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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SANFORD ABRAMS,
Plaintiff,
v.
CARL J. TRUSCOTT,
Director, Bureau of Alcohol, Tobacco,
Firearms & Explosives
Defendant.

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Civil Action No.: 06-643 (CKK)

MOTION TO DISMISS OR IN THE ALTERNATIVE TO TRANSFER
Defendant in this case, Carl J. Truscott, Director, Bureau of Alcohol, Tobacco, Firearms
and Explosives (“ATF”), moves to dismiss this case for lack of subject matter jurisdiction,
pursuant to Rule 12(b)(1). Alternatively, Defendant moves to transfer the case to the U.S.
District Court for the District of Maryland, pursuant to 28 U.S.C. § 1404(a). Plaintiff in this case
seeks to bar the ATF from prosecuting him. Because there is no justiciable controversy, Plaintiff
lacks standing and his case should be dismissed. In addition, Plaintiff is litigating essentially the
same claims in a case he filed in the District of Maryland (now pending before the Fourth
Circuit). Accordingly, transfer would be appropriate if the Court finds that it does have
jurisdiction.
A memorandum in support of this motion is attached, along with a proposed order.

June 15, 2006

Respectfully submitted,

KENNETH L. WAINSTEIN, D.C. Bar # 451058
United States Attorney

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RUDOLPH CONTRERAS, D.C. Bar # 434122
Assistant United States Attorney
/s/
ALAN BURCH, D.C. Bar # 470655
Assistant United States Attorney
555 4th St., N.W.
Washington, D.C. 20530
(202) 514-7204
alan.burch@usdoj.gov
Of Counsel:
Stephen R. Rubenstein
Chief Counsel
Joel J. Roessner
Associate Chief Counsel (Litigation)
Bureau of Alcohol, Tobacco, and Firearms

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SANFORD ABRAMS,
Plaintiff,
v.
CARL J. TRUSCOTT,
Director, Bureau of Alcohol, Tobacco,
Firearms & Explosives
Defendant.

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Civil Action No.: 06-643 (CKK)

DEFENDANT’S MEMORANDUM IN SUPPORT MOTION TO DISMISS
OR IN THE ALTERNATIVE TO TRANSFER
Defendant in this case, Carl J. Truscott, Director, Bureau of Alcohol, Tobacco, Firearms
and Explosives (“ATF”), moves to dismiss this case for lack of subject matter jurisdiction,
pursuant to Rule 12(b)(1). Plaintiff in this case seeks to bar the ATF from prosecuting him for
dealing in firearms in violation of 18 U.S.C. § 921(a)(21)(C). Because there is no justiciable
controversy presented in this case, Plaintiff lacks standing and his case should be dismissed.
Alternatively, in the event the Court determines that it does have jurisdiction, Defendant moves
to transfer the case to the United States District Court for the District of Maryland, pursuant to
28 U.S.C. § 1404(a). Transfer to Maryland is appropriate because Plaintiff brought suit in the
District of Maryland and raised essentially the same claims.
Background
Plaintiff, as the president of RSM, Inc. d/b/a Valley Gun, held a Federal Firearms License
as a dealer in firearms, (Compl. ¶ 4), meaning he could engage in the business “of dealing in
firearms as a regular course of trade or business with the principle objective of livelihood or

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profit through the repetitive purchase and resale of firearms” per 18 U.S.C. § 921(a)(21)(C).
Much of the relevant background in this case is a matter of public record, because Plaintiff is
challenging the ATF’s seizure of RSM’s Federal Firearms License in the a civil action he filed in
the District of Maryland. See RSM, Inc. v. Herbert, No. WMN-05-847 (D. Md. filed Mar. 29,
2005).
A.

Plaintiff’s Challenge to ATF’s Seizure of RSM’s Federal Firearms License In
the District of Maryland.

In 1997, an ATF inspection of RSM uncovered several violations of the Gun Control Act
(GCA) of 1968, as amended, and its corresponding regulations, 27 C.F.R. Part 478. See RSM,
Inc. v. Herbert, No. WMN-05-847, Mem. Op. at 2 (D. Md. Feb. 23, 2006), attached hereto as Ex.
1. The violations included deficiencies in RSM’s Acquisition and Disposition Records (“A&D
Book”), incorrectly or incomplete Firearms Transaction Records (“Form 4473”), and 45 missing
firearms.
A 1999 inspection uncovered more discrepancies in the A&D Book, improperly
completed Form 4473s, and missing firearms. See id. at 2-3. In January of 2000, a “warning
conference” was held with plaintiff, at which he was warned that future violations could result in
the revocation of his dealer’s license. Id. Plaintiff indicated that he understood the
recordkeeping requirements and would improve in the future. Id.
In September 2001, another ATF inspection found the same A&D Book and Form 4473
deficiencies and 133 missing weapons, as well as a failure to record National Instant Criminal
Background Check System (NICS) information as required by 27 C.F.R. § 478.102 and a failure
to record multiple handgun sales as required by 27 C.F.R. § 478.126a. Id. at 3. After the 2001
inspection a second warning conference was held with plaintiff. Id.
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Another ATF inspection in May 2003 uncovered numerous problems again with RSM’s
A&D Book and Form 4473s, and found 422 firearms unaccounted for (later reduced to 287). Id.
at 4. ATF issued a Notice of Revocation of License on May 4, 2004. Id.; Compl. ¶ 6. RSM
requested an administrative hearing and one was held on October 6, 2004. RSM v. Herbert at 3;
Compl. ¶¶ 7-8. On October 29, 2004, the hearing officer found that RSM willfully violated the
GCA and its regulations and upheld the revocation. RSM v. Herbert at 4-5. A Final Notice of
Revocation was issued on February 2, 2005; a stay of the effective date was issued while RSM
sought judicial review. Id. at 5; accord Compl. ¶ 9.
RSM petitioned the United States District Court for the District of Maryland pursuant to
18 U.S.C. § 923(f)(3) for a de novo review of ATF’s decision to revoke its license. RSM v.
Herbert at 5; Compl. ¶ 10. The district court upheld the revocation and dismissed RSM’s
petition on February 23, 2006. RSM v. Herbert at 1, 11; Compl. ¶ 11. The ATF seized RSM’s
Federal Firearms License the next day. Compl. ¶ 12.
B.

Plaintiff’s Intentions to Sell the Firearms and This Case.

ATF agreed to give RSM thirty days from February 23, 2006 to wind down its
operations. On February 24, 2006, plaintiff’s attorney contacted ATF Assistant Chief Counsel
Jeff Cohen via e-mail to clarify what could and could not be done within the 30-day window.
See Ex. to Compl. (email chain). On February 27, 2006, Mr. Cohen advised Mr. Gardiner that
no new sales of inventory could be conducted and no new firearm purchases could be made after
February 23, 2006, and suggested that plaintiff contact other Federal firearms licensees to
dispose of RSM’s remaining inventory, which is believed to consist of thousands of firearms.
Id. Mr. Gardiner then asked if the inventory could be transferred to plaintiff personally; Mr.
Cohen responded yes, but cautioned Mr. Gardiner that because plaintiff no longer held a license,
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he could not “engage[] in the business” of dealing in firearms. Id. Mr. Gardiner responded that
the term “engaged in the business” means the repetitive purchase and resale of firearms, not only
sales of firearms. Id. Mr. Cohen then replied that “If the situation arises, a court can interpret
the meaning of that phrase applying the specific facts of that case. As always, you are free to
advise your client based on your interpretation of the Gun Control Act.” Id.
RSM then filed a motion in the district court in Maryland to compel the ATF to permit
RSM to continue to operate until and unless the district court’s decision became final and
unappealable. See RSM, Inc. v. Herbert, No. WMN-05-847, Mem. Op. at 1 (D. Md. Mar. 15,
2006) (denying the motion), attached hereto as Ex. 2. RSM appealed the case to the Fourth
Circuit. See RSM v. Herbert, No. 016-1393 (4th Cir. docketed Apr. 3, 2006).
In the instant action before this Court, Plaintiff alleges that “an agent and employee of
Defendant has threatened Plaintiff Abrams with seizure and forfeiture of the inventory and with
criminal prosecution. See Compl. ¶ 22; see also id. ¶ 26 (“Defendant’s agent/employee has
threatened Plaintiff Abrams with seizure and forfeiture of the inventory and with criminal
prosecution[.]”). Plaintiff asks the Court to enjoin ATF from such forfeiture and prosecution and
declare the prospective sale of plaintiff’s firearms to be lawful.
Standard of Review
A motion under Rule 12(b)(6) tests the legal sufficiency of the complaint and, therefore,
in deciding a motion to dismiss under Rule 12(b)(6), the Court must presume that the factual
allegations in the complaint are true and liberally construe those factual allegations in favor of
the plaintiff. See, e.g., Shear v. NRA, 606 F.2d 1251, 1253 (D.C. Cir. 1979). In addition to the
liberally construed facts in the complaint, the Court may consider certain additional evidence in
deciding the motion. For example, the D.C. Circuit specifically held that federal courts may take
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“judicial notice of facts on the public record,” including judicial decisions, as part of the factual
assumptions used in evaluating a motion to dismiss under Rule 12(b)(6). See Covad Comm. Co.
v. Bell Atlantic Corp., 407 F.3d 1220, 1222 (D.C. Cir. 2005). See also Arizmendi v. Lawson,
914 F. Supp. 1157, 1160-61 (E.D. Pa. 1996) (“In resolving a Rule 12(b)(6) motion to dismiss, a
court may properly look beyond the complaint to matters of public record including court files,
records and letters of official actions or decisions of government agencies and administrative
bodies, documents referenced and incorporated in the complaint and documents referenced in the
complaint or essential to a plaintiff’s claim which are attached to a defendant’s motion.”).
Legal conclusions, assertions, or arguments in the complaint are not to be presumed true,
liberally construed, or otherwise deferred to by the court. See In re Delorean Motor Co., 991
F.2d 1236, 1240 (6th Cir. 1993).
Argument
I.

