Case Information
*1 United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 9, 2013 Decided May 31, 2013
No. 12-5009
T HE N ATIONAL S HOOTING S PORTS F OUNDATION , I NC ., J&G S ALES , L TD . AND F OOTHILLS F IREARMS , LLC, A PPELLANTS v.
B. T ODD J ONES , A CTING D IRECTOR ,
B UREAU OF A LCOHOL , T OBACCO , F IREARMS & E XPLOSIVES ,
A PPELLEE Cоnsolidated with 12-5010 Appeal from the United States District Court for the District of Columbia (No. 1:11-cv-01401) Richard E. Gardiner argued the cause for appellants J&G Sales, Ltd. and Foothills Firearms, LLC. Stephen P. Halbrook was on brief.
James B. Vogts argued the cause for appellant National Shooting Sports Foundation, Inc. Andrew A. Lothson was on brief.
Michael S. Raab , Attorney, United States Department of Justice, argued the cause for the appellee. Stuart F. Delery , Acting Assistant Attorney General, Ronald C. Machen Jr. , United States Attorney, and Anisha S. Dasgupta , Attorney, were on brief.
Steven G. Reade was on brief for the amicus curiae The Brady Center to Prevent Gun Violence in support of the appellee.
Before: H ENDERSON and R OGERS , Circuit Judges , and E DWARDS , Senior Circuit Judge .
Opinion for the Court filed by Circuit Judge H ENDERSON .
K AREN L E C RAFT H ENDERSON , Circuit Judge : In July 2011, in an effort to reduce gun trafficking from the United States to Mexico, the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) issued a demand letter under 18 U.S.C. § 923(g)(5)(A) to a number of federal firearms licensees (FFLs) in four southwest border states: Arizona, California, New Mexico and Texas. The demand letter requires each recipient making two or more sales of a specific type of firearm to the same buyer within five business days to file a report with ATF. The report must include information identifying the FFL, the customer and the firearm. National Shooting Sports Foundation, Inc., J&G Sales, Ltd. and Foothills Firearms, LLC (collectively, NSSF), challenge the demand letter, arguing that ATF lacks statutory authority to issue it and that ATF acted in an arbitrary and capricious manner in selecting which FFLs are subject to it. For the reasons set forth below, we affirm the district court’s grant of summary judgment to ATF.
I. Regulatory/Factual Background
The Gun Control Act of 1968, Pub. L. No. 90-618, 82
Stat. 1213 (codified as amended at 18 U.S.C. §§ 921
et seq.
)
(GCA), requires anyone who wishes to “engage in the
business of . . . dealing in firearms” to obtain a license from
ATF. 18 U.S.C. § 923(a).
[1]
Licensees are known as FFLs and
must comply with various provisions of the GCA, including
recordkeeping requirements.
See id.
§ 923(g). In 1968, the
United States Department of the Treasury
[2]
promulgated
regulations
to
implement certain GCA recordkeeping
requirements.
RSM, Inc. v. Buckles
,
In 1986, the Congress amended the GCA
via
the Firearm
Owners’ Protection Act, Pub. L. No. 99-308, 100 Stat. 449
(1986) (FOPA). FOPA “was intended to reduce the regulatory
burden on law-abiding firearms owners without incapacitating
[ ]ATF’s ability to combat violations of the firearms laws.”
RSM
,
In February 2008, William Hoover (Hoover), the ATF Assistant Director for Field Operations, testified before a subcommittee of the United States House of Representatives regarding an “increased incidence of firearms trafficking to Mexico” from the United States, which “facilitate[d] the drug trade” and threatened safety “on both sides of the border.” Statement of William Hoover, Assistant Director for Field Operations of ATF Before the U.S. House of Representatives Committee on Foreign Affairs Subcommittee on the W. Hemisphere (Feb. 7, 2008) (Joint Appendix (JA) 529-30), available at http://www.atf.gov/press/releases/2008/02/ 020708-testimony-atf-ad-hoover-sw-border.html. Hoover explained that, while criminals had previously used .38 caliber handguns as their “weapon[ ] of choice,” they were developing a preference for “higher quality, more powerful weapons” such as the Colt AR-15 .223 caliber assault rifle and the AK-47 7.62mm caliber assault rifle. Id. (JA 531). Hoover believed that ATF could best combat the trafficking by developing better intelligence, but noted that ATF had difficulty obtaining such intelligence because it was difficult to “trace” firearms recovered in Mexico. See id. JA 531-32.
5
Tracing entails “tracking the movement of a firearm
involved in a crime from its first sale by the manufacturer or
importer through the distribution chain to the non-licensed
purchaser.” Decl. of Arthur Herbert ¶ 5,
Nat’l Shooting Sports
Found., Inc. v. Jones
, No. 11-1401 (D.D.C. Sept. 23, 2011)
(JA 43). Law еnforcement agencies use tracing “to link a
suspect to a firearm in a criminal investigation; to identify
potential traffickers; and to detect patterns in the sources and
kinds of firearms that are used in crime.”
Id.
