Fourth Circuit to Gun Shop: Break the Law Before Fighting It

By William Peacock, Esq. on October 19, 2012 | Last updated on March 21, 2019

Hire Order, Ltd, and Robert Privott, are both good ol' boys and good boys. These two entities, which operate federally-licensed gun shops in Virginia and North Carolina, follow the law to perfection. That law, however, prevents these two licensed dealers from selling guns to each other at a gun show.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives' predecessor issued Revenue Ruling 69-59 in 1969. This ruling essentially stated that holders of federal firearms licenses could not sell guns at any location outside of their licensed premises, including gun shows. In 1986, the Firearms Owners' Protection Act amended the law to state that sales could occur at gun shows in the same state as the licensed premises. The ATF's 1969 ruling continues to bar out-of-state gun show sales.

Hire Order, Ltd (d/b/a Afton Arms) has its licensed premises in Virginia. Privott (d/b/a Outer Banks Ammunition) has a store in North Carolina. As a result, Privott cannot sell firearms to a fellow licensed dealer at a Virginia gun show.

The two dealers attempted to challenge the interpretation of the statute, but were shot down due to the six year statute of limitations. The district court ruled that the clock started ticking in 1969, even though the two dealers didn’t start their businesses until 2008. The Fourth Circuit reviewed the lower court’s decision de novo.

Before their appeal was heard by the Fourth Circuit, the two plaintiffs sent a letter to the ATF requesting an amendment to Revenue Ruling 69-59. They were denied.

The review of the district court’s dismissal was upheld. The statute of limitations clock begins to tick at the moment of “final agency action.” This means that once the rule was issued in 1969, facial challenges to its validity must have been made within six years.

On the other hand, in dismissing the facial claim, the court did indicate that an as applied challenge might be possible. In other words, break the law and then challenge it.

As for the dealers’ request to the ATF to amend Revenue Ruling 69-59, its impact on the statute of limitations should not have been brought before the appeals court. Though it certainly might form the basis for an as applied challenge, the question was never brought in front of the district court. The plaintiffs will therefore have to bring a new case if they wish to bring an as applied challenge based on the letter.

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