The Court Lacks Subject Matter Jurisdiction Over Plaintiff’s Claims.
A.

Plaintiff Does Not Present a Justiciable Case or Controversy.

Plaintiff fails to present a justiciable case or controversy. The “threshold inquiry” for
subject matter jurisdiction is whether the complaint “alleges a ‘case’ or ‘controversy’ as required
by both Article III of the Constitution and the Declaratory Judgment Act [28 U.S.C. § 2201].”
Gem County Mosquito Abatement Dist. v. EPA, 398 F. Supp. 2d 1, 6 (D.D.C. 2005). “Serv[ing]
to identify those disputes which are appropriately resolved through the judicial process is the
doctrine of standing.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal
citations omitted). To establish standing, a plaintiff must meet three requirements. “First, the
plaintiff must have suffered an ‘injury in fact’—an invasion of a legally protected interest which
is (a) concrete and particularized, and (b) actual or imminent, not ‘conjectural’ or
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‘hypothetical.’” Id. (internal citations omitted). “Second, there must be a causal connection
between the injury and the conduct complained of—the injury has to be ‘fairly … trace[able] to
the challenged action of the defendant, and not … th[e] result [of] the independent action of
some third party not before the court.’” Id. And third, “it must be ‘likely,’ as opposed to merely
‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Id. at 561; see also
Cruz v. American Airlines, Inc., 356 F.3d 320, 328 (D.C. Cir. 2004) (“To establish standing, the
[plaintiff] must show that [defendant’s] actions have caused them some concrete injury that this
declaratory and injunctive relief will redress.”)
1.

There is no “Actual Controversy” Regarding 18 U.S.C.
§ 921(a)(21)(C).

“An Article III court … may not adjudicate a dispute until it has … crystallized as an
actual ‘case’ or ‘controversy.’” Pfizer Inc. v. Shalala, 182 F.3d 975, 980 (D.C. Cir. 1999).
Before undertaking to decide any dispute brought before it, a federal court must first
assure itself that the dispute presented by the parties represents a justiciable “case” or
“controversy”; that is, … the factual claims underlying the plaintiff’s challenge are
concrete enough and the legal issues submitted for decision sharply focused enough to
ensure that a genuine clash between the parties exists.
Gem County, 398 F. Supp. 2d at 6; see also Babbitt v. United Farm Workers Nat’l Union, 442
U.S. 289, 298 (1979) (“The basic inquiry is whether the ‘conflicting contentions of the parties
. . . present a real, substantial controversy between parties having adverse legal interests, a
dispute definite and concrete, not hypothetical or abstract.’”).
There is no “actual controversy” as to the meaning of “engaged in the business” as
defined by 18 U.S.C. § 921(a)(21)(C). In order to be engaged in the business as a dealer, a
person must in the regular course of business, with the principle objective of making a profit,
repeatedly purchase and resell firearms. This is consistent with plaintiff’s claim that he “will
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not be ‘engaged in the business of selling firearms at wholesale or retail’ within the meaning of
18 U.S.C. § 921(a)[(21)](C) as he will not be repetitively purchasing and reselling firearms.”
Compl., Para. 21; see also id. Paras. 16-18. It has been ATF’s long standing position that (in
cases such as plaintiff’s) when a dealer loses his license he can dispose of his inventory by
selling those firearms without being deemed to have engaged in the business without a license in
violation of 18 U.S.C. § 922(a)(1)(A). Plaintiff will only run afoul of section 922(a)(1)(A) if he
chooses to purchase and resell firearms. Therefore, there is simply no dispute as to the language
of section 921(a)(21)(C). See Gem County, 398 F. Supp. 2d at 8 (The court held that because
“there is no real dispute between the Plaintiffs and EPA arising from its interpretations of the
two environmental statutes … standing appears to be absent.”); id. (The “mere fact that EPA
issues or denies permits under the [Clean Water Act] does not by itself, create an adversarial
relationship, nor does it create a case or controversy between it and the Plaintiffs.”)
2.

Plaintiff Has Suffered No Injury.

