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September 24, 2013 Department of Justice Attn: Jeff Amador P.O. Box 160487 Sacramento, CA 95816-0487 (916) 263-0256 VIA E-MAIL: Jeff.Amador@doj.ca.gov Re: Proposed Regulation 11 C.C.R. §4200 et seq.

Mr. Amador, I write today on behalf of my clients, The Calguns Foundation (“CGF”) and the California Association of Federal Firearms Licensees (“CAL-FFL”), in response to the proposed Department of Justice (“DOJ”, the “Department”) regulations noticed at http://oag.ca.gov/sites/all/files/agweb/pdfs/firearms/pdf/des_notice_proposed_rulem.pdf. The Calguns Foundation is a nonprofit organization incorporated under the laws of California. CGF’s purposes include protecting the civil rights of California’s current and future gun owners. CGF represents these members and supporters who would be affected by the proposed regulations. California Association of Federal Firearms Licensees is a nonprofit organization incorporated under the laws of California. As California’s largest firearms industry and consumer advocacy association, CAL-FFL represents thousands of commercial and individual members and supporters who would be affected by the proposed regulations. The stated purpose of the proposed regulations is DOJ’s intent to assume the duties of facilitating the electronic transfer of Dealer’s Record of Sale (“DROS”) information. The proposed regulations, however, go far beyond the stated purpose and include unlawful attempts to require dealers to waive all liability against the Department of Justice in order to sell firearms within the state of California, to require dealers to assume fraudulent charges regardless of the dealer’s actual innocence and conduct, and to require dealers and consumers to wait for the approval of the Department of Justice before physical transfer of the personal property can take place – despite the lack of any law requiring such authorization and current litigation on the same topic.

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 2 RULEMAKING PROCESS Every department, division, office, officer, bureau, board or commission in the executive branch of California state government must follow the rulemaking procedures in the Administrative Procedure Act. (Gov’t Code § 11340 et seq.) Agency regulations are permitted whenever, by the express or implied terms of any statute, a state agency has the authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute. No regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute. (Gov’t Code Section 11342.2.) Each agency must have the “authority” to establish a particular regulation. "Authority" means the provision of law which permits or obligates the agency to adopt, amend, or repeal a regulation. (Gov’t Code §11349 (b).) When reviewing a quasi-legislative regulation, courts consider whether the regulation is within the scope of the authority conferred, essentially a question of the validity of an agency’s statutory interpretation. The courts must determine whether the rulemaking agency has exercised its authority within the bounds established by statute. In deciding whether a regulation alters, amends, enlarges, or restricts a statute, or merely implements, interprets, makes specific, or otherwise gives effect to a statute, often a court must interpret the meaning of the statute. In so doing, courts apply principles of statutory interpretation developed primarily in case law. They examine the language of the statute, and may consider appropriate legislative history materials to ascertain the will of the Legislature so as to effectuate the purpose of the statute. In making this determination, a court may consider, but is not bound by, the rulemaking agency’s interpretation of the statute at issue. As the California Supreme Court explained in Yamaha v. State Board of Equalization (1998) 19 Cal.4th 1: "Whether judicial deference to an agency's interpretation is appropriate and, if so, its extent – the 'weight' it should be given – is ... fundamentally situational." The court identified factors to be considered relating to (1) the possible interpretive advantage of the agency and (2) the likelihood that the agency is correct, and suggested the following: "The deference due an agency interpretation ... 'will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.'" Each regulation must also satisfy the consistency standard. "Consistency" means being in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law. (Gov’t Code §11349(d).) Additionally, each regulation must satisfy the necessity standard. The Office of Administrative Law reviews the rulemaking record to ensure that each provision of regulation text that is adopted, amended, or repealed satisfies the necessity standard. “Necessity” means the record of the rulemaking proceeding demonstrates by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. For purposes of this standard, evidence includes, but is not limited to, facts, studies, and expert opinion. (Gov’t Code § 11349(a).) The “substantial evidence” standard used by the Office of Administrative Law is the same as the “substantial evidence” standard used in judicial review of regulations. The following is a definition of "substantial evidence" drawn from the legislative history of

