Fairmont Cash Mgmt, L.L.C. v. Tanarra James
858 F.3d 356
5th Cir.2017Background
- Cash Cow Pawn (Fairmont Cash Management, LLC), owned by veteran FFL-holder Derek Munz, held a federal firearms license (FFL) since 2007.
- After an anonymous tip, ATF conducted an undercover investigation in 2013 showing multiple illegal sales by store manager Nelson Alonso (including sales to a felon and a straw purchase); Alonso pleaded guilty to criminal charges.
- A 2014 unannounced ATF compliance inspection uncovered numerous additional record-keeping and transfer violations under the Gun Control Act; ATF notified Cash Cow of intent to revoke its FFL and held an administrative hearing.
- The ATF hearing officer found willful violations and recommended revocation; ATF’s Houston Director issued final revocation. Cash Cow sought de novo judicial review in district court.
- The district court granted ATF summary judgment (finding at least one willful violation sufficient for revocation), denied Cash Cow’s motion to compel ATF internal files, and refused to enforce a 14-day automatic stay; Cash Cow appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ATF was authorized to revoke Cash Cow’s FFL (willfulness) | Violations were not "willful"—at most inadvertent or paperwork errors | Multiple, repeated violations (including Alonso’s deliberate conduct) show willfulness sufficient for revocation | Affirmed: at least one willful violation (Alonso’s) imputable to Cash Cow authorized revocation |
| Whether Alonso’s misconduct is imputed to the licensee (rogue-employee defense) | Alonso was a rogue employee; Cash Cow should not be vicariously liable | Under the GCA, a corporate licensee is chargeable with employees’ conduct and knowledge | Affirmed: respondeat superior applies; Monell framework inapplicable |
| Whether district court abused discretion by denying discovery (ATF internal files) | Cash Cow needed ATF internal files to contest willfulness and to supplement the record | Administrative record was complete; Cash Cow admitted the violations and could not identify relevant missing proof | Affirmed: denial not an abuse of discretion; administrative record sufficed |
| Whether FRCP 62(a) automatic 14-day stay applied to ATF revocation actions | Judgment enforcement subject to Rule 62(a); Cash Cow entitled to 14-day stay after judgment | ATF’s statutory revocation process is not enforcement of a judicial judgment; ATF agreed to a stay rendering motion moot | Court declined to reach a meaningful remedy; appeal does not entitle advisory relief |
Key Cases Cited
- Roberts v. City of Shreveport, 397 F.3d 287 (5th Cir.) (summary judgment standard)
- Arwady Hand Trucks Sales, Inc. v. Vander Werf, 507 F. Supp. 2d 754 (S.D. Tex.) (discusses scope of de novo review of ATF revocation and weight afforded administrative findings)
- Stein’s, Inc. v. Blumenthal, 649 F.2d 463 (7th Cir.) (corporate liability for employees’ violations in FFL context)
- Monell v. Department of Social Services of City of New York, 436 U.S. 658 (1978) (municipal liability principles are inapplicable to corporate vicarious liability here)