Nat'l Shooting Sports Found., Inc. v. Jones

Citation716 F.3d 200
Decision Date31 May 2013
Docket Number12–5010.,Nos. 12–5009,s. 12–5009
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
PartiesThe NATIONAL SHOOTING SPORTS FOUNDATION, INC., J & G Sales, Ltd. and Foothills Firearms, LLC, Appellants v. B. Todd JONES, Acting Director, Bureau of Alcohol, Tobacco, Firearms & Explosives, Appellee.

OPINION TEXT STARTS HERE

Appeal from the United States District Court for the District of Columbia (No. 1:11–cv–01401).

Richard E. Gardiner argued the cause for appellants J & G Sales, Ltd. and Foothills Firearms, LLC. Stephen P. Halbrook was on brief.

James B. Vogts argued the cause for appellant National Shooting Sports Foundation, Inc. Andrew A. Lothson was on brief.

Michael S. Raab, Attorney, United States Department of Justice, argued the cause for the appellee. Stuart F. Delery, Acting Assistant Attorney General, Ronald C. Machen Jr., United States Attorney, and Anisha S. Dasgupta, Attorney, were on brief.

Steven G. Reade was on brief for the amicus curiae The Brady Center to Prevent Gun Violence in support of the appellee.

Before: HENDERSON and ROGERS, Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

In July 2011, in an effort to reduce gun trafficking from the United States to Mexico, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) issued a demand letter under 18 U.S.C. § 923(g)(5)(A) to a number of federal firearms licensees (FFLs) in four southwest border states: Arizona, California, New Mexico and Texas. The demand letter requires each recipient making two or more sales of a specific type of firearm to the same buyer within five business days to file a report with ATF. The report must include information identifying the FFL, the customer and the firearm. National Shooting Sports Foundation, Inc., J & G Sales, Ltd. and Foothills Firearms, LLC (collectively, NSSF), challenge the demand letter, arguing that ATF lacks statutory authority to issue it and that ATF acted in an arbitrary and capricious manner in selecting which FFLs are subject to it. For the reasons set forth below, we affirm the district court's grant of summary judgment to ATF.

I. Regulatory/Factual Background

The Gun Control Act of 1968, Pub.L. No. 90–618, 82 Stat. 1213 (codified as amended at 18 U.S.C. § 921 et seq.) (GCA), requires anyone who wishes to “engage in the business of ... dealing in firearms” to obtain a license from ATF. 18 U.S.C. § 923(a).1 Licensees are known as FFLs and must comply with various provisions of the GCA, including recordkeeping requirements. See id. § 923(g). In 1968, the United States Department of the Treasury 2 promulgated regulations to implement certain GCA recordkeeping requirements. RSM, Inc. v. Buckles, 254 F.3d 61, 64 (4th Cir.2001). One requirement provided that an FFL “shall, when required by letter issued by [the Department of the Treasury], and until notified to the contrary ... submit on Form 4483, Report of Firearms Transactions, for the periods and at the times specified in the letter ... all record information required by this subpart, or such lesser record information as the ... letter may specify.” 27 C.F.R. § 178.126(a) (1986).

In 1986, the Congress amended the GCA via the Firearm Owners' Protection Act, Pub.L. No. 99–308, 100 Stat. 449 (1986) (FOPA). FOPA “was intended to reduce the regulatory burden on law-abiding firearms owners without incapacitating [ ]ATF's ability to combat violations of the firearms laws.” RSM, 254 F.3d at 64. FOPA authorized the Attorney General to promulgate implementing rules 3 but expressly prohibited any rule establishing a firearms registry of any kind maintained by “the United States or any State or any political subdivision thereof.” 18 U.S.C. § 926(a).4

In February 2008, William Hoover (Hoover), the ATF Assistant Director for Field Operations, testified before a subcommittee of the United States House of Representatives regarding an “increased incidence of firearms trafficking to Mexico” from the United States, which “facilitate[d] the drug trade” and threatened safety “on both sides of the border.” Statement of William Hoover, Assistant Director for Field Operations of ATF Before the U.S. House of Representatives Committee on Foreign Affairs Subcommittee on the W. Hemisphere (Feb. 7, 2008) (Joint Appendix (JA) 529–30), available at http:// www. atf. gov/ press/ releases/ 2008/ 02/ 020708– testimony– atf– ad– hoover– sw– border. html. Hoover explained that, while criminals had previously used .38 caliber handguns as their “weapon[ ] of choice,” they were developing a preference for “higher quality, more powerful weapons” such as the Colt AR–15 .223 caliber assault rifle and the AK–47 7.62mm caliber assault rifle. Id. (JA 531). Hoover believed that ATF could best combat the trafficking by developing better intelligence, but noted that ATF had difficulty obtaining such intelligence because it was difficult to “trace” firearms recovered in Mexico. See id. JA 531–32.

