Federal firearms license (FFL) holders are under far more scrutiny these days than they have ever been before.  An FFL is the license a person or business needs to be a licensed gun seller.    The Gun Control Act (GCA) of 1968, codified in 18 U.S.C. Sect. 923(a), requires firearms dealers to maintain a license from the Attorney General.  But the Attorney General, after notice and a hearing, has the power to revoke a license if the holder has “willfully violated” any provision of the Gun Control Act.  But what is a willful violation?    

Unfortunately, “any provision” has meant exactly that:  even minor violations can mean that FFLs may find themselves facing a revocation hearing.  Beginning in 2021, the Bureau of Alcohol, Tobacco, and Firearms (ATF) instructed its agency personnel to seek license revocations for certain first-time violations of the Gun Control Act.

After extensive dealings and communications with the ATF, Phillips & Thomas was recently successful in preventing an FFL from losing his license. 

The FFL was a gun dealer located in the metro Kansas City area.  To understand what happened, it is important to understand how the federal firearms licensing process works.  A federal firearms license is an essential prerequisite to running a firearms business.  If a firearms license is granted from the Attorney General, the licensee may deal, manufacture, transfer, or import firearms subject to a large number of rules and regulations. 

The holder of an FFL is required to keep detailed records to document compliance with all relevant regulations.  The ATF conducts regular audits and inspections to make sure that FFLs are in compliance.  Even minor violations can land an FFL in hot water very quickly.  A “willfull violation” occurs when the holder of the FFL “knew of its obligations and purposefully disregarded or was plainly indifferent to the record keeping process.”  The problem for FFLs is that it does not take much to run afoul of this standard. 

In the case of Phillips & Thomas’s client, the FFL holder had been audited by the ATF.  There were some deficiencies noted in the paperwork related to the storage and transfer of several firearms.  The ATF sent the client a notice stating the problems, and provided an opportunity for the FFL holder to remedy the deficiencies.  When additional issues were noted during another audit, the ATF found the FFL holder in violation of the GCA, and gave the FFL holder the opportunity for an administrative hearing to dispute the license revocation. 

At the hearing, if the ATF decides to reverse its decision, it will inform the FFL holder.  If the ATF decides not to reverse its decision, the FFL holder’s only recourse then is to petition a U.S. District Court for relief.  In those situations, the District Court then decides whether the FFL holder willfully violated the Gun Control Act and whether the ATF correctly revoked the license.    

In Phillips & Thomas’s case, the matter went to an administrative hearing.  We were able to show to the ATF’s satisfaction that:  (1) the audit and inspection deficiencies had been corrected, and (2) there was a specific plan in place that would prevent the problems from happening again.  Considering the ATF’s strict interpretation of the Gun Control Act, it is not easy for an FFL to prevail in these administrative hearings.  We are proud of the fact that our client was able to preserve his license and keep his firearms business. 

If you are the holder of a FFL and find yourself facing issues with the ATF, please give us a call at 913-385-9900.