Morehouse Enters., LLC v. Bureau of Alcohol

78 F.4th 1011

MOREHOUSE ENTERPRISES, LLC, doing business as Bridge City Ordinance;

Eliezer Jimenez; Gun Owners of America, Inc.; Gun Owners Foundation, Plaintiffs - Appellants

State of Arizona; State of West Virginia; State of Alaska; State of Arkansas;

State of Idaho; State of Indiana; State of Kansas; Commonwealth of Kentucky;

State of Louisiana; State of Missouri; State of Montana; State of Nebraska;

State of Oklahoma; State of South Carolina; State of Texas;

State of Utah; State of Wyoming, Plaintiffs v. BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES;

United States Department of Justice; Bureau of Alcohol, Tobacco & Firearms,

Director, Steven M. Dettelbach (formerly Gary M. Restaino), Defendants - Appellees

District of Columbia; State of New Jersey; State of Pennsylvania;

State of California; State of Colorado; State of Connecticut; State of Delaware;

State of Hawaii; State of Illinois; State of Maine; State of Maryland;

State of Massachusetts; State of Michigan; State of Minnesota; State of New York;

State of North Carolina; State of Oregon; State of Rhode Island;

State of Washington; State of Wisconsin; Prosecutors Against Gun Violence;

16 Major Cities; Gun Violence Prevention Groups, Amici on Behalf of Appellee(s)

Morehouse Enterprises, LLC, doing business as Bridge City Ordinance;

Eliezer Jimenez; Gun Owners of America, Inc.;

Gun Owners Foundation; State of Arizona, Plaintiffs

State of West Virginia; State of Alaska; State of Arkansas; State of Idaho;

State of Indiana; State of Kansas; Commonwealth of Kentucky;

State of Louisiana; State of Missouri; State of Montana; State of Nebraska;

State of Oklahoma; State of South Carolina; State of Texas;

State of Utah; State of Wyoming, Plaintiffs - Appellants v. Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Department of Justice;

Bureau of Alcohol, Tobacco & Firearms, Director, Steven M. Dettelbach

(formerly Gary M. Restaino), Defendants - Appellees

District of Columbia; State of New Jersey; State of Pennsylvania;

State of California; State of Colorado; State of Connecticut; State of Delaware;

State of Hawaii; State of Illinois; State of Maine; State of Maryland;

State of Massachusetts; State of Michigan; State of Minnesota; State of New York;

State of North Carolina; State of Oregon; State of Rhode Island;

State of Washington; State of Wisconsin; Prosecutors Against Gun Violence;

16 Major Cities; Gun Violence Prevention Groups, Amici on Behalf of Appellee(s)

No. 22-2812

No. 22-2854

United States Court of Appeals, Eighth Circuit

Submitted: March 14, 2023

Filed: August 22, 2023

Appeal from United States District Court for the District of North Dakota - Eastern

Counsel who presented argument on behalf of the appellants Gun Owners Foundation, Morehouse Enterprises, LLC, Eliezer Jimenez and Gun Owners of America, Inc., was Robert Jeffrey Olson, of Vienna, VA. Kathleen L. Smithgall, of Arlington, VA, presented argument on behalf of appellants State of Kansas, State of West Virginia, State of Utah, State of Indiana, State of Missouri, State of Oklahoma, State of Montana, State of Arizona, State of Louisiana, State of Wyoming and Commonwealth of Kentucky in 22-2854.

Counsel who presented argument on behalf of the appellees was Sean Janda, of Washington, DC. The following attorney(s) appeared on the appellee brief; Abby Wright, of Washington, DC., Sean Janda, of Washington, DC, Michael S. Raab, of Washington, DC, and Mark B Stern, of Washington DC.

The following attorney(s) appeared on the amicus brief of Gun Violence Prevention Groups in Support of Defendants-Appellees and Affirmance; Kathleen R. Hartnett, of San Francisco, CA., Adam M. Katz, of Boston, MA., Daniel Grooms, of Washington, DC., and Rachel Alpert, of San Francisco, CA. The following attorneys appeared on the amicus brief of the District of Columbia and the States of New Jersey, Pennsylvania, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, Rhode Island, Washington, and Wisconsin were Karl A. Racine, AAG, of Washington, DC., Josh Shapiro, AAG, of Harrisburg, PA., Jeremy R. Girton, AAG, of Washington, DC, Matthew Platkin, AAG, of Trenton, NJ., Mayur Saxena, AAG, of Trenton, NJ., Tim Sheehan, AAG, of Trenton, NJ., and Jacob Boyer, AAG, of Philadelphia, PA. The following attorneys appeared on the amicus brief of 16 major cities and prosecutors against gun violence in support of the appellees; Marten N. King, of Seattle, WA., Lee S. Richards, III, of New York, NY., Caroline Van Zile, AAG, of Washington, DC., Ashwin Phatak, AAG, of Washington, DC., Arjun Ogale, AAG, of Washington, DC., Arthur Greenspan, of New York, NY., David Massey, of New York, NY., Rachel Mechanic, of New York, NY., Jacob Taber, of New York, NY., Rebecca Salk, of New York, NY.

Before COLLOTON, MELLOY, and GRUENDER, Circuit Judges.

MELLOY, Circuit Judge.

Two organizations, one individual, one business, (collectively "Private Plaintiffs") and seventeen states ("the States") sued the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") for overstepping its statutory authority and for violating federal law in promulgating the "Definition of 'Frame or Receiver' and Identification of Firearms" ("Final Rule"). 87 Fed. Reg. 24,652 (April 26, 2022) (codified at 27 C.F.R. pts. 447, 478, and 479). The plaintiffs appeal the district court's¹ denial of a motion for a preliminary injunction. We affirm.

I.

The Gun Control Act of 1968 ("the Act") requires anyone "engag[ing] in the business of importing, manufacturing, or dealing in firearms" to be licensed and places certain requirements—such as record keeping—on licensed persons. 18 U.S.C. § 923(a), (g); see generally Gun Control Act of 1968, Pub. L. No. 90-618, § 101, 82 Stat. 1213-1236 (1968) (codified at 18 U.S.C. § 921-28). The Act defines "firearm" as "(A) any weapon (including a starter gun) which will or is designed to or may readily be converted to expel a projectile by the action of an explosive; (B) the frame or receiver of any such weapon; (C) any firearm muffler or firearm silencer; or (D) any destructive device. Such term does not include an antique firearm." 18 U.S.C. § 921(a)(3). The responsibility for administering and enforcing the Act is delegated to the Director of the ATF subject to the direction of the Attorney General. See 26 U.S.C. § 599A.

The ATF has promulgated rules and regulations defining terms necessary to enforce the Act, such as "frame or receiver." In 2021, ATF began the process of updating these rules and regulations to reflect changes to firearms in circulation. In May 2021, the ATF issued a Notice of Proposed Rule Making ("Notice"). See generally Definition of "Frame or Receiver" and Identification of Firearms, 86 Fed. Reg. 27,720 (proposed May 21, 2021) (to be codified at 27 CFR pts. 447, 478, and 479). The summary of the Notice stated:

The Department of Justice ("Department") proposes amending Bureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF") regulations to provide new regulatory definitions of "firearm frame or receiver" and "frame or receiver" because the current regulations fail to capture the full meaning of those terms. The Department also proposes amending ATF's definitions of "firearm" and "gunsmith" to clarify the meaning of those terms, and to provide definitions of terms such as "complete weapon," "complete muffler or silencer device," "privately made firearm," and "readily" for purposes of clarity given advancements in firearms technology. Further, the Department proposes amendments to ATF's regulations on marking and recordkeeping that are necessary to implement these new or amended definitions.

Notice, 86 Fed. Reg. at 27,720. The Notice contained the text of the proposed rule. The comment period closed on August 19, 2021. ATF and the DOJ reviewed over 290,000 public comments, made several changes to the proposed definitions, and published the Final Rule on April 26, 2022. The Final Rule became effective on August 24, 2022. See Final Rule, 87 Fed. Reg. 24,652.

On July 5, 2022, Private Plaintiffs filed a complaint in the district court. Private Plaintiffs include: 1) an individual who lives in North Dakota and buys materials online to make firearms; 2) an LLC that holds an active federal firearms license and sells firearms in North Dakota; 3) a California corporation formed to protect the Second Amendment rights of gun owners; and 4) a Virginia corporation that operates as a nonprofit legal defense and educational foundation. Private Plaintiffs and the States filed an amended complaint on July 27.² The two complaints assert the same causes of action. The complaints discuss distinct harms for the different categories of plaintiffs.

The plaintiffs have three categories of claims. First, the plaintiffs argue the Final Rule violates the APA because the Notice did not give interested parties fair notice. Second, the plaintiffs argue the Final Rule violates federal law in several ways including: 1) updating definitions in a way that impermissibly expands the scope of the Act; 2) creating a new requirement that dealers put serial numbers on firearms; 3) creating a national gun registry in violation of 18 U.S.C. § 926 ("no such rule . . . may require that records required to be maintained under this chapter or any portion of the contents of such records, be recorded at or transferred to a facility owned, managed, or controlled by the United States[ ]"); and 4) generating requirements in violation of the Second Amendment. Finally, the plaintiffs argue the rule is arbitrary and capricious.

On August 23, 2022, the district court denied a motion for a preliminary injunction. On October 4, this court denied a motion for an injunction pending appeal. All parties have agreed to stay the case in the district court pending the result of this interlocutory appeal.³

II.

"A plaintiff seeking a preliminary injunction must establish four factors showing such relief is...