GOA sues over ATF's gun store shutdowns :: 07/13/2023

The ATF’s “zero tolerance” policy on gun store inspections is leading to the revocation of federal firearms licenses for even minor paperwork errors, according to Gun Owners of America. GOA’s Erich Pratt joins Bearing Arms’ Cam & Co to detail a newly-filed suit in federal court alongside a North Dakota gun shop that’s been targeted for closure by the agency.

This isn’t the first time that Morehouse Enterprises has tangled with the ATF. As Pratt pointed out, the gun shop (which does business as Bridge City Ordnance) also teamed up with GOA last year to challenge the agency’s rule on unfinished frames and receivers. Just a few months later, in February of this year, ATF agents showed up at the gun shop for an administrative compliance inspection; coincidentally (or not) the first inspection the store had received since opening in 2019.

Pratt says one of the field agents even joked at the time about the inspection not being retaliation for the ongoing lawsuit, so apparently even the agents involved were aware of what this looks like. But things got even worse after the inspection was complete. Despite a compliance rate of more than 99%, the agency issued its notice of intent to revoke the FFL license held by Morehouse Enterprises for what amounts to a handful of paperwork errors. From the complaint:

IOI Temp’s investigation involved a complete audit of BCO’s Acquisition and Disposition (“A&D”) book.  As part of that audit, IOI Temp verified that every single one of BCO’s approximately 2,700 firearm acquisitions and 2,470 dispositions was properly documented, meaning that every single firearm was accounted for.

IOI Temp expressed his approval at that result in particular, noting that BCO had done quite well in its overall level of compliance.

Although BCO had held two firearm licenses, including one for nearly four years, and in that time, had conducted thousands of firearm transactions (each of which was accounted for), IOI Temp identified only five violations that allegedly occurred.

Three of these were transcription errors. On one occasion, BCO had forgotten to record that it had returned a firearm to a customer who had brought it in for gunsmithing services. On a second occasion, BCO had mistakenly written a customer’s social security number, instead of the NICS Transaction Number (“NTN”), in box “27b” on a Form 4473. And in a third case, BCO had mistakenly transcribed an NTN, which was “missing a digit.”

The other two violations found by ATF involved a single transaction on August 25, 2022. The first was for “sale or delivery to out of state resident,” where “licensee transferred handgun … to a Georgia Resident.” With respect to the same sale was a second alleged violation for a “failure to complete a NICS/POC background check,” where “licensee failed to contact NICS prior to transfer of firearm, Licensee recorded Georgia Weapons Carry License.”

None of these errors appear to be “willful” in nature, which is supposedly what’s required to revoke a license, but as the complaint notes, the ATF has its own squirrelly definition of what constitutes “willful”:

The 2019 AAP provided three ways that “ATF can establish the knowledge element of willfulness” – (i) a history of similar violations brought to the FFL’s attention by ATF, (ii) prior “acknowledgement of Federal firearms regulations” in prior inspection reports, and (iii) statements or admissions by the FFL.

The 2022 AAP, however, adds three new categories, now listing six ways to demonstrate willfulness: (i) “publications and information provided to the FFL which explain the FFL’s legal responsibilities,” (ii) a history of past compliance by the FFL with the same regulation, and (iii) by “demonstrate[ing] that the FFL has substantial experience as an FFL.”

ATF does not further explain how any of these factors demonstrates any actual “purposeful disregard of, or a plain indifference to, or reckless disregard of a known legal obligation” necessary to prove willfulness.

Nevertheless, based on factors (ii) and (iii), ATF believes that a lengthy history of an FFL following the rules should be used to prove that the FFL “willfully” failed to follow the rules when a mistake or oversight inevitably occurs. In other words, the longer and more faithfully an FFL has followed the rules, the more severely it can be punished for an inevitable inadvertent slip up, leading to a perverse incentive structure where a history of good behavior is grounds for more serious punishment.

As Pratt tells Bearing Arms, the ATF isn’t required to live up to its own standards. The agency failed to secure and keep track of thousands of firearms at its Martinsville, West Virginia office, allowing them to be stolen by a man named Christopher Yates over a period of several years. The thefts weren’t discovered until guns started showing up at crime scenes and were traced by the ATF agents, who discovered that the weapons in question were supposed to be under the agency’s control.

As part of the Yates scandal, criminal investigators discovered that ATF personnel had deliberately signed “certif[ied] … reports” falsely stating that countless firearms had been destroyed, even though the same firearms were later were recovered on the streets (clearly not destroyed).

f these same violations had been committed by an FFL, license revocation would be swift for having made “a false or fictitious written statement in the FFL’s required records,” or “inventory … for which disposition could not be accounted for….”  Yet upon information or belief, not one ATF employee was ever punished for the Yates fiasco.

“Rules for thee, but not for me”, in other words.

Pratt is hoping that a judge will issue an injunction against the ATF’s “zero tolerance” policy and force it to return to the “willful” standard that was in place for many years before the 2022 Administrative Action Policy was implemented. The agency could still revoke FFL licenses for truly willful violations of the law, but minor clerical errors and inadvertent mistakes would no longer be cause to destroy the livelihood of a small business and its employees. Given that license revocations are up 300% under Joe Biden’s watch and many other FFL’s are choosing to shut down rather than fight the agency for their survival, judicial relief is desperately needed, and we’ll be watching this case closely in the hopes that yet another of the agency’s abuses will soon be put to rest.

https://bearingarms.com/camedwards/2023/07/12/goa-sues-over-atfs-gun-store-shutdowns-n72499