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Media Alerts - 10 Ring Precision, Inc. v. Jones - Fifth Circuit
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July 12, 2013
  10 Ring Precision, Inc. v. Jones - Fifth Circuit
Headline: Fifth Circuit Upholds the ATF's Authority to Collect Information on Gun Purchases from Gun Dealers in Border States.

Area of Law: Administrative law.

Issue Presented: Whether the Bureau of Alcohol, Tobacco, Firearms, and Explosives had statutory authority to issue demand letters seeking information on multiple-gun purchases from federal firearms licensees in Arizona, California, New Mexico, and Texas.

Brief Summary: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) issued demand letters in July 2011 to all federal firearms licensees (FFLs) classified as a dealer or pawnbroker located in Arizona, California, New Mexico, and Texas to assist in its efforts to combat the illegal trafficking of firearms from the U.S. into Mexico. The letters required the FFLs to report to ATF whenever they make multiple sales of certain semiautomatic rifles to the same person. Some of the letter recipients filed suit and argued that the ATF lacked statutory authority to send the letter, and alternatively, if the ATF did have authority, that its decision regarding which FFLs to target was arbitrary and capricious. The U.S. District Court for the Western District of Texas granted summary judgment in favor of the ATF, and the U.S. Court of Appeals for the Fifth Circuit affirmed. The Fifth Circuit ruled that the ATF had statutory authority to issue the letters under 18 U.S.C. § 923(g)(5)(A) and that the agency's decision regarding which dealers to target had a rational basis in the administrative record.

Extended Summary: The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) issued demand letters in July 2011 to all federal firearms licensees (FFLs) classified as a dealer or pawnbroker located in Arizona, California, New Mexico, and Texas to assist in its efforts to combat the illegal trafficking of firearms from the U.S. into Mexico. The letters required the FFLs to report to ATF whenever "at one time or during any five consecutive business days, [they] sell or otherwise dispose of two or more semi-automatic rifles capable of accepting a detachable magazine and with a caliber greater than .22 (including .223/5.56 caliber) to an unlicensed person." Some of the letter recipients filed suit and argued that the ATF lacked statutory authority to send the letter, and alternatively, if the ATF did have authority, that its decision regarding which FFLs were to receive the letter was arbitrary and capricious. The U.S. District Court for the Western District of Texas granted summary judgment in favor of the ATF, and the U.S. Court of Appeals for the Fifth Circuit affirmed.

The ATF relied on 18 U.S.C. § 923(g)(5)(A), a part of the Firearms Owners' Protection Act of 1986 (FOPA) that amended the Gun Control Act of 1968 (GCA), as its authority to issue the demand letters. ATF research had shown that the tracing of firearms is important to its firearms trafficking investigations and that Arizona, California, and Texas were the most prolific states for trafficking. In 2009, the General Accountability Office (GAO) released a report stating that the lack of reporting of multiple sales for long guns posed a challenge to the ATF and that multiple sales or purchases of firearms by a non-licensee was a significant firearms trafficking indicator. Then, in 2010, the Office of the Inspector General (OIG) recommended that the ATF find a way to obtain information that would improve its investigative ability. In response, the ATF submitted a proposal, which went through the appropriate notice and comment process, and, as a result, the ATF issued the demand letters in July 2011.

Addressing the appellant's first issue of the ATF lacking statutory authority to issue the demand letters, the Fifth Circuit reasoned that the ATF had statutory authority because 18 U.S.C. § 923(g)(5)(A) permits the government to demand information that firearms licensees are required to collect and the letters did not request any additional information. The court further explained that §§ 923(g)(1)(A), 923(g)(1)(B), 923(g)(3)(A), and 923(g)(7) did not limit the ATF's authority to issue the letters; the letters did not run afoul of § 926(a), which prohibits establishment of a national firearms registry; and the Consolidated and Continuing Appropriations Act of 2012 rider allowed for some specific collection of firearm transaction records. Addressing the appellant's second issue that the ATF's decision regarding which FFLs were to receive the letter was arbitrary and capricious, the Fifth Circuit reasoned that a rational connection existed between the facts in the administrative record and the FFLs that were chosen to receive the letter and that the ATF was not required to consider all available alternatives to obtain the information it sought.

For the full opinion, please see: http://www.ca5.uscourts.gov/op...2/12-50742-CV0.wpd.pdf.

Panel: Circuit Judges King, Higginbotham, and Clement

Argument Date: 04/02/2013

Date of Issued Opinion: 07/11/2013

Docket Number: No. 12-50742

Decided: Affirmed

Case Alert Author: Deena Herndon-Remy

Counsel: Richard E. Gardiner for Plaintiff-Appellant 10 Ring Precision, Inc.; Andre M. Landry III, Looper Reed & McGraw, for Intervenor Plaintiff-Appellant Betts; Michael S. Raab, Department of Justice, for Defendant-Appellee Jones

Author of Opinion: Judge Higginbotham

Case Alert Circuit Supervisor: Aaron-Andrew P. Bruhl

    Posted By: Aaron Bruhl @ 07/12/2013 10:21 PM     5th Circuit  

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