Federal Judge Issues Preliminary Injunction Against New ATF Gun Business Licensing Rule

Last updated on August 7th, 2024 at 04:28 pm

A federal judge has issued a preliminary injunction blocking the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) from enforcing its new firearms business licensing rules against a limited set of plaintiffs challenging the regulation.

On April 10, the ATF announced U.S. Attorney General Merrick Garland had approved a final rule, expanding the definition of firearms-related business activity to include a broader range of transfers and transactions.

Prior to the ATF’s new rule, individuals had some room to arrange transfers of firearms to other private individuals without it being considered an act of business requiring a federal firearms license or generally requiring the recipient to undergo a background check. The old rules allowed private individuals to loan firearms to friends and family members or to sell their firearms without necessarily having to transact through a licensed firearms dealer.

The new ATF rule states that individuals are engaged in firearms-related business requiring licensure if the ATF determines they are acting “predominantly to earn a profit.”

On Tuesday, U.S. District Judge Matthew Kacsmaryk, of the U.S. District Court for the Northern District of Texas, issued an order barring the ATF from enforcing its firearms business licensing against members of Gun Owners of America (GOA), the Tennessee Firearms Association (TFA), the Virginia Citizens Defense League (VCDL), and residents of Texas, Utah, Mississippi, and Louisiana.

The preliminary injunction expands on a temporary restraining order Kacsmaryk issued last month, barring the ATF from enforcing its new rule in Texas, and against the GOA, TFA, and VCDL. The judge had previously ruled Mississippi, Louisiana, and Utah lacked standing to challenge the ATF rule, but allowed them to submit revised arguments for standing.

In his Monday ruling, Kacsmaryk determined all of the plaintiffs had shown sufficient standing to warrant protection from the ATF rule under the preliminary injunction.

The plaintiffs together have argued that the new ATF rule violates the Administrative Procedure Act (APA), which generally states executive branch agencies must have clear authorization from Congress to set regulations. In granting the preliminary injunction, Kacsmaryk ruled the plaintiffs are likely to succeed on the merits of their claims.

The federal government, arguing in favor of the new ATF rule, contends that the agency derived the authority for the new firearms business licensing regulations from the Bipartisan Safer Communities Act (BSCA) Congress passed in June 2022. The defendants argued the BSCA defines firearms-related business to include activity where the intent is to earn a profit. They further contend that the new ATF rule is in line with the BSCA as an act of Congress.

In issuing the preliminary injunction, Kacsmaryk largely reiterated conclusions he drew when issuing the initial temporary restraining order last month. Then as now, Kacsmaryk ruled that intent to earn a profit is too vague of a standard for defining firearms-related business because it could encompass a person who repeatedly advertises firearm sales that, if transacted would prove profitable, even if they never find a buyer to complete the transaction.

“Moreover, the mere fact that the word ‘intent’ appears in the Section does necessitate — or even suggest — that intent is all that is required. On the contrary, the Section’s usage of ‘intent’ serves merely to distinguish the type of intent contemplated,” the judge added.

Kacsmaryk also concluded the new ATF rule is in conflict with another provision of law passed by Congress, which states that the definition of a firearms-related business “shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.”

Celebrating the new ruling, GOA Senior Vice President Erich Pratt noted that even before the new ATF rule went into effect, the federal agency had carried out a no-knock raid on the home of Arkansas airport executive Bryan Malinowski, on grounds he lacked proper licensing for some of his firearms-related transactions. ATF and partner law enforcement officers entered Malinowski’s home and fatally shot him during the pre-dawn raid. Malinowski’s family contends he had no reason to suspect his transfers of firearms at local gun shows were illegal, as the ATF contends.

“This Administration’s ceaseless aggression towards gun owners has already turned deadly, and the enforcement of this rule would have inevitably led to more unnecessary bloodshed. GOA and our valued partners will continue to fight back against this lawless and tyrannical administration,” Pratt said Wednesday.

Lawmakers have expressed concerns about the ATF’s conduct during the deadly March raid on Malinowski’s home, including the fact that agents covered over Malinowski’s doorbell camera and didn’t wear body cameras during the operation.