The Second Circuit Court of Appeals has issued a July 9, 2013 decision that makes it the third case in three years that fees can be imposed by governments on handgun licenses to defray administrative expenses, in this case specifically, that a $340/3-year licensing fee is not a prohibitively expensive impediment to the exercise of fundamental individual liberties under the Second Amendment.  The case is Shui W. Kwong, et al. vs. Michael Bloomberg (Docket No. 12-1578-cv) and the decision is available in our on-line Orchid Advisors research library. Why does this matter to manufacturers? The fee applies to those persons seeking an individual permit in NYC and in Nassau County.  Fees throughout the rest of the state are limited to #3-$10 as per state law.  The NYC and Nassau County fees are determined by their county boards of supervisors. If we consider average retail prices for entry-level rifles, for example, fees over $300 for licensing for 3-years plus a one-time fee of $94.25 for fingerprinting and background check can exceed the price of the firearm.  In terms of basic economic theory, these added costs of entry to a class of consumer goods can strongly effect demand, and, at the point these added costs exceed the price of the product, it can (arguably) halt demand.  This theory is not negated when considering existing customers; the impact merely spreads more slowly over a period of time.  The decision gave no reflection to the cost of the fees relative to the price of the product. The majority opinion in the Kwong case comments more than once that the plaintiffs failed to make a persuasive argument that the fee was “prohibitively expensive” because all individual plaintiffs had, in fact, paid the fee.  The courts’ language intends to push the line on whether the plaintiffs had legal standing to sue or had rendered their claim “moot” (no longer an issue).  But, the court’s language for one reason becomes a catch-22 for those who in good faith want to protect their licenses while pursuing constitutional litigation:  comply and your civil lawsuit may get dismissed because you’re not injured; fail to comply but file your claim as part of your criminal defense. Stay tuned for a future court decision that quantifies the point at which a licensing fee becomes prohibitively expensive.  Both the majority and the concurring opinions state they do not know where that “dividing line” would be. Finally, keep your eyes open on whether additional counties will apply to set their licensing fees outside the state limits.  The decision points out that under the current statutory scheme there is no restriction on other counties following the NYC/Nassau County lead, even though none have done so to date.