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 3 the necessity standard: “Such evidence as a reasonable person reasoning from the evidence would accept as adequate to support a conclusion.” A number of principles and limitations are involved in the application of this standard. Clearly, “substantial evidence” is more than “any evidence,” but is nowhere near “proof beyond a reasonable doubt.” A key characteristic of the standard is its deferential nature. The “substantial evidence” test was added to the necessity standard by Chapter 1573, Statutes of 1982 (AB 2820). The following letter from Assemblyman Leo McCarthy to Speaker Willie Brown summarized the "substantial evidence" test as used in the necessity standard: The principal addition AB 2820 makes to what we approved in AB 1111 in 1979 is a specific level of evidence that an agency must meet to demonstrate the need for a particular regulation. The standard is substantial evidence taking the record as a whole into account. That standard is a familiar one in the law and has been given a definite interpretation by the courts in the past. Our intent is that an agency must include in the record facts, studies or testimony that are specific, relevant, reasonable, credible and of solid value, that together with those inferences that can rationally be drawn from such facts, studies or testimony, would lead a reasonable mind to accept as sufficient support for the conclusion that the particular regulation is necessary. Suspicion, surmises, speculation, feelings, or incredible evidence is not substantial. Such a standard permits necessity to be demonstrated even if another decision could also be reached. This standard does not mean that the particular regulation necessarily be 'right' or the best decision given the evidence in the record, but that it be a reasonable and rational choice. It does not mean that the only decision permitted is one that [the Office of Administrative Law] or a court would make if they were making the initial decision. It does not negate the function of an agency to choose between two conflicting, supportable views. The proposed standard requires the assessment to determine necessity to be made taking into account the totality of the record. That means the standard is not satisfied simply by isolating those facts that support the conclusion of the agency. Whatever in the record that refutes the supporting evidence or that fairly detracts from the agency’s conclusion must also be taken into account. In

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 4 other words, the supporting evidence must still be substantial when viewed in light of the entire record. (California, Assembly Daily Journal, 208th Sess. 13, 663-34 (1982).) PROPOSED 11 C.C.R. §4210(a)(1) My clients CGF and CAL-FFL oppose the proposed regulation in this section to the extent that the regulation unlawfully immunizes the California Department of Justice from “any and all theories of liability, including but not limited to any contract or tort claim for any cause whatsoever, for any indirect, incidental, special or consequential damages, including loss of revenue or profits, even if aware of the possibility thereof.” The agency lacks authority for this provision entirely. Nothing within the Penal Code – or any other code – grants the Department of Justice the authority to alter, amend, enlarge, or restrict its statutory and constitutional liability to consumers and dealers through a mandatory regulatory release of liability. The proposed provision is inconsistent, as it is not in harmony with, and is in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law. (Gov’t Code §11349(d).) Specifically, this mandatory waiver conflicts with the California legislative decision to hold certain agencies and individuals accountable for their actions through the California Tort Claims Act. The California Tort Claims Act is the act that governs filing claims against a government entity. The Tort Claims Act is found in Division 3.6 of the Government Code, Govt. Code §§ 810 et seq. The Act does provide that the liability is subject “to any immunity of the public entity provided by statute.” Here, no such statute exists that provides immunity for the Department of Justice for its unlawful acts (of which there are many). This proposed regulation directly conflicts with the Tort Claims Act by providing an end-run release of liability through the regulatory process. In addition to the Tort Claims Act, the proposed regulation would conflict with existing law by acting as a self-imposed waiver of liability for constitutional challenges to the Department of Justice’s actions (including Second Amendment, Due Process, Equal Protection, Unlawful Search and Seizure, and Takings violations, among others). Also, the proposed regulation, by acting as a release from any federal statutory violations, conflicts with federal statutory law such as 42 U.S.C. §1983, which provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 5 proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer’s judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. It should be noted that employees within the Department are currently defendants in at least two lawsuits relating to the delivery of firearms, an activity addressed by these proposed regulations. (See Darrin Owen, et. al. vs. Kamala Harris, et. al., United States District Court Eastern Division Docket No: 2:13-at010821 and Daniel Schoepf, et al. v. Steven Lindley, et al. Fresno Superior Court Case No: 13CECG011322.) This provision, as well as the others discussed herein, is a unilateral end-run around the Department of Justice Bureau of Firearms’ liability in those and future actions. Given the federal and state provisions mandating liability for public entities, the mandatory release provision directly conflicts with existing laws. Further, the proposed provision is not necessary. The rulemaking proceeding does not demonstrate by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. On the contrary, the Initial Statement of Reasons is void of any facts, studies, or expert opinion supporting the necessity of this provision. PROPOSED 11 C.C.R. §4210(a)(3) My clients CGF and CAL-FFL oppose the proposed regulations in this section to the extent that the section states: “[n]otwithstanding such notification, DOJ shall not be liable for transaction charges fraudulently incurred on the account of this dealership. It is the dealership’s responsibility to pay these transactions.” The agency lacks authority for this provision. While the Department of Justice is authorized to enact regulations relating to fees incurred by dealerships, it has no authority to mandate that dealerships are required to pay fees “fraudulently” incurred upon their account regardless of the individual dealership’s culpability in such “fraudulent” charges. Penal Code section 28225 limits the fees charged in the context of this provision to actual purchasers as follows (not any and all charges regardless of whether they are actual or fraudulent): “The Department of Justice may require the dealer to charge each firearm purchaser a fee not to exceed fourteen dollars ($14), except that the fee may be increased at a rate not to exceed any increase in the California Consumer Price Index as compiled and reported by the Department of Industrial Relations.” Thus, the fees are based upon individual firearm purchasers, and are only collected and submitted to the Department of Justice by the dealership. Any attempt to mandate that “fraudulent” charges not relating to firearm purchasers be borne by the dealership as a cost of doing business under the supervision of the Department of Justice is
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Available at: http://ia601002.us.archive.org/8/items/gov.uscourts.caed.259271/gov.uscourts.caed.259271.1.0.pdf. Available at: http://www.calgunsfoundation.org/wp-content/uploads/2013/04/cgf_dros-delay-complaint.pdf.