In other words,
tracing serves as a valuable tool for investigating drug crimes.
Id.
¶ 7 (JA 44). Tracing begins when a law enforcement
officer recovers a firearm used in a crime and makes a “trace
request” by entering the firearm’s identifying information—
e.g.
, serial number, caliber, make and model—into a database
called the “ATF Firearms Tracing System.”
Id.
¶ 6 (JA 44).
ATF compares the identifying information to other firearms
transactions records to “determine[ ] the firearm’s entry point
into U.S. commerce and its path through the distribution
chain.”
Id.
¶ 7 (JA 44);
see also id.
¶¶ 7-10, 39-42 (JA 44-45,
52-53). Because FOPA limits ATF’s ability to collect and
maintain firearms transactions records, however, most of the
records are kept by individual FFLs and not routinely
provided to ATF.
See, e.g.
,
J&G Sales Ltd. v. Truscott
, 473
F.3d 1043, 1045 (9th Cir.) (“Rather than submitting all of
their transaction rеcords to the Bureau, FFLs keep their
records on their own premises. . . . in part because [FOPA] . .
. . ban[s] . . . creating a centralized registration system . . . .
”),
cert. denied
,
The GCA permits ATF to maintain records of firearms transactions in certain circumstances. For example, if an FFL goes out of business, the GCA generally requires that the FFL deliver his records to ATF. [5] 18 U.S.C. § 923(g)(4). The GCA further requires that an FFL report to ATF sales of two or more “pistols, or revolvers, or any combination of pistols and revolvers” to the same buyer within five business days; the report is due by the close of business on the day the multiple sale occurs. Id. § 923(g)(3)(A). Additionally, the GCA permits ATF to send demand letters to FFLs to obtain “record information” therein specified. Id. § 923(g)(5)(A).
If ATF is able to match a trace request with the records it maintains, it can complete a trace request more quickly. See Decl. of Arthur Herbert ¶¶ 39, 41-42 (JA 52-53). For example, “[m]ultiple sales reports [of handguns pursuant to 18 U.S.C. § 923(g)(3)(A)] are entered into ATF’s Firearms Tracing System . . . . When a firearm is traced, it is checked against these reports. A match expedites tracing because ATF does not need to contact all active FFLs in the distribution chain ( e.g. , manufacturers and distributors), but instead only needs to contact the retail dealer.” Id. ¶ 41 (JA 52-53). Therefore, when ATF conducts a trace pertaining to records in its own possession, it can generate more timely and valuable investigative leads for law enforcement. Id. ¶¶ 42-45 (JA 53- 54).
As noted, ATF struggles to trace firearms reсovered from gun trafficking operations into Mexico. Specifically, Mexican cartels have made long guns ( i.e. rifles and shotguns) their new “weapons of choice.” U.S. D EP ’ T OF J USTICE , O FFICE OF I NSPECTOR G EN ., R EVIEW OF ATF’ S P ROJECT THE G UNRUNNER iv (Nov. 2010) (JA 382) (hereinafter OIG R EPORT ). Because—unlike multiple sales of pistols—there is no requirement that an FFL report multiple sales of long guns, however, ATF usually cannot use its own records to conduct a trace request involving Mexican gun trafficking. See id. (JA 382); U.S. G OV ’ T A CCOUNTABILITY O FFICE , F IREARMS T RAFFICKING : U.S. E FFORTS TO C OMBAT A RMS T RAFFICKING TO M EXICO F ACE P LANNING AND C OORDINATION C HALLENGES 28 (June 2009) (JA 582) (hereinafter GAO R EPORT ). Thus, a June 2009 report prepared by the Government Accountability Office (GAO) regarding Mexican arms trafficking recommended that ATF investigate “approaches to address the challenges law enforcement officials raised in this report regarding the constraints on the collection of data that inhibit the ability of law enforcement to conduct timely investigations.” GAO R EPORT at 59 (JA 613). Similarly, a May 2010 report by the Office of the Inspector General (OIG) of the United States Department of Justice found, inter alia , “the lack of a reporting requirement for multiple sales of long guns . . . hinders ATF’s ability to disrupt the flow of illegal weapons into Mexico.” OIG R EPORT at iv (JA 382). The OIG report explained that (1) “the percentage of crime guns recovered in Mexico that were long guns steadily increased each year from 20 percent in FY 2004 to 48 percent in FY 2009,” id. at 38 (JA 428); (2) “long guns tend to have a shorter time-to-crime than handguns, and shorter time-to-crime intervals generate more valuable leads for ATF,” id. ; and (3) “Mexican cartels are obtaining long guns in multiple sales,” id. It concluded that “mandatory reporting of long gun multiple sales could help ATF identify, investigate, and refer for prosecution individuals who illegally traffic long guns into Mexico,” id. at 39-40 (JA 429-30), and recommended that ATF “explore options for seeking a requirement for reporting multiple sales of long guns,” id. at 40, 94 (JA 430, 484). ATF responded that it “would explore the full range of options” but that some options “may require a change to the Gun Control Act.” Id. at 127 (JA 517).
