be conducted in a uniform manner, that inspections procedures are limited to the steps needed to accomplish a valid review, and that violations are processed in a uniform and appropriate manner.

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See,D.O.J. Report No. I-2004-005 (July 2004)).

Following the July 2004 report, ATF

implemented its National Federal Firearms License Adverse Action Policy which emphasized the importance of fairness and consistency when deciding whether it should revoke a license or take some lesser action: A national policy for administering adverse actions is necessary to promote consistent and fair resolution of violations. Revocation should be undertaken for willful violations of the GCA or its regulations that could affect public safety or hamper the Bureaus ability to reduce violent crime. See, ATF B 5370.2 at 2(b). This policy was revised in 2009 via ATF Order 5370.1A, the National Firearms Licensee Adverse Action Policy. At the upcoming FFL revocation hearing, a hearing officer (also an attorney for ATF) will hear evidence and issue a recommendation as to whether to overturn or uphold the revocation of Brinks FFL. Brinks wishes to make inquiry into the basis for DIO Bennetts initial decision to revoke its FFL in light of the governing Adverse Action Policy. In order to ensure that Brinks has an opportunity to inquire concerning issues that will have a direct bearing on the matters at issue in the hearing and, if necessary, in any judicial review of such, it has requested that a number of individuals (including DIO Bennett) be made available as witnesses at the upcoming hearing to testify concerning the decision to revoke the FFL at issue, whether and how ATF policies and procedures concerning such were applied in this instance, and the overall events at issue in this case. ATF has refused to make any of the above individuals available, thus foreclosing the opportunity for Brinks to inquire into key issues involving ATFs action on its license. Brinks petitioned this Court for the relief requested because, apart from such, it will be proceeding in a quasi-judicial hearing without any compulsory process to require the presence of

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persons that it believes have relevant information for the defense of its FFL. The recently cancelled hearing on Brinks F.R.C.P. 27 petition would have permitted Brinks to seek discovery in time for the upcoming hearing, and ATFs grounds for seeking such were erroneous. I. THE TOUHY REGULATIONS DO NOT APPLY TO BRINKS REQUEST. The law does not require one party to an action in federal court to seek permission from its adversary before discovery may be sought. Such, however, is precisely what ATF is asking the Court to require from Brinks before the Court may order ATF to make available the individual who is arguably the most important witness at ATF with regard to its decision to revoke Brinks FFL. Given ATFs refusal to make any requested witnesses available at its upcoming FFL revocation hearing (because the requested individuals testimony cannot do anything but help Brinks make its case), it is not difficult to imagine what conclusion ATFs counsel would arrive at when faced with a request for such discovery under Touhy (addressed below). The Touhy regulations, however, do not apply here. 5 U.S.C. 301 authorizes an agency head to promulgate regulations limiting how its employees may disseminate information obtained in performance of their official duties. See, Westchester General Hospital, Inc. v. Department of Health and Human Services, 2011 U.S. Dist. LEXIS 28039 (S.D. Florida 2012); citing Moore v. Armour Pharm. Co., 927 F.2d 1194, 1196-97 (11th Cir. 1991) ("an unbroken line of authority directly supports [the] contention that a federal employee may not be compelled to obey a subpoena contrary to his federal employer's instructions under valid agency regulations") (internal citation marks omitted; brackets in original). The Supreme Court, in United States ex rel. Touhy v. Ragen, 340 U.S. 462, 468 (1951), upheld this authority in the context of private litigation to which the government was not a party.

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Regulations promulgated under 5 U.S.C. 301 are now commonly referred to as "Touhy" regulations. The purpose of the Touhy regulations is to "allow for the 'centralizing [of an agency's] determination as to whether subpoenas . . . will be willingly obeyed or challenged.'" United States v. Rosen, 520 F. Supp. 2d 802, 2007 U.S. Dist. LEXIS 81530, 15-16 (E.D. Va. 2007) (citing Touhy, 340 U.S. at 468). To comply with these regulations, "a defendant or litigant wishing to subpoena a government official or government documents must serve the subpoena on the head of each agency or department, failing which the subpoena must be quashed." Id. However, fundamental fairness dictates that the Touhy regulations should not apply where the Government is a party to the litigation. See, Montgomery v. Sanders, 2011 U.S. Dist. LEXIS 141458 (S.D. Ohio 2011); citing Sperandeo v. Milk Drivers & Dairy Employees Local Union No. 537, 334 F.2d 381, 384 (10th Cir. 1964) (holding that federal agencies are bound by discovery rules in the same manner as any other litigant). Here, DIO Bennett is not a low-level employee who has been subpoenaed as a non-party to litigation and asked to make disclosures or give testimony about agency policies or procedures. Rather, DIO Bennett is a party to the present action, and the chief decision maker in ATFs underlying FFL revocation process that is set for hearing on September 18, 2012. Further, she is the only individual qualified to testify as to how or whether she applied ATFs standards to the present set of facts to arrive at the decision to revoke. Nothing in Touhy or cases interpreting such support the notion that, in a matter such as the present where the respondent is represented throughout by the United States Attorneys Office and all procedural protections are in place, that the United States Department of Justices internal procedures may be used to override the Federal Rules of Civil Procedure and this Courts role of presiding over such.