Tracing entails “tracking the movement of a firearm involved in a crime from its first sale by the manufacturer or importer through the distribution chain to the non-licensed purchaser.” Decl. of Arthur Herbert ¶ 5, Nat'l Shooting Sports Found., Inc. v. Jones, No. 11–1401, 2011 WL 3875241 (D.D.C. Sept. 23, 2011) (JA 43). Law enforcement agencies use tracing “to link a suspect to a firearm in a criminal investigation; to identify potential traffickers; and to detect patterns in the sources and kinds of firearms that are used in crime.” Id. In other words, tracing serves as a valuable tool for investigating drug crimes. Id. ¶ 7 (JA 44). Tracing begins when a law enforcement officer recovers a firearm used in a crime and makes a “trace request” by entering the firearm's identifying information— e.g., serial number, caliber, make and model—into a database called the “ATF Firearms Tracing System.” Id. ¶ 6 (JA 44). ATF compares the identifying information to other firearms transactions records to “determine[ ] the firearm's entry point into U.S. commerce and its path through the distribution chain.” Id. ¶ 7 (JA 44); see also id. ¶¶ 7–10, 39–42 (JA 44–45, 52–53). Because FOPA limits ATF's ability to collect and maintain firearms transactions records, however, most of the records are kept by individual FFLs and not routinely provided to ATF. See, e.g., J & G Sales Ltd. v. Truscott, 473 F.3d 1043, 1045 (9th Cir.) (“Rather than submitting all of their transaction records to the Bureau, FFLs keep their records on their own premises.... in part because [FOPA].... ban[s] ... creating a centralized registration system....”), cert. denied,552 U.S. 887, 128 S.Ct. 208, 169 L.Ed.2d 146 (2007); see also Decl. of Arthur Herbert ¶ 8 (JA 44–45) ([An FFL's] records are not routinely provided to ATF....”). Therefore, ATF often “relies upon FFL records when it seeks to trace a firearm.” J & G Sales, 473 F.3d at 1045. Specifically, ATF “must contact the manufacturer(s) or importer, then the wholesaler, and then the [FFL], who then provides [within twenty-four hours, see18 U.S.C. § 923(g)(7) ] information about to whom the firearm was sold.” Decl. of Arthur Herbert ¶ 40 (JA 52). Tracing typically takes “ten to twelve days on average to complete.” Id.

The GCA permits ATF to maintain records of firearms transactions in certain circumstances. For example, if an FFL goes out of business, the GCA generally requires that the FFL deliver his records to ATF.518 U.S.C. § 923(g)(4). The GCA further requires that an FFL report to ATF sales of two or more “pistols, or revolvers, or any combination of pistols and revolvers” to the same buyer within five business days; the report is due by the close of business on the day the multiple sale occurs. Id. § 923(g)(3)(A). Additionallythe GCA permits ATF to send demand letters to FFLs to obtain “record information” therein specified. Id. § 923(g)(5) (A).

If ATF is able to match a trace request with the records it maintains, it can complete a trace request more quickly. See Decl. of Arthur Herbert ¶¶ 39, 41–42 (JA 52–53). For example, [m]ultiple sales reports [of handguns pursuant to 18 U.S.C. § 923(g)(3)(A) ] are entered into ATF's Firearms Tracing System.... When a firearm is traced, it is checked against these reports. A match expedites tracing because ATF does not need to contact all active FFLs in the distribution chain ( e.g., manufacturers and distributors), but instead only needs to contact the retail dealer.” Id. ¶ 41 (JA 52–53). Therefore, when ATF conducts a trace pertaining to records in its own possession, it can generate more timely and valuable investigative leads for law enforcement. Id. ¶¶ 42–45 (JA 53–54).

As noted, ATF struggles to trace firearms recovered from gun trafficking operations into Mexico. Specifically, Mexican cartels have made long guns ( i.e. rifles and shotguns) their new “weapons of choice.” U.S. Dep't of Justice, Office of the Inspector Gen., Review of ATF's Project Gunrunner iv (Nov. 2010) (JA 382) (hereinafter OIG Report). Because—unlike multiple sales of pistols—there is no requirement that an FFL report multiple sales of long guns, however, ATF usually cannot use its own records to conduct a trace request involving Mexican gun trafficking. See id. (JA 382); U.S. Gov't Accountability Office, Firearms Trafficking: U.S. Efforts to Combat Arms Trafficking to Mexico Face Planning and Coordination Challenges 28 (June 2009) (JA 582) (hereinafter GAO Report). Thus, a June 2009 report prepared by the Government Accountability Office (GAO) regarding Mexican arms trafficking recommended that ATF investigate “approaches to address the challenges law enforcement officials raised in this report regarding the constraints on the collection of data that inhibit the ability of law enforcement to conduct timely investigations.” GAO Report at 59 (JA 613). Similarly, a May 2010 report by the Office of the Inspector General...

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