Willingham Sports v. Bureau of Alcohol, Tobacco

• Decision Date: 16 December 2004
• Docket Number: No. CIV.A.04-0121-WS-C.,CIV.A.04-0121-WS-C.
• Citation: 348 F.Supp.2d 1299
• Parties: WILLINGHAM SPORTS, INC., Plaintiff, v. BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES, Defendant.
• Court: U.S. District Court — Southern District of Alabama

348 F.Supp.2d 1299

WILLINGHAM SPORTS, INC., Plaintiff, v. BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES, Defendant.

No. CIV.A.04-0121-WS-C.

United States District Court, S.D. Alabama, Southern Division.

December 16, 2004.

Peter S. Mackey, Burns, Cunningham & Mackey, Mobile, AL, for Plaintiff.

Alex F. Lankford, IV, U.S. Attorney's Office, Mobile, AL, for Defendant.

ORDER

STEELE, District Judge.

This matter is before the Court on defendant's Motion for Summary Judgment (doc. 18). The Motion has been fully briefed and is ripe for disposition at this time.

I. Background.

Plaintiff Willingham Sports, Inc. ("Willingham") initiated this action against the federal Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") seeking review of the administrative denial of Willingham's application to renew its federal firearms dealer license. Judicial review of the ATF's determination is governed by the Gun Control Act of 1968, as amended, including specifically 18 U.S.C. § 923(f).

A. Licensure of Plaintiff and Recordkeeping Requirements.

President and sole proprietor Jimmy Ronald Willingham ("Mr.Willingham") testified at the administrative hearing that Willingham was first issued a federal firearms license, License No. 1-63-091-2D-33629 (the "License"), in 1987. (Tr. 157.)¹ Pursuant to the License, Willingham was authorized to serve as a dealer, including a pawnbroker, in firearms other than destructive devices at its facility in Demopolis, Alabama. While a licensed dealer, Willingham sold between 100 and 150 firearms per year. (Tr. 164-65.)

Mr. Willingham was fully cognizant that the License was contingent on Willingham complying with federal firearms laws and regulations. (Tr. 139.) In that regard, Willingham periodically received books, pamphlets, circulars and other literature from ATF setting forth the requirements it was bound to follow as a licensed firearms dealer. (Tr. 139-40.) Mr. Willingham acknowledged that as a federal firearm licensee, the company was charged with responsibility for knowing and understanding all applicable laws and regulations. (Tr. 140-41.)

For purposes of this action, two regulatory recordkeeping requirements are of paramount importance. First, Willingham and all other licensed firearms dealers must maintain a bound book recording the acquisition and disposition of every firearm that enters and leaves their inventory, pursuant to 27 C.F.R. § 478.125(e).² This book is often referred to as an "Acquisitions and Dispositions Book," or "Bound Book," for short. Second, gun dealers must ensure completion of a Firearms Transaction Record, or a "Form 4473," for each gun they sell, in order to record identifying information about the purchaser, to facilitate the tracing of firearms involved in crimes, and to prevent gun transfers to certain prohibited persons. See 27 C.F.R. § 478.124.³ ATF maintains that Willingham was repeatedly found in violation of both of these recordkeeping requirements over a series of inspections occurring in 1990, 1992, 1999 and 2001, ultimately culminating in the revocation/nonrenewal of Willingham's License.

B. The Inspections.

In November 1990, ATF Inspector Ginger Davis conducted a compliance inspection at Willingham. This inspection revealed that the Bound Book did not reconcile with Willingham's physical inventory of firearms, and that all of the more than 500 Forms 4473 on file at Willingham contained certain omissions or errors relating to required information. (Tr. 77-78.) A Report of Violations was prepared and given to Mr. Willingham, who signed it to acknowledge receipt of same. (Exh. G-19.)⁴

In March 1992, Willingham again submitted to a compliance inspection, this one performed by ATF Inspector Karl Fleischmann ("Mr.Fleischmann").⁵ Mr. Fleischmann discovered a host of recordkeeping violations, including some 27 firearms that the Bound Book listed as being on hand but that were not actually there, some 38 guns (including 12 guns submitted for cleaning or repairs) on hand that had not been logged into the Bound Book, no listed dates of acquisition in the Bound Book for 75 firearms, and an array of errors and omissions in the Forms 4473. (Tr. 75-76 & Exh. G-18.) In view of the 1990 inspection, Mr. Fleischmann considered these observed shortcomings to be repeat or recurring violations. (Tr. 76.) Once again, a Report of Violations was prepared and Mr. Willingham signed that Report in Mr. Fleischmann's presence. (Exh. G-18.)⁶