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 6 inconsistent, as it is not in harmony with, and is in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law. (Gov’t Code §11349(d).) Further, the proposed provision is not necessary. The rulemaking proceeding does not demonstrate by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. On the contrary, the Initial Statement of Reasons is void of any facts, studies, or expert opinion supporting the necessity of this provision. PROPOSED 11 C.C.R. §4230(b) My clients CGF and CAL-FFL oppose this section in its entirety. This proposed regulation states that “a firearm may be delivered to the purchaser/transferee only if the status of the DES transaction record is ‘approved.’ If the current status is ‘pending,’ ‘rejected,’ ‘delayed,’ or ‘denied,’ the firearm shall not be delivered.” The Department has no legal authority for this provision. While the DOJ is authorized to enact regulations relating to the Dealer Record of Sale electronic information capture and submission process, nothing within the Penal Code (or any other statute) grants the Department the power to alter, amend, enlarge, or restrict the statutes relating to the waiting period and delivery process. In general, licensed California firearm dealers are prohibited from delivering any firearms to the purchaser or transferee until 10 days have lapsed from the time of their submission of the purchaser’s information to the DOJ. (Penal Code § 27540(a) and 26815(a).) This background check period statutorily provides 10 days for the DOJ to conduct a background check on the purchaser or transferee. Upon submission of the firearm purchaser information, the DOJ is required to examine its records, as well as those records that it is authorized to request from the California Department of State Hospitals pursuant to Section 8104 of the Welfare and Institutions Code, in order to determine if the purchaser is a person described in subdivision (a) of Section 27535, or is prohibited by state or federal law from possessing, receiving, owning, or purchasing a firearm. (Penal Code § 28220(a).) California expressly mandates the DOJ’s response in Penal Code section 28220. If the DOJ determines that the purchaser is prohibited by state or federal law from possessing, receiving, owning, or purchasing a firearm or is a person described in subdivision (a) of Section 27535, it shall immediately notify the dealer of that fact. (Penal Code § 28220(c).) If the department determines that the information transmitted to it by the licensed California firearm dealer pursuant to Section 28215 contains inaccurate or incomplete information preventing identification of the purchaser or the handgun or other firearm to be purchased, or if the fee required pursuant to Section 28225 is not transmitted by the dealer, the DOJ may notify the dealer of that fact. (Penal Code § 28220(c).) California’s Penal Code expressly mandates the licensed California firearm dealers’ response to the notices provided to them by the DOJ. A purchase is required to be denied upon notification by the DOJ that the purchaser or transferee is prohibited from possessing firearms, because the Dealer is prohibited from

