T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3.

T he pa ne l una ni m ous l y f i nds thi s c a s e s ui t abl e f

orde c i s i on w i thout ** o r a l a r g u m e n t. See F ed. R . A pp . P . 34 (a )( 2).

T he H onor abl e T hom a s S . Z i l l y , S e ni orU ni t e d S t a t e s D i s tr i c tJ udge ** * f orthe W e s t e rn D i s tr i c tof W a s hi ngt on, s i tt i ng by de s i gna t i on. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T N A T IO N A L L E N D IN G G R O U P , L L C , an A r iz o n alim ite d liab ility c o rp o r a tio n ; e t a l., P l ai n t i ffs - A p p el l an t s, v. E R I C H . H O L D E R J r ., A tto rn e y G e n e r a l, A tt orney G ener al of the U ni t ed S t at es ; et a l., D efen d an t s - A p p el l ees. N o. 09- 15166 D. C . No . 2 : 0 7 - c v - 0 0 0 2 4 - P GR ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt

f orthe D i s tr i c tof

A r i z ona P aul G . R os e nbl a tt , D i s tr i c tJ udge , P r e s i di ng S ubm i tt e d F e brua ry 11, 2010 ** S a n F r a n c is c o , C a lif

o rn ia B e f o r e : T HO MP S ON a n d Mc KE OWN, C i r c u i tJ u d g e s , a n d Z I L L Y, S e ni or *** D i stri ctJudg e. 

# FI LED FEB 19 2 010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS09- 15166 2 N at i on al L endi ng G roup , L L C (“N at i on al L endi ng ”) and M i l l enni um B anc, L t d . (“ M i l l en n i u m ”), w h i ch are o r w ere en g ag ed i n th e p aw n b ro k er b u si n ess, ap p e a l f r o m th e d is tr ic t c o u rt’s g r a n t o f s u m m a ry ju d g m e n t c o n c lu d in g th a t, d u e to w i l l f ul vi ol a t i ons of

the G un C ontr ol A c tof 1968 ( “ G C A ” ) a nd r e l a t e d r e gul a t i ons by N at i on al L endi ng and M i l l enni um (c ol l ec t i vel y, “ L i ce nsee s” ), the A tt orney G e ne r a l w a s author i z e d t o r e voke c e r t a i n F e de r a l F i r e a rm s L i c e ns e s ( “ F F L s ” ) a nd de ny appl i c a t i ons f

orothe rF F L s . W e ha ve j ur i s di c t i on unde r28 U . S . C . § 1291, a nd w e a f

f i rm the di s tr i c tc ourt ’ s de c i s i on. T he G C A author i z e s the A tt orne y G e ne r a l , “ a f t e rnot i c e a nd oppor tuni ty f or he a r i ng, ” t o r e voke aF F L i f the l i c e ns e e “ ha s w i l l f

ul l y vi ol a t e d” a ny pr ovi s i on of the G C A orthe r e gul a t i ons pr om ul ga t e d the r e unde r . 18 U . S . C . § 923( e ) . W i l l f ul v io la tio n is a ls o ab a s is f o rth e A tto rn e y G e n e r a l to d e n y a n ap p lic a tio n f o raF F L . I d. § 9 23 (d)( 1)(C ). A n agg ri eved party m ayfi l e apet i t i on w i th the di stri ctcourt for the di stri cti n w hi ch the party r es i des or does busi ness , se eki ng de no vo j ud i ci al r e v ie w . I

d. § 9 23 (f

)( 3). T he di stri ctcourtm ay“ consi der a ny evi dence s ub m i tt ed by the pa r t i e s t o the pr oc e e di ng w he the rornots uc h e vi de nc e w a s c ons i de r e d a tthe he a r i ng he l d” by a n of

f i c e rw i th the B ur e au of

A l c ohol , T oba c c o, F i r e a rm s , a nd E x p lo s iv e s ( “A T F ” ) , to w h o m th e A tto rn e yG e n e r a l h a s d e le g a te d au th o r ity . I d. ; se e 2 8 C .F .R . § 0 .1 3 0 ( a ) ( 1 ) ; see a l so 27 C . F . R . § 478. 74.L i c e ns e e s ’ c ha r a c t e r i z a t i on of E xhi bi t s 83, 84, a nd 85 a s c ont a i ni ng or 1 const i tut i ng hear say does nothi ng t o adv ance thei r posi t i on because the F eder al R u le s o f E v id e n c e d o n o t ap p ly to a d m in is tr a tiv e p r o c e e d in g s . See Fe d . R. E v id . 1 1 0 1 ( a ) & ( b ) ; see a l so N at i on w i de Je w elry& P aw n, Inc. v. U ni ted Stat es , 45 5 F . S up p. 2d 13 79 , 13 83 (M . D . G a. 20 06 ). 09- 15166 3 F orthe f i r s tt i m e on appe a l , L i c e ns e e s r a i s e adue pr oc e s s c ha l l e nge t o the w a y i n w hi c h he a r i ngs w e r e c onduc t e d by A T F pr i ort o r e voc a t i on a nd de ni a l of the F F L s. B y f

