Breit & Johnson Sporting Goods, Inc. v. Ashcroft

• Decision Date: 17 March 2004
• Docket Number: No. 01 C 9081.,01 C 9081.
• Citation: 320 F.Supp.2d 671
• Parties: BREIT & JOHNSON SPORTING GOODS, INC., an Illinois Corporation, Plaintiff, v. John ASHCROFT, Attorney General, Defendant.
• Court: U.S. District Court — Northern District of Illinois

320 F.Supp.2d 671

BREIT & JOHNSON SPORTING GOODS, INC., an Illinois Corporation, Plaintiff, v. John ASHCROFT, Attorney General, Defendant.

No. 01 C 9081.

United States District Court, N.D. Illinois, Eastern Division.

March 17, 2004.

Arnold H. Landis, Law Office of Arnold H. Landis, Chicago, IL, for Plaintiff.

Donald R. Lorenzen, AUSA, United States Attorney's Office, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

LEFKOW, District Judge.

This is an action brought under the Gun Control Act, 18 U.S.C. § 923(f)(3), to review the decision of the Bureau of Alcohol Tobacco, and Firearms ("ATF") to revoke the federal license to sell firearms of plaintiff, Breit & Johnson Sporting Goods, Inc. ("Breit & Johnson"). Before the court is defendant's motion for summary judgment. For the reasons stated below, the court grants the motion.

Standard of Review

Section 923(f)(3) of the Gun Control Act permits a party whose license to sell firearms has been revoked by ATF to obtain "de novo judicial review" of the revocation and, "[i]f the court decides that the Attorney General was not authorized to ... revoke the license, the court shall order the Attorney General to take such action as may be necessary to comply with the judgment of the court." 18 U.S.C. § 923(f)(3). Under § 923(f)(3), the district court may only determine whether the Attorney General's decision was "authorized;" the selection of the penalty is a matter within the discretion of the Attorney General. Stein's Inc. v. Blumenthal, 649 F.2d 463, 464 n. 2 (7 th Cir.1980). The Attorney General's decision may be upheld if the court concludes, in its own judgment, that the evidence supporting the Attorney General's decision is "substantial." Id.

"De novo review" may be confined to the administrative record or may be supplemented by the admission of additional evidence.¹ In either event, although the district court need not accord any particular weight to the Attorney General's findings and decision, it may, in the exercise of its discretion, accord them such weight as it believes they deserve. Stein's, 649 F.2d at 467. Absent genuine issues of material fact, a court may properly grant summary judgment without an evidentiary hearing. Cucchiara v. Secretary of the Treasury, 652 F.2d 28, 30 n. 1 (9th Cir.1981).

Summary judgment obviates the need for a trial where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The party seeking summary judgment bears the initial burden of proving there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response, the non-moving party cannot rest on bare pleadings alone but must use the evidentiary tools listed above to designate specific material facts showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. 2548; Insolia v. Philip Morris Inc., 216 F.3d 596, 598 (7th Cir.2000). A material fact must be outcome determinative under the governing law. Insolia, 216 F.3d at 598-99. Although a bare contention that an issue of fact exists is insufficient to create a factual dispute, Bellaver v. Quanex Corp., 200 F.3d 485, 492 (7th Cir.2000), the court must construe all facts in a light most favorable to the non-moving party as well as view all reasonable inferences in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Facts

Breit & Johnson Sporting Goods Company, Inc. ("Breit & Johnson") has been in business as a sporting goods store since approximately 1945. (Def. L.R. 56.1 ¶ 1.) The store sells a variety of sporting goods, including baseball, football, and hockey equipment, and it outfits teams with uniforms for these sports. (Id. ¶ 2.) It also sells firearms. (Id. ¶ 3.)

Breit & Johnson is organized as a corporation. (Id. ¶ 4.) Sid Breit is the corporate president and store owner. (Id. ¶ 5.) His son, Mark Breit, is the corporate vice president and has been working at the store full time since 1973. (Id. ¶ 6.) Breit & Johnson has been licensed to sell firearms since at least 1972. (Id. ¶ 7.) Mark Breit has been selling guns at Breit & Johnson since the mid- to late-1970s, and he is the person who runs the store today. (Id. ¶ 8-9.)

ATF has inspected Breit & Johnson on numerous occasions since 1977. (Id. ¶ 10.) Full compliance inspections of Breit & Johnson in 1977, 1978, 1994, and 1998 revealed numerous violations of the Gun Control Act and the regulations promulgated under it. (Id. ¶ 11.) At each full compliance inspection, ATF noted the same types of violations. (Id. ¶ 12.) Most commonly, ATF noted that Breit & Johnson (1) failed to ensure proper completion of Firearms Transaction Records, Forms 4473,² as required by 27 C.F.R. § 478.124, and (2) failed to accurately maintain a bound book recording the acquisition and disposition of firearms in and out of its inventory,³ as required by 27 C.F.R. § 478.125(e).