On December 17, 2010, ATF announced a proposed information collection program requiring each FFL to “report multiple sales or other dispositions whenever the [FFL] sells or otherwise disposes of two or more rifles within any five consecutive business days with the following characteristics: (a) [s]emi automatic; (b) a caliber greater than .22; and (c) the ability to accept a detachable magazine.” Agency Information Collection Activities: Proposed Collection, 75 Fed. Reg. 79,021, 79,021 (Dec. 17, 2010). After a sixty-day comment period, ATF received 12,680 comments (8,928 in support and 3,752 in opposition). Agency Information Collection Activities; Proposed Collection Comments Requested: Report of Multiple Sale or Other Disposition of Certain Rifles, 76 Fed. Reg. 24,058, 24,058 (Apr. 29, 2011). ATF subsequently extended the comment period for an additional thirty days and clarified that the multiple-reporting requirement applied only to FFLs classified as licensed “dealers and/or pawnbrokers” located in Arizona, California, New Mexico and Texas. Id.
Accordingly, in July 2011, ATF sent a demand letter to each FFL classified as a “licensed dealer[ or] pawnbroker[ ]” [6] and located “in Arizona, California, New Mexico and Texas.” Letter from Charles Houser, Chief, Nat’l Tracing Ctr., to Fed. Firearms Licensees 1 (Jul. 12, 2011) (JA 32) (hereinafter July 2011 Demand Letter). The demand letter stated in pertinent part:
You must submit to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) reports of multiple sales or other dispositions whenever, at one time or during any five consecutive business days, you 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. You are required to report all such sales that oсcur on or after August 14, 2011 . You must continue reporting multiple sales for the rifles subject to this demand letter until we provide written notice to stop.
The required information must be submitted on ATF Form 3310.12, Report of Multiple Sale or Other Disposition of Certain Rifles, no later than the close of business on the day the multiple sale or other disposition takes place.
Id.
National Shooting Sports Foundation, J&G Sales and Foothills Firearms filed separate actions against ATF on August 3, 2011, and the district court subsequently consolidated them, Order Consolidating Cases, Nat’l Shooting Sports Found., Inc. v. Jones , 11-cv-1401 (Aug. 18, 2011). NSSF sought, inter alia , to enjoin ATF from requiring the Id. The July 2011 demand letter is directed to Type 01 and Type 02 FFLs.
submission of the information requested by the demand letter and to require ATF to destroy any information already submitted. Nat’l Shooting Sports Found., Inc. v. Jones , 840 F. Supp. 2d 310, 312 (D.D.C. 2012). On January 13, 2012, the district court granted ATF’s motion for summary judgment and denied NSSF’s cross-motions for summary judgment. Id. at 323. NSSF timely appealed. Our jurisdiction arises under 28 U.S.C. § 1291.
II.
NSSF’s primary challenge is that ATF lacks statutory authority to issue the demand letter for multiple reasons. Alternatively, it argues that ATF arbitrarily and capriciously failed to tailor the demand letter. [7] We reject both arguments.
A. Section 923(g)(5)(A)
NSSF first argues that ATF’s demand letter authority, 18 U.S.C. § 923(g)(5)(A), does not authorize ATF to issue the letter issued in July 2011. We review ATF’s interpretation of the GCA under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837 (1984). See Resolution Trust Corp. v. Walde , 18 F.3d 943, 948 (D.C. Cir. 1994) (applying Chevron to construction of administrative subpoena powers).
Under Chevron , we ask first “whether Congress has directly spoken to the precise question at issue,” in which case we as well as the agency “must give effect to the unambiguously expressed intent of Congress.” Chevron , 467 U.S. at 842-43. If the “statute is silent or ambiguous with respect to the specific issue,” however, we move to the second step and defer to the agency’s interpretation as long as it is “based on a permissible construction of the statute.” Id.
Section 923(g)(5)(A) of the GCA provides: Each licensee shall, when required by letter issued by the Attorney General, and until notified to the contrary in writing by the Attorney General, submit on a form specified by the Attorney General, for periods and at the times specified in such lettеr, all record information required to be kept by this chapter or such lesser record information as the Attorney General in such letter may specify .
18 U.S.C. § 923(g)(5)(A) (emphasis added). NSSF argues that the demand letter is unlawful because the information it requests is not “record information required to be kept by this chapter or such lesser record information.” We disagree.
“[T]his chapter” is Chapter 44 of Title 18 of the United States Code. 18 U.S.C. § 923(g)(1)(A)—part of Chapter 44— provides that an FFL must “maintain such records of importation, production, shipment, receipt, sale, or other disposition of firearms at his place of business for such period, and in such form, as the Attorney General may by regulations prescribe.” 27 C.F.R. § 478.124(a) provides in turn that an FFL must record firearms transactions with non- FFLs ( i.e. customers) on a Form 4473. The customer initially provides certain identifying information [8] on the Form 4473. Id. § 478.124(c)(1), (d), (e). Additionally, the FFL must record on the Form 4473 “the name of the manufacturer, the name of the importer (if any), the type, model, caliber or gauge, and the serial number of the firearm.” Id. § 478.124(c)(4). The FFL is required to keep these forms in either “alphаbetical (by name of purchaser), chronological (by date of disposition), or numerical (by transaction serial number) order.” Id. § 478.124(b).