Plaintiff claims he has been threatened with “seizure and forfeiture of the inventory and
with criminal prosecution.” Compl. Para. 22. While the “D.C. Circuit has recognized that ‘[a]
credible threat of imminent prosecution can injure [a] threatened party by putting [him] between
a rock and a hard place,’” such a threat must still be “credible and immediate, and not merely
abstract or speculative” to be considered an injury in fact. Gem County, 398 F. Supp. 2d at 8;
see also United Farm Workers, 442 U.S. at 298 (“[P]ersons having no fears of … prosecution
except those that are imaginary or speculative, are not to be accepted as appropriate plaintiffs.”);
Seegars v. Gonzales, 396 F.3d 1248, 1252 (D.C. Cir. 2005) (“If the threat is imagined or wholly
speculative, the dispute does not present a justiciable case or controversy.”), cert. denied, 126 S.
Ct. 1187 (2006). “[A] general threat of prosecution is not enough to confer standing.” San
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Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1127 (9th Cir. 1996).
Here there is no credible threat of prosecution. In an e-mail exchange in response to a
question posed by Plaintiff’s attorney, agency counsel reminded Plaintiff’s counsel that if
Plaintiff “were to engage in dealing firearms without a license, the inventory involved in these
violations would be subject to seizure and forfeiture and Mr. Abrams could be subject to
criminal prosecution.” Ex. to Compl. (emphasis added). This is simply a statement of what
could happen if plaintiff violates the law. Moreover, the authority to bring a criminal
prosecution for a violation of the Federal firearms laws is solely within the province of the
United States Department of Justice, generally the United States Attorney’s Offices. See United
States v. Nixon, 418 U.S. 683, 693 (1974) (“the Executive Branch has exclusive authority and
absolute discretion to decide whether to prosecute a case”); accord United States Attorneys’
Manual 3-2.140.
Several pre-enforcement challenges have been made to various provisions of the Gun
Control Act, some involving claims of future prosecution like this case, and the courts uniformly
dismiss such cases for lack of injury and standing. “Significantly, the mere ‘possibility’ of
criminal sanctions applying does not itself create a case or controversy.” San Diego Gun Rights
Comm., 98 F.3d at 1126 (finding no standing based upon the threat of prosecution where the
plaintiffs alleged an intention to violate the Gun Control Act). See Navegar, Inc. v. United
States, 103 F.3d 994, 1001 (D.C. Cir. 1997) (finding no standing on the part of certain
manufacturers because the court found the threat of prosecution inadequate, even where ATF
agents visited the manufacturers and took an inventory of their weapons); National Rifle Ass’n
of America v. Magaw, 132 F.3d 272, 293-94 (6th Cir. 1997) (although some of the individual
plaintiffs telephoned ATF agents, “submitted a hypothetical question, and received an answer
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that the questioned activity could subject them to federal prosecution,” the Sixth Circuit still
found that such activity “does not confer standing” because the “threat of prosecution against
these plaintiffs is still abstract, hypothetical, and speculative”); Crooker v. Magaw, 41 F. Supp.
2d 87, 88-90 (D. Mass. 1999) (plaintiff, having received a negative response from ATF to his
written request to possess a certain kind of ammunition, could not show an injury in the fear of
possible future prosecution).
This facts presented in this case are similar to those in NRA and Crooker in that Plaintiff
asked ATF for advice, did not like the answer, and thus claimed he was “threatened” with
prosecution. However, an individual’s dislike of, or disagreement with, the answer he receives
is irrelevant. The “threat” faced by Mr. Abrams—if he breaks the law at some time in the future,
he may be prosecuted as a result—is the same “threat” faced by every member of society.
If the statutes that might be possibly enforced against respondents are valid laws, and if
charges under these statutes are not improvidently made or pressed, the question becomes
whether any perceived threat to respondents is sufficiently real and immediate to show an
existing controversy simply because they anticipate violating lawful criminal statutes and
being tried for their offenses …. But it seems to us that attempting to anticipate whether
and when these respondents will be charged with crime and will be made to appear …
takes us into the area of speculation and conjecture.
O’Shea v. Littleton, 414 U.S. 488, 496-97 (1974). “In so-called ‘threat of prosecution’ cases, the
distinction has been made between specific and general threats of an intent to commence legal
action.” Venetian Casino Resort v. Cortez, 96 F. Supp. 2d 1102, 1107-08 (D. Nev. 2000) (The
district court found a threat to be general, and thus not an injury, where, “according to the
Complaint, the [defendant] has merely poised a ‘threat of litigation’ of ‘significant legal
repercussions’ … [s]uch allegations, at best, establish only speculative and arguably chimerical
fears.”); see also Eckles v. City of Corydon, 341 F.3d 762, 768 (8th Cir. 2003) (The court found
no injury in fact where plaintiff received a letter from the County stating that the failure of
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plaintiff to remove signs from his property could result in action from the City.); Stubbs v.
Goldschmitd, No. Civ. 04-6029-AA, 2004 WL 1490323, at *4 (D. Or. June 29, 2004)
(dismissing for lack of standing where the University of Oregon sent plaintiff a letter stating that
the University would enforce its policy of no weapons on campus, even if plaintiff had a valid
state permit: “No threat to plaintiff’s rights appear beyond that implied by the existence of the
regulation itself.”) The e-mail correspondence at issue here is analogous to the letters in Eckles
and Stubbs--the possibility that action could be taken by some other, independent entity if
plaintiff engages in certain conduct.
Like the cases cited above, the facts alleged by plaintiff Abrams do not show that he is
injured by a credible or imminent threat of prosecution. His allegations are speculative at best:
the Federal firearms laws may be enforced against him if he violates those laws. See National
Rifle Ass’n, 132 F.3d at 294 (“Every criminal law, by its very existence, may have some chilling
effect on personal behavior. That is the reason for its passage.”)
3.

Plaintiff Cannot Show Redressability Either.

Even if Plaintiff were able to show an injury, plaintiff is unable to show that a court
could fully redress that injury as required by the third prong of the standing analysis. See Lujan,
504 U.S. at 561. Enjoining the ATF Director from prosecuting plaintiff, as plaintiff requests,
would remedy nothing; it would prohibit the Director from taking an action he does not have the
authority to do in the first place. For plaintiff to receive actual relief the appropriate official to
be enjoined would be the United States Attorney for the District of Maryland—where plaintiff
resides—or the district in which plaintiff would violate the law.

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B.

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Plaintiff’s Case Does Not “Arises Under” Federal Law or the Constitution

Plaintiff does not cite to any federal law or constitutional provision conferring
jurisdiction upon the court; he cites only to 28 U.S.C. § 1331 as the basis for jurisdiction. See
Compl. Para. 2. A party seeking to invoke a federal court’s jurisdiction has the burden of
establishing that jurisdiction exists.” Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377
(1994). While section 1331 confers jurisdiction in the federal courts for cases that “arise under”
the Constitution and laws of the United States, “[s]ection 1331 does not independently or
separately confer jurisdiction.” Gem County, 398 F. Supp. 2d at 12 (emphasis added); see also
Government of Guam v. American President Lines, Ltd., 809 F. Supp. 150, 154 (D.D.C. 1993)
(“section 1331 … confers jurisdiction only when the claim ‘arises under’ a federal statute”)
(emphasis added), aff’d, 28 F.3d 142 (D.C. Cir. 1994); Mead Corp. v. United States, 490 F.
Supp. 405, 407 (D.D.C. 1980) (“section 1331 does not in itself create substantive rights or causes
of action, but only confers jurisdiction on the district court to hear certain cases that are
supported by an independently created substantive cause of action”) (internal citation omitted),
aff’d, 652 F.2d 1050 (D.C. Cir. 1981). Plaintiff has provided no “independently created
substantive cause of action” and section 1331, standing alone, is not sufficient to confer
jurisdiction.
C.

The United States Has Not Waived Sovereign Immunity.

Moreover, because Plaintiff has brought this claim against an official of the Federal
government acting in his official capacity, the jurisdictional statute on which the claim is based
must contain an express waiver of sovereign immunity. See FDIC v. Meyer, 510 U.S. 471, 475
(1994). “It is well established that the United States is immune from suit unless a waiver of
federal sovereign immunity was ‘unequivocally expressed’ in the statutory text.” Jordan v.
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Evans, 404 F. Supp. 2d 28, 31 (D.D.C. 2005); see also El-Shifa Pharm. Indus. Co. v. United
States, 402 F. Supp. 2d 267, 270 (D.D.C. 2005) (“A waiver of ‘sovereign immunity must be
unequivocally expressed in statutory text’ and will be ‘strictly construed, in terms of its scope, in
favor of the sovereign.’”) Plaintiff bases jurisdiction on 28 U.S.C. § 1331; however section 1331
is “only a general jurisdictional statute and such a statute does not provide a general waiver of
sovereign immunity.” Bliss v. England, 208 F. Supp. 2d 2, 4 (D.D.C. 2002); see also Cobell v.
Babbitt, 30 F. Supp. 2d 24, 39 n.15 (D.D.C. 1998) (section 1331 does not constitute a waiver of
sovereign immunity); Saunders v. Reno, Civ. A. No. 93-1829 (RCL), 1993 WL 771009, at *2
(D.D.C. Dec. 20, 1993) (Section 1331 “confers general jurisdiction, and sovereign immunity is
not waived by general jurisdictional statutes. Rather, section 1331 presupposes a specific waiver
of sovereign immunity under some other federal statute.”) (internal quotation marks and citation
omitted), aff’d, No. 94-5007, 1994 WL 541497 (D.C. Cir. May 12, 1994); Stich v. United States
Department of Justice, Civ. A. No. 86-2523, 1987 WL 9237 (D.D.C. Mar. 27, 1987) (“[i]t is
well-settled that neither the federal question statute, 28 U.S.C. § 1331, nor the Declaratory
Judgment Act, 28 U.S.C. § 2201, constitute waivers of sovereign immunity.”) Section 1331
does not waive the sovereign immunity of the United States, as such the United States is immune
from suit.
D.

Plaintiff’s Request for Equitable Relief Does Not Remedy the Lack of
Jurisdiction
1.

Plaintiff is Not Entitled to Injunctive Relief.

