Gilbert v. Bangs, Civil Action No. 10–cv–1440–AW.

Decision Date22 August 2011
Docket NumberCivil Action No. 10–cv–1440–AW.
Citation813 F.Supp.2d 669
PartiesCharles R.A. GILBERT, Jr., Petitioner, v. Gary BANGS, Director of industry Operations Baltimore Field Division Bureau of Alcohol, Tobacco, Firearms and Explosives, Respondent.
CourtU.S. District Court — District of Massachusetts

OPINION TEXT STARTS HERE

David W. Fischer, Fischer and Putzi PA, Glen Burnie, MD, Richard Ernest Gardiner, Law Office of Richard E. Gardiner, Fairfax, VA, for Petitioner.

Larry D. Adams, Office of the United States Attorney, Baltimore, MD, for Respondent.

MEMORANDUM OPINION

ALEXANDER WILLIAMS, JR., District Judge.

The matters currently before the Court are a motion for summary judgment by Respondent Gary Bangs, the Director, Industry Operations of the Baltimore Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (hereinafter ATF), with the U.S. Department of Justice, see Doc. No. 13, and a motion for leave to file a surreply by Petitioner Charles Gilbert (Gilbert), see Doc. No. 29. Gilbert's complaint seeks judicial review of ATF's denial of his application for a license to deal in firearms. Doc. No. 1. The issues are fully briefed and the Court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons stated more fully below, the Court will GRANT ATF's motion for summary judgment and DENY Gilbert's surreply.

I. FACTUAL AND PROCEDURAL BACKGROUND

The following facts are either undisputed or construed in the light most favorable to Gilbert, and are based primarily on documents in the administrative record (cited as “AR”), which was filed on October 1, 2010, and contains the much of the evidence referenced by the parties in this matter. Gilbert is the present owner of Gilbert Indoor Range, LLC, (“GIR”), which operates an indoor firearms range, and the former owner of American Arms International (“AAI”).

At some point around 1984, AAI secured a federal firearms dealers license to sell firearms and ammunition. AAI's license was later revoked in administrative proceedings beginning in 2006 because an inspection of Gilbert's operations revealed a multitude of record-keeping and other violations of the Gun Control Act of 1968 (“GCA”), as amended, 18 U.S.C. §§ 921–930, Pub.L. No. 90–618, 82 Stat. 213 (1968).1

Under 18 U.S.C. § 923(g)(1)(A), every licensed firearms dealer must maintain such records of importation, production, shipment, receipt, sale, or other disposition of firearms at his place of business for such period, and in such form, as the Attorney General may by regulations prescribe. It is unlawful for a licensed dealer knowingly to make any false entry in, to fail to make appropriate entry in, or to fail to properly maintain, any record which he is required to keep pursuant to section 923 or regulations promulgated thereunder. 18 U.S.C. § 922(m). The Attorney General may revoke a license for willful violations of this statute, after notice and opportunity for a hearing. 18 U.S.C. § 923(e). After a revocation, the aggrieved party may petition for de novo review to the United States District Court within 60 days. 18 U.S.C. § 923(f)(3).

ATF inspectors found violations of the provisions detailed above after inspections of Gilbert's businesses in 1984, 1987, 1991, 2000, and 2003. Following the August 2003 inspection, as detailed in the Fourth Circuit's opinion:

ATF issued a notice of Revocation of License to AAT on January 21, 2005. The Notice indicated that AAI had willfully violated the provisions and regulations of the GCA and it detailed the aforementioned history of noncompliance. On January 13, 2006, the ATF issued a Notice of Denial for GIR's application for renewal of its federal firearms license.

At Gilbert's request, a hearing regarding these decisions was held before an ATF Hearing Officer on March 30, 2006. At this hearing, Gilbert, represented by counsel, introduced no evidence to contest the factual basis for the revocation and denial, and he refused to testify when called as a witness by the Government. On May 22, 2006, the Hearing Officer issued his report, recommending revocation and denial.

On June 24, 2006, ATF's Director of Industry Operations for the Baltimore Field Division, Arthur Herbert, issued a Final Notice of Revocation/Denial to Gilbert. The Final Notice stated that Gilbert had “willfully engaged in repeat violations of the Gun Control Act.” At Gilbert's request, ATF stayed the effective date of the revocation pending review by the United States District Court for the District of Maryland pursuant to 18 U.S.C. § 923(f)(3) (2006).

Gilbert's petition for review asked the district court to “1) decide that ATF erred and was not authorized to revoke AAI's license or to deny GIR's license application; 2) order ATF to withdraw the revocation and denial; and 3) award such other relief, including costs and attorney's fees ... as appropriate.” Instead, the district court granted summary judgment to ATF on February 19, 2008.

