Armaline, Inc. v. Marcia F. Lambert

• Decision Date: 27 September 2007
• Docket Number: No. 3:06 CV 2929.,3:06 CV 2929.
• Citation: 512 F.Supp.2d 1070
• Parties: ARMALITE, INC., Petitioner, v. MARCIA F. LAMBERT, Respondent.
• Court: U.S. District Court — Northern District of Ohio

512 F.Supp.2d 1070

ARMALITE, INC., Petitioner, v. MARCIA F. LAMBERT, Respondent.

No. 3:06 CV 2929.

United States District Court, N.D. Ohio, Western Division.

September 27, 2007.

David M. Buda, Sr., Fry & Waller, Columbus, OH, Richard E. Gardiner, Fairfax, VA, for Petitioner.

Robert G. Young, Office of the U.S. Attorney, Toledo, OH, for Respondent.

MEMORANDUM OPINION AND ORDER

JACK ZOUHARY, District Judge.

BACKGROUND

Petitioner filed a Petition for Judicial Review (Doc. No. 1) of the revocation of a firearms dealer license alleging revocation was improper because his actions were not willful. The case was referred to Magistrate Judge Armstrong for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). Respondent Marcia Lambert, the Director of Industry Operations, Columbus Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), filed a Motion for Summary Judgement (Doc. No. 7) and Petitioner filed an opposition (Doc. No. 17). In her Report and Recommendation (Doc. No. 28), the Magistrate Judge recommended the Court grant Respondent's Motion for Summary Judgment and dismiss the case.

The case is now before the Court on Petitioner's Objections to the Magistrate's Report and Recommendation (Doc. No. 31), to which Respondent filed an opposition (Doc. No. 34). In accordance with Hill v. Duriron Co., 656 F.2d 1208 (6th Cir.1981) and 28 U.S.C. §§ 636(b)(1)(B) and (C), this Court has made a de novo determination of the Magistrate's findings. For the following reasons, the Court finds Petitioner's Objections not well taken.

DISCUSSION

Petitioner raises the following Objections to the Magistrate's Report and Recommendation:

1. the Magistrate accepted certain statements of fact which were actually disputed;

2. the Magistrate failed to properly apply the meaning of "willfully" with respect to the Gun Control Act of 1968(GCA); and

3. the Magistrate mistakenly determined that the ATF had authority to promulgate rules and regulations under the GCA

Each objection is addressed below.

1. No material facts are in dispute and summary judgment is proper

Petitioner objects to the determination that there is no dispute in material facts and argues summary judgment is, therefore, inappropriate.

Pursuant to Federal Civil Rule 56(c), summary judgment is appropriate where there is "no genuine issue as to any material fact" and "the moving party is entitled to judgment as a matter of law." "Material facts are only those facts that might affect the outcome of the action under governing law." Talley v. Bravo Pitino Rest., Ltd., 61 F.3d 1241, 1245 (6th Cir. 1995).

Petitioner argues two purported facts are at issue: (1) Petitioner "failed to follow-up" regarding a conference with the ATF, and (2) Petitioner admitted being "overly complacent" about the regulations. Petitioner claims he was not responsible for following-up with ATF to schedule a conference, and points to Record evidence of confusion between the parties. Petitioner's deposition transcript also shows the Magistrate misstated in her Report that Petitioner was "overly complacent" when Petitioner actually used the language "somewhat complacent." Although a dispute exists over the exact sequence of events and responsibilities of the parties with respect to the conference, and the descriptive term used to describe Petitioner's admitted complacency, these differences are not material and have no effect on the legal outcome. Petitioner's license was not revoked for failing to schedule a conference with ATF, and the subsequent violations were not a result of the missed conference. Rather, the license was revoked because of repeated record violations. Petitioner stated that he was complacent (Doc. No. 34, n. 5), and the actual degree of complacency between "overly" and "somewhat" is also not material to the license revocation. Summary judgment is appropriate because no material facts are in dispute and Respondent is entitled to judgment as a matter of law.

2. Petitioner wilfully violated the GCA

Petitioner objects to the Magistrate's finding that the definition of "willfully" is governed by the Sixth Circuit decision in Appalachian Res. Dev. Corp. v. McCabe, 387 F.3d 461, 465 (6th Cir.2004) rather than the Supreme Court's definition in Safeco Ins. Co. of America v. Burr, U.S., ___ U.S. ___, 127 S.Ct. 2201, 2208, 167 L.Ed.2d 1045 (2007).

