Moreno v. Bureau of Alcohol

• Decision Date: 13 April 2015
• Docket Number: No. EP–14–CV–00089–DCG.,EP–14–CV–00089–DCG.
• Citation: 113 F.Supp.3d 916
• Parties: Valerie MORENO d/b/a CWS Country Wide Shooters, Petitioner, v. BUREAU OF ALCOHOL, TOBACCO, FIREARMS, and EXPLOSIVES, Respondent.
• Court: U.S. District Court — Western District of Texas

113 F.Supp.3d 916

Valerie MORENO d/b/a CWS Country Wide Shooters, Petitioner,

v.BUREAU OF ALCOHOL, TOBACCO, FIREARMS, and EXPLOSIVES, Respondent.

No. EP–14–CV–00089–DCG.

United States District Court, W.D. Texas, El Paso Division.

Signed April 13, 2015.

Robert J. Perez, Attorney at Law, El Paso, TX, for Petitioner.

Magdalena G. Jara, Assistant U.S. Attorney, El Paso, TX, for Respondent.

ORDER

DAVID G. GUADERRAMA, District Judge.

Presently before the Court is Respondent Bureau of Alcohol, Tobacco, Firearms and Explosives' ("the government" or "ATF") "Motion for Summary Judgment" ("Motion") (ECF No. 9), filed on October 7, 2014. After due consideration of the Motion, the parties' filings, and the applicable law, the Court enters the following Order.

I. BACKGROUND

Petitioner Valerie Moreno d/b/a CWS Country Wide Shooters ("Moreno" or "Petitioner") filed a petition in this Court on March 10, 2014, requesting de novo judicial review pursuant to 18 U.S.C § 923(f)(3) of the administrative decision denying renewal of her application for a federal firearms license. See Pet. 1, ECF No. 1. Petitioner contends that the government improperly denied her renewal application when it found that she willfully violated the Gun Control Act of 1968 ("GCA"), as amended, 18 U.S.C. §§ 921 –31. See id.

The GCA, which governs the licensing of firearms importers, manufacturers, and dealers, authorizes the government to inspect licensed firearm businesses in order to ensure the businesses meet initial qualifying standards and that they later continue to comply with federal firearms license regulations. See 18 U.S.C. § 923(g). During the course of an application inspection that occurs after approval, government investigators conduct a sit-down interview at the licensee's place of business and review the required records with that individual along with the regulatory requirements of a firearms licensee.See Resp't's Proposed Undisputed Facts ("RPUF") ¶ 6, ECF No. 10.¹ Government investigators also conduct unannounced compliance inspections which involve examining the records and firearms inventory that are on file. See id. ¶ 7.

Petitioner initially procured a federal firearms license on or about March 2010. See id. ¶ 3. Petitioner's original federal firearms license application listed the place of business² and business hours of Tuesday through Thursday, from 10:00 am until 2:00 pm. See id. ¶ 4. The government conducted a qualification inspection of Petitioner in March 2010. See id. ¶ 8. As part of the inspection, Petitioner was presented with a document ("the Acknowledgement") which, when executed, acknowledged that she had reviewed and discussed the applicable legal requirements with respect to required records, conduct of business, definition of terms and miscellaneous provision. See id. ¶¶ 8, 13. In particular, Petitioner was informed of the government's right to enter a licensee's premises at any time, unannounced, during business hours to examine required records as part of a compliance inspection. See id. ¶ 10. Petitioner was cautioned that if ATF inspectors, after properly identifying themselves with ATF credentials, were denied access to the premises and if they were not provided with the required records of the inventory at such time, her license could be subject to revocation. See id. Petitioner was also advised that the firearms business could only be conducted on the premises of the listed place of business and that a separate license must be acquired for any and each additional location where firearms were to be dealt. See id. ¶ 11. Petitioner assured ATF during the course of the inspection that she had extensive knowledge of the firearms business from her previous work experience as an employee of a federal firearms licensee. See id. ¶ 9. After being given an opportunity to ask questions and request further explanation, Petitioner signed the Acknowledgement, indicating that she understood that she was responsible for familiarizing herself with all the laws and regulations governing the licensed firearms business. See id. ¶¶ 12–13. Shortly thereafter, ATF issued Petitioner her firearms license as a manufacturer of firearms other than destructive devices. See id. ¶ 16.