In 1977, an ATF inspector found numerous omissions and incomplete answers on the Forms 4473 he reviewed at Breit & Johnson. In some cases Breit & Johnson's forms failed to identify the purchaser's date of birth, place or birth, address and other identifying information. In other cases, Breit & Johnson failed to obtain sufficient answers to the certification section of the form to determine if the purchaser was permitted to purchase a firearm. (Def. L.R. 56.1 ¶ 17.) The 1977 inspection also revealed that Breit & Johnson was not properly recording in its bound book the acquisition and disposition of firearms purchased by Breit & Johnson. (Id. ¶ 18.) The ATF inspection report noted that Breit & Johnson had begun to address this problem by conducting a physical inventory, closing out entries, reconciling double entries and beginning new records utilizing a proper accounting system. (Pl. Stat. of Add'l Facts ¶ 13.) However, the inspection report stated,

Although the dealer has corrected the majority of the violations listed above and has nearly completed the reconciliation of his bound book records, I find these discrepancies are serious and future compliance is vital to the accuracy of the recordkeeping system. Those violations pertaining to the bound book records have been noted previously but the licensee, prior to this inspection, has failed to take corrective action. Therefore, I recommend that an admonitory letter, strongly outlining possible consequences of future noncompliance, be sent to this licensee to further emphasize the importance of accurate records.

(Scouffas Decl., Ex. 1, at 65.) The ATF inspector certified that he explained all of the violations to Breit & Johnson and left the original notice of the violations with the store. (Def. L.R. 56.1 ¶ 19.) Following the 1977 inspection, ATF held a warning conference with Breit & Johnson to discuss the violations found at the inspection. ATF explained the necessity that Breit & Johnson adhere to ATF's record-keeping requirements. (Id. ¶ 20.)

At a 1978 inspection, ATF found some of the same types of violations it had found the year before. (Id. ¶ 21.) The 1978 inspection revealed four occasions when Breit & Johnson had transferred guns despite the fact that purchasers had not fully completed the certification questions on Form 4473. In one case, the form indicated that Breit & Johnson transferred a gun to someone who had answered one of the certification questions affirmatively, indicating that the person was not entitled to possess a firearm. (Id. ¶ 22.) ATF also found violations concerning the acquisition and disposition record-keeping requirements. Notably, Breit & Johnson had failed to record the fact that two firearms had been stolen. It was also not recording firearms brought in for repairs. (Id. ¶ 23.) At the time, ATF did not find these violations to be significant enough to recommend revocation of Breit & Johnson's license. The inspection report noted that

the incidence of error on Forms 4473 in comparison to the total number of forms completed by Mr. Breit during the period of investigation is insignificant. The licensee was cited to remind him that incomplete Forms 4473 are a violation of federal law and that he should strive for as near perfection as possible. He was then asked to contact the individuals and have the forms completed. Forms 4473 on a whole were found to be complete and in order. The incomplete entries (such as p/o/b, d/o/b, and address) for which Mr. Breit was cited last year did not reappear.

(Pl. Stat. of Add'l Facts ¶ 16; Scouffas Decl., Ex. 3, at 109.) The report also noted that "on the whole, the licensee is properly recording the acquisition and disposition of all firearms." The report stated that "the percentage of error in comparison to the total volume of sales, however, is minimal." Finally, the report found that "on the whole, the licensee's records were found to be complete and in order" and recommended renewal of Breit & Johnson's firearms license. (Pl. Stat. of Add'l Facts ¶ 16.) Sid Breit signed the notice of violations indicating that he had received a copy and that the inspector had explained the violations to him. (Def. L.R. 56.1 ¶ 25.)

ATF inspected Breit & Johnson in 1989 and found no violations. (Def. Resp. to Pl. Stat. of Add'l Facts ¶ 21.)

In 1994, ATF again conducted a full compliance inspection of Breit & Johnson. The inspector found discrepancies in over ten percent of the Forms 4473 she reviewed (402 of 3900 forms reviewed). This included 363 instances where Breit &amp Johnson had not obtained the complete identifying information from the purchasers and 16 instances where Breit & Johnson transferred firearms without requiring purchasers to provide a complete certification that they were not prohibited from possessing firearms. (Def. L.R. 56.1 ¶ 27.) The 1994 inspection also revealed that Breit & Johnson had failed to record guns received for repairs in its acquisition...