Federal Judge Issues Stay on ATF Rule Restricting Private Gun Sales

Texas Attorney General Ken Paxton speaks during the annual Conservative Political Action Conference (CPAC) meeting in National Harbor, Md., on Feb. 23, 2024. Mandel Ngan/AFP via Getty Images

Texas Attorney General Ken Paxton secured a temporary restraining order in a case against a Biden administration rule that would affect American citizens who engage in the private sale of guns.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) has the authority to administer and enforce the Gun Control Act of 1968, which makes it unlawful for any individual other than a licensed dealer to engage in the business of dealing in firearms until they have received a license from the ATF.

In 1986, the definition of “engaged in the business” was modified in the law to mean an individual who devotes his time and attention to dealing in firearms as a regular course of business “with the principal objective of livelihood and profit” through such activities.

In 2022, President Joe Biden signed into law the Bipartisan Safer Communities Act, which further expanded the meaning by stating that the “principal objective” of the individual engaged in firearms trade needs to “predominantly earn a profit” rather than “livelihood and profit.”

In April, the ATF published a final rule adopting this definition of the term “engaged in the business” to determine whether a person selling firearms was engaged in the trade or to pursue legal action. On May 1, Mr. Paxton led a coalition of states and several organizations to sue the ATF, the U.S. Department of Justice (DOJ), the attorney general, and the ATF director.

The lawsuit argued that the final rule would subject “hundreds of thousands of law-abiding gun owners to presumptions of criminal guilt” for merely practicing their constitutionally protected right to engage in private firearm sales.

It warned that the rule would make many Americans “felons overnight” and asked the court to issue a stay on the final rule until its merits are legally reviewed.

Violation of Procedure

On May 19, U.S. District Judge Matthew J. Kacsmaryk sided with plaintiffs in the case, temporarily restraining the ATF and DOJ from enforcing the final regulations until June 2 as the plaintiffs seek a permanent injunction.

In the court order, Judge Kacsmaryk said that ATF clarified in its final rule that even a “single firearm transaction or offer to engage in a transaction” may require a license.

The final rule states that firearms dealing can also happen via “a gun show or event, flea market, auction house, or gun range or club; at one’s home; by mail order; over the internet.”

Judge Kacsmaryk noted that the plaintiffs are “substantially likely to prevail on the merits,” noting that the ATF’s final rule “likely violates” the Administrative Procedure Act.

The Administrative Procedure Act requires that agencies must “point to explicit Congressional authority justifying their decisions.” As such, courts are obliged to set aside agency actions deemed to be arbitrary and not within a department’s authority.

The judge pointed out that the final rule’s determination that “even a single firearm transaction or offer to engage in a transaction … may be sufficient to require a license” is not in accordance with the provision of the Bipartisan Safer Communities Act.

The act states that “engaged in the business” only means someone who makes a profit through “the repetitive purchase and resale of firearms.” It clearly mentions the definition is inapplicable to individuals who make “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.” This comes under the safe harbor provision of the rule.

Judge Critical of ATF

Despite knowing that two-thirds of Americans own firearms for defense and protection purposes, the ATF maintains its interpretation, which means that the provision provides “no safe harbor at all for the majority of gun owners” if the final rule were to be implemented, Judge Kacsmaryk wrote.

Moreover, the final rule creates various “highly problematic” presumptions such as suggesting “when a person has the intent to ‘predominantly earn a profit.’”

Such presumptions require firearm owners to prove innocence rather than the government to prove guilt, the court order said.

“Plaintiffs understandably fear that these presumptions will trigger civil or criminal penalties for conduct deemed lawful just yesterday,” the judge wrote. “Nevertheless, ATF avers that its ‘knowledge of existing case law’ and ’subject-matter expertise‘ will prevent misuse or abuse of the presumptions. In other words, ’just trust us.'”

After the ruling, Mr. Paxton said he was “relieved that we were able to secure a restraining order that will prevent this illegal rule from taking effect. The Biden Administration cannot unilaterally overturn Americans’ constitutional rights and nullify the Second Amendment.”

When the DOJ announced the updated definition of “engaged in the business” as a firearms dealer in April, Attorney General Merrick B. Garland justified the rule, saying it would protect lives.

“Under this regulation, it will not matter if guns are sold on the internet, at a gun show, or at a brick-and-mortar store: if you sell guns predominantly to earn a profit, you must be licensed, and you must conduct background checks,” he said. “This regulation is a historic step in the Justice Department’s fight against gun violence. It will save lives.”

ATF Director Steven Dettelbach said the final rule is about “ensuring compliance with an important area of the existing law where we all know, the data show, and we can clearly see that a whole group of folks are openly flouting that law. That leads to not just unfair but, in this case, dangerous consequences.”

“This is about protecting the lives of innocent, law-abiding Americans as well as the rule of law,” Mr. Dettelbach said. “There is a large and growing black market of guns that are being sold by people who are in the business of dealing and are doing it without a license.”

The Epoch Times reached out to the ATF and DOJ for comment.