Plaintiff’s request for injunctive relief does not surmount the above jurisdictional defects,
including his lack of injury for standing purposes. Regardless of how Plaintiff characterizes this
action, he remains unable to show the alleged “threat” constitutes an injury. See Wisconsin Gas
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Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (“Injunctive relief ‘will not be granted against
something merely feared as liable to occur at some indefinite time.’”); San Diego County Gun
Rights Comm., 98 F.3d at 1126 (“Because plaintiffs seek declaratory and injunctive relief only,
there is a further requirement that they show a very significant possibility of future harm; it is
insufficient for them to demonstrate only a past injury.”)
As for the waiver of sovereign immunity, although plaintiff does not cite to the
Administrative Procedure Act (APA), which does provide a waiver of sovereign immunity in
certain situations, the APA’s waiver of sovereign immunity is not available here because 5
U.S.C. § 704 provides judicial review for final agency action only. See El-Shifa Pharm., 402 F.
Supp. 2d at 272 (“The APA, however, provides for judicial review only of final agency action. 5
U.S.C. § 704.”); Gem County, 398 F. Supp. 2d at 11 (“Judicial review may be obtained under the
APA if the agency action is considered ‘final.’”) “Absent an independent provision for review,
however, the APA permits review only of ‘final agency action.’” Public Citizen v. Office of
United States Trade Representatives, 970 F.2d 916, 921 (D.C. Cir. 1992).
Final agency action “must mark the consummation of the agency’s decision-making
process, not be merely interlocutory in nature, and the action must be one by which rights or
obligations have been determined.” Gem County, 398 F. Supp. 2d at 11. Actions that are
“purely advisory and in no way affected the legal rights of the relevant actors,’ fall outside the
definition of ‘final agency action.’” Trudeau v. Federal Trade Comm’n, 384 F. Supp. 2d 281,
289 (D.D.C. 2005) (finding press release issued by the FTC about its settlement with plaintiff
was not final agency action); see also id. at 294 (finding that even if plaintiff’s argument that
“section 702 waives sovereign immunity in the absence of final agency action under section
704,” plaintiff still “must identify some provision other than section 704 of the APA that gives
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rise to a cause of action”); Lac Vieux Desert Band of Lake Superior Chippewa Indians v.
Ashcroft, 360 F. Supp. 2d 64, 68 n.4 (D.D.C. 2004) (finding that “the advisory letter” of the
General Counsel for the National Indian Gaming Commission which warned of possible future
criminal prosecution if certain gaming continued “could not be considered a ‘final agency
action’”). An e-mail exchange with an ATF Attorney, initiated by Plaintiff’s attorney, is in no
way “final agency action”—it is not the “consummation of the decision-making process” nor did
it determine “rights or obligations.” Rather, like the letter in the Lac Vieux case, the “advisory”
e-mail at issue here cannot be considered a final agency action; as such sovereign immunity has
not been waived.
2.

Plaintiff is Not Entitled to Declaratory Relief.

The fact that Plaintiff brings this suit pursuant to the Declaratory Judgment Act does not
alter any of the above analysis. As discussed, plaintiff presents no actual case or controversy for
purposes of standing; therefore he presents no actual controversy for purposes of the Declaratory
Judgment Act. See Gem County, 398 F. Supp. 2d at 7 (“An ‘actual controversy’ under the
Declaratory Judgment Act shares the same characteristics: ‘the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to warrant the issuance of a declaratory
judgment.’”); Federal Express Corp. v. Air Line Pilots Ass’n, 67 F.3d 961, 963-64 (D.C. Cir.
1995) (“The requirement of a case or controversy is no less strict when a party is seeking a
declaratory judgment than for any other relief. In order to meet this threshold requirement, there
must be ‘a real and substantial controversy admitting of specific relief through decree of a
conclusive character, as distinguished from an opinion advising what the law would be upon a
hypothetical state of facts.’”) (internal citation omitted); see also p. 6, supra.
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Likewise, as Plaintiff has not established a proper basis for jurisdiction, he cannot
remedy that failure by citing to the Declaratory Judgment Act. “Section 1331 does not
independently or separately confer jurisdiction …. Similarly, it is well-settled that the
Declaratory Judgment Act does not independently create jurisdiction.” Gem County, 398 F.
Supp. 2d at 12; see also id. (“[A]bsent [an] independent legal right, the Declaratory Judgment act
does not confer jurisdiction.”) “[T]he availability of [declaratory] relief presupposes the
existence of a judicially remediable right.” C&E Servs., Inc. v. District of Columbia Water &
Sewer Auth., 310 F.3d 197, 201 (D.C. Cir. 2002). As there is no “independent legal right,”
plaintiff is unable to create jurisdiction by seeking declaratory relief.
Finally, the Declaratory Judgment Act does not provide the otherwise missing waiver of
sovereign immunity. The Declaratory Judgment Act “does not waive sovereign immunity.” Lac
Vieux, 360 F. Supp. 2d at 66 n.3; see also Alaska Legislative Council v. Babbitt, 15 F. Supp. 2d
19, 26 n.8 (D.D.C. 1998) (“if the agency's action is not final so as to be reviewable under the
[APA], appellant is not helped on the question of jurisdiction by the Declaratory Judgment
Act”), aff’d, 181 F.3d 1333 (D.C. Cir. 1999); Stich, 1987 WL 9237, at *2 (“It is well-settled that
neither the federal question statute, 28 U.S.C. §1331, nor the Declaratory Judgment Act, 28
U.S.C. § 2201, constitute waivers of sovereign immunity.”).
II.