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 7 transferring the firearm. (Penal Code §§ 27540(d) and 26815(d).) A purchase can be delayed if the purchaser information provided by the dealer is incomplete or incorrect or if the requisite fees are unpaid or insufficient. In such instance, the dealer shall transmit corrections to the record of electronic or telephonic transfer to the Department, or shall transmit any fee required pursuant to Section 28225, or both, as appropriate, and if notification by the Department is received by the dealer at any time prior to delivery of the firearm to be purchased, the dealer shall withhold delivery until the conclusion of the background check period described in Sections 26815 and 27540. (Penal Code § 28220(e).) After the requisite background check period, the dealer shall then deliver the firearm to the purchaser or transferee or the person being loaned the firearm in accordance with all other transfer requirements, unless the dealer is notified by the Department of Justice that the person is prohibited by state or federal law from possessing, receiving, owning, or purchasing a firearm. (Penal Code § 28050(c).) Nothing within the Penal Code or any other statute gives the DOJ the power to change or alter the above referenced procedure. The proposed provision is inconsistent, as it is not in harmony with, and is in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law. (Gov’t Code §11349(d).) Specifically, the above-described laws mandate that the DOJ has a duty to determine whether a person is prohibited and to notify the dealership if the person is prohibited within 10 days. The proposed regulation conflicts with the relevant statutes by mandating that the DOJ “approve” all transactions before the dealership can deliver the firearm – regardless of whether 10 days have passed without a denial from the Department. This provision is in direct response to above-referenced litigation currently challenging the Department of Justice’s unlawful policies mirroring the proposed regulations. Further, the proposed provision is not necessary. The rulemaking proceeding does not demonstrate by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. On the contrary, the Initial Statement of Reasons is void of any facts, studies, or expert opinion supporting the necessity of this provision. PROPOSED 11 C.C.R. §4230(d) My clients CGF and CAL-FFL oppose this section on the basis that a dealership will be unable to “deliver firearms for which a DROS was previously submitted.” This proposed section prevents a dealer from delivering firearms that have been properly processed through the Dealer Record of Sale system and the DROS Entry System, and whose payments have been timely submitted – thereby denying customers and the dealership the right to transfer a firearm that was purchased by an otherwise-eligible customer on the basis that the dealership has not paid the DROS fees for other firearm transfers. The proposed provision is inconsistent, as it is not in harmony with, and is in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law. (Gov’t Code §11349(d).) Specifically, Penal Code section 28220 permits the delay of individual firearm transactions if the fees have not been paid:

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Proposed Regulations 11 C.C.R. §4200 et seq. September 24, 2013 Page 8 If the department determines that . . . any fee required pursuant to Section 28225 is not submitted by the dealer in conjunction with submission of copies of the register, the department may notify the dealer of that fact. Upon notification by the department, the dealer . . . shall submit any fee required pursuant to Section 28225 . . . and, if notification by the department is received by the dealer at any time prior to delivery of the firearm to be purchased, the dealer shall withhold delivery until the conclusion of the waiting period described in Sections 26815 and 27540. Here, the proposed regulation would prohibit the transfer of firearms where the purchaser and dealer have paid the requisite fees and the firearm can otherwise lawfully be transferred. Further, the proposed provision is not necessary. The rulemaking proceeding does not demonstrate by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. On the contrary, the Initial Statement of Reasons is void of any facts, studies, or expert opinion supporting the necessity of this provision. CONCLUSION The proposed regulations discussed above do not meet the requisite authority or necessity and conflict with existing laws. As such, the proposed regulations discussed herein should be rejected and not approved. Sincerely,

Sincerely, DAVIS & ASSOCIATES s/ Jason A. Davis JASON DAVIS