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II.

BRINKS ACTION IS NOT BOUND BY THE F.R.C.P. 27(a) SERVICE PROVISIONS BECAUSE IT WAS FILED UNDER F.R.C.P. 27(c). ATF seeks to present this action to the Court as one under F.R.C.P. 27(a), when in fact it

is brought pursuant to F.R.C.P. 27(c). Brinks request is straightforward and, while there is admittedly not a substantial amount of authority addressing what F.R.C.P 27(c) does (or does not) allow, the facts in this case are virtually identical to those in In re Fitzgerald, 1972 U.S. Dist. LEXIS 14188, *3 (D.D.C. April 17, 1972). In Fitzgerald, the petitioner was terminated from his employment for the Secretary of the Air Force and appealed such termination to the Civil Service Commission. The hearing commenced behind closed doors despite Fitzgerald's demand for a public hearing, and the hearing was suspended pending resolution in court of whether the hearing would be open or closed. Id. In the meantime, petitioner has sought relief under

F.R.C.P. 27 to take the depositions of two persons with assertedly relevant information about his discharge. Id. Specifically, the petitioner alleged that the depositions are needed for an anticipated suit for judicial review of the Civil Service Commission's decision on reinstatement. Id (emphasis added). The circumstances in Fitzgerald were such that there is no indication that the administrative process will be completed in the foreseeable future, and the Court noted that [t]he situation is especially serious since the Commission has no subpoena power and it appears that the testimony of at least one witness may not appear in the administrative record for this reason. Id. In granting the requested relief in Fitzgerald, the Court acknowledged that F.R.C.P. 27(c) provided relief independent of F.R.C.P. 27(a): The Government appears to take no cognizance of Rule 27(c), F.R.Civ.P., which states, "This rule does not limit the power of a court to entertain an action to perpetuate testimony." What is the meaning of this enigmatic section? Since Rules 27(a) [depositions before an action], 29 [depositions during an action],

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and 27(b) [depositions pending appeal] cover all situations which relate to a civil action, Rule 27(c) must have been intended for some other situation, since it must be assumed that this section is not superfluous. The court believes that the purpose of Rule 27(c) is to give the court flexibility in the use of its equity powers and to permit the court to order a deposition to be taken when a person appears before the court and shows good cause for needing one. The court feels that such a showing has been made by the petitioner. In this particular case, he will be proceeding in a quasi-judicial hearing without any compulsory process to require the presence of persons whom he believes have relevant information. The court believes that it clearly has the power to order a deposition of such witnesses and sees no reason why it would not be admissible at the hearing proceeding. Id. (emphasis added). The facts of the present case could not be more similar to those in Fitzgerald. Here, Petitioner has asked to question a witness who possesses information both as to: 1) ATFs policies and procedures governing its decisions to revoke FFLs, and 2) DIO Bennetts specific personal knowledge concerning her. Rather than address the reasoning in Fitzgerald or F.R.C.P. 27(c) in general, ATF simply presents the matter as failing to meet requirements under F.R.C.P. 27(a) which Petitioner submits has no bearing on the present case. F.R.C.P. 27(c) allows the Court flexibility where, as here, time and justice require such, and any alleged failure of timely service should not serve as a basis to deprive Brinks of its day in court on this matter.1

Even if F.R.C.P. 27(a)s service requirements were to be applied to a F.R.C.P. 27(c) petition, DIO Bennett was faxed a copy of the Courts order setting the hearing on the date it was issued (August 22, 2012) and was provided a copy of the Petition even before that. Correspondence with the United States Attorneys Office makes clear that both DIO Bennett had actual knowledge of the scheduled hearing date over 21 days in advance of such, delays in official service until August 29, 2012 were due only to DIO Bennetts refusal to waive service requirements, and ATF is not prejudiced in any way by any alleged service deficiency.