Venue is More Appropriate in the District of Maryland.
The general venue provision of 28 U.S.C. § 1391(e) provides that:
A civil action in which a defendant is an officer or employee of the United States
or any agency thereof acting in his official capacity or under color of legal
authority, or an agency of the United States, or the United States, may, except as
otherwise provided by law, be brought in any judicial district in which (1) a
defendant in the action resides, (2) a substantial part of the events or omissions
giving rise to the claim occurred, … or (3) the plaintiff resides.
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Because the ATF Director is named in his official capacity, he “resides” in the District of
Columbia and in Maryland because the ATF carries out its duties in both districts. See Farmer v.
Hawk, No. 94-CV-2274 (GK), 1996 WL 525321, at *2 (D.D.C. Sept. 5, 1996) (“Public officials,
when sued in their official capacity, ‘reside’ in the District where they perform their official
duties.”).
However, a defendant in a civil case may seek to transfer the case pursuant to 28 U.S.C.
§ 1404(a), which provides that “[f]or the convenience of parties, and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district or division where it
might have been brought.” The “burden is on the moving party to demonstrate that transfer
would be proper.” Deloach v. Philip Morris Cos., 132 F. Supp. 2d 22, 24 (D.D.C. 2000). A
court “retains substantial discretion” as to whether to grant a transfer and should consider such
motions “according to individualized, case-by-case considerations of convenience and fairness.”
Id.
A lawsuit may be transferred to another district only if it could have been brought in that
district originally, therefore, “the threshold question is whether this suit could have been brought
in the proposed transferee district.” Deloach, 132 F. Supp. 2d at 24. This suit could have been
properly brought in Maryland because it is the district in which the plaintiff resides and where a
“substantial part of the events” occurred, within the meaning of the general venue statute in
section 1391(e). Although the “plaintiff’s choice of forum is ordinarily accorded a significant
degree of deference … such a choice receives substantially less deference where the plaintiff[],
as here, neither reside[s] in, nor ha[s] any substantial connection to, that forum.” Id.; see also
Reiffin v. Microsoft Corp., 104 F. Supp. 2d 48, 52 (D.D.C. 2000) (“[S]ubstantially less
deference is warranted when the forum preferred by the plaintiff is not his home forum.”).
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Because plaintiff resides in the District of Maryland, conducted his business as a firearms
dealer in the District of Maryland, had his licensed revoked in the District of Maryland, and
challenged that revocation in the District of Maryland, his decision to bring this suit in the
District of Columbia is entitled to “substantially less deference” than would otherwise be the
case. See Deloach, 132 F. Supp. 2d at 25 (The Court transferred the case out of the District of
Columbia because “the only real connection this lawsuit has to the District of Columbia is that a
federal agency headquartered here … is charged with generally regulating and overseeing” the
subject matter.); Reiffin, 104 F. Supp. 2d at 52 (transferring the case out of the District of
Columbia to the Northern District of California where “plaintiff is a resident of the state of
California” and “will not be burdened by litigating in the Northern District of California, because
the plaintiff himself chose that district as the forum for his clearly related, earlier-filed …
action”).
In addition, courts frequently look to several other “public- and private-interest factors”
to decide if a transfer is appropriate. “Private interest considerations traditionally include: (1)
the plaintiff’s choice of forum; (2) the defendant’s choice of forum; (3) whether the claim arose
elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses; and (6) the
ease of access to sources of proof.” Holland v. A.T. Massey Coal, 360 F. Supp. 2d 72, 76
(D.D.C. 2004). “Public interest considerations, by contrast, include (1) the transferee’s
familiarity with governing laws; (2) the relative congestion of the calendars of the potential
transferee and transferor courts; and (3) the local interest in deciding controversies at home.” Id.
“In addition to these considerations, a transfer may also be appropriate where there is ongoing
related litigation in another jurisdiction.” Id. (emphasis added).
All of these factors weigh in favor of transferring this case to the District of Maryland
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because it is: (1) Plaintiff’s home forum, (2) Defendant’s choice of forum, (3) where the
underlying events took place, (4) the site of “local interest,” and (5) the forum in which related
litigation (i.e., the license revocation) has been adjudicated with an appeal currently pending.
See Holland, 360 F. Supp. 2d at 77 (“[T]he fact that there is an ongoing case dealing with similar
issues in another jurisdiction weighs very heavily in favor of a transfer under § 1404(a). Simply
stated, judicial economy would not be best served by having similar claims proceed on parallel
tracks in neighboring jurisdictions.”) (internal citations omitted); Reiffin, 104 F. Supp. 2d at 55
(“As the D.C. Circuit has held, ‘In fleshing out the phrase “for the convenience of the parties in
the interest of justice,” the courts have considered . . . whether one circuit is more familiar with
the same parties and issues or related issues than other courts[.]’”) Due to Plaintiff’s petition for
judicial review of the revocation, the District of Maryland is already familiar with the parties and
related issues.
Moreover, there are no factors that weigh significantly in favor of the District of
Columbia. The fact that ATF is headquartered in the District of Columbia is not controlling.
“[M]ere involvement of the part of federal agencies, or some federal officials who are located in
Washington D.C. is not determinative.” Shawnee Tribe v. United States, 298 F. Supp. 2d 21, 2526 (D.D.C. 2002). The dispute at issue arose between Plaintiff and ATF agency counsel,
corresponding via email. Agency counsel was the attorney responsible for defending the
revocation of RSM--in the District of Maryland. Mr. Cohen does not work at ATF
Headquarters. Director Truscott, whose office is at ATF Headquarters, does not play an active
role in license revocations made in the Field Divisions, had no active involvement in the
revocation of RSM, or the e-mail exchange at issue. See id at 26 (Transfer is appropriate
“especially where the involvement of government officials in Washington has not been
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significant, and there is no real connection between the District of Columbia and this litigation
other than the presence of federal agencies in this forum.”); Cameron v. Thornburgh, 983 F.2d
253, 257 (D.C. Cir. 1993) (finding transfer proper where “Appellant’s complaint did not allege a
single rule or policy emanating from Washington that had affected his case.”); Sierra Club v.
Flowers, 276 F. Supp. 2d 62 (D.D.C. 2003) (“The court determines that the plaintiff’s choice of
forum merits little deference because the District of Columbia has ‘no meaningful ties to the
controversy and no particular interest in the parties or subject matter.’”); Trout Unlimited v.
United States Dep’t of Agric., 944 F. Supp. 13, 16 (D.D.C. 1996) (transfer proper where none of
the decision-making at issue occurred in the District of Columbia); but see Greater Yellowstone
Coalition v. Bosworth, 180 F. Supp. 2d 124, (D.D.C. 2001) (distinguishing Trout Unlimited on
its facts and finding that where plaintiffs alleged high-ranking government officials in
Washington D.C. were involved in the subject matter, an allegation defendants presented no
evidence to disprove, transfer was not appropriate). As in Shawnee Tribe, Cameron, Sierra Club
and Trout Unlimited, there has been no significant involvement by ATF officials in Washington
D.C., nor is there any “real connection” between the District of Columbia and this litigation.
The only real advantage Plaintiff receives from litigating this lawsuit in the District of
Columbia is to avoid the district court in which the revocation of his license was upheld. That is,
Plaintiff is attempting to forum shop. “Indeed, courts in this circuit must be particularly careful
in examining challenges to venue ‘to guard against the danger that a plaintiff might manufacture
venue in the District of Columbia.’” Holland, 360 F. Supp. 2d at 76; see also Cameron, 983 F.2d
at 256 (“By naming high government officials as defendants, a plaintiff could bring a suit here
that properly should be pursued elsewhere.”) “[F]orum shopping must not be indulged in the
face of multiple litigation especially where, as here, the shopper is offered an equally convenient
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forum.” Reiffin, 104 F. Supp. 2d at 54 n.12. The District of Maryland is a more convenient
forum. Therefore, transfer is strongly indicated under all relevant factors.
Conclusion
For the foregoing reasons, this case should be dismissed for lack of subject matter
jurisdiction, pursuant to Rule 12(b)(1). In the alternative, if the Court finds that it could exercise
jurisdiction, Defendant respectfully requests that the case be transferred to the District of
Maryland, pursuant to 28 U.S.C. § 1404.

June 15, 2006

Respectfully submitted,

KENNETH L. WAINSTEIN, D.C. Bar # 451058
United States Attorney

RUDOLPH CONTRERAS, D.C. Bar # 434122
Assistant United States Attorney
/s/
ALAN BURCH, D.C. Bar # 470655
Assistant United States Attorney
555 4th St., N.W.
Washington, D.C. 20530
(202) 514-7204
alan.burch@usdoj.gov
Of Counsel:
Stephen R. Rubenstein
Chief Counsel
Joel J. Roessner
Associate Chief Counsel (Litigation)
Bureau of Alcohol, Tobacco, and Firearms

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RSM, INC. (d/b/a VALLY GUN)

:
:
:
:
:

v.
ARTHUR W. HERBERT

Civil No. WMN-05-847

MEMORANDUM
Petitioner RSM, Inc. has petitioned this Court pursuant to
18 U.S.C. § 923(f)(3) for a de novo review of the decision made
by the Bureau of Alcohol, Tobacco, and Firearms (ATF) to revoke
its Federal Firearm License.

Respondent, the Director of

Industry Operations for the Washington Field Office of the ATF,
has moved for summary judgment, arguing that the undisputed facts
establish that RSM committed willful violations of the laws
regulating the sale of firearms and that no discovery or hearing
in this matter is necessary.

Paper No. 6.

The Court concludes

that no discovery or hearing is required and that Respondent is
entitled to summary judgment.
Federal Firearm Licensees are subject to two major
recordkeeping requirements.

First, a licensed dealer must

maintain a bound book for recording the acquisition and
disposition of every firearm that enters and leaves its
inventory. (hereinafter, the A&D Book).
478.125(e).

See 27 C.F.R. §

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repair and remain in the possession of the dealer overnight.1
Second, gun dealers are required to complete a Firearm
Transaction Record, or “Form 4473" for every firearm that they
sell.

These Form 4473s include information about the weapon

being sold and the purchaser, as well as a series of questions
which enable the dealer to determine whether that individual can
legally purchase the weapon.
In July 1997, the ATF conducted an inspection of RSM’s
inventory and records and discovered numerous deficiencies in
RSM’s A&D Book,

incorrectly or incompletely filled-out Form

4473s, and 45 missing firearms (that is, firearms which should
have been on the premises based upon the records in the A&D Book
but could not be found in the physical inventory).

In November

1999, the ATF conducted another inspection and found more

1

The regulations speak of "acquisitions," and do not
distinguish between firearms "acquired" for purposes of repair
and those acquired for sale. 27 C.F.R. § 478.125 (e) ("The
purchase or other acquisition of a firearm shall . . . be
recorded not later than the close of the next business day
following the date of such purchase or acquisition."); Shyda v.
Director, Bureau of Alcohol, Tobacco and Firearms, U. S. Dept. of
Treasury 448 F. Supp. 409, 413 (D.D.C. 1977). See also Pinion
Enterprises, Inc. v. Ashcroft, 371 F. Supp. 2d 1311, 1313 (N.D.
Ala. 2005) (affirming revocation of license based in part on
licensee’s failure to record guns received for repairs in its
acquisition and disposition records); Breit & Johnson Sporting
Goods, Inc. v. Ashcroft, 320 F. Supp. 2d 671, 676 (N.D. Ill.
2004) (same).

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discrepancies in the A&D Book, more improperly completely Form
4473s, and more missing weapons.

A “Warning Conference” was held

with RSM’s president, Sanford Abrams, in January of 2000 at which
Mr. Abrams indicated that he understood the record keeping
requirement and would attempt to do better in the future.

Mr.

