# State of Texas v. Bureau of Alcohol Tobacco Firearms and Explosives

> District Court, N.D. Texas · June 11, 2024

URL: https://www.frixlaw.com/law-library/cases/10672082

## Case

- **Court:** District Court, N.D. Texas
- **Decided:** June 11, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10672082

## How later opinions describe it (automated extraction)

- holding that courts must look to “the language and design of the statute as a whole”
- recognizing that “financ[ing] the organization’s activities, including the case’s litigation costs” constitutes an “indicia of membership”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
AMARILLO DIVISION

STATE OF TEXAS, et al.,

Plaintiffs,

v. 2:24-CV-089-Z

BUREAU OF ALCOHOL, TOBACCO,
FIREARMS, AND EXPLOSIVES, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiffs’ Motion for a Preliminary Injunction (“Motion”)
(ECF No. 16), filed May 9, 2024. Defendants filed their response (“Response”) (ECF No. 31)
on May 14, 2024. Having reviewed the briefing and relevant law, the Court GRANTS the Motion.
Defendants are hereby ENJOINED from enforcing the regulations — “Definition of ‘Engaged in
the Business’ as a Dealer in Firearms” (hereinafter “Final Rule”) — published at 89 Fed. Reg.
28968 (April 19, 2024) (to be codified at 27 C.F.R. pt. 478) against Plaintiffs Texas, Louisiana,
Mississippi, Utah, Jeffrey Tormey (“Tormey”), the Gun Owners of America, Inc. (“GOA”),
the Gun Owners Foundation (“GOF”), the Tennessee Firearms Association (“TFA”), and the
Virginia Citizens Defense League (“VCDL”) pending the resolution of this lawsuit.
BACKGROUND
The United States Attorney General has authority to enforce the Gun Control Act of 1968
(“GCA”) and promulgate regulations necessary to enforce its provisions. 18 U.S.C. § 926(a).
Congress and the Attorney General, in turn, delegated GCA administrative and enforcement
responsibilities to the Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives
(“ATF”). 28 U.S.C. §§ 599A(b)(1), (c)(1); 28 C.F.R. §§ 0.130(a)(1)–(2).
The GCA imposes strict requirements on firearms dealers and severe consequences for
violating them. It makes it unlawful for any person — save a licensed dealer — to “engage in the
business” of dealing in firearms until he has filed an application with ATF and received a license.
18 U.S.C. § 923(a). It requires dealers to conduct background checks on prospective firearms

recipients and to maintain records for tracing purposes. Id. §§ 922(t), 922(b)(5), 923(g)(1)(A).
And it provides that persons who willfully engage in the business of dealing firearms without
a license face imprisonment for up to five years, a fine of up to $250,000, or both. Id.
§§ 922(a)(1)(A), 924(a)(1)(D), 3571(b)(3). Any firearms involved in such violations may be
subject to administrative or civil forfeiture. Id. § 924(d)(1).
The Firearms Owners’ Protection Act of 1986 (“FOPA”) modified the GCA, adding a
statutory definition of “engaged in the business” as “a person who devotes time, attention, and
labor to dealing in firearms as a regular course of trade or business with the principal objective of
livelihood and profit through the repetitive purchase and resale of firearms.” Pub. L. 99-308,
§ 101, 100 Stat. 449, 450 (1986). Then in 2022, President Biden signed into law the Bipartisan

Safer Communities Act (“BSCA”). The BSCA broadened the definition of “engaged in the
business” by eliminating the requirement that a person’s “principal objective” of purchasing and
reselling firearms must include both “livelihood and profit,” replacing it with a requirement to
“predominantly earn a profit.” 18 U.S.C. § 921(a)(21)(C). However, the BSCA did not alter
FOPA’s exclusions for “a person who makes occasional sales, exchanges, or purchases of firearms
for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal
collection of firearms.” Id.
On April 19, 2024, ATF promulgated a Final Rule to “provide clarity to persons who
remain unsure of whether they are engaged in the business as a dealer in firearms with
the predominant intent of obtaining pecuniary gain.” 89 Fed. Reg. at 28968 (emphasis added).
To that end, it clarifies “that firearms dealing may occur wherever, or through whatever medium,
qualifying . . . activities are conducted.” Id. This includes “a gun show or event, flea market,
auction house, or gun range or club; at one’s home; by mail order; over the internet; [and] through

. . . other electronic means (e.g., an online broker, online auction, text messaging service, social
media raffle, or website) . . . .” Id. at 28973–74. And it clarifies that “a single firearm transaction
or offer to engage in a transaction” may require a license. Id. at 29091 (emphasis added).
Four States, a handful of organizations, and an individual citizen argue that the Final Rule
violates the Administrative Procedure Act (“APA”) and the Constitution. In their view, the Final
Rule is (1) arbitrary and capricious; (2) in excess of ATF’s lawful authority; (3) an abuse of ATF’s
discretion; (4) in contravention of the BSCA; and (5) violative of the Second and Fourth
Amendments. See generally ECF No. 16. And Plaintiffs aver that they will suffer irreparable harm
if the Final Rule takes effect. Id. at 2. Defendants respond that (1) Plaintiffs do not have standing,
and (2) even if they did, their claims fail on the merits. ECF No. 31 at 25, 36.

