Some gun rights activists and the state of Texas have won at least a temporary reprieve from a new federal rule redefining who is considered to be engaged in the type of firearms-related business activities requiring federal licensing.
U.S. District Judge Matthew Kacsmaryk of the U.S. District Court for the Northern District of Texas issued a new order on Sunday, blocking the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) from enforcing its new “final rule” reframing the definition of when an individual is deemed to be “engaged in the business” of firearms transactions.
The ATF announced on April 11 that it had finalized and would begin implementing a new rule limiting the variety of firearms transactions for which individual participants do not require a license.
Before this new ATF rule, private citizens could conduct a range of firearms-related transfers without needing to obtain a federal firearms license (FFL). Advocates of the new rule seek to expand licensing requirements over transactions where the firearm seller is primarily motivated to earn a profit, even if selling firearms isn’t the seller’s regular source of income.
“Under this regulation, it will not matter if guns are sold on the internet, at a gun show, or at a brick-and-mortar store: if you sell guns predominately to earn a profit, you must be licensed, and you must conduct background checks,” Attorney General Merrick Garland said in a statement announcing the new ATF rule.
The ATF rule prompted resistance from a coalition of gun rights activists and pro-gun state attorneys general. The state governments of Louisiana, Mississippi, Texas, and Utah, working in conjunction with the Gun Owners of America (GOA), the Gun Owners Foundation (GOF), the Tennessee Firearms Association (TFA), and the Virginia Citizens Defense League (VCDL), filed a challenge in a Texas federal court on May 9, seeking to stop the ATF rule from going into effect.
Judge Kacsmaryk, an appointee of President Donald Trump, ruled on Sunday that Louisiana, Mississippi, and Utah lacked standing to challenge the law but that the state of Texas, the GOF, TFA, and VCDL did present an actionable case to challenge the new ATF rule. The federal judge concluded the latter four plaintiffs had shown they are “substantially likely to prevail on the merits” of their case and that a temporary restraining order should be granted, halting enforcement of the rule.
The judge’s order bars the U.S. Department of Justice and the ATF from enforcing the new rule in Texas or against members of the covered entities at least through June 2, when the court will revisit the matter. The judge noted his ruling would not apply to Louisiana, Mississippi, or Utah.
Judge Finds ATF Rule Likely Violates Lawmaking Process
The plaintiffs in the case argued that the new ATF rule redefining what types of firearms dealing require licensure had overstepped the Administrative Procedure Act (APA), which limits how far executive branch agencies can regulate without the express say-so of Congress.
The ATF contends its new definition for firearms-related business actions requiring licensure is consistent with the 2022 Bipartisan Safer Communities Act (BSCA). This 2022 law ostensibly broadened the definition of who is engaged in the business of firearms dealing to include anyone whose objective is to “predominantly earn a profit.”
Judge Kacsmaryk concluded the ATF rule does not set a minimum number of firearms-related transactions a person must engage in to be considered by the ATF as requiring more specific federal licensure and could be interpreted to mean that even a single transfer of a firearm could fall subject to the rule if the seller’s motivation is primarily one of profit. The federal judge concluded this ATF rule is not consistent with language in the BSCA that states engaging in the business of firearms dealing entails the “repetitive purchase and resale of firearms” and that the definition of firearms-related business “shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.”
The judge concluded that the ATF rule may be constructed so broadly as to require an individual who advertises the sale of firearms for a profit to obtain a federal firearms license, even if he doesn’t find an eventual buyer.
“Plaintiffs understandably fear that these presumptions will trigger civil or criminal penalties for conduct deemed lawful just yesterday. Nevertheless, ATF avers that its ‘knowledge of existing case law’ and ‘subject-matter expertise’ will prevent misuse or abuse of the presumptions. In other words, ‘just trust us,'” Judge Kacsmaryk wrote.
Gun Rights Activists Cheer Limited Win
Republican Texas Attorney General Ken Paxton touted the new temporary restraining order as a positive sign while he and others continue to challenge the new ATF rule.
“I am relieved that we were able to secure a restraining order that will prevent this illegal rule from taking effect,” Mr. Paxton said in a Sunday press statement. “The Biden Administration cannot unilaterally overturn Americans’ constitutional rights and nullify the Second Amendment.”
GOA Senior Vice President Erich Pratt also presented the temporary restraining order as a rebuke of President Joe Biden’s gun control efforts.
“President Biden and his anti-gun administration have aggressively pursued an agenda meant to harass, intimidate, and criminalize gun owners and dealers at every turn. This ruling is a compelling rebuke of their tyrannical and unconstitutional actions that purposely misinterpreted federal law to ensure their preferred policy outcome,” Mr. Pratt said Sunday.
The other gun rights groups represented in the case also cheered Judge Kacsmaryk’s ruling on the ATF rule, even as they advised their followers about the limits of the ruling.
“This is not a national injunction so citizens of Tennessee who are not members of TFA, VCDL, GOA or GOF are not protected by this injunction,” TFA announced in a press statement.
VCDL similarly warned Virginia residents who are not members of VCDL or GOA that they “unfortunately” are not also covered by Judge Kacsmaryk’s order. The group noted other lawsuits involving additional states are pending.
NTD News reached out to the Department of Justice for comment on Judge Kacsmaryk’s ruling but did not receive a response by press time.
Eric Tirschwell, the executive director of the gun-control advocacy group Everytown Law, called Judge Kacsmaryk’s ruling”deeply flawed.”
“The District Court’s decision to prevent ATF’s ‘Engaged in the Business Rule’ from taking full and immediate effect everywhere is not only deeply flawed, it’s also dangerous, and will put communities and law enforcement at greater risk of gun violence,” Mr. Tirschwell said in a Monday press statement.
“Congress was clear: those engaged in the business of selling firearms need to be licensed and need to conduct background checks. The Rule implements that common sense mandate and we will continue to vigorously defend it as these meritless challenges by the gun lobby and its allies make their way through the federal courts.”