The FFL must also create a “Firearms Acquisition and Disposition Record.” Upon acquiring a firearm, the FFL must record “the date of receipt, the name and address or the name and license number of the person from whom received, the name of the manufacturer and importer (if any), the model, serial number, type, and the caliber or gauge.” Id. § 478.125(e). Similarly, no later than seven days after selling the firearm to a non-FFL, the FFL must record “the date of the sale . . . the name and address of the [customer] . . . or the firearms transaction record, Form 4473, serial number if the licensed dealer transferring the firearm serially numbers the Forms 4473 and files them numerically.” Id.
NSSF urges that the July 2011 demand letter requires the FFL to report information beyond what he is currently required to record. As noted, it requires the FFL to submit “reports of multiple sales or other dispositions whenever, at one time or during any five consecutive business days, you sell or otherwise dispose of two or more semi-automatic rifles State of residence; and certification by the transferee that the transferee is not prohibited by the Act from transporting or shipping a firearm in interstate or foreign commerce or receiving a firearm which has been shipped or transported in interstate or foreign commerce or possessing a firearm in or affecting commerce.” 27 C.F.R. § 478.124(c)(1).
capable of accepting a detachable magazine and with a caliber greater than .22 (including .223/5.56 caliber) to an unlicensed person [ i.e. a non-FFL].” July 2011 Demand Letter at 1 (JA 32). NSSF contends that the demand letter requires that an FFL submit three types of information the GCA does not currently require FFLs to record: (1) “the firearm’s type of action” (semi-automatic); (2) “the firearm’s type of ammunition feeding source” (capable of accepting a detachable magazine); and (3) “the number of days between sales of rifles to the same person.” Opening Br. for J&G Sales, Ltd. and Foothills Firearms, LLC 12 (hereinafter FF Opening Br.).
We disagree. The GCA unambiguously authorizes the demand letter and thus our inquiry ends at Chevron step one. NSSF’s argument confuses the conditions precedent to submission with the information submitted. The demand letter provides that, if the conditions precedent are satisfied—that is, the FFL has sold “two or more semi-automatic rifles capable of accepting a detachable magazine and with a caliber greater than .22 . . . to [the same] unlicensed person”—then the FFL has a duty to submit the information requested on Form 3310.12. But Form 3310.12 does not require that the FFL report the rifle’s type of action or the rifle’s ammunition feeding source or the number of days between sales to the same person. Rather, Form 3310.12 requires that the FFL report basic identifying information about the FFL and the customer as well as the rifle’s serial number, manufacturer, importer, model, caliber and sale date—all information “required to be kept” under the GCA, 18 U.S.C. § 923(g)(5)(A), and its implementing regulations. See Bureau of Alcohol, Tobacco, Firearms and Explosives, Form 3310.12, https://www.atf.gov/files/forms/download/atf-f- 3310-12.pdf (JA 34). By limiting its applicability in this manner, the demand letter requires information only about a limited subset of firearms transactions: those that satisfy the conditions precedent. [9] In other words, the July 2011 demand letter’s conditions precedent are not being used to require additional information from FFLs, but instead limit the scope of the information demanded.
NSSF maintains that ATF’s interpretation of the demand letter is flawed because an FFL cannot determine, using only information he is required to record, whether certain rifle sales must be reported. Even assuming arguendo that such a gap could invalidate the demаnd letter, NSSF nevertheless fails to show that an FFL cannot use information he already is required to record to determine whether certain rifle sales satisfy the conditions precedent. First, in determining the number of business days between sales to the same person, the FFL can examine both the sale date and the customer name, information he is required to record pursuant to 27 C.F.R. § 478.124. NSSF responds that the search could be too costly for certain FFLs. It relies on 27 C.F.R. § 478.124(b), which permits the FFL to retain his Form 4473s in alphabetical, chronological or numerical order; NSSF argues that, if an FFL chooses to retain his Form 4473s in some order other than chronological, searching the records would be
15
particularly difficult. Searching records for multiple sales of a particular type of firearm to the same customer, however, is nothing new for FFLs. Since 1975, an FFL who sells “two or more pistols or revolvers [to the same person] аt one time, or during any five consecutive business days” has been required to submit a report to ATF similar to the one at issue. See U.S.C. § 923(g)(3)(A); Pistols and Revolvers; Reporting Requirement on Multiple Sales, 40 Fed. Reg. 19,201 (May 2, 1975). The fact that an FFL chooses to keep his records in alphabetical or numerical order does not mean that the FFL can complain if his choice may not always be the least burdensome. Moreover, there is nothing preventing an FFL from maintaining records in a less burdensome (in this case, chronological) manner.
