By Ilya Shapiro - March 19, 2013

Nearly two years ago, I wrote about an intriguing Commerce Clause case involving the Montana Firearms Freedom Act. To wit, Montana enacted a regulatory regime to cover guns manufactured and kept wholly within state lines that was less restrictive than federal law. The Montana Shooting Sports Association filed a claim for declaratory judgment to ensure that Montanans could enjoy the benefits of this state legislation without threat of federal prosecution. The federal district court ruled against the MSSA.

On appeal to the Ninth Circuit, Cato joined the Goldwater Institute on an amicus brief, arguing that federal law doesn’t preempt Montana’s ability to exercise its sovereign police powers to facilitate the exercise of individual rights protected by the Second and Ninth Amendments. More specifically, for federal law to trump the MFFA, the government must claim that the Commerce and Necessary and Proper Clauses give it the power to regulate wholly intrastate manufacture, sale, and possession of guns, which is a state-specific market distinct from any related national one.

The lawsuit’s importance is not limited to Montana; a majority of states have either passed or introduced such legislation. The goal here is to reinforce state regulatory authority over commerce that is by definition intrastate, to take back some of the ground occupied by modern Commerce Clause jurisprudence.

Well, after much delay – in part due to the Ninth Circuit’s waiting for Supreme Court instruction on the Commerce Clause in the Obamacare litigation – MSSA v. Holder finally saw oral argument two weeks ago. The Goldwater Institute’s Nick Dranias, who was the principal author of our joint brief, was able to get 10 minutes of argument time and sent me this report afterwards, which I reprint with his permission:

The Montana Firearms Freedom Act came under fire before the Ninth Circuit [March 4]. Appellants Gary Marbut, the Montana Shooting Sports Association, and their attorney Quentin Rhoades advanced the unusual strategy of declaring they should lose under current Supreme Court precedent. Victory would consist of nothing short of overturning the decades-old case law underpinning the federal firearms regulatory regime that conflicts with the Montana Firearms Freedom Act’s declaration that firearms may be freely manufactured and sold within the state primarily from components that originate from the state. The goal was to force a loss in the Ninth Circuit so that they would be able to petition the Supreme Court for certiorari to reconsider and overturn its expansive post-New Deal Commerce Clause precedent, including Gonzales vs. Raich and the infamous Wickard vs. Filburn. Appellants’ argument was quite a gamble; and an admirable one if only for its Western State gutsiness. But it is debatable whether the gamble was a wise one. The panel consisting of two conservative jurists and one liberal jurist—a rare composition for the Ninth Circuit—looked perplexed when one judge asked Attorney Rhoades almost rhetorically if the hearing were merely a way station on to the Supreme Court. The Goldwater Institute and the Cato Institute took a different approach as amici curiae. In an unusual move, the Ninth Circuit allowed the amici 10 minutes of additional time to argue in support of the constitutionality of the Montana Firearms Freedom Act. We seized the opportunity. Our argument opened with the observation that the case presented a question of first impression and one that should prevail under current Supreme Court precedent—especially in view of the Court’s emphasis in NFIB vs. Sebelius that the “letter and spirit” of the Constitution limits claims of implied power under the Commerce Clause, as confirmed by the Necessary and Proper Clause. Based on Federalist Nos. 28, 31, 33 and 51, we contended that the Ninth and Tenth Amendments were meant to work in tandem to confirm that the states may exercise their reserved powers to secure constitutional liberty against federal overreach. In other words, the Founders fully intended for the people to resist federal usurpation through their state representatives passing laws such as the Montana Firearms Freedom Act to protect freedoms guaranteed by the Second and Ninth Amendments. Consequently, the “letter and spirit” of the Constitution prohibited preemption of the Montana Firearms Freedom Act to the very extent that such preemption was premised on implied power under the Commerce Clause. We also argued that any exercise of implied power under the Commerce Clause should be subjected to heightened judicial scrutiny. Relying on Fourteenth Amendment enforcement clause precedent, such as Horne vs. Flores, we contended that the scrutiny should ask whether the claimed exercise of power is proportionate to and congruent with regulating a problem involving actual interstate commerce to ensure that the exercise of power did not exceed the principal Commerce Clause power to which it was supposed to be merely incidental. At the very least, the case should be allowed to proceed through discovery to assess whether the manufacturing of firearms under the Montana Firearms Freedom Act would, in fact, have a trivial or substantial effect on the illegal trafficking of guns across interstate lines. In response, the ever-ironically-named Department of Justice ably presented the standard defense offered by the federal government to just about any constitutional challenge—the argument that Appellants did not have standing to bring their case. Eventually, however, the DOJ urged the Court to rule on the merits and affirm the dismissal of the lawsuit, arguing that comprehensive federal firearms regulations should preempt the Montana Firearms Freedom Act for the same reasons that comprehensive federal drug regulations preempted medical marijuana laws in Raich. Although dancing away from the question implies a nimbleness that was absent from its argument, the federal government pointedly never grappled with our key argument that Congress’ implied power under the Commerce Clause cannot override state laws that exert powers reserved under the 10th Amendment in order to protect constitutional liberties guaranteed by the Second and Ninth Amendments. Nor did the DOJ address the need for heightened scrutiny to ensure that any claim of implied power under the Commerce Clause truly is incidental to the main power of regulating actual interstate commerce. Hopefully, the unusual majority-conservative panel will address these issues—even if the Ninth Circuit does prove to be a way station to the Supreme Court after all.

You can listen to the oral argument here. Thanks to Nick for all his efforts in the case on our behalf. We expect a ruling in the next few months.