XVP Sports, LLC v. Bangs
| Decision Date | 17 September 2012 |
| Docket Number | CIVIL ACTION NO. 2:11cv379 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | XVP SPORTS, LLC, Plaintiff, v. GARY BANGS, Defendant. |
This matter is before the Court on XVP Sports LLC's ("Plaintiff" or "XVP") objections to the United States Magistrate Judge's Report and Recommendation ("R&R") recommending that this Court grant summary judgment in favor of defendant Gary Bangs ("Defendant" or "Bangs"). After carefully considering the Magistrate Judge's thorough R&R and the objections thereto, this Court conducted a de novo review as to all proposed findings and recommendations that were objected to by Plaintiff. Having completed such review, this Court hereby adopts and approves the findings and recommendations set forth in the R&R, as supplemented by this Order. Accordingly, the Court GRANTS Defendant's motion for summary judgment.
On September 14, 2009, Tim Donaldson ("Donaldson"), the president of XVP, submitted XVP's application for a federal firearms license ("FFL") to the United States government'sBureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF"). The only "Individual Owner" of XVP or "Other Responsible Person[]" for XVP that was listed on XVP's initial FFL application was Donaldson. Admin Record ("A.R.") at 36, ECF No. 13-1 at 36.1
After receiving XVP's initial application, the ATF scheduled an application inspection due to concerns arising from its discovery that Shooting Sports Distributors, Inc. ("SSDI"), a former firearms licensee operating out of the same location as XVP, had its FFL revoked for willful violations of the federal Gun Control Act ("GCA"). During the inspection, the ATF learned that Norman Gladden ("Gladden"), the sole owner of SSDI, was also the sole owner of XVP. As a result, Donaldson was informed that Gladden would need to be listed as a "Responsible Person" on XVP's application. However, due to SSDI's prior willful violations of the GCA, the ATF also advised Donaldson that listing Gladden would likely lead to a denial of XVP'sapplication for a FFL. XVP did not revise its application to identify Gladden as a responsible person. Instead, Gladden transferred ownership of XVP to his wife. XVP then resubmitted its application, which again did not list Gladden, but did list Gladden's wife as an owner/other responsible person. Even after such transfer of ownership: (1) Gladden remained the sole owner of SSDI, which provided the sole compensation to Donaldson—who acted as both XVP's and SSDI's president; (2) Gladden/Gladden's personal FFL retained ownership of 500 to 1,000 firearms that would be sold by XVP under a consignment agreement;2 (3) XVP would not hire any employees; rather, SSDI employees would provide work for XVP but would only be paid by SSDI; and (4) Gladden owned the building where XVP would operate and although XVP would be required by contract to pay Gladden monthly rent, as long as SSDI paid Gladden its monthly rent, XVP would not be required to make any rent payments. Accordingly, Donaldson was fully aware that "Shooting Sports Distributors . . . 100 percent owned by Mr. Norman Gladden would actually employ the personnel to run [XVP's] firearms business under [XVP's] license." A.R. at 209. Furthermore, Donaldson testified that Gladden couldfire Donaldson from SSDI (the only entity that paid Donaldson a salary) or exert control over Donaldson by threating to fire him. A.R. at 190-91, 202. Additionally, XVP's application for an FFL indicates that it was doing business as "AP Arms, and Donaldson testified that the fictitious name of "A&P Arms" was currently being used to sell firearms from the location where XVP would take over, and that such business name was owned by SSDI. A.R. at 29, 173.
On March 8, 2010, XVP was denied a FFL on the grounds that: (1) it had willfully violated the GCA, or any rules or regulations thereunder; and (2) it had willfully failed to disclose material information in the FFL application. A.R. at 14-15. Following an administrative hearing, XVP received a Final Notice of Denial similarly indicating: (1) that XVP was ineligible to receive a FFL under 18 U.S.C. § 923(d)(1)(D) because XVP "willfully failed to disclose material information required in connection with its application, namely that Norman Gladden is a responsible person for XVP . . ."; and (2) that XVP was ineligible to receive a FFL under 18 U.S.C. § 923(d)(1)(C) because "XVP is controlled by Norman Gladden, and Norman Gladden willfully violated the provisions of the Gun Control Act." A.R. at 4.