Second, NSSF fails to explain why an FFL cannot determine a rifle’s type of action and ammunition feeding source using his record of the rifle’s serial number, manufacturer and/or model name. To argue, as NSSF does, that an FFL—who purchases and sells firearms for a living— would price and sell rifles without knowing its type of action and ammunition feeding source blinks reality. And even assuming an FFL could somehow not determine the characteristics of his own rifles, ATF provides a web site and telephone number that the FFL can use to obtain assistance in determining whether a rifle is “semi-automatic” and “capable of accepting a detachable magazine.” See Bureau of Alcohol, Tobacco, Firearms and Explosives, Q&As for the Report of Multiple Sale or Other Disposition of Certain Rifles , http://www.atf.gov/files/firearms/industry/080911-qa- multiple-rifles.pdf. While NSSF argues that it is possible that a rifle has no model designation, see 27 C.F.R. § 478.92(a)(1)(ii)(A) (manufacturer must engrave on each firearm “[t]he model, if such designation has been made ” (emphasis added)), there is no record evidence of a rifle with no model name, nor does the record evince that the absence of a model name causes or could cause the confusion of which NSSF complains. [10] In any event, NSSF does not show that an FFL could not determine the type of action or ammunition feeding source of a rifle lacking a model name from the manufacturer information the FFL dоes possess.
B. Section 923(g)(1)(A) and Legislative History NSSF argues that the demand letter violates 18 U.S.C. § 923(g)(1)(A)’s requirement that an FFL “shall not be required to submit to the Attorney General reports and information with respect to such records and the contents thereof, except as expressly required by this section.” While section 923(g)(5)(A) expressly grants ATF the authority to issue a demand letter, NSSF argues that ATF is using this authority to circumvent more specific provisions contained in section 923(g). See, e.g. , Gozlon-Peretz v. United States , 498 U.S. 395, 407 (1991) (“A specific provision controls over one of more general application.”). We disagree.
NSSF first relies on section 923(g)(1)(A) and (B).
Section 923(g)(1)(A) provides in part that ATF may inspect
an FFL’s premises if it obtains a warrant by showing
“reasonable cause to believe a violation of [the GCA] has
occurred and that evidence thereof may be found on such
premises.” 18 U.S.C. § 923(g)(1)(A). Similarly, under 18
U.S.C. § 923(g)(1)(B)(i) and (iii), ATF may “inspect or
examine the inventory and records of a[n FFL] without such
reasonable cause or warrаnt . . . in the course of a reasonable
inquiry during the course of a criminal investigation of a
person or persons other than the [FFL]” or if “required for
determining the disposition of one or more particular firearms
in the course of a bona fide criminal investigation.” NSSF
contends that, by issuing the July 2011 demand letter, ATF
can “circumvent
the
limits of [the above-discussed
provisions] by sending a demand letter for records without
there being either ‘reasonable cause’ to believe a violation has
occurred or without there being any criminal investigation.”
FF Opening Br. 30. In so contending, NSSF erroneously
conflates provisions that apply in two different contexts. The
inspection provisions of 18 U.S.C. § 923(g)(1)(A) and (B)
apply to
entry onto
an FFL’s premises. By contrast, section
923(g)(5)(A) simply authorizes ATF to require the FFL to
submit information. Further, two sister circuits, addressing
challenges to other demand letters sent by ATF to FFLs,
squarely rejected this argument, explaining that “section
923(g)(1)(B) is aimed at рreventing warrantless,
on-site
searches of FFLs’ records. In contrast, issuance of a letter
under section 923(g)(5)(A) does not involve the entry of
[ ]ATF agents onto an FFL’s premises.”
RSM
,
Next, NSSF relies on section 923(g)(7) which requires an FFL to respond within 24 hours to a trace request aimed at “determining the disposition of 1 or more firearms in the course of a bona fide criminal investigation.” 18 U.S.C. § 923(g)(7). It argues that, by issuing a demand letter, ATF can “circumvent the ‘bona fide criminal investigation’ requirement . . . and compel information to be reported within less than 24 hours.” FF Opening Br. 31. We agree with our sister circuits’ rejection of this argument, to wit, section 923(g)(7)’s specific trace request requirements do not purport to bear on section 923(g)(5)(A)’s demand letter requirements. RSM , 254 F.3d at 66 (“Section 923(g)(7) does not purport either to address or restrict [ ]ATF’s section 923(g)(5)(A) authority tо issue letters. Instead, it establishes the duties of FFLs when they receive a trace request.”); J&G Sales , 473 F.3d at 1050 (“[Section] 923(g)(7) imposes speedy reporting requirements on FFLs in the context of criminal investigations, and neither explicitly nor implicitly serves to limit the Bureau’s power under § 923(g)(5)(A).”).
NSSF also relies on section 923(g)(3)(A) which requires
an FFL to “prepare a report of multiple sales or other
dispositions whenever the licensee sells or otherwise disposes
of, at one time or during any five consecutive business days,
two or more pistols, or revolvers, or any combination of
pistols and revolvers totalling [sic] two or more.” 18 U.S.C.
