The H onorab le G . P a tric k M urph y ofthe Southern Dist ri ct  ofI l l i noi s , s i t t i ng by des i gna t i on.



## In the 

# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

N o. 10

- 2927 S H A WA NO G UN & L OAN, LLC , d /b/a S H A WA NO G UN & L OAN, Plai nt i f f

-Appe l l ant, v.

M ARY J O H UGHES, Dir ecto r ofInd ustr y Opera ti ons, Bu re au ofA l cohol, Tobac co, Fi re ar m s a nd Exp l osi ves, D efend a nt-A pp ellee.
Appeal from the United States District Court fo r the E astern Di stricto f Wisc onsin
. No . 2:0 9-cv-00 15 0-WCG

—WilliamC. G riesbach, Judge
.
A RG UE D J AN UA RY 18, 2011

— D ECI DE D J UNE 7, 2011

Befo re T IND ER an d H A MI L T ON, C ircu it Ju dges , a nd M UR PHY, D i s t r i ctJudg e . 2 N o. 10

- 2927 M URP HY, D i s t r i ctJudg e . S h a wa n o G u n & L o a n, LL C ( Shawano) sel l s fi shi ng equi pm ent a nd fi re ar m s fro m i ts spor ti ng g oo ds sto re and paw nshop i n nor ther n W i sco n s i n . T h e B u r e a u o f Al c o h o l, T o b a c c o , F i r e a r ms an d E x p los ive s (A T F) re vo ke d Sh aw an o’s fed er al lic en se to se ll fi rearm s in De cem ber 2008 after i t r ejected Shaw an o’s admi ni st r at i ve a ppea lfr o m a he ar i ngo ffi ce r ’s fi ndi ng tha tS ha wa no wi l l ful l y v i o l a t e d r e c o r d k e e pi ngr e qu i r em ents ofthe G u n C ontrolA ct a nd per ti nent r egul ati ons. S haw ano fi l ed sui t in the distri ct c ourtag ai nst M ar y J o H ughes, A TF Dir ecto r ofInd ustr y Opera ti ons, und er18 U
. S. C. § 9 23 (f)(3 ) forde nov o j ud i ci alr evi ew o fthe a dm i ni st r at i ve de ci si o n a nd r equest ed ane vi den

ti ar y hea ring. The dist ri ct c ourttho ught there was am p le u n c on tr ov er te d ev id en c e t h at Sh aw an o h ad w illfully f ai l ed to co m plywith the r eco rd ke epi ng r equi re m en ts a nd g r an te d s um m ar y j udg m en t ag ains t S ha wano w i thout conducti ng an evid en ti ar y hea ring. The di str i ct co urt stay ed en f o r ce m en t o fthe r ev o ca ti o n pe ndi ng appe al

. The que st i o n fo r the di st r i ctc o ur t an d the i ss ue here is w hetherS haw ano’ s v i ol ati ons ar e wil l ful f or pu rpos es ofthe Gu n Contro lA ct. Forthe re aso ns that f o l l o w, the di s t r i c tc o ur t ’ s j ud g men ti s a ffi r med

.

I . F a c t ua l a nd Pr o c e dur a l B a c kg r o und I n 1 9 9 8 , T i mo th y B a c k e s o b t a i n e d a f e de r a lfi r e a r ms l i ce ns e f o r hi s so l e pr o pr i et o r sh i p, no w kno wn as S ha wano an d re o r g an i ze d as a l i m i te d l i ab i l i tyc o m pan y ( LLC)

. The G u n C on tr ol A c t req u ire s firea rm s d ea ler s to ke ep ce rt ain r ec o r ds. The g en er alr ec o r d k ee pi ngpr o vi si o ns oftheN o. 10

- 2927 3 Gu n Contro lA ct of1968 (GCA ) , 18 U

. S. C. § 9 21 ets eq . , are f ou nd a t1 8 U. S

. C. § 9 2 3 ( g ) a nd i t s i mpl e men t i ngr e g ul at i o n s , 2 7C

. F
. R. P a r t4 7 8 ( f o r me r l y P a r t1 7 8 )