Willingham was not inspected again until November 30, 1999. At that time, Mr. Fleischmann discovered recurring violations similar in tenor to those previously reported in 1990 and 1992. In particular, Mr. Fleischmann found that the Bound Book omitted disposition information for 130 firearms listed as being on hand that were not there, failed to show any record of 24 firearms on hand in the facility, and omitted certain acquisition information (date, source) for a number of guns. (Tr. 68-69 & Exh. G-16.) The inspection also disclosed numerous violations relating to Forms 4473, including 136 forms plagued by errors such as background check and other sections not being completed, omission of key dates (such as the date on which NICS was contacted), and dozens of instances in which Willingham failed to record driver's license or other acceptable ID information on the form. (Tr. 69 & Exh. G-16.) The ensuing Report of Violations was prepared by the ATF and signed by Mr. Willingham on behalf of the company. (Tr. 70 & Exh. G-16.)

As a result of the 1999 inspection, the ATF took several steps to advise Willingham that it was treading on thin ice. Contemporaneously with the Report of Violations, Mr. Willingham signed a Federal Firearms Regulations Guide Form listing numerous firearms regulations (including recordkeeping requirements). (Tr. 73 & Exh. G-17.) By signing the form, Mr. Willingham agreed that on December 2, 1999, information pertaining to those regulations was fully explained to him by an ATF inspector and that any questions he had concerning those regulations had been answered. (Id.) Then, on February 10, 2000, the ATF sent a document to Willingham entitled "WARNING LETTER." (Exh. G-20.) That letter reminded Willingham of the recordkeeping violations discovered in the 1999 inspection, including specifically improperly maintained Bound Book and Forms 4473, and further stated as follows:

"You are reminded that your Federal firearms license is conditioned upon your compliance with Federal firearms laws and regulations. Repeat violations of those listed above will be viewed as willful, and may result in the revocation of your license."

(Exh. G-20 (emphasis added).) A certified mail return receipt reflects that Willingham received the Warning Letter on February 12, 2000.

Finally, in July 2001, Mr. Fleischmann conducted another records inspection at Willingham, where he found that many of the previously identified problems persisted. (Tr. 19.) Indeed, the 2001 inspection revealed that the Bound Book: (a) lacked disposition information for 25 firearms that were listed as on hand but were not, (b) recited dispositions for nine firearms that were still in Willingham's inventory, (c) lacked any information (including acquisition information) about seven firearms that were on hand, and (d) lacked any information at all about three firearms that Willingham had both acquired and disposed of. (Tr. 33-34, 42, 45, 49-50, 56-57 & Exh. G-8.) The same inspection also yielded defects in Willingham's Forms 4473, including 85 forms in which buyers had answered eligibility questions in section 9 with a "Y" or an "N" even though the instructions specifically required "yes" or "no" answers; 7 forms in which the purchaser had left one or more eligibility questions blank; 27 forms in which no purchaser's identification had been recorded in box 11A; 4 forms with other errors or omissions in the buyer's personal information; and 56 forms that were improperly dated. (Tr. 58-65 & Exh. G-8.) These violations were similar to and consistent with those uncovered in the 1999 inspection, and Mr. Fleischmann regarded them as repeat violations. (Tr. 68, 72-73.)

C. The Revocation/Nonrenewal of Plaintiff's License.

In the wake of the July 2001 inspection, the ATF issued a Notice of Revocation of License to Willingham on January 8, 2002, advising Willingham that the License was to be revoked effective 15 days thereafter. (Exh. G-1A.) The Notice also advised Willingham of its right to request a hearing within 15 days. (Id.) Appended to the Notice was a five-count document explaining the factual basis for the revocation. Each count conformed to a deficiency observed in the 2001 inspection, to-wit: (1) disposal of 25 firearms without recording such dispositions in the Bound Book; (2) possession in inventory of nine firearms listed in the Bound Book as having been disposed of; (3) acquisition of seven firearms without logging them in the Bound Book; (4) acquisition and disposition of three firearms without any log entries about them in the Bound Book; and (5) errors on 123 Forms 4473. (Id.)

On or about January 15, 2002, Willingham sent a letter to the ATF timely requesting an administrative hearing to review the revocation decision. (Exh. G-3.) The ATF set the matter for administrative hearing before Hearing Officer Darlene Brown in Tuscaloosa, Alabama on November 13, 2002. (Exh. G-4.)⁷ Apparently by choice, Willingham was not represented by counsel at the hearing; rather, Mr. Willingham spoke for the company.⁸

During the administrative hearing, Mr. Willingham readily conceded that recordkeeping errors had been made.⁹ When asked whether he disputed any violations reported in the inspections, other than one minor exception, Mr. Willingham answered negatively. (Tr. 142.) By way of explanation, however, Mr. Willingham stated during the hearing that "a lot of it is human error" and that "[i]t was not just flat not wanting to do my job. It was just too...