ai l i ng t o p re se ntthe i ss ue t o the di stri ctcourt , L i ce nsee s w ai ved th e ird u e p r o c e s s c la im . See B r oad v . Se alas ka C or p. , 85 F . 3d 42 2, 43 0 (9th C i r. 1996) . W i th r e ga r d t o the di s tr i c tc our t ’ s r e vi e w of the de c i s i on t o r e voke a nd de ny the F F L s a ti s s ue , L i c e ns e e s a s s e r ttha tthe a dm i ni s tr a t i ve r e c or d c ont a i ns i nform at i on the di stri ctcourtshou l d n othave consi dere d b ec ause i tl ac ked p roper fo u n d at i o n o r co n st i tu t ed i n ad m i ssi b l e h earsay. I n m a k in g th is a r g u m e n t, 1 L i c e ns e e s f

a i l t o pr ovi de as i ngl e c i t a t i on t o the r e c or d. T he y c om pl a i n tha t , dur i ng the A T F proceedi ng , an A T F agentw ou l d b e handed a report“ fr om another l ocal la w e n f o r c e m e n t a g e n c y a n d a s k [ e d ] . . . ab o u t its c o n te n ts .” O p e n in g B r . a t 6 - 7 . T hey do n ot , ho w ever , po i ntt o any pl ac e i n the re cord w here such procedure w as fol l ow ed. T o the contrary , fi ve di ff er entst at e or l ocal l aw enforce m entoffi ce rs t e s t i f i e d a nd, i n e a c h i ns t a nc e , a l though the of f i c e rm i ghtnotha ve w r i tt e n the r e la te d r e p o rt, th e o f

f ic e rp e r s o n a lly o b s e rv e d o rp a r tic ip a te d in th e e v e n ts de s c r i be d.09- 15166 4 L i c e ns e e s ’ r e l a t e d c ont e nt i on tha t , i n c ons i de r i ng the a dm i ni s tr a t i ve r e c or d, the di s tr i c tc ourt“ e vi s c e r a t e d” R ul e 56 bor de r s on f r i vol ous . T he rul e s gove rni ng s u m m a ry ju d g m e n t s e t f o rth w ith p a r tic u la r ity th e r e q u ir e m e n ts o f a n a f f id a v it, se e F e d. R . C i v. P . 56( e ) , butc ontr a ry t o L i c e ns e e s ’ i m pl i c i ta s s e r t i on, the rul e s do not r e q u ir e th a t a f

f id a v its b e s u b m itte d . See F e d . R . C iv . P . 5 6 ( c ) ; see a l so A dv i sory C om m i tt ee N ot es (196 3) (r ef erri ng t o “ af

fi davi t s or other e vi dent i ary m att er ”) . L i cen sees’ att em p tt o ch aract eri ze M arkB ro o k s’ s i n v o l v em en tas m erel y a s e c ur e d c r e di t ori s l i ke w i s e m e r i t l e s s . T he e vi de nc e e s t abl i s he d tha tM r . B r ooks part i ci pat ed i n the dai l y a ct i vi t i es of the bu si ness , appeari ng behi nd the coun t er , hand l i ng fi re arm s, havi ng the al arm s c od es , and res po nd i ng t o al arm i nci dent s; that unt i l S e pt e m be r2005, he ha d di r e c tow ne r s hi p i nt e r e s ti n N a t i ona l L e ndi ng; a nd th a t a f te rS e p te m b e r2 0 0 5 , h e c o n tin u e d to h a v e a n o w n e r s h ip in te r e s t th r o u g h h is sol el y ow ned com pany, A l exi s J . , L . L . C . T he di stri ctcourtapprop ri at el y f ou nd an ab s e n c e o f

f a c tu a l is s u e s o n th e s u b

je c t. F i nal l y, w i th regard t o w i l l ful ness , L i ce nsee s argue thatthe type of e vi dence p resen t ed t o th e A T F H eari n g O ffi cer w as i n su ffi ci en tb ecau se i td i d n o test ab l i sh e ith e rah is to ry o f

r e g u la to ry v io la tio n s o ra n a d m itte d f a ilu r e to c o m p ly w ith kn ow n regul at ory r equi re m ent s. A l tho ug h a hi st ory of r egul at ory vi ol at i on s or an a dm i s s i on of

c ul pabi l i ty c ons t i tut e e vi de nc e of w i l l f ul ne s s , L i c e ns e e s pr ovi de no09- 15166 5 autho ri ty f

or the cont ent i on thatthese ar e the on l y m eans by w hi ch w i l l ful ness can be es t abl i shed. In thi s c as e, the evi dence of w i l l ful ness w as of a di ff er entnature, bu tw as equal l y or m ore c om pel l i ng . T he un di sput ed evi dence es t abl i shed that L i c e ns e e s kne w the r e qui r e m e nt s of the l a w , a nd notonl y w e r e pl a i nl y i ndi f f e r e nt to , b u t a ls o e n g a g e d in d e lib e r a te e f f o r ts to c ir c u m v e n t th e m . See G en. Store, Inc. v . V an L oan , 560 F . 3d 920, 923 ( 9th C i r . 2009) . R e voc a t i on a nd de ni a l of the F F L s a ti ss ue w as autho ri ze d, and the di stri ctcourtprop er l y grant ed sum m ary ju d g m e n t a g a in s t L ic e n s e e s . See Ste i n’s I nc . v . B lum e nthal , 6 4 9 F .2 d 4 6 3 , 4 6 4 n .2 (7th C i r. 19 80 ). AF F I RME D.