. F i r e a r ms deal er s a re r equi re d to ensure thata F irear m ’ s Tr ansac tio n R ec or d , A T F F or m 44 73 , i s c o m p let ed p ro p er ly to record i d en tifying inform ation ab ou t fi rear m pu rchaser s, to pro hibi t t ra nsfer s t o perso ns pro hibi ted fro m posse ssing fi re ar m s, and to f aci l i tat e the tr aci ng o ffi re arm s involved i n crim es. A prosp ective fi rearm pu rchaserco m ple tes S ecti ons A and C ofA TF Fo rm 44 73 to disc l ose cer tain i den tifying i nfo rm ati on a nd to answer questi ons from w h i ch the deal ercan deter m i ne wh ether the fi re ar m l ega l l y c an be tr ansfer re d to the pr ospect i ve purcha ser . The fi r ea r m s dea l erc o m pl et es S ec ti o ns B a nd D to provi de i nfo rm ation abo ut the fi re ar m being tr ansfer r ed, the i den ti fi ca ti o n do cument s p ro duce d b y the pu rchas er, and the re su lts ofthe re quis i te Brady Law N ati onalInstant Cri m i nal B ackg ro und Check S yst em ( N I CS check )

. S ecti on D furt her re quir es the deal erto cer ti fy that the deal erbel i eve s, bas ed upon th e info rm ati o n di sc l o se d i n ATF F o r m 4 47 3, tha t i t is notunl awful f orthe deal erto t ra n sfer the fi re ar m to the pros pecti ve p u rc h ase r. S uch unlawfultr ansfer s a re o utl i ned i n 18 U. S

. C. § 9 22 a nd i nc l ude , a m ong othe r s, t r an sa ct i o ns w here a deal er knows or has re aso nabl e cause to be lieve that th e purchas eri s a co nvi cted fel on, i s a fugi ti ve, uses or is ad d ict ed to an y con tr olle d su b st an c e, h a s a n a dj u d icat ed m en ta lde fec t, i s ani l l eg ala l i en, o r ha s be enc o nv i c t e d o f mi s de mea no r do mes t i c v i o l e nc e . 1 8 U. S

. C. § 9 22( d). A deal ervi ol ate s the GC A i fthe deal er tran sfers a f irearm based up on inform ation in A T F Form4 N o. 10

- 2927 44 73 th at h e kn ow s or h as re as on to b elie ve is fals e. See 18 U .S.C . §§ 9 22 (m ) an d 92 4(a )(1) (A ); see also 2 7 C. F. R. § 478.124(c). A federa lfi re ar m s deal eral so m ust m ai n ta in se parat e r e c or d s in bo u n d form for th e a c q u isit ion an d d isp os iti on o ffi re arm s. Thi s a cquis i ti on a nd di sposi ti on bo ok i den ti fies e ac h fi r ea r m tha t a dea l ert ak es i nt o i ts i nv en to r y a nd tha t l ea ve s th e dea l er ’ s i nv en to r y a nd the p e rs on from w h om it w as ac q u ire d or to w h om it w as tr ansfer re d. A deal er ’ s a cquisiti on a nd di sposi ti on re c or d s m u st b e rea d ily av ailab le for in s p ec tio n . See 27 C.F

. R. § 478. 125( e)

. In J anuary20 02, A T F g ra nted Shawano a v ar i an c e, al l owing i t t o use a speci al i zed co m put ers o ftwa r e pr o g r am ca l l ed Pa wnm aster to i nput and m ai ntai n acqui si tio n s and di sposi ti ons offi re ar m s, p ro vid ed t h a t S h aw an o p rin te d th e re c or d s a t le as t s em ia nn ua l l y o r wh e n r e qu e s t e d b y a n ATF o ffi c e r, wh en the s yst em m em or y was purge d, an d u pon dis continuati on o fthe busi ness. I n Decem ber19 99, A TF S peci alOperations I nspector J ohn M oo re co nd ucted the fi rs t co m pli ance inspecti on ofS haw ano and noted ni ne vi olat i ons: ( 1) f ai l ure to en su re accu rate com p leti on of A T F Form s 4473 ; ( 2) f ail ure to proper ly m ai ntai n com ple ted A TF Fo rm s 4 473; (3) inc ons istent disp ositi ons of tw o fi rearm s; (4) fai lure to proper l y m ai ntai n the ac quis i ti on a nd di sposi ti on bo o kfr o m Augus t to De ce m be r 1 99 9, i n that S ha wano kept com pu ter i zed r eco rds without fi rs t obtain in g a com pu ter var i ance; ( 5) f ai l ure to ti m el y r eco rd di sposi ti on en tr ies in a t le as t 1 45 ins ta n c es ; (6) failu re to tim elyN o. 10