§ 923(g)(3)(A). It argues that, because the Congress expressly
imposed a multiple reporting requirement for handguns only,
it intended to preclude multiple sales reporting for other types
of firearms. In support, NSSF cites a number of
expressio
unius est exclusio alterius
cases.
See, e.g.
,
Russello v. United
States
, 464 U.S. 16, 23 (1983). The Ninth Circuit rejected a
similar argument, explaining that “[s]imply because some
provisions of § 923 impose specific duties upon FFLs to
respond to certain requests within a specified time frame and
to provide record information sua sponte does not mean that
the Bureau is prohibited from seeking further FFL record
information by demand letter.”
J&G Sales
,
In sum, although section 923(g)(1)(A) prevents ATF
from directing an FFL to submit records “except as expressly
required by this section,” the GCA expressly grants authority
under section 923(g)(5)(A)
to require disclosure of
information
via
a demand letter. As the Ninth Circuit
explained, “[i]t is certainly true that § 923(g)(1)(A) limits the
Bureau’s ability to procure information from FFLs to the
express requirements of § 923, but it does not eviscerate the
content of § 923(g)(5)(A).”
J&G Sales
,
Finally, NSSF contends that the legislative history of FOPA shows that the Congress intended section 923(g)(5)(A) to be limited to “(1) information from FFLs who were in violation of the law, and (2) information from any FFLs about specific firearms dispositions necessary for bona fide criminal investigations.” FF Opening Br. 38. Our sister circuits found no need to analyze legislative history once they concluded that the text of section 923(g)(5)(A) and its surrounding provisions plainly foreclosed arguments similar to those NSSF makes to us. J&G Sales , 473 F.3d at 1050 (“Because we find that—even after considering § 923(g)(5)(A) in its broader context—the statute is clear, we need not address J&G’s exhaustive discussion of 18 U.S.C. § 923’s legislative history.”); Blaustein & Reich, Inc. v. Buckles , 365 F.3d 281, 288 n.15 (4th Cir. 2004) (“Bob’s Gun Shop included in its briefs considerable discussion of the legislative history of § 923(g)(5)(A) and § 926(a), which it claims shows that Congress intended to limit the use of demand letters to criminal investigations and to noncompliant FFLs. Because we find the statute unambiguous on its face, we do not resort to legislative history to determine what Congress intended its enactments to mean.”), cert. denied , 543 U.S. 1052 (2005). We likewise need not resort to the legislative history. “[W]e do not resort to legislative history to cloud a statutory text that is clear.” Ratzlaf v. United States , 510 U.S. 135, 147-48 (1994).
C. Section 926(a) and Creation of a “National Firearms Registry” NSSF also contends that the July 2011 demand letter violates section 926(a), which provides that the Attorney General “may prescribe only such rules and regulations as are necessary to carry out the provisions of this chapter.” 18 U.S.C. § 926(a). That section goes on to say:
No such rule or regulation prescribed after the date of the enactment of the Firearms Owners’ Protection Act [of 1986] may require that records required to be maintained under this chapter or any portion of the contents of such records, be recorded at or transferred to a facility owned, managed, or controlled by the United States or any State or any political subdivision thereof, nor that any system of registration of firearms, firearms owners, or firearms transactions or dispositions be established. Nothing in this section expands or restricts the [Attorney General’s] authority to inquire into the disposition of any firearm in the course of a criminаl investigation.
Id.
NSSF’s argument fails under the plain text of this
provision. Section 926(a) applies to a “rule or regulation” that
is “prescribed after the date of the enactment of the [FOPA].”
The words “rule or regulation” are not mere surplusage; in
fact, section 926(b) explains that “rule or regulation” refers to
rules created after “ninety days public notice” while giving
“interested parties opportunity for hearing.” 18 U.S.C.
§ 926(b). The demand letter is not a rule or regulation and,
therefore, section 926(a) does not apply.
See J&G Sales
, 473
F.3d at 1051;
RSM
, 254 F.3d at 66. Furthermore, the
authority on which ATF relies to issue the demand letter, 18
U.S.C. § 923(g)(5)(A), is itself a statutory provision, not a
regulation.
RSM
,
NSSF also argues thаt the July 2011 demand letter
unlawfully creates a national firearms registry. ATF’s demand
letter authority is not unlimited. We agree with our sister
circuits that the Congress intended to prevent ATF from
“establish[ing] a national firearms registry” by “issu[ing]
limitless demand letters under section 923(g)(5)(A) in a
backdoor effort to avoid section 926(a)’s protections for law-
abiding firearms owners.”
RSM
,
A national firearms registry is a large-scale collection of
records.
Blaustein & Reich
, 365 F.3d at 289 (“Both
consolidating and centralizing connote a large-scale enterprise
relating to a substantial amount of information.”);
see also J&G Sales
,
D. APA Challenge
Under the Administrative Procedure Act, 5 U.S.C. §§ 701
et seq.
(APA), we “set aside agency action, findings, and
conclusions” that are “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordancе with law.” 5 U.S.C.