XVP then filed a Petition for Judicial Review of the ATF's denial pursuant to 18 U.S.C. § 923(f)(3). Pursuant to 28 U.S.C.§ 636(b)(1)(B), the undersigned judge referred the case to United States Magistrate Judge Douglas E. Miller for a R&R on the pending motion for summary judgment. Judge Miller issued his R&R recommending that this Court grant summary judgment in favor of Defendant, and XVP filed timely objections to the R&R. Having received such objections, and Defendant's reply, this matter is now ripe for review.
"The Federal Magistrates Act requires a district court to 'make a de novo determination of those portions of the [magistrate judge's] report or specified proposed findings or recommendations to which objection is made.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (quoting 28 U.S.C. § 636(b)(1)) (alteration in original). As to portions of the R&R that are not objected to, this Court "must *only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Id. (quoting Fed. R. Civ. P. 72 Advisory Committee's Note).
The recommended findings of undisputed facts are laid out in detail in the Magistrate Judge's R&R. XVP directly challenges only one recommended factual finding set forth therein. XVP disputes the purported factual finding that Gladden himself, rather than SSDI, committed willful violationsof the GCA. However, a careful reading of the R&R reveals that the recommended factual finding is not that Gladden personally committed willful violations of the GCA. Rather, the finding is that Defendant Bangs previously concluded that Gladden committed violations of the GCA. As the Magistrate Judge was merely reiterating one of Defendant's justifications for denying XVP a FFL, and it is undisputed that Defendant previously offered such justification, this Court overrules XVP's objection and adopts the Magistrate Judge's recommended factual findings without exception.3
In addition to the lone objection to the Magistrate Judge's proposed facts, XVP restates nine "material facts" that it contends weigh in its favor. This Court, however, finds that the mere listing of "material facts" in XVP's recently filed brief is insufficient to constitute a "specific objection" to the Magistrate Judge's recommended factual findings. See Fed. R. Civ. P. 72(b) () (emphasis added); Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 316 (4th Cir. 2005) (). Notably, the Magistrate Judge presented detailed objective factual findings, drawn in part from Gladden's and Donaldson's own testimony, and the accuracy of such findings is not directly challenged by XVP. R&R 2-4. Absent specific objections that seek to illuminate a purported error committed by the Magistrate Judge, this Court adopts the proposed factual findings set forth in the R&R. See Smith v. Washington Mut. Bank FA, 308 Fed. Appx. 707, 708 (4th Cir. 2009) (quoting Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982)) ("The [district] court need not conduct de novo review, however, 'when a party makes general and conclusory objections that do not direct the court to a specific error in the magistrate's proposed findings and recommendations.'") (emphasis added).
Even if this Court viewed XVP's listing of "material facts" as a sufficient "specific objection" to the Magistrate Judge's proposed factual findings, the Court would adopt the facts as set forth in the R&R. Notably, several of the facts listed by XVP appear undisputed and do not conflict with the MagistrateJudge's proposed factual findings. Some of the nine facts, even if disputed, are not "material" to the issues raised in the summary judgment motion. Portions of three of the nine facts (numbers 1, 3 & 6 in XVP's brief) do, however, appear directed at the material issue of whether Gladden had any direct or indirect control over XVP. ECF No. 22 at 2. Those facts are nevertheless insufficient to create a "material" factual dispute because the majority of such factual assertions merely demonstrate that neither Gladden nor his wife intended to be involved with XVP's business operations. Such subjective plans, however, considered in light of the undisputed objective facts demonstrating that Gladden retained the ability to influence XVP if he so chose, fail to create a "material dispute." Furthermore, to the extent the proffered facts go beyond Gladden's intent, such as the assertion that Gladden "relinquished complete . . . control over XVP," such claim is not really a "fact" but is instead a conclusory statement going to the ultimate issue in this case. Plaintiff cannot avoid summary judgment by first failing to challenge the undisputed objective facts establishing specific details about XVP's relationship with SSDI and Gladden and then merely advancing the conclusory...
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