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III.

BRINKS F.R.C.P. 27(c) HEARING MUST TAKE PLACE BEFORE ATFS REVOCATION HEARING OR ELSE BRINKS EFFORTS TO OBTAIN DISCOVERY MAY BE RENDERED MOOT. The purpose of Brinks request is to allow it to fully and adequately defend its FFL at the

revocation hearing and, if necessary, during the course of the statutory judicial review process that will be pursued in the event that the license is revoked. For the reasons set forth above, in order for the present petition to serve its sole purpose, Brinks requests that the Court reinstate the hearing for Friday, September 14, 2012. Alternatively, Brinks asks this Court to exercise its broad equitable authority and order DIO Bennett to reschedule the underlying revocation hearing until such time after this Court has conducted its hearing on Brinks F.R.C.P. 27 petition.2 If ATF is correct and Brinks must first submit a request and await a ruling from its adversary on whether, and to what extent, Brinks may obtain discovery to prepare for the revocation hearing, then ATFs scheduling of the revocation hearing in a manner that does not allow sufficient time to do so is inherently unfair and should not be permitted. Accordingly, Brinks requests that the Court enjoin Respondent from proceeding with its scheduled September 18, 2012 revocation hearing pending resolution of its F.R.C.P. 27 petition. The factors

governing the Courts analysis of Brinks request for injunctive relief weigh heavily in favor of granting such: 1. Whether a substantial likelihood exists that Brinks will eventually prevail on the merits. Whether Brinks will suffer irreparable harm if the injunction is not granted, Whether the threatened injury to Brinks outweighs whatever damage the proposed injunction may cause Respondent, and

2.

3.

The timing of the two hearing is important, because ATF recently prevailed in another F.R.C.P. 27(c) case primarily because the administrative revocation hearing had already occurred prior to the F.R.C.P. 27(c) hearing.

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4.

Whether the injunction, if issued, will not disserve or adversely affect the public interest.

See, Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). Here, the present petition serves as Brinks only opportunity to obtain discovery for the purposes of defending its license and making a record prior to the administrative hearing in the event that it becomes necessary to seek review from ATFs determination (which will be made by DIO Bennett who has already decided beforehand that revocation is appropriate entirely independent of any findings at the hearing for which she will not be present). Not even ATF will dispute that it opposes Brinks deposing DIO Bennett now, at the de novo review stage, or ever. Neither ATF nor the public are in any way harmed by the continuance of the underlying revocation hearing, especially as Brinks has agreed not to engage in any business that would require maintenance of an FFL during the course of any continuance. Accordingly, if the Court is unwilling or unable to reinstate the F.R.C.P. 27 hearing on Friday, September 14, 2012, then Brinks requests that it order DIO Bennett to postpone the underlying FFL revocation hearing until after such time as the Court has ruled on the present petition. CONCLUSION The present petition is Brinks sole opportunity to fully prepare to defend its FFL at the upcoming revocation hearing as well as make a complete record for a foreseeable judicial review petition should DIO Bennett uphold her revocation decision. ATF has unilaterally come before this Court to have the hearing on Brinks F.R.C.P. 27 petition cancelled and then refused to move the underlying revocation hearing to accommodate such. Such an unfair result should not be permitted and the Court should grant Brinks current motion in order to afford it sufficient protections under the law.

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Respectfully submitted,

/s/ S. Gary Werley__________ S. Gary Werley (Texas Bar 21187000) Email: sgwerley@werleylaw.com LAW OFFICES OF S. GARY WERLEY 306 West 7th Street, Suite 508 Fort Worth Club Building Fort Worth, TX 76102 Telephone: (817) 335-4300 Facsimile: (817) 335-4335 Scott L. Braum (pro hac vice to be submitted) Email: slb@braumlaw.com Timothy R. Rudd (pro hac vice to be submitted) Email: trr@braumlaw.com SCOTT L. BRAUM & ASSOCIATES, LTD. 812 East Franklin Street, Suite C Dayton, Ohio 45459 Telephone: (937) 396-0089 Facsimile: (937) 396-1046 Attorneys for Brinks
S:\Clients 335 FFLG - Clients\A to H\Brink's Inc. 335-9183\Motion to Reinstate Hearing Date.doc

CERTIFICATE OF SERVICE This is to certify that a true and correct copy of this document was served via the ECF system on September 10, 2012 on counsel for Respondent. /s/ S. Gary Werley

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