§ 706(2)(A). An agency must “examine the relevant data and
articulate a satisfactory explanation for its action including a
rational connection between the facts found and the choice
made” to allow us to evaluate the agency’s decision-making
process.
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.
Ins. Co.
, 463 U.S. 29, 43 (1983) (quotation marks omitted).
We may not uphold agency action based on speculation,
see
Williams Gas Processing-Gulf Coast Co. v. FERC
, 475 F.3d
319, 328-29 (D.C. Cir. 2006), or on the
post hoc
rationalization of the agency’s appellate counsel,
State Farm
,
NSSF argues that ATF acted arbitrarily in sending the demand letter to qualifying FFLs located in Arizona, California, New Mexico and Texas instead of considering “actual geographic proximity to the border with Mexico, evidence of established patterns of illegal trafficking activities, and evidence of actual sales of firearms by identified retail sellers under circumstances that ATF considers indicative of illegal firearms trafficking.” Opening Br. for National Shooting Sports Foundation 15-16 (hereinafter NSSF Opening Br.). NSSF suggests that ATF could have used its own data to identify the proximity of each FFL to Mexico, determine how many rifles each FFL sold in a given year or determine how many rifles sold by an FFL were recovered in Mexico and how soon they were recovered after sale. According to NSSF, ATF’s data “demonstrated that the overwhelming majority of retail sellers in the United States and, more specifically, in the Border States, had not sold a single rifle that was later recovered in Mexico.” NSSF Opening Br. 20. Rather, “[s]ales of rifles recovered in Mexico were heavily concentrated among relatively few specifically identified retail sellers.” NSSF Opening Br. 20-21. NSSF thus raises two separate concerns. First, it argues that ATF drew an imрroper line in determining which FFLs to target. Second, NSSF argues that ATF failed to explain why it did not target FFLs based on NSSF’s alternative targeting method.
This line-drawing argument fails. An agency has “wide discretion” in making line-drawing decisions and “[t]he relevant question is whether the agency’s numbers are within a zone of reasonableness, not whether its numbers are precisely right.” WorldCom, Inc. v. FCC , 238 F.3d 449, 462 (D.C. Cir. 2001) (quotation marks omitted). An agency “is not required to identify the optimal threshold with pinpoint precision. It is only required to identify the standard and explain its relationship to the underlying regulatory concerns.” Id. at 461-62; see also ExxonMobil Gas Mktg. Co. v. FERC , 297 F.3d 1071, 1085 (D.C. Cir. 2002) (“We are generally unwilling to review line-drawing performed by the Commission unless a petitioner can demonstrate that lines drawn . . . are patently unreasonable, having no relationship to the underlying regulatory problem.” (quotation marks omitted and ellipsis in original)), cert. denied , 540 U.S. 937 (2003); Leather Indus. of Am., Inc. v. EPA , 40 F.3d 392, 409 (D.C. Cir. 1994) (“Where the agency’s line-drawing does not appear irrational and the [challenger] has not shown that the consequences of the line-drawing are in any respect dire . . . we will leave that line-drawing to the agency’s discretion.”). Here, ATF’s line-drawing plainly satisfies the standard because the problem ATF sought to address is most severe in Arizona, California, New Mexico and Texas. “According to ATF trace data from the ATF Firearms Tracing System, the top four source locations by state for all firearms recovered in Mexico that were submitted for tracing and successfully traced to non-licensed purchasers between December 1, 2006 and August 31, 2010, were Texas, Arizona, California and New Mexico.” Decl. of Arthur Herbert ¶ 34 (JA 51); see also GAO R EPORT at 19 (JA 573) (“From fiscal year 2004 to fiscal year 2008, most of the firearms seized in Mexico and traced came from U.S. Southwest border states. In particular, about 70 percent of these firearms came from Texas, California, and Arizona.”).
Nor is ATF’s targeting method arbitrary and capricious
based on its failure to explain why it did not adopt the NSSF’s
alternative targeting method. While an agency must consider
and explain
its
rejection of “reasonably obvious
alternative[s],”
Natural Res. Def. Council, Inc. v. SEC
, 606
F.2d 1031, 1053 (D.C. Cir. 1979), it need not consider every
alternative proposed nor respond to every comment made,
Thompson v. Clark
, 741 F.2d 401, 408 (D.C. Cir. 1984)
(agency need not “respond to every comment, or [ ] analyze
every issue or alternative raised by the comments, no matter
how insubstantial”). Rather, an agency must consider only
“significant and viable” and “obvious” alternatives.
City of
Brookings Mun. Tel. Co. v. FCC
,
[O]nly comments which, if true, raise points relevant to the agency’s decision and which, if adopted, would require a change in an agency’s proposed rule cast doubt on the reasonableness of a position taken by the agency. Moreover, comments which themselves are purely speculative and do not disclose the factual or policy basis on which they rest require no response. There must be some basis for thinking a position taken in opposition to the agency is true.
Home Box Office, Inc. v. FCC
,
So ordered
.