On May 9, 2024, Plaintiffs moved for a temporary restraining order (“TRO”). ECF No. 16.
After reviewing briefing and conducting a hearing, this Court granted a TRO — but not as to all
Plaintiffs. ECF No. 44. Observing that Louisiana, Mississippi, and Utah’s demonstration of
standing fell short, this Court excluded them from the TRO’s reach and ordered supplemental
briefing. ECF No. 60. Defendants responded to that supplemental briefing on June 7, 2024.
ECF No. 66.
LEGAL STANDARD

To obtain a preliminary injunction, Plaintiffs must show (1) a substantial likelihood of
prevailing on the merits; (2) a substantial threat of irreparable injury if the injunction is not granted;
(3) the threatened injury outweighs any harm that will result to the non-movant if the injunction is
granted; and (4) the injunction will not disserve the public interest. Robinson v. Ardoin, 86 F.4th
574, 587 (5th Cir. 2023); Air Prod. & Chemicals, Inc. v. Gen. Servs. Admin., No. 2:23-CV-147-Z,
2023 WL 7272115, at *2 (N.D. Tex. Nov. 2, 2023).

The first two factors are most critical, and the latter two merge when the government is an
opposing party. Valentine v. Collier, 956 F.3d 797, 801 (5th Cir. 2020); Nken v. Holder, 556 U.S.
418, 435 (2009). That said, no factor has a “fixed quantitative value.” Mock v. Garland, 75 F.4th
563, 587 (5th Cir. 2023). On the contrary, “a sliding scale is utilized, which takes into account the
intensity of each in a given calculus.” Id. In sum, “[t]he decision to grant or deny [relief] lies within
the sound discretion of the trial court . . . .” White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989).
ANALYSIS
I. All Plaintiffs have standing.
“Article III standing is a threshold issue.” Cibolo Waste, Inc. v. City of San Antonio, 718
F.3d 469, 473 (5th Cir. 2013). As such, the Court addresses it before moving on to the merits.

See Env’t Conservation Org. v. City of Dallas, 529 F.3d 519, 525 (5th Cir. 2008) (“[B]efore
considering any other matters raised by the parties, [the Court is] obliged to resolve the standing
question as a threshold matter of jurisdiction.”) (internal marks omitted).
To have standing, a plaintiff must have (1) suffered an injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a
favorable judicial decision. Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016), as revised (May 24,
2016). And such an injury must be “concrete, particularized, and actual or imminent . . . .”
Davis v. Fed. Election Comm’n, 554 U.S. 724, 733 (2008); Texas v. Biden, 589 F. Supp. 3d 595,
611 (N.D. Tex. 2022).
A. Plaintiff States
Texas, Louisiana, Mississippi, and Utah all plead a “pocketbook injury” — “a prototypical
form of injury in fact.” Collins v. Yellen, 141 S. Ct. 1761, 1779 (2021); Czyzewski v. Jevic Holding
Corp., 580 U.S. 451, 461 (2017). Each State illustrates that the Final Rule will prohibit otherwise

eligible persons from obtaining a Federal Firearms License (“FFL”), thereby reducing total
attendance and sales at gun shows. This is not speculative. See ECF Nos. 61-1 at 2 (Declaration of
Darwin Boedeker) (describing a “30% loss in reservations and attendance at [Boedeker’s] shows”
and “a loss of about $150,000 over the last six weeks” due to a reduction in “attendance, sales of
tables, and people coming to sell” firearms); 37 at 7–8; 59 at 2–3; 62 at 3; 64 at 5–6. Indeed, the
Final Rule itself recognizes — and anticipates — this effect. See 89 Fed. Reg. at 29054 (providing
an estimate “of the proportion of those sellers who are likely to be either unwilling or unable to
become licensed as an FFL as a result of the [Final Rule]”) (emphasis added). And because each
State collects a sales tax applicable to gun show admission fees, floor space fees, rental fees,
parking fees, and — of course — the sale of firearms, each State will sustain financial losses.1

ECF Nos. 37 at 7; 59 at 3; 62 at 2; 64 at 5.
Although the foregoing is itself a sufficient injury, the States specify that even taxable
gun sales by persons without an FFL will be reduced as well. See ECF No. 59-1 at 6
(“Many websites allow lawful sales of firearms by persons who are not required to be an FFL.”).
Those sales are taxed. See ECF No. 62-1 at 1–2 (“Internet sellers . . . are required to register to
collect Mississippi use tax on behalf of their Mississippi customers.”). Louisiana, for example,
collects a 4.45 percent sales tax on internet sales, purchases, and trades of firearms. ECF No. 59-
1 at 6. As such, the Final Rule injures the States by — at the very least — (1) reducing taxable

1 See Taxes — Fairs, Festivals, Markets, and Shows, https://comptroller.texas.gov/taxes/publications/96-211.php#:~:t
ext=You%20must%20collect%20sales%20or,tax%20on%20your%20taxable%20sales.
sales by persons with FFLs, and (2) reducing taxable sales by persons without FFLs. Both results
shrink the firearms market, lower attendance at gun shows, and deny the States taxable revenue.
Lastly, traceability and redressability “typically overlap” when a plaintiff challenges
government action. Carpenters Indus. Council v. Zinke, 854 F.3d 1, 6 n.1 (D.C. Cir. 2017)