Am. Arms Int'l, 563 F.3d at 81 (citations omitted).

Following the August 2003 inspection, ATF found that Gilbert engaged in subsequent violations of the GCA and related regulations which served as additional bases for denying his application for a license.

First, the Director of Industry Operations (DIO) found that, following the August 2003 inspection, Gilbert had willfully failed to report the theft/loss of nineteen firearms in violation of 18 U.S.C. § 923(g)(6) and 27 C.F.R. § 478.39a. AR at 9. Gilbert was notified both during the August 2003 inspection and on October 14, 2003, that he needed to report firearms missing from his inventory. See id. According to Gilbert, he did not know the 19 firearms were missing, see Doc. No. 21 at 27.

Second, inspections conducted in 2008 following the revocation of AAI's firearms license February 20, 2008, revealed subsequent conduct by Gilbert or his employees taking orders for firearms and accepting payments for firearms. AR at 9–11. The ATF found that these actions constituted the continued business of dealing in firearms in violation of 18 U.S.C. §§ 922(a)(1)(A) and 18 U.S.C. § 921(a)(21)(C), (a)(22). Specifically, Gilbert or his employees continued to take orders for the purchase of new firearms on February 21, 2008 and March 4, 7, and 10, 2008, after Gilbert had been advised not to do so. AR at 9–11. Gilbert contended that his employees took the orders for the firearms rather than himself, Doc. No. 21 at 29, but the Director of Industry Operations rejected this argument, AR at 9–12.

The underlying facts regarding these sales are not contested. Once an order was taken from a customer, Gilbert or his employees would put in an order to a supplier. Pursuant to an agreement with Engage Armament, a federally licensed firearms dealer, the firearms would be received and transferred through Engage's license in exchange for Engage's sharing $30 in the sale proceeds. HT 316–319. Payment to the supplier was made from Gilbert's business account. HT at 310–11. The firearms would be shipped to Engage, the licensed dealer, and run through Engage's books, but customers would pay Gilbert's business for the firearm. HT at 312–13, 316.

Third, On March 6 and March 21, 2008, Gilbert ordered firearms, paid for with business funds. Gilbert received and signed for the March 21, 2008 order at his place of business. The ATF found these transactions to violate 18 U.S.C. § 922(a)(1)(A), (6), and (a)(3). Gilbert acknowledged that he personally ordered the firearms but stated that he had ordered them prior to the revocation of AAI's license, and that they were sent to his place of business in error, and that he signed for the packages not knowing what they contained. Doc. No. 1 at 21–23.

According to the Administrative Record filed with the Court, after the revocation of AAI's federal firearms dealers license, Gilbert submitted an application to the ATF for a new license on approximately October 20, 2008. AR at 946–953. Gilbert listed his own name as the “Name of Owner or Corporation.” AR at 948. Gilbert provided the address where he had sold firearms during his business' last year of licensed activity in the section of the form requesting “Business Address” Id. The application form also asked whether the “Applicant or any Person [previously identified as an Individual Owner, Partner, and Other Responsible Person[ ] in the Business] had previously “Held a Federal Firearms License,” “Been an Officer in a Corporation Holding a Federal Firearms License,” “Been an Employee of a Federal Firearms Licensee,” or “Had a Federal Firearms License Revoked.” AR at 949–50. Gilbert marked “Yes” as his response for all of those questions. AR at 950.

ATF denied Gilbert's application in an initial Notice of Denial on June 23, 2009, on the basis that Gilbert was the chief responsible person for his AAI and GIR businesses and that he was responsible for multiple willful violations that supported revocation of AAI's license. AR at 3, 9. Following an administrative hearing, Gilbert received on April 23, 2010 a Final Notice of Denial of his application along with findings of fact and conclusions of law from the administrative hearing. Doc. No. 1 at 2.

II. STANDARD OF REVIEW

Gilbert challenges the ATF's denial of his license application pursuant to 18 U.S.C. § 923(f). The district court exercises de novo review. 18 U.S.C. § 923(f)(3). Under the de novo standard of review for a decision of the ATF, the district court may give the agency's finding and decision ‘such weight as it believes they deserve,’ but need not accord any particular deference to those findings.” Article II Gun Shop, Inc. v. Ashcroft, No. 03–4598, 2005 WL 701053 (N.D.Ill. Mar. 25, 2005) (quoting Stein's Inc. v. Blumenthal, 649 F.2d 463, 467 (7th Cir.1980)). Where appropriate, the reviewing court can receive and consider evidence in addition to that submitted in the administrative proceeding. DiMartino v. Buckles, 129 F.Supp.2d 824, 827 (D.Md.2001). The court can grant summary...

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