Abrams was warned that future violations could result in the
revocation of RSM’s firearm dealer license.
The ATF completed another inspection of RSM in September of
2001.

Again, the ATF found problems in the A&D Book, the Form

4473s, and, this time, 133 missing weapons.

In addition, the

inspection revealed that RSM had failed to accurately record
information regarding a “National Firearms Act” weapon2 found in
its inventory, failed to record National Criminal Instant
Background Check (NICS) information within the prescribed time
period, and failed to complete numerous reports of multiple
handgun sales as required under ATF regulations.

This inspection

led to a second Warning Conference which included additional
assurances from Mr. Abrams that he understood the relevant record
keeping requirements and would strive to improve his compliance.
Mr. Abrams was also given the repeated warning that continued
violations would lead to the revocation of RSM’s license.

2

National Firearm Act weapons are highly regulated weapons
such as machine guns, sawed off shotguns, and silencers that are
subject to special registration requirements. See 26 U.S.C. §
5841 et seq. The particular weapon found in RSM’s inventory
during this particular inspection was a silencer.
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The ATF conducted another inspection in May of 2003.

As the

reader might anticipate, the inspection again uncovered numerous
problems with the RSM’s A&D Book and Form 4473s.

Specifically,

of the 1,524 firearms that should have been on the premises
according to the A&D Book, only 1,052 were initially found in the
inventory, leaving 472 unaccounted for.

After the ATF gave RSM

the opportunity to reconcile its inventory, the difference was
reduced to 422.

(RSM found 37 of the missing guns in its

inventory and records for the sale of 13 more.)3

In the A&D Book

used to record firearms accepted for repair, records for 456 of
the 475 weapons listed did not include information regarding the
disposition of the weapon.

Finally, the inspection revealed that

RSM had failed to properly record A&D information related to
three NFA firearms and had transferred a firearm after the NICS
approval period had expired.4
As a result of this inspection, the ATF issued a Notice of
Revocation of License on May 5, 2004.
that was held on October 6, 2004.

3

287.

RSM requested a hearing

On October 29, 2004, the

The number of unaccounted-for weapons was later reduced to
Hearing Transcript (Tr.) 107.

4

Once a NICS check is completed, the transfer must take
place within 30 days. See 27 C.F.R. § 178.102(c). Once that
time period expires, a new background check on the purchaser must
be completed before the weapon can be transferred to that
individual. RSM acknowledges that the transfer in question took
place 36 days after the NICS approval was obtained and no
subsequent background check was undertaken.
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hearing officer issued a 28-page report finding that all of the
claims against RSM were substantiated by undisputed evidence and
that RSM’s violations were “willful.”

Consistent with those

findings, the hearing officer concluded that revocation of RSM’s
license was appropriate.

Respondent issued a Final Notice of

Revocation on February 2, 2005, but stayed the effective date of
revocation while RSM sought judicial review.
Under the de novo standard of review for a decision of the
ATF, this Court may give the agency’s finding and decision “‘such
weight as it believes they deserve,’ but need not accord any
particular deference to those findings.”

Article II Gun Shop,

Inc. v. Ashcroft, Civil Action No. 03-4598, 2005 WL 701053 (N.D.
Ill. March 25, 2005)(quoting Stein’s Inc. v. Blumenthal, 649 F.2d
463, 467 (7th Cir. 1980)).

Where appropriate, the reviewing

court can receive and consider evidence in addition to that
submitted in the administrative proceeding.

DiMartino v.

Buckles, 129 F. Supp. 2d 824, 827 (D. Md. 2001).

The court can

grant summary judgment, however, without conducting an
evidentiary hearing if it is clear from the pleadings and
exhibits that no genuine issue of material fact exists.

Id.

Notwithstanding the posture of this case as an appeal of an
administrative decision, the summary judgment standard is the
same as in any other civil action.

A district court may grant

summary judgment when reviewing a firearms license revocation

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pursuant to 18 U.S.C. § 923(f)(3), provided no issues of material
fact are in dispute.

DiMartino v. Buckley, 19 Fed. Appx. 114,

115 (4th Cir. 2001).

In determining whether there is a genuine

issue of material fact, the district court must assess the
factual evidence and all inferences to be drawn therefrom in the
light most favorable to the non-moving party.

Smith v. Virginia

Commonwealth Univ., 84 F.3d 672, 675 (4th Cir. 1996).

The non-

moving party, however, may not rely upon the mere allegations of
his complaint.

Rather, its response must, with affidavits or

other verified evidence, set forth specific facts showing that
there is a genuine issue for trial. Fed. R. Civ. P. 56(e); see
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

If the

adverse party fails to so respond, summary judgment, if
appropriate, shall be entered.

Fed. R. Civ. P. 56(e).

Under 18 U.S.C. § 923, "the ATF may revoke a firearm
dealer’s license if the dealer willfully violates any statute or
regulation governing the firearms industry."

Willingham Sports,

Inc. v. Bureau of Alcohol, Tobacco, Firearms and Explosives, 348
F. Supp. 2d 1299, 1302 (S.D. Ala. 2004).

While "willfulness"

must be found in order to support a revocation decision, there is
no requisite quantum of violations that must be identified: "A
single violation is sufficient for denying an application or
revoking a license."
in original).

DiMartino, 129 F. Supp. 2d at 827 (emphasis

This Court’s role is to determine whether there

was "substantial" evidence of a willful violation.
649 F.2d at 467.

Stein’s Inc.,

While the district court makes that
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determination de novo, once that determination is made, the
district court must defer to the ATF’s selection of the
appropriate penalty.

Id. ("Selecting an appropriate penalty for

the violations found is a matter committed to the [agency’s]
discretion.").

Thus, the district court’s only role in reviewing

the choice of a penalty is to determine whether the penalty
imposed was "authorized."

18 U.S.C. § 923(f)(3); Stein’s, 649

F.2d at 464 n.2.
Petitioner raises a variety of arguments to show that some
of the deficiencies identified by the ATF inspectors were not
actual violations of federal firearms regulations.

For example,

among the deficiencies on Form 4473s was the failure to indicate
the type of firearm in box 16 of the Form 4473s.

RSM argues

that, while 27 C.F.R. § 478.124(c) may require dealers to
identify the type of firearm, the regulations do not require that
it be identified in box 16.

Opp’n 19-20.

RSM contends it

complied with the regulations by identifying the type of firearm
in box 27 of the Form 4473s.
Elsewhere in its opposition, RSM attempts to downplay the
scope of its violations.

Noting that errors were found on only

24 of the 345 Form 4473s reviewed, and that each form required 37
different entries to be made, RSM calculated its error rate to be
only .2%.

Id. 18-19.

Similarly, noting that it only transfered

a firearm on one occasion based on a expired NICS check but
transferred firearms on 344 occasions on unexpired NICS checks,
RSM asserts that its error rate in that regard was only .3%.
7

Id.

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RSM also argues, at length, that some of the alleged

violations cited by Respondent cannot form the basis for
revocation as they took place outside of the applicable statute
of limitations.

Id. 27-36 (citing the five year limitations

period of 28 U.S.C. § 2462).
Without commenting on the merits of any of these arguments,
the Court notes that, even assuming their validity, there remain
numerous violations that Petitioner does not contest and that
undisputedly occurred within the limitations period.

RSM

acknowledges that there were 70 firearms sold after May 4, 1999,
that were not entered into the A&D book.

See id. 7.

concedes that there were errors on 24 Form 4473s.

RSM

See id. 8.

RSM does not dispute that in December of 2002, it transferred a
firearm 6 days after the 30-day limitation on NICS checks.
id. 8-9.

See

Thus, while RSM may challenge the numerousness or

seriousness of its violations of federal firearms law, it makes
no credible argument that there were no violations.
Instead, the primary thrust of Petitioner’s pleading is that
the violations that it did make were not "willful."

Under

Petitioner’s definition of willfulness, Respondent has the burden
to prove that RSM acted "intentionally and purposely and with the
intent to do something the law forbids."

Opp’n 16.

While

admitting violations, RSM attributes its violations to "human
error" or deems them "inadvertent, technical record-keeping
errors."

Compl. ¶¶ 23, 24, 28.

Mr. Abrams repeats this “human

error” theme throughout his testimony at the administrative
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When asked why there were so many open entries in RSM’s

A&D Book, he responds, "Human error.
paperwork has been mislaid."