On July 27, 2010, an agency inspector attempted to conduct a compliance inspection of Petitioner's business during a verified, regular business day and hour. See id. ¶¶ 17, 19. Petitioner was not on the premises at the time, and when contacted by telephone, Petitioner told the agency inspector that she could not be available for the inspection at that time for personal reasons. See id. ¶ 18. The ATF area supervisor then contacted Petitioner and explained the reasons for ATF's urgency to conduct the inspection—a local federal firearms licensee had a large amount of firearms taken from her inventory and ATF had information that some or all of these firearms might have been transferred to Petitioner—and so arrangements were made for an inspection the next day. See id. ¶¶ 20–21.

The following day, Petitioner told an agency inspector that she did not have any ATF firearms transaction records ("Forms 4473")³ because she only sold to licensed dealers; that she had the Acquisition & Disposition records ("A & D Records") on an excel spreadsheet in the computer; and advised that the records were not current because 339 firearms had been sent to California for a gun show. See id. ¶¶ 22–23. Consequently, the inspection was delayed again, and Petitioner was instructed that the gun show firearms needed to be inventoried once they returned to El Paso, Texas. See id. ¶ 25. On August 3, 2010, Petitioner notified ATF that she was on her way to the licensed business premises with the gun show firearms but she requested the inventory be postponed until the following day. See id. ¶ 26. ATF rejected her request and immediately proceeded to the licensed business premises. See id. ¶ 27. When the ATF area supervisor arrived thirty minutes later, Petitioner informed him that, despite instructions to retain all firearms until ATF had inspected them, 58 of the 339 firearms had been sold, loaded back unto the truck, and shipped back to California. See id. ¶¶ 28–29.

As a result of the this inspection, ATF issued an Amended Report of Violations to Petitioner citing violations that included conducting business in an address other than the one specified on the license, not obtaining a National Instant Criminal Background Check System check on an individual, failing to execute an ATF Form 4473, and not logging the guns out of the records. See id. ¶¶ 30–33. Both the violations and the regulations were reviewed with Petitioner at a warning conference, and she signed a new Acknowledgement that specifically addressed ATF's "Right of Entry and Examination" pursuant to 27 C.F.R. § 478.23, as well as the "Premises Covered" by the license pursuant to 27 C.F.R. § 478.50. See id. ¶¶ 35–37. Following the warning conference, ATF issued Petitioner a letter reminding her of the topics discussed at the conference, and cautioning her that future violations could be considered willful and could result in the revocation of her license. See id. ¶ 38. The letter also advised Petitioner to anticipate future inspections to ensure compliance, and to contact ATF with any questions she may have about the requirements of the federal firearms laws. See id.

On July 31, 2012, at approximately 11:00 am, ATF attempted to conduct another compliance inspection during regular posted business hours. See id. ¶¶ 40, 42. Petitioner was not on the premises but her business appeared to be open to customers and an employee was present.⁴ See id. ¶ 41. The Agency inspectors identified themselves, stated the purpose of their presence, and requested the required firearms records. See id. ¶¶ 41, 43. Petitioner was reached by phone, whereupon she requested that the inspection be delayed until she was able to return. See id. ¶ 44. She further stated that her employee was not qualified to assist in the inspection and insisted that she or her attorney needed to be present. See id. ¶¶ 44–45, 48. When Petitioner was unable to procure the delay, she ended the phone call so that she could contact her attorney. See id. ¶ 45. When contacted again by the ATF area supervisor—who had proceeded to the premises over one hour after the compliance inspection was set to begin—Petitioner was warned that failure to permit the inspection was grounds for revocation. See id. ¶ 56. Petitioner was reminded that this requirement had been discussed with her during the previous inspections. See id. Shortly thereafter, the employee on site stated to ATF that he, the employee, needed to leave the premises. See id. ¶ 57. The ATF inspector informed the employee that he would remain and await his return. See id. ¶ 58. The employee did not return despite the inspector remaining outside the business premise until 6:00 pm. See id. Petitioner later contacted ATF to inform ATF that she was available for an inspection.See id. ¶ 59. She was advised that ATF does not schedule inspections because Petitioner failed to allow the inspection to occur when ATF was present. See id. No further attempts to conduct an inspection were made. See id.

On November 28, 2012, an agency inspector received information from a local federal firearms licensee that a customer had purchased a rifle from Petitioner, and that the transfer of the firearm took place in the parking lot of a local restaurant. See id. ¶ 60. ATF opened an investigation into the allegation. See id. In the course of an investigation, the purchaser was located and following an interview, the investigator ascertained that the incident did in fact take place. See id. ¶¶ 60–63.

On February 3, 2013, Petitioner submitted an application to renew her federal firearms license. See id. ¶ 64. On April 10, 2013, ATF denied her application, alleging that Petitioner willfully: (1) failed to allow ATF to conduct an inspection, in violation of 18 U.S.C. § 923(g...