(Kavanaugh, J.). Here, the States establish that the Final Rule will result in losses to State fiscs.
See, e.g., ECF Nos. 59-1 at 6 (Declaration of Lucius L. Morris II of the Louisiana Department
of Revenue); 62-1 at 1 (Declaration of Gregory I. Duke of the Mississippi Department of
Revenue); 61-3 at 2 (Declaration of Murl E. Miller of the Office of the Texas Comptroller).
That is a “real, immediate, and direct” injury. See Davis v. Fed. Election Comm’n, 554 U.S. 724,
734 (2008). Moreover, enjoining the Final Rule — a but-for cause of the States’ lost revenue —
will redress that injury. See Carpenters Indus. Council v. Zinke, 854 F.3d at 6 n.1 (“After all, if a
government action causes an injury, enjoining the action usually will redress that injury.”).
Defendants respond with several arguments. First, they argue that Plaintiff States’ pled
injuries are foreclosed by United States v. Texas, 599 U.S. 670 (2023). But that case merely held

that a “State’s claim for standing can become more attenuated” when it asserts “that a federal law
has produced only . . . indirect effects” on “state revenues or state spending.” Texas, 599 U.S. at
680, n.3 (2023) (emphasis added). “Can” does not mean “does.” Rather, Texas counsels that —
in evaluating standing — a fact-specific, case-by-case inquiry is appropriate. The Supreme Court
acknowledged as much about its decision. See id. at 683 (“The Court’s standing decision today is
narrow and simply maintains the longstanding jurisprudential status quo.”).
Defendants next cite El Paso Cnty, Texas v. Trump for the proposition that “incidental and
attenuated harm” to “general tax revenue” is “insufficient to grant a state or county standing.”
982 F.3d 332, 341 (5th Cir. 2020); ECF No. 66 at 10. There, the Fifth Circuit explained that “[a]
direct link, such as the loss of a specific tax revenue, is necessary . . . .” El Paso Cnty.,
982 F.3d at 340 (emphasis added). But that is what Plaintiff States provide. In line with cases like
Wyoming v. Oklahoma, they allege “a direct injury in the form of a loss of specific tax revenues.”
502 U.S. 437, 438 (1992) (emphasis added). Those tax revenues include, first and foremost, the

sales and use taxes levied against firearms transactions (both at gun shows and via e-commerce)
— but also motor fuels taxes, entertainment taxes, alcoholic beverages taxes, hotel taxes, and more.
ECF Nos. 61-3 at 4–5 (Declaration of Murl E. Miller of the Office of the Texas Comptroller);
59-1 at 6 (Declaration of Lucius L. Morris II of the Louisiana Department of Revenue); 62-1 at 1
(Declaration of Gregory I. Duke of the Mississippi Department of Revenue); 64 at 5 (State of
Utah’s Brief on Standing).
Lastly, Defendants object that Plaintiff Texas’s evidence merely suggests “that firearms
sales at certain gun shows decreased compared to previous shows, which the promoter attributes
to vendors’ confusion regarding the [Final] Rule’s scope.” ECF No. 66 at 16 (emphasis in original).
As such, the evidence “does not . . . speak to whether the number of firearms sold in Texas overall

— including by FFLs and unlicensed sellers unimpacted by the Rule — decreased as well.” Id.
(emphasis in original). But how Texas — or any State, entity, or organization — could possibly
demonstrate that is unclear. Indeed, the nature of many unlicensed sales is that they go unreported.
In any event, a demonstration of omniscience is not required for Article III standing. See Clapper
v. Amnesty Int’l USA, 568 U.S. 398, 414 n.5 (2013) (“Our cases do not uniformly require plaintiffs
to demonstrate that it is literally certain that the harms they identify will come about.”).
Rather, courts “have found standing based on a ‘substantial risk’ that the harm will occur . . . .” Id.
(quoting Monsanto Co. v. Geertson Seed Farms, 130 S. Ct. 2743, 2747 (2010)). Plaintiff States
meet their burden.
B. Plaintiff Tormey
Challenging the potential future enforcement of a regulation requires a plaintiff to show
(1) “an intention to engage in a course of conduct” that is “arguably proscribed” by the regulation
and (2) that “the threat of future enforcement . . . is substantial.” Susan B. Anthony List v. Driehaus,

573 U.S. 149, 161–64 (2014). Tormey is a gun owner who possesses a “large personal collection
of firearms” that he “accumulated over many years.” ECF No. 53 at 1. He pleads that he has
“bought, sold, and traded firearms” and “previously purchased a table at certain gun shows, in
order to facilitate enhancing [his] collection.” ECF No. 16-3 at 3. He frequently changes the
“model of firearm [he] carr[ies] for personal protection” due to the rapid changes in firearms
technology. ECF No. 53-1 at 2. And he fears the Final Rule presumes “that much of his perfectly
lawful conduct is in fact felonious, foisting on him the burden to prove his innocence for conduct
that the statute already expressly declares to be lawful.” ECF No. 53 at 2.
In response, Defendants contend that Tormey’s intended conduct “does not . . . rise to the
level of being ‘engaged in the business.’” ECF No. 66 at 20; see also Tr. at 36: 18–21 (“[Tormey’s