The Sixth Circuit has repeatedly held the term "willfully," within the GCA, does not require a showing of a bad purpose but only that a licensee knowingly failed to follow the law or be indifferent to it. Appalachian Res. Dev. Corp., 387 F.3d 461, 464. Although Safeco sets forth a meaning of "willfully" for the Fair Credit Reporting Act, the Court does not agree with Petitioner that Safeco sets forth a general definition for all federal civil enforcement statutes. The holding in Safeco is distinguishable from Petitioner's claim. The Fair Credit Reporting Act provides a private right of action against businesses to protect consumers. Safeco, 127 S.Ct. at 2208. The GCA enables government enforcement of the transfer and sale of firearms, enacted to prevent weapons from reaching persons classified by Congress as "potentially irresponsible and dangerous." Barrett v. United States, 423 U.S. 212, 218, 96 S.Ct. 498, 46 L.Ed.2d 450 (1976). Willfully is "`a word of many meanings' whose construction is often dependent on the context in which it appears." Bryan v. United States, 524 U.S. 184, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998). The Fair Credit Reporting Act and the GCA are vastly different statutes, in term of construction and purpose, and, as such, the meaning of willfully differs between them.

In Appalachian Resources, the Sixth Circuit provided a clear definition of "willfully," and then reaffirmed that decision in Procaccio v. Lambert, No. 06-4299, 2007 WL 1544956, at *5 (6th Cir. May 29, 2007). The Supreme Court's holding in Safeco is not inconsistent with Appalachian Resources. This Court is bound by the Sixth Circuit decision. Following established precedence, a licensee who understands his legal obligations and fails to abide by them, can have his licenses revoked for. "willfully" violating the GCA. Appalachian Res. Dev. Corp., 387 F.3d at 464. The Magistrate correctly analyzed the undisputed facts in her Report (Doc. No. 28, p. 11) and Petitioner did willfully violate GCA, making summary judgment appropriate.

3. The ATF has authority to promulgate rules and regulations, including the specific portions challenged

Petitioner objects to the Magistrate's comprehensive finding that the ATF has authority under 18 U.S.C. §§ 923(g)(1)(A) and 926(a) to promulgate rules and regulations that "are necessary to carry out the provision of the GCA ..." that requires licensed dealers to maintain certain records, and that the regulations Petitioner violated were not "necessary" under the statute.

The purpose of the GCA is "to curb crime by keeping `firearms out of the hands of those not legally entitled to possess them because of age, criminal background, or incompetency.'" Huddleston v. United States, 415 U.S. 814, 824, 94 S.Ct. 1262, 39 L.Ed.2d 782 (1974) (citations omitted), In order to effectuate that purpose Congress vested the right to draft rules and regulations with the Attorney General. See § 926. In National Rifle Association v. Brady, the Fourth Circuit performed an extensive analysis of the validity of certain firearm regulations promulgated pursuant to the GCA and rejected the National Rifle Association's position that the regulations were broad and unnecessary. 914 F.2d 475 (4th Cir.1990). Petitioner's objection offers no new argument for his claim that the ATF's rules are beyond the scope of the GCA, and the Court finds the reasoning in Brady persuasive and dispositive.

CONCLUSION

After conducting a de novo review, the Report and Recommendation is adopted and affirmed. Petitioner's claims are dismissed.

IT IS SO ORDERED.

MAGISTRATE'S REPORT AND RECOMMENDATION

VERNELIS K. ARMSTRONG, United States Magistrate Judge.

This Petition for review of Respondent's Revocation of Application for Firearms License was filed pursuant to the Gun Control Act of 1968(GCA), 18 U.S.C. § 923 et seq. The case was subsequently referred to the undersigned Magistrate for disposition of all pretrial issues.

Pending is Respondent's Motion for Summary Judgment (Docket No. 7), Petitioner's Opposition (Docket No. 17), Respondent's Reply (Docket No. 24) and a Notice of Supplemental Authority followed by a Response and Reply (Docket Nos. 25, 26 and 27). For the reasons that follow, the Magistrate recommends that Respondent's Motion for Summary Judgment be granted.

THE PARTIES

Petitioner, an Illinois corporation, was issued a federal firearms license (FFL) to sell firearms other than destructive devices in its Port Clinton, Ohio, facility (Docket No. 1, ¶ 4 and Tr. 5-6).¹ Mark Westrom is Petitioner's president (Tr. 4). Respondent is the Director of Industry Operations for the Bureau of Alcohol, Tobacco and Firearms (ATF) (Docket No. 1, ¶ 5). Erica Whelan and Mark Salloun, both non-parties in this lawsuit, are Industry Operations Investigators (IOI) for ATF who were assigned to the Cleveland, Ohio, office (Tr. 12, 73).

FACTUAL BACKGROUND

On February 21, 2006, a notice of revocation of license was mailed to Petitioner (Tr. 9 and Docket No. 1, ¶ 6). Petitioner filed a timely request for an administrative hearing (Docket No. 1, ¶ s 7 & 8). The following facts were adduced at the administrative hearing held on June 27, 2006.

In 1999, Petitioner was issued a federal license to engage in the business of dealing in firearms, including as a pawnbroker in firearms, in Port Clinton, Ohio (Tr. 6-7). The GCA and enabling regulations require gun dealers to maintain records at their place of business subject to review for compliance by the Secretary and/or Attorney General. 18 U.S.C. § 923 (Thomson/West 2007). Investigator Erica Whelan...