Tr. 189.

The guns were sold,
When asked why three NFA

weapons dispositions were not recorded, he responded, "[j]ust
human error; forgot."

Tr. 197.

In his testimony, Mr. Abrams

expressed his own frustration that his employees continue to make
mistakes:
So I tried to impress upon them as much
as possible, and tried to check up on them as
much as possible as they were doing their
work. Has some of these things got lost,
misplaced? I don’t know. I mean, I am
extremely frustrated that this had continued
to happen; I lost many nights of sleep on it;
my stomach has been in, you know, basically
destroyed, because I can’t figure out B we
keep doing the best we can and we still keep
coming up with mistakes.
The only thing I can say is that when
you sell an awful lot of firearms in a short
period of time, like at a gun show or during
hunting season, the chance of error rates go
up. I think if you check the dates, you’d
find that a lot of these errors were in our
busiest seasons. And it’s no excuse, I’m
just explaining it.
Tr. 262-63.
The term "willful" is not defined in the statute.

Courts

interpreting the statute, however, have reached near unanimous
consensus5 that "a bad purpose or evil motive is not required"

5

The only court taking a view consistent with that taken by
Petitioner is Rich v. United States, 383 F. Supp. 797 (D. Ohio
1974). The holding in Rich has been soundly rejected by other
courts interpreting § 923. See 3 Bridges, Inc. v. United States,
216 F. Supp.2d 655, 658 (E. D. Ky. 2002) (observing that
"[Rich’s] holding finds no other support in the case law, and has
been expressly rejected in Perri [v. Department of Treasury,
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Willingham Sports, Inc. v. Bureau

of Alcohol, Tobacco, Firearms and Explosives, 415 F.3d 1274, 1276
(11th Cir. 2005).

As the Eleventh Circuit explained in a

decision issued just last year, "[a] firearms dealer is
considered to have acted willfully under § 923 if, with knowledge
of what the regulations require, the dealer repeatedly violates
those regulations."

Id. at 1276-77 (emphasis added).

In support

of this definition of willful, the Eleventh Circuit cited
decisions from five other circuit courts of appeals, including
the Fourth Circuit.6
The undisputed evidence, including Mr. Abrams’ own
testimony, conclusively establishes that RSM was well aware of
the regulations imposed on federal firearms dealers and yet,
despite that knowledge, continued to violate those same
regulations.
willful.

Thus, RSM’s conduct clearly meets the definition of

While Mr. Abrams may seek to minimize the significance

of RSM’s errors or to excuse its non-compliance by citing the
busyness of gun shows and hunting seasons, the undisputed fact is
that because of RSM’s lapses, scores of firearms are unaccounted

Bureau of Alcohol, Tobacco and Firearms, 637 F.2d 1332, 1336 (9th
Cir. 1981)] and Cucchiara [v. Secretary of the Treasury, 652 F.2d
28, 30 (9th Cir. 1981)]).
Prino v. Simon, 606 F.2d 449, 451 (4th Cir. 1979);
Stein's, Inc., 649 F.2d at 467 (Seventh Circuit); Appalachian
Res. Dev. Corp. v. McCabe, 387 F.3d 461, 464-65 (6th Cir. 2004);
Lewin v. Blumenthal, 590 F.2d 268, 269 (8th Cir. 1979); Perri,
637 F.2d at 1336 (Ninth Circuit).
6

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for, and therefor, untraceable.

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As one court recently observed,

the gravity of the policy objectives of the
Gun Control Act, from both a law enforcement
standpoint and a safety standpoint, strongly
militates in favor of allowing the ATF to
insist on total compliance as a condition of
retaining the privilege of dealing in
firearms. Indeed, the Supreme Court has
noted that one purpose of the Gun Control Act
is "to keep firearms away from the persons
Congress classified as potentially
irresponsible and dangerous." Barrett v.
United States, 423 U.S. 212, 218 [] (1976).
Where a dealer does not properly maintain ATF
records to the agency's exact specifications,
the ATF's ability to fulfill its legislative
mandate may be compromised. See 3 Bridges,
216 F. Supp. 2d at 659. If ever there were a
statutory scheme where a licensee should be
obligated to "sweat the details,"
irrespective of how trifling they may appear,
the Gun Control Act would appear to fit that
bill.

Willingham Sports, 348 F. Supp. 2d at 1309.
As there is substantial evidence of willful violations on
the part of RSM, and as the revocation of a dealer’s license is
clearly an authorized response to violations of the regulations,
see 18 U.S.C. § 923(e), the Court therefore will grant
Respondent’s motion for summary judgment and dismiss RSM’s
Petition.

A separate order consistent with this memorandum will

issue.

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/s/
William M. Nickerson
Senior United States District Judge
Dated: February 23, 2006

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RSM, INC.
v.
ARTHUR W. HERBERT

:
:
:
:
:
:

Civil No. WMN-05-847

MEMORANDUM
Before the Court are two motions filed by RSM.

One is a

motion to direct Respondent that RSM may continue to operate
during the pendency of judicial review, Paper No. 14, and the
other is a motion to alter or amend judgment.
Both motions are ripe for decision.

Paper No. 15.

Upon a review of the

pleadings and applicable case law, and in consideration of the
arguments presented to the Court during a March 9, 2006, hearing,
Respondent’s motions will be denied.
I.

FACTUAL AND PROCEDURAL BACKGROUND
On February 23, 2006, this Court dismissed RSM’s petition

for review of ATF’s decision to revoke its Federal Firearm
License.

On February 24, 2006, ATF seized RSM’s license.

ATF

agreed to allow RSM to "wind down" its business for thirty days,
until March 25, 2006.

Under this agreement, RSM can dispose only

of existing inventory for which sales had been made on or before
February 23, 2006.
II.
A.

DISCUSSION
Motion to Direct Respondent that RSM May Continue to Operate
During Pendency of Judicial Review, Paper No. 14.
On May 4, 2004, the ATF Director of Industry Operations

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(DIO), Baltimore Field Division, revoked Petitioner’s license to
sell firearms after evidence presented at a revocation hearing
established that RSM knew and understood the record keeping
requirements of the Gun Control Act but violated the provisions
on numerous occasions.

RSM requested a hearing after being

issued a notice of revocation.1

Pursuant to 18 U.S.C. §

923(f)(2), which requires ATF to stay the effective date of the
revocation if the licensee requests a hearing,2 ATF stayed the
revocation.

After the hearing, ATF revoked the license.

RSM

then indicated that, pursuant to § 923(f)(3),3 it intended to

1

2

3

18 U.S.C. § 923(f)(1) requires notice of revocation:
Any person whose application for a license is
denied and any holder of a license which is
revoked shall receive a written notice from the
Attorney General stating specifically the grounds
upon which the application was denied or upon
which the license was revoked. Any notice of a
revocation of a license shall be given to the
holder of such license before the effective date
of the revocation.

18 U.S.C. § 923(f)(2) states:
If the Attorney General denies an application for,
or revokes, a license, he shall, upon request by
the aggrieved party, promptly hold a hearing to
review his denial or revocation. In the case of a
revocation of a license, the Attorney General
shall upon the request of the holder of the
license stay the effective date of the revocation.
A hearing held under this paragraph shall be held
at a location convenient to the aggrieved party.
18 U.S.C. § 923(f)(3) states:
(3) If after a hearing held under paragraph (2)
the Attorney General decides not to reverse his
decision to deny an application or revoke a
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file an action in federal court seeking de novo review of the
revocation.

Exercising its discretionary authority under 27

C.F.R. § 478.78,4 ATF allowed RSM to continue operations while it
sought judicial review.

After this Court’s February 23, 2006,

dismissal of RSM’s petition for judicial review, ATF lifted its
stay of the license revocation.

Now pending before the Court is

RSM’s petition requesting an order requiring ATF to re-stay the
license revocation during further appeals of this Court’s
decision.