conduct] is not the type of conduct that would implicate the [Final Rule] which targets unlicensed
individuals engaged in the selling of firearms . . . principally for profit.”). In support of that
contention, they cite the Final Rule’s definition of “engaged in the business”: “[a] person who
devotes time, attention, and labor to dealing in firearms as a regular course of trade or business to
predominantly earn a profit through the repetitive purchase and resale of firearms.” ECF No. 66 at
20 (citing 89 Fed. Reg. at 29091). From that, they conclude that “occasionally sell[ing] a small
number of personal-protection firearms to upgrade to newer models do[es] not meet [the] multi-
element standard.” ECF No. 66 at 21–22.
But for the reasons explained infra, the Court disagrees. See Part II(A). Moreover,
Defendants fail to clarify which element Tormey has not met. Instead, they assure Tormey that “a
fact-specific inquiry” governs whether someone is “engaged in the business of dealing.” Id. at 22.
Given Defendants’ subsequent reiteration that “a person can be engaged in the business of dealing

without necessarily having completed multiple firearms sales,” the promise of a “fact-specific
inquiry” is cold comfort. Id. at 21–22.
Defendants next argue that Tormey fails to illustrate that the “threat of future enforcement”
against him is “substantial.” Id. at 22 (citing Susan B. Anthony List, 573 U.S. at 164). But that case
“treated the threat of future enforcement as case- and fact-specific, understanding that evaluating
threats . . . cannot be neatly reduced to a rigid formula.” Braidwood Mgmt., Inc. v. Equal Emp.
Opportunity Comm’n, 70 F.4th 914, 928 (5th Cir. 2023). The Fifth Circuit in Braidwood counsels
that “even a ‘public[] announce[ment]’ to enforce a statute and one prior proceeding are sufficient
for standing.” Id. (quoting Telescope Media Grp. v. Lucero, 936 F.3d 740, 750 (8th Cir. 2019)).
Here, Defendants announced their intent to enforce the Final Rule. ECF No. 37 at 9. And Plaintiffs

have identified a prior enforcement proceeding “targeting conduct falling squarely within the
[Final] Rule’s ambit.” Id.; e.g., ECF No. 16-4 at 8–9 (Declaration of Erich M. Pratt).
Defendants respond that (1) the identified prior enforcement proceeding “involved very
different circumstances than those set forth in Tormey’s declarations,” and (2) the Fifth Circuit in
Braidwood only found standing “where there was a prior enforcement action and the plaintiffs
were unquestionably ‘breaking’ the agency guidance they were challenging.” ECF No. 66 at 23
(emphasis in original). Neither argument succeeds. First, the prior enforcement proceeding
involved a man — Mr. Arwady — who voluntarily surrendered his FFL after having been
prosecuted by ATF but acquitted on all charges. ECF No. 16-4 at 8. He then “sold those personally
owned firearms to other private parties” to liquidate his collection and recoup his investment. Id.
In doing so, Mr. Arwady did more than the law required: he paid for a transfer from his local FFL
to the buyer’s FFL and ensured proper paperwork and background checks for each firearm and
buyer, respectively. Id. at 9. Nevertheless, ATF charged him with being “engaged in the business”

without a license, arrested him, “put him in federal lockup, and seized his lifetime of collected
firearms.” Id. After the government brought the case to trial, the jury unanimously voted — again
— to acquit him of all charges. Id. As such, Mr. Arwady’s case and that of Tormey are relevantly
similar in at least three ways: (1) neither held, nor hold, an FFL; (2) both intended, or intend, to
sell firearms from a “personal collection”; and (3) Mr. Arwady was charged under — and Tormey
challenges — similar “engaged in the business” language. ECF No. 44 at 6.
Second, Defendants misconstrue Braidwood. They characterize the Fifth Circuit as having
found — via independent factual analysis — that “the plaintiffs were unquestionably ‘breaking’
the agency guidance they were challenging.” ECF No. 66 at 23. Not quite. The court in Braidwood
merely recognized that the plaintiffs “admit they are breaking [the] guidance” and “posit statutory

. . . issues with the laws under which they are at risk of being prosecuted.” Braidwood, 70 F.4th at
926 (emphasis added). But even if the Braidwood court had made such a finding, the opinion
nowhere suggests that the “threat of enforcement” analysis requires this Court to find an actual
violation. It suffices that the threat against Tormey is “substantial.” Susan B. Anthony List, 573
U.S. at 164. And Defendants do not deny — nor could they — that such an enforcement would
result in irreparable injury if it occurred.
C. Plaintiff Organizations
Under the doctrine of associational standing, an association may bring suit on behalf of its
members when (1) those members would otherwise have standing to sue; (2) the interests it seeks
to protect are germane to the organization’s purpose; and (3) neither the claim asserted nor the
relief requested requires the participation of individual members. Hancock Cnty. Bd. of Sup’rs v.
Ruhr, 487 F. Appx. 189, 195 (5th Cir. 2012) (citing Ass’n of Am. Physicians & Surgeons, Inc. v.
Tex. Med. Bd., 627 F.3d 547, 550 (5th Cir. 2010)).