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re cor d acquis i ti on e ntri es i n a t l eas t three i nstance s; ( 7) m aking a dispos i ti on e ntrywh en fi re ar m was not tr an sfe rre d ; (8) failu re to r ec or d ac q u isit ion an d d isp os iti on info rm ati on o fa Brown i ng p istol ; and ( 9) f ai l ure to proper l y rec or d fi re ar m m odeland ser i alnum ber s into the a cqu isiti on a nd di sposi ti on bo ok i n at l eas t tw entythre e instance s. M r. B acke s s i gned the A TF Repor t o f V i o l a t i o n s , wh i c h s e t f o r th th e n i n e v i o l a t i o n s a n d t he co r r ec ti ve a ct i o n t o b e ta k en . I n J une 200 4, ATF I ns pec to r Ca si m i r M l ec zk o c o ndu cted a second com pli ance i nspecti on, wh i ch uncover ed s i x v i o l a t i o n s : ( 1 ) i mp r o p e r t r a n s fe r o f e l e v e n fi r e a r ms at a t avern as part ofa ra ffl e; ( 2) f ai l ure to p ro vid e wri tten noti fi cati on to non- l i censee s and t o displ ay a s i gn re quir ed by the Youth H andgun SafetyA ct; ( 3) se ven instan ces of i m p rop er trans fer offirearm s to pe rsons who i ndi ca te d o n ATF F o r m s 44 73 tha t th eyw ere p r o hibi te d; ( 4) f ai l ur e to e ns ur e pr o pere xe cut i o n a nd com ple ti on o fA TF Fo rm 44 73; ( 5) f ailur e to m ai ntai n an acc ura te record of receip t an d d is p ositi on; and ( 6) f ail ure t o ma k e a s e mi

- a n n u a lh a r d c o p y p r i n t o u to fth e c o mpu ter i zed acqui si ti on a nd di sposi ti on r eco rd as r eq u i re d by the AT F c om pu tervar i ance. Inspecti on fi nd i ngs we r e r e v i e we d i n J u l y 2 0 0 4 , a n d th e fe d e r a lfi r e a r ms re gul ati ons w er e r evi ew ed. InspectorM l eczk o cauti oned M r. Backe s, S haw ano m anage r Sco tt Backes, and another empl o y ee abo uts tr aw pur chas er s, i nc o m pl et e ATF For m s 4 473, and prohibi ted purchase rs . M r. Backe s si gned a seco nd A TF Repor t o fVi ol ati ons, wh i ch note d th e vi o l at i o ns a nd the c o r r ec ti ve a ct i o n t o b e ta k en .6 N o. 10

- 2927 A fterthi s s eco nd co m pli ance inspecti on r eve al ed that M r. Backes w as oper ating hi s busi ness as an LL C rather than a sol e propri eto rs hi p, M r. Backe s s ubm i tte d a new l i ce ns e appl i ca ti o n di sc l o singh is b us i ne ss e nt i tys ta tu s a s a n LLC

. In S e pt e mbe r 2 0 0 5 , S ha wa no Gu n & Lo a n, LL C, w as l i cen sed as a deal er, i ncl ud i ng paw nbro ker, i n fi re ar m s o th ertha n de st r uct i ve de vi ce s. M r . Ba ck es r emai ns its ow ne r. I n Mar ch2 005, ATF Di r ec to r o fIndus try Ope r at i o ns J ohn J ar owski se nt M r. Backe s a l ett er to sc hedu l e a m ee tingt o di sc us s th e vi o l at i o ns f o und dur i ngthe s e c o nd c o mpl i a nce in s pe c t i o n. T he l e t t e r i nc l ud e d a wa r ni ngth a ta n y w i l l fu lv i o l a t i o n o ffe d e r a lfi r e a r ms l aws a nd r egul at i o ns might r es ul t i n r ev o ca ti o n o fthe federa lfi re ar m s l i cense and that a ny vi ol ati ons, ei ther re peat orother w i se, co uld be vