GALVESTON, Texas (CN) — A Texas firearms parts dealer asked a federal judge Tuesday to block a Biden administration rule targeting "ghost guns" it claims will shutter its business.
A federal license to import, make or sell firearms costs just $200 for three years. But many companies in the industry cater to DIY enthusiasts who prefer to make their own handguns and rifles with no serial numbers.
For decades, these companies enjoyed a status quo of no government inference because under the Gun Control Act of 1968, the feds did not define firearm frames, also known as “lower receivers” and “receiver blanks,” as firearms subject to regulation.
But with President Joe Biden’s appeals for Congress to pass gun control legislation going nowhere and law enforcement agencies across the country complaining about a rise in the use of ghost guns by criminals, Biden announced in April 2021 he had instructed the Justice Department to identify “immediate, concrete actions” he could take without going through Congress.
Attorney General Merrick Garland said the proliferation of ghost guns—which can be also be made with 3D printers--was due to a “regulatory loophole.”
Seeking to close that gap, the Bureau of Alcohol, Tobacco, Firearms and Explosives, part of the DOJ, unveiled a proposed rule in May 2021 to update the definition of a firearm to include weapon parts kits that can be readily converted to expel projectiles.
The ATF solicited public comments after releasing the proposed rule, then published a final rule, setting out the same key changes to firearms regulations.
The rule is set to take effect Aug. 24.
But not without a fight from Division 80 LLC, a Texas company that has sold $220,000 worth of firearm parts by mail since it opened in November. It sued the Justice Department, Garland, ATF and its then-acting director in May.
Pressing for a preliminary injunction, Division 80’s attorney, Cory Liu of the Ashcroft Law Firm in Austin, said in a hearing Tuesday that the company’s owner, Brandon Padilla, has no other job and his livelihood depends on its current business model.
“Why doesn’t he just get the [federal firearm] license?” U.S. District Judge Jeffrey Brown asked.
“There’s a thriving market of people who want to make their own guns and don’t want to go through licensed dealers,” Liu explained. “Padilla’s entire product line would be wiped out; consumer demand wouldn’t be there.”
“It’s not just about a license,” the attorney added. “It’s about the ability to build a firearm, a right that’s existed since the nation’s founding.”
But Liu’s arguments were undercut by a disclaimer from Justice Department attorney Daniel Riess, after Liu showed Brown a receiver Division 80 sells for an AR-15 style rifle, the most popular firearm in America.
Riess gave the judge a paper with illustrations taken from the ATF’s final rule, outlining what it does and does not consider to be a receiver.
To qualify as a regulated receiver, Riess explained, the part must come with a “jig” or template – typically a piece of plastic that snaps into place to guide the purchaser on where and how deep to drill holes – drill bits and instructions, making the receiver “readily convertible” within minutes to a fully functional firearm.
Liu was flabbergasted. “That’s news to me,” he said. “For months, we’ve been asking what role do instructions and tools play in this. You can sell a receiver blank without tools and jigs. That’s news to me. Had this handout been posted on ATF’s website that would have cleared up a lot of questions.”
Brown asked if that doomed Division 80’s injunction request: “What if the product can still be sold? Is that fatal to a preliminary injunction? Or are you still saying you want an injunction?”
But Liu said the revelation just proves Division 80’s contention the rule is unconstitutionally vague. He said it is so open-ended the public can’t understand it.
“They want the rule to be as ambiguous as possible. And they’ll just give handouts on a case-by-case basis to meet their need,” he griped.
The rule would also require licensed dealers who buy privately made firearms to put serial numbers on them and create records for them within seven days of receipt.
If an unlicensed company is unsure if the ATF would consider a component to be a receiver subject to the new regulation, they can ask the agency for a classification decision.
Liu complained that going back to the 1970s, the ATF had issued classification letters to numerous companies, letting them know if the parts they were selling were legal to do so without a license, which provided guidance to industry newcomers.
ATF could have let those letters stand, Liu said, and “grandfathered in” those companies, so they could keep doing business as they always have. But it repudiated those letters in the final proposed rule.
However, Riess, the government attorney, noted ATF had, in fact, grandfathered in some complete receivers for specific weapons, so the sellers can still be unlicensed.
But he said it had chosen not to do so for incomplete frames that need modifications.
In summations at the end of the 90-minute hearing, Liu argued Biden had turned the regulatory process on its head by circumventing Congress in his eagerness to implement tougher gun-control measures.
“That’s not how it works,” Liu said. “Congress passes regulations and agencies implement them.”
Brown took the matter under advisement. The judge said he anticipates he will decide on the preliminary injunction before the final rule goes on the books Aug. 24.
The rule is also being challenged by Arizona, West Virginia, Alaska, Arkansas, Idaho, Indiana, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, Oklahoma, South Carolina, Texas, Utah and Wyoming, through their Republican attorneys general, in a case filed in North Dakota federal court.
Gun Owners of America Inc. and Bridge City Ordnance, owner of a gun shop in Barnes County, North Dakota, filed the lawsuit in early July and the states joined as plaintiffs in a July 27 amended complaint.Follow @cam_langford
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