Here, three organizations (GOA, TFA, and VCDL) count Tormey — who has standing —
as a member. ECF No.16-3 at 2. Moreover, TFA and VCDL have provided declarations evidencing
that they have specific members “who will be impacted [by the Final Rule] because they have . . .
bought and resold firearms, and wish to do so in the future without being improperly labeled as a
‘dealer’ in firearms.” ECF No. 16-5 at 3 (Declaration of C. Richard Archie); ECF No. 16-6 at 3–4
(Declaration of Philip Van Cleave). The same holds true for GOF. See ECF No. 16-4 at 4
(Declaration of Erich M. Pratt). And the GOA describes a former FFL whose retirement savings
are now frozen in unsellable inventory. ECF Nos. 37 at 11; 16-4 at 8.
Defendants respond that GOF “is not the sort of membership organization that can
invoke such standing in the first place.” ECF No. 66 at 24–25. And indeed, “a non-membership

organization . . . cannot contend that it has associational standing.” Vote.org v. Callanen,
39 F.4th 297, 303 n.2 (5th Cir. 2022). However, an association without traditional members may
establish standing “by proving that it has ‘indicia of membership’ . . . .” Funeral Consumers All.,
Inc. v. Serv. Corp. Int’l, 695 F.3d 330, 344 n.9 (5th Cir. 2012) (quoting Hunt v. Wash. State Apple
Advert. Comm’n, 432 U.S. 333, 344 (1977)); see also Gettman v. Drug Enf’t Admin., 290 F.3d
430, 435 (D.C. Cir. 2002) (“In determining whether an organization that has no members in the
traditional sense may nonetheless assert associational standing, the question is whether the
organization is the functional equivalent of a traditional membership organization.”).
As described in Plaintiffs’ Complaint, GOF is “a nonprofit legal defense and educational
foundation” that is “supported by gun owners across the country.” ECF No. 1 at 4. It litigates
cases “throughout the country on behalf of [its] members and supporters.” ECF No. 56 at 4.
GOF members receive information about its activities through a quarterly newsletter and regular

emails about its activities. Id. at 3. They regularly communicate their views to GOF about issues
on which GOF should focus. Id. And they voluntarily fund GOF. Id. Indeed, because GOF is a
nonprofit organization, it receives all its funding from supporters. Id. The foregoing, together,
suffice for GOF’s associational standing. See Funeral Consumers All., 695 F.3d at 344 n.9
(“The organization must represent the individuals it claims as members and provide ‘the means by
which [those individuals] express their collective views and protect their collective interests.’”)
(quoting Hunt, 432 U.S. at 345); see also id. (recognizing that “financ[ing] the organization’s
activities, including the case’s litigation costs” constitutes an “indicia of membership”).
Defendants next argue that the organizations must identify their members by name to have
associational standing. See ECF No. 31 at 33 (“[The organizational Plaintiffs] cannot establish

standing based on an unnamed member.”). But Defendants’ purported support, Summers v. Earth
Island Institute, did not consider impermissible reliance on anonymous or pseudonymous
declarations to establish standing.2 555 U.S. 488, 495 (2009). Rather, it considered the plaintiffs’
failure “to allege that any particular . . . sale or other project claimed to be unlawfully subject to
the regulations [would] impede a specific and concrete plan” of the plaintiffs. Id. (emphasis in
original). Nor has the Supreme Court adopted a “naming requirement” — such as the one proposed
by Defendants — in the wake of Summers. See, e.g., Students for Fair Admissions, Inc. v. Harvard,

2 The Tenth Circuit recognized that “[a]nonymity was not even an issue before the Supreme Court in Summers.”
Speech First, Inc. v. Shrum, 92 F.4th 947, 949 (10th Cir. 2024). “Although one might read language in that opinion to
require that only persons identified by their legal names can have standing, that was clearly not the intent of the Court.”
Id. “The opinion provided no hint, much less an emphatic statement, that it was abrogating decades of precedent.” Id.
600 U.S. 181, 200–01 (2023) (holding that an organization had standing “when it filed suit” where
it “identified” individual harmed members but did not provide their names).
Moreover, Defendants may be correct that some other Circuits require a named member.
See ECF No. 66 at 25 (arguing that cases from the First, Second, and Sixth Circuits establish that

unnamed members are insufficient for associational standing). But this Circuit does not. See, e.g.,
Hancock Cnty. Bd. of Sup’rs, 487 F. Appx. at 195 (upholding the use of anonymous declarations);
Speech First, Inc. v. Fenves, 979 F.3d 319, 335 (5th Cir. 2020) (accepting anonymous
declarations); Chamber of Com. of U.S.A. v. Consumer Fin. Prot. Bureau, No. 6:22-CV-00381,
2023 WL 5835951, at *6 (E.D. Tex. Sept. 8, 2023) (“[D]efendants argue that no plaintiff has shown
that an ‘identified member’ suffers harm because some plaintiffs have used pseudonyms . . . .
That argument fails.”); id. (finding that anonymous declarations “credibly show that plaintiffs have
identified members . . . currently suffering cognizable harm”).
Lastly, Defendants argue that, “[r]ather than providing declarations from members
themselves, the organizations each filed a supplemental declaration from one of its leaders” that