J&G Sales
, 473 F.3d at 1051-53;
Blaustein & Reich
, 365 F.3d at
291-92. The demand letters in
J&G Sales
and
Blaustein & Reich
targeted FFLs whose sales may have led to firearms trafficking
because
the firearms
they sold were
the subject of a
disproportionate number of trace requests.
See, e.g.
,
J&G Sales
,
Notes
[1] Unless otherwise noted, all citations to statutes or regulations are to the most recent version.
[2] “The GCA originally granted the Secretary of the Treasury
the authority to issue licenses. The Secretary delegated this
authority to [ATF]. As part of the Homeland Security Act of 2002,
the licensing authority was transferred to the Department of Justice.
The Attorney General of the United States, in turn, delegated the
licensing authority to the newly reconfigured Bureau.”
Blaustein &
Reich, Inc. v. Buckles
, 365 F.3d 281, 283 n.3 (4th Cir. 2004)
(citation omitted),
cert. denied
,
[3] FOPA also codified at least one existing rule, 27 C.F.R. § 178.126(a) (1986), in the provisions of 18 U.S.C. § 923(g)(5)(a), quoted infra at Part II.A.
[4] FOPA preserves the Attorney General’s “authority to inquire into the disposition of any firearm in the course of a criminal investigation.” 18 U.S.C. § 926(a).
[5] An FFL going out of businеss does not deliver his records to ATF if (1) he is succeeded by a new FFL; or (2) “where State law or local ordinance requires the delivery of records to other [sic] responsible authority.” 18 U.S.C. § 923(g)(4).
[6] There are eleven categories of FFLs. See United States Department of Justice, The Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Online—Statistics—Listing of Federal Firearms Licensees , http://www.atf.gov/about/foia/ffl-list.html. Type 01 is a dealer in firearms other than destructive devices. Id. Type 02 is a pawnbroker in firearms other than destructive devices.
[7] National Shooting Sports Foundation’s brief in this court asserts that ATF’s action is arbitrary and capricious while the brief submitted by J&G Sales and Foothills Firearms asserts that ATF lacks statutory authority to issue the demand letter. Each brief incorporates the arguments of the other.
[8] Specifically, the transferee must disclose his “name, sex, residence address (including county or similar political subdivision), date and place of birth; height, weight and race of the transferee; the transferee’s country of citizenship; the transferee’s INS–issued alien number or admission number; the transferee’s
[9] NSSF also complains that FFLs ordinarily have seven days from the transaction date to record the sale or disposition of a firearm in a Firearms Acquisition and Disposition Record, 27 C.F.R. § 478.125(e), and that, because the demand letter requires that FFLs report multiple sales by the close of business on the day of the second sale, it contravenes section 478.125(e). The demand letter, however, does not require that FFLs record any information in a Firearms Acquisition and Disposition Record; it simply requires that FFLs report certain sales. NSSF thus improperly conflates the recording requirement of section 478.125(e) with the requirement that an FFL respond to a demand letter set forth in 18 U.S.C. § 923(g)(5)(A).
[10] At oral argument, NSSF’s counsel conceded that there is no record evidence establishing that the absenсe of a model name causes confusion: THE COURT: . . . . There’s no record evidence in this case from you indicating this confusion about model number and what a model number means, right? MR. GARDINER: . . . [T]here is no evidence in the record concerning that, that’s correct . . . . Oral Argument at 36:15-36:28, Nat’l Shooting Sports Found. v. Jones , No. 12-5009 (D.C. Cir. Jan. 9, 2013).
[11] NSSF argues that the appropriations rider makes unlawful
the demand letter because the demand letter requires information to
be sent to “ATF’s National Tracing
Center
” and thus requires the
centralization of records. FF Opening Br. 44 (emphasis in original).
The Congress enacted section 923(g)(5) in 1986,
after
enacting the
first appropriations rider, so it could not have intended to authorize
the record collection in section 923(g)(5) while simultaneously
prohibiting it.
See RSM
,
[12] While National Shooting Sports did comment that firearms purchasers could avoid detection by “shift[ing] their trafficking activities outside the four[ ]states of this proposed requirement,” JA 723, NSSF’s present proposal to target only individual dealers instead of entire states raises the same concern. ATF notes that if the demand letter targeted only certain dealers rather than entire states, purchasers could simply travel to another dealer, instead of another state, to avoid detection. ATF Br. 52-54. Moreover, ATF notes that adopting NSSF’s proposal would “require ATF to constantly adjust the specific licensees subject to the reporting requirement.” ATF Br. 55.
[13] ATF concluded in response to comments that “the overall burden of this collection will be minimal to FFLs” as it affects FFLs in “four southwest border states,” does not affect FFLs “who do not make multiple sales” of certain rifles to the same person in a five-business-day period and will take an FFL only twelve minutes to fill out each report. JA 748.
[14] The fact that the demand letters reviewed in J&G Sales and Blaustein & Reich targeted specific FFLs based on whether the FFL had ten or more traces within the period between sale and recovery of three years or less does not make that option “obvious” here.