Petitioner asserts that ATF does not have authority to limit
RSM’s acquisitions and dispositions of firearms until there is a
license, the Attorney General shall give notice of
his decision to the aggrieved party. The aggrieved
party may at any time within sixty days after the
date notice was given under this paragraph file a
petition with the United States district court for
the district in which he resides or has his
principal place of business for a de novo judicial
review of such denial or revocation. In a
proceeding conducted under this subsection, the
court may consider any evidence submitted by the
parties to the proceeding whether or not such
evidence was considered at the hearing held under
paragraph (2). If the court decides that the
Attorney General was not authorized to deny the
application or to revoke the license, the court
shall order the Attorney General to take such
action as may be necessary to comply with the
judgment of the court.
4

Section 478.78 gives a licensee 60 days to appeal a
license revocation and states, "when the Director of
Industry Operations finds that justice so requires, he may
postpone the effective date of suspension or revocation of a
license or authorize continued operations under the expired
license, as applicable, pending judicial review."
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final, unreviewable judgment.

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To support this proposition,

Petitioner relies on a sentence extracted from the middle of §
923(f)(2), which states, "[i]n the case of a revocation of a
license, the Attorney General shall upon the request of the
holder of the license stay the effective date of the revocation."
According to Petitioner, the mandatory stay of a license
revocation triggered by a hearing request may not be lifted by
ATF until all appeals are final.

Petitioner supports this

position by asserting that under § 923(f)(3), after a hearing
during which the Attorney General upholds the decision to revoke
a license, he is only required to give notice to the licensee of
the decision; the subsection does not require the Attorney
General at this time to lift any stay that may have been imposed.
Petitioner thus reasons that, under the statute, the stay should
remain in place throughout the pendency of judicial proceedings.5

5

Petitioner further supports its interpretation of the
statute by noting that under 18 U.S.C. § 925(b), if a
criminal prosecution is initiated against a licensee, the
licensee may continue operations until any conviction
pursuant to the indictment becomes final. Petitioner
reasons that if § 923(f)(2) is not interpreted to require
the revocation to be stayed, then "a licensee’s continuance
of operations has greater protection if he is the subject of
criminal prosecution than if he is the subject of a license
revocation." Reply 2. Petitioner notes that, “ATF has long
taken the position that a conviction does not become final
until all appeals have been exhausted.” Reply 2 n.2
Notwithstanding the initial appeal of Petitioner’s argument,
it cannot overcome the persuasiveness of the guidance
offered under § 923(e) and ATF’s own regulations, which are
both discussed below. In addition, the Court notes one
potential reason for the different levels of protection
pointed out by Petitioner. Under § 923(e) the license is
being revoked due to the licensee’s failure to meet the
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Respondent argues that Petitioner takes the sentence from §
923(f)(2) out of context and that the section in its entirety
clearly illustrates that, upon request, the license revocation
should be stayed until a hearing is held.

In addition,

Respondent asserts that § 923(f) reads chronologically and that
subsection (1) addresses notice, subsection (2) discusses the
hearing process, and subsection (3) discusses a licensee holder’s
right to judicial review of a revocation.

Respondent reasons

that the clause mandating a stay of revocation upon request of a
hearing is contained in the hearing subsection and, as such,
pertains only to that hearing process.

Subsection (3), which

sets out the judicial review process, does not contain a similar
stay provision.
The Court finds that while the language of § 923(f) does not
provide a definitive answer as to when a stay of a revocation
should be lifted, § 923(e) and ATF regulations at 27 C.F.R. §
478.78 make clear that ATF can revoke the license after a hearing
has been held and a Notice of Revocation has been served on the
licensee.

Under § 923(e), "[t]he Attorney General may, after

notice and opportunity for hearing, revoke any license issued
under this section . . . ."

Giving ATF the authority to revoke a

license after a hearing, implies that the stay mandated by the
licensee’s request for such a hearing would no longer be in

requirements of the license itself, while under § 925(b) a
license holder, indicted for any crime punishable by a year
imprisonment, can continue operation until conviction
becomes final.
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Importantly, § 923(e) does not limit the Attorney

General’s power to revoke a license to a point in time after
notice, opportunity for hearing, and pending judicial review.
Further, pursuant to ATF regulations, any decision to stay the
effect of the revocation after a hearing is held is entirely
discretionary.

Section 478.78 gives the ATF Director of Industry

Operations authority to either "postpone . . . the revocation of
a licensee or authorize continued operations under the expired
license, as applicable, pending judicial review."
Petitioner contends that § 478.78 is void because Congress
did not delegate authority to the ATF to promulgate the
regulation.

Specifically, Petitioner asserts that no such

delegation exists under either § 923(e) or (f).

Reply 4.

Respondent counters that ATF had the proper authority to
promulgate this regulation under § 926, which grants the Attorney
General authority to prescribe "only such rules and regulations
as are necessary to carry out the provisions of this chapter . .
. ."

Petitioner contends that § 926 grants ATF authority to

promulgate regulations only where the statutory provision, in
reference to which a regulation is promulgated, itself includes
language that allows ATF to promulgate the regulation.
Court disagrees.

This

Section 926 grants the ATF authority to

promulgate rules that are "necessary" to carry out the chapter’s
provisions.

As previously discussed, § 923(f) does not state

when a stay should be lifted and § 478.78 was promulgated in
order for ATF to carry out its responsibilities under the
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The Court also rejects Petitioner’s contention that §

478.78 is contrary to the statute; § 923(f) fails to state when
the stay is to be lifted and the regulation reasonably fills in
this blank in accordance with the timing suggested in § 923(e).
"[I]n construing a statute, this Court normally accords
great deference to the interpretation, particularly when it is
longstanding, of the agency charged with the statute's
administration."

N. Haven Bd. of Educ. v. Bell, 456 U.S. 512,

522 n.12 (1982).

Petitioner argues that "no deference is due ATF

as the statute is not ambiguous and Congress did not delegate
authority to ATF to promulgate § 478.78."

Reply 4 n.4.

As this

Court has found, § 923(f) does not offer definitive guidance as
to when a stay is to be lifted and ATF did have authority to
promulgate § 478.78.

Thus, the Court will defer to ATF’s

interpretation under which the decision to stay a license
revocation pending judicial review is not mandatory but is
discretionary.
Petitioner also argues that Fed. R. Civ. P. 62(a) requires
an automatic stay B "no execution shall issue upon a judgment . .
. until the expiration of 10 days after its entry."

Respondent

correctly points out that RSM’s reliance on 62(a) is misplaced
because the revocation of RSM’s license did not result from
enforcement of a judgment.

The Attorney General has the

authority under § 923(e) to revoke a license without a District
Court judgment.
B.

Motion to Alter or Amend Judgment, Paper No. 15.
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The only issue raised in this motion is RSM’s continued
advocacy for a different definition of “willfulness” than that
adopted by every circuit court of appeals to have addressed the
issue.6

Citing a recent Eleventh Circuit case, this Court stated

in its February 23, 2006, Memorandum that, "‘[a] firearms dealer
is considered to have acted willfully under § 923 if, with
knowledge of what the regulations require, the dealer repeatedly
violates those regulations.’"

Mem. 10 (quoting Willingham

Sports, Inc. v. Bureau of Alcohol, Tobacco, Firearms and
Explosives, 415 F.3d 1274, 1276 (11th Cir. 2005).

RSM does not

dispute that its conduct falls within this definition of
wilfulness, and largely ignores the above quoted language from
Willingham and the holdings of those other circuit court
decisions cited in Willingham.
Petitioner’s motion to alter or amend judgment will be
denied.
III.

CONCLUSION
For these reasons, RSM’s motions will be denied.

A separate

order consistent with this Memorandum will follow.

6

RSM also argued at the hearing that the Court erred in
applying a “substantial evidence” standard. While the Court
did use that term in the concluding paragraph of its
February 23, 2006 Memorandum, the Court clearly stated
elsewhere in the opinion that its conclusion was based upon
“undisputed” evidence. See Mem. 8, 10.
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/s/
William M. Nickerson
Senior United States District Judge
Dated: March 15, 2006

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SANFORD ABRAMS,
Plaintiff,
v.
CARL J. TRUSCOTT,
Director, Bureau of Alcohol, Tobacco,
Firearms & Explosives
Defendant.

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Civil Action No.: 06-643 (CKK)

ORDER
UPON CONSIDERATION of Defendant’s Motion to Dismiss any opposition thereto,
and the entire record herein, it is hereby
ORDERED that the motion is GRANTED and it is
FURTHER ORDERED that this case is dismissed for lack of subject matter jurisdiction,
pursuant to Rule 12(b)(1). This is a final and appealable order.
So ordered this _____ day of _______________ 2006.

COLLEEN KOLLAR-KOTELLY
United States District Judge