merely “summarizes statements made by other non-declarants . . . who purportedly ‘fear’ that the
[Final] Rule will affect them in some way.” ECF No. 66 at 25. This objection fails for two reasons.
First, it is factually inaccurate. In TFA’s case, for example, it filed a declaration from C. Richard
Archie, who is both a director and a member of the TFA. See ECF No. 54-1 at 1 (“I make these
statements in my capacity as a director of the [TFA], of which I am also a member.”) (emphasis
added). As with many organizations of this sort, there is no expectation that a leader will not also
be a member — if anything, the opposite assumption holds. Second, the declarations provide
concreteness and detail, not mere fears that the Final Rule will affect the declarants in some way.
See, e.g., id. at 4–5 (explaining that the Final Rule’s examples, exceptions, and presumptions make
it unclear how personal collections of firearms will be treated, thereby discouraging the altering,
amending, improving, or selling of parts of the collection); 55-1 at 2 (describing a gun owner’s
concern that selling firearms from his personal collection will require him “to rebut th[e]
presumption” of having an “intent to predominantly earn a profit,” pursuant to 89 Fed. Reg. at

29091); 57-1 at 2.
The foregoing analyses establish that all Plaintiffs — the States, Tormey, and the firearm
organizations — have standing. Having addressed that “threshold inquiry,” this Court now moves
to the merits analysis. See Cibolo Waste, Inc., 718 F.3d at 473.
II. Plaintiffs are substantially likely to prevail on their APA claim.
Judicial review under the APA is limited to the administrative record. 5 U.S.C. § 706.
“[A]gencies, as mere creatures of statute, must point to explicit Congressional authority justifying
their decisions.” Clean Water Action v. U.S. Env’t Prot. Agency, 936 F.3d 308, 313 n.10 (5th Cir.
2019); see also Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“It is axiomatic that
an administrative agency’s power to promulgate legislative regulations is limited to the authority

delegated by Congress.”). As such, courts are compelled to “hold unlawful and set aside agency
action[s]” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law” or “in excess of statutory . . . authority . . . .” 5 U.S.C. § 706(2)(A), (C).
The “arbitrary and capricious” standard asks a court to consider whether the agency
“has relied on factors which Congress has not intended . . . , entirely failed to consider an important
aspect of the problem, offered an explanation for its decision that runs counter to the evidence[,]”
or is “so implausible that it could not be ascribed to a difference in view or the product of agency
expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
As this is a question of statutory interpretation, the Court begins with the text. United States
v. Lauderdale Cnty., Miss., 914 F.3d 960, 961 (5th Cir. 2019); Air Prod. & Chemicals, Inc. v.
Gen. Servs. Admin., No. 2:23-CV-147-Z, 2023 WL 7272115, at *7 (N.D. Tex. Nov. 2, 2023).
Here, the Final Rule clashes with the text of the BSCA in at least three ways. First, it asserts that

there is no “minimum number of firearms to actually be sold to be ‘engaged in the business’” for
the purposes of the licensing requirement. 89 Fed. Reg. at 29021. “[A] single firearm transaction”
— or even a mere offer to engage in a transaction — may suffice. Id. at 28976.
[W]hile selling large numbers of firearms or engaging or offering to engage in
frequent transactions may be highly indicative of business activity, neither the
courts nor the Department have recognized a set minimum number of firearms
purchased or resold that triggers the licensing requirement. Similarly, there is no
minimum number of transactions that determines whether a person is “engaged in
the business” of dealing in firearms. Even a single firearm transaction, or offer to
engage in a transaction, when combined with other evidence, may be sufficient to
require a license.

89 Fed. Reg. at 28976 (emphasis added).
But the BSCA says otherwise:
The term “engaged in the business” means . . .
***

as applied to a dealer in firearms, as defined in section 921(a)(11)(A), a person who
devotes time, attention, and labor to dealing in firearms as a regular course of trade
or business to predominantly earn a profit through the repetitive purchase and
resale of firearms, but such term shall not include a person who makes occasional
sales, exchanges, or purchases of firearms for the enhancement of a personal
collection or for a hobby, or who sells all or part of his personal collection of
firearms[.]

18 U.S.C. § 921(a)(21)(C) (emphasis added).
Defendants’ proffered interpretation is severely undercut by Section 921(a)(21)(C)’s use
of (1) “firearms,” in the plural; (2) the phrase “regular course,” clearly contemplating a series of
events; (3) “repetitive,” meaning more than once; and (4) the Section’s exemption of “sales,
exchanges, or purchases” in the plural. 18 U.S.C. § 921(a)(21)(C). So too does Section
921(a)(21)(C) require the “purchase and resale” of firearms — a conjunctive requirement that
flatly contradicts Defendants’ assertion that “there is no minimum threshold number of firearms
purchased or sold that triggers the licensing requirement.” 89 Fed. Reg. at 29091 (emphasis

added).
Second, the Final Rule suggests that “actual profit is not a requirement of the statute —
it is only the predominant intent to earn a profit through the repetitive purchase and resale of
firearms that is required.” Id. at 29045. In other words, “a person may repeatedly advertise and
display firearms for sale, and therefore demonstrate a predominant intent to earn a profit
from repeatedly reselling the firearms purchased, but never actually find a buyer.” Id.
But Section (a)(22) of the BSCA provides:
The term “to predominantly earn a profit” means that the intent underlying the sale
or disposition of firearms is predominantly one of obtaining pecuniary gain, as
opposed to other intents, such as improving or liquidating a personal firearms
collection: Provided, That proof of profit shall not be required as to a person who
engages in the regular and repetitive purchase and disposition of firearms for
criminal purposes or terrorism.

