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General Store, Inc. v. Van Loan

March 31, 2009

THE GENERAL STORE, INC., PLAINTIFF-APPELLANT,
v.
RICHARD VAN LOAN, DIRECTOR OF INDUSTRY OPERATIONS, SEATTLE FIELD DIVISION, BUREAU OF ALCOHOL TOBACCO AND FIREARMS, ATF, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Eastern District of Washington Fred L. Van Sickle, District Judge, Presiding D.C. No. CV-06-00103-FVS

The opinion of the court was delivered by: McKEOWN, Circuit Judge.

FOR PUBLICATION

Argued and Submitted October 22, 2008-Seattle, Washington

Filed December 31, 2008; Amended March 31, 2009

Before: Barry G. Silverman, M. Margaret McKeown and Marsha S. Berzon, Circuit Judges.

OPINION

The General Store appeals the district court's grant of summary judgment upholding the revocation of The General Store's federal firearms dealer license for willful violations of federal and state firearms laws. This appeal gives us occasion, following the Supreme Court's decision in Safeco Insurance Company of America v. Burr, 551 U.S. __, 127 S. Ct. 2201 (2007), to consider the definition of "willfully" in the Gun Control Act of 1968, codified at 18 U.S.C. §§ 921-930. We hold that the violations were willful and therefore affirm the revocation of The General Store's federal firearms license.

BACKGROUND

The General Store is an aptly named retailer in Spokane, Washington. The General Store maintains a federal firearms dealers license in order to sell, among its many wares, firearms and ammunition.

The Gun Control Act of 1968 and related regulations impose certain requirements on federal firearms licensees. Two provisions are pertinent to this appeal. First, the Gun Control Act specifies record keeping requirements, including maintaining "such records of importation, production, shipment, receipt, sale, or other disposition of firearms at [the] place of business for such period, and in such form, as the Attorney General may by regulations prescribe." 18 U.S.C. § 923(g)(1)(A). The regulations, in turn, prescribe that licensed firearms dealers must "enter into a record each receipt and disposition of firearms." 27 C.F.R. § 478.125(e). The regulations include a form for the record-commonly called an Acquisition and Disposition Record-that requires specific information be gathered and recorded. See id. Second, licensed firearms dealers may not conduct transactions that violate state law. 18 U.S.C. § 922(b)(2). For example, Washington law requires that firearms dealers send a copy of all handgun applications "to the chief of police of the municipality or the sheriff of the county of which the purchaser is a resident." Wash. Rev. Code § 9.41.090(5). Under the licensing provisions of the Gun Control Act, the Attorney General has the authority to "revoke any license issued under this section if the holder of such license has willfully violated" any provision of the Act or the related regulations. 18 U.S.C. § 923(e).

The Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"), as well as state officials, periodically sends letters to all firearms dealers with information about federal and state laws and instructions for compliance. Two such letters preceded the violations at issue here. In November 1998, the ATF issued an Open Letter to All Washington Federal Firearms Licensees regarding compliance with the permanent provisions of the Brady Law, 18 U.S.C. § 922(t). The letter instructed licensees "to contact the chief law enforcement officer in the jurisdiction of the purchaser's residence, in accordance with State law requirements" to conduct background checks for handgun transactions. An undated follow-up letter, labeled a "Correction Notice," clarified a point about concealed pistol licenses and reaffirmed the Brady Act requirement that: "[l]icensees should continue to contact the chief law enforcement officer in the jurisdiction of the purchaser's residence to request a background check for handgun purchasers who do not have any concealed pistol license."

In 2000, the ATF inspected The General Store and issued a Report of Violations. The ATF cited The General Store for three separate record keeping violations and, most notably, one violation of the receipt and disposition requirement, 27 C.F.R. § 478.125(e).*fn1 The subsection (e) violation was because "[o]ne firearm acquisition and 185 dispositions were not recorded . . . [l]icensee used sale date, not actual transfer date for dispositions recording some dispositions prior to actual transfer . . . [and] [l]icensee failed to record actual date of receipt of firearms." The ATF instructed The General Store to "establish controls to ensure all future entries are correct" no later than May 19, 2000. Following the inspection, the ATF held a warning conference on June 16, 2000, in which representatives met with William Barany, The General Store's president, "to discuss the manner in which [The General Store] plan[s] to prevent these violations from re-occurring."

The ATF next inspected The General Store in 2001 and issued a Report of Violations on October 15, 2001. The ATF cited The General Store for violations of 27 C.F.R. § 478.44, § 478.99, § 478.124, and § 478.125(e). Significantly, there was a "Repeat Violation" of § 478.125(e) for one unlogged firearm that was leaning against The General Store's counter; it was a customer's gun obtained for repair. The ATF required the following corrective action:

Immediately record all acquisition information on firearms that have remained on premises overnight. Implement internal controls as was discussed during the June 16, 2000 warning conference. Firearms acquired for gunsmithing, repairs, sights, or any other reason should be recorded by some one [sic] or in some way so that firearms returned or otherwise ...


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