18 U.S.C § 921(a)(22) (emphasis added).
The negative corollary is obvious: while proof of profit is not required “for criminal
purposes or terrorism,” it is required for all other cases. See Baptist Mem’l Hosp. - Golden
Triangle, Inc. v. Azar, 956 F.3d 689, 694 (5th Cir. 2020) (“[T]he canon of Expressio Unius Est
Exclusio Alterius . . . provides that expressing one item of [an] associated group or series excludes
another left unmentioned.”) (internal marks omitted). Moreover, the mere fact that the word
“intent” appears in the Section does not necessitate — or even suggest — that intent is all that is
required. Rather, the Section’s usage of “intent” serves to distinguish the type of intent
contemplated: “one of obtaining pecuniary gain.” 18 U.S.C § 921(a)(22). Action is needed, too.
Third, the Final Rule arbitrarily eviscerates Section 921(a)(21)(C)’s safe harbor provision.3
That provision reads:
The term “engaged in the business” . . . shall not include a person who makes
occasional sales, exchanges, or purchases of firearms for the enhancement of a
personal collection or for a hobby, or who sells all or part of his personal collection
of firearms[.]

18 U.S.C. § 921(a)(21)(C). Nothing in the foregoing text suggests that the term “personal
collection” does not include firearms accumulated primarily for personal protection — yet that is
exactly what the Final Rule asserts. See 89 Fed. Reg. at 29090 (“[T]he term [personal collection]
shall not include firearms accumulated . . . for personal protection[.]”). Nor can Defendants’
position be supported by its own interpretative policy of implementing terms’ “common meaning.”
See id. at 28974 (“This definition is consistent with the common meaning of ‘purchase,’ . . . .
This definition is consistent with the common meaning of ‘sale[.]’”). Here, Plaintiffs’ reading of
the Section 921(a)(21)(C) terminology “personal collection” is more consonant with “common
meaning.” See Collection, WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (1993) (“[A]
number of objects or persons or a quantity of a substance that has been collected or has collected
often according to some unifying principle . . . .”); see also Collection, WEBSTER’S SECOND NEW
INTERNATIONAL DICTIONARY (1940) (“That which is collected; as: a gathering or assemblage of
objects or of persons; an accumulation of specimens of a certain class . . . .”).
Yet Defendants maintain their interpretation despite acknowledging that “two-thirds of
Americans report owning firearms primarily for ‘defense’ or ‘protection’” — thereby necessitating
the absurdity that the statute’s safe harbor provision provides no safe harbor at all for the majority

3 Defendants themselves recognize the accuracy of the phrase “safe harbor provision” and utilize it several times
throughout the Final Rule. See, e.g., 89 Fed. Reg. at 29025 (“The proposed rule explicitly recognized the GCA’s ‘safe
harbor’ provision that a person is not engaged in the business if the person makes occasional sales, exchanges, or
purchases of firearms for the enhancement of a personal collection or for a hobby.”).
of gun owners. 89 Fed. Reg. at 29036. Such an interpretation is untenable given the provision’s
logical statutory role. See A. Scalia & B. Garner, READING LAW: THE INTERPRETATION OF LEGAL
TEXTS 167 (2012) (“[T]he whole-text canon . . . calls on the judicial interpreter to consider the
entire text, in view of its structure and of the physical and logical relation of its many parts,” as

“[t]he entirety of the document thus provides the context for each of its parts.”) (emphasis added);
K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988) (holding that courts must look to “the
language and design of the statute as a whole”); FDA v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 133 (2000) (“A court must . . . interpret the statute as a symmetrical and coherent
regulatory scheme, and fit, if possible, all parts into a[] harmonious whole.”).
Lastly, the Final Rule creates sets of presumptions indicating (1) “when a person has the
intent to ‘predominantly earn a profit’” and (2) “that someone is ‘engaged in the business.’”
89 Fed. Reg. at 28968–69. But these presumptions are highly problematic for at least two reasons.
First, they flip the statute on its head by requiring that firearm owners prove innocence rather than
the government prove guilt. See id. at 29024 (“[T]he presumptions are rebuttable, so in the event

a civil or administrative proceeding is brought, and a presumption is raised, it can be rebutted with
reliable evidence to the contrary.”) (emphasis added). Second, several presumptions conflict with
the statutory text. Two of them, for example, provide that a person is presumptively “engaged in
the business” if he “demonstrates a willingness and ability to purchase and resell” firearms or
“purchases . . . or . . . resells” firearms. Id. at 29091 (emphasis added). But as discussed supra,
a mere willingness is not enough — there must also be prohibited acts. See 18 U.S.C.
§ 921(a)(21)(C) (“through the repetitive purchase and resale of firearms”) (emphasis added).
Nor is purchasing or reselling sufficient — the statute provides a conjunctive. See id.
(“purchas[ing] and res[elling]”) (emphasis added).
Plaintiffs understandably fear that these presumptions will trigger civil or criminal
penalties for conduct deemed lawful just yesterday. Nevertheless, ATF avers that its “knowledge
of existing case law” and “subject-matter expertise” will prevent misuse or abuse of the
presumptions. 89 Fed. Reg. at 28975. In other words, “just trust us.” But “[p]resumptions,

especially in administrative proceedings that may generate institution-destroying liability, cannot
be a matter of Department ipse dixit.” Career Colleges & Sch. of Tex. v. U.S. Dep’t of Educ.,
98 F.4th 220, 251 (5th Cir. 2024). As such, Defendants’ assurances fall short.
For the foregoing reasons, Plaintiffs are substantially likely to succeed on the merits of
their APA claim. Accordingly, further analysis of their other claims — including their
constitutional ones — is unnecessary at this time. See VanDerStok v. BlackHawk Mfg. Grp. Inc.,
659 F. Supp. 3d 736, 741 (N.D. Tex. 2023) (“To obtain a preliminary injunction, . . . movants must
show that they are likely to succeed on the merits of at least one of their claims.”) (emphasis
added); Daniels Health Scis., L.L.C. v. Vascular Health Scis., L.L.C., 710 F.3d 579, 582 (5th Cir.
2013). “The Court defers ruling on the remaining Counts, which should not be construed as an

indication of the Court’s view of their merits.” Texas v. United States, 515 F. Supp. 3d 627, 632
(S.D. Tex. 2021).
III. Plaintiffs face irreparable injury and are favored by the equities and public
interest.

“In general, a harm is irreparable where there is no adequate remedy at law, such as
monetary damages.” U.S. Navy Seals 1-26 v. Biden, 27 F.4th 336, 348 (5th Cir. 2022); VanDerStok
v. Garland, 625 F. Supp. 3d 570, 582 (N.D. Tex. 2022). Irreparable harm must also be concrete,
non-speculative, and more than de minimis. Daniels Health Scis., L.L.C., 710 F.3d at 586.
Lastly, “[t]he government’s and the public’s interests merge when the government is a party.”
Mock v. Garland, 75 F.4th 563, 577 (5th Cir. 2023).
That Plaintiffs would suffer irreparable injury absent an injunction is hard to dispute.
Plaintiff States face the irreparable injury of revenue loss. Wages & White Lion Invs., 16 F.4th
1130, 1142 (5th Cir. 2021). The particular amount of that revenue loss is of limited relevance.
See Rest. L. Ctr. v. U.S. Dep’t of Lab., 66 F.4th 593, 597 (5th Cir. 2023) (“In determining whether

costs are irreparable, the key inquiry is ‘not so much the magnitude but the irreparability.’”)
(quoting Texas v. U.S. Env’t Prot. Agency, 829 F.3d 405, 433 (5th Cir. 2016)). Indeed, “[e]ven
purely economic costs may count as irreparable harm ‘where they cannot be recovered in the
ordinary course of litigation.’” Id. (quoting Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674
(D.C. Cir. 1985)).
Other Plaintiffs face both civil and criminal enforcement actions for engaging in conduct
that the BSCA permits but the Final Rule impermissibly forbids. They cannot engage in lawful,
noncommercial conduct without fear of prosecution. They cannot collect firearms for personal
defense while enjoying statutory protection. Nor can they dispose of firearms from their
personal collections for fear of being presumed “engaged in the business.” ECF No. 16 at 43.

And Plaintiffs’ monetary costs — as well as those accrued by persons seeking licensure to avoid
liability — “are unrecoverable because of the government–defendant’s sovereign immunity from
monetary damages[.]” Nat’l Rifle Ass’n of Am., Inc. v. Bureau of Alcohol, Tobacco, Firearms &
Explosives, No. 3:23-CV-1471-L, 2024 WL 1349307, at *9 (N.D. Tex. Mar. 29, 2024); see also
Louisiana v. Biden, 55 F.4th 1017, 1034 (5th Cir. 2022) (“[C]omplying with a regulation later held
invalid almost always produces the irreparable harm of nonrecoverable compliance costs[.])”
Moreover, “[t]here is generally no public interest in the perpetuation of unlawful agency
action.” State v. Biden, 10 F.4th 538, 560 (5th Cir. 2021). And as this Court’s analysis makes clear,
Defendants’ Final Rule is almost certainly violative of — at the least — the APA. As such, “both
the balance of equities and the public interest weigh in favor of allowing orderly judicial review
of the Rule before anyone shuts down their businesses or sends them to jail.” VanDerStok v.
Garland, 2023 U.S. App. LEXIS 26499, at *6 (Sth Cir. Oct. 2, 2023).
CONCLUSION
Plaintiffs’ Motion for a preliminary injunction is GRANTED. Defendants are hereby
ENJOINED from enforcing the regulations — “Definition of ‘Engaged in the Business’ as a
Dealer in Firearms” — published at 89 Fed. Reg. 28968 (April 19, 2024) (to be codified at 27
C.F.R. pt. 478) against all Plaintiffs pending the resolution of this lawsuit.
SO ORDERED.
June 11, 2024

MATTHEW J. KACSMARYK
ITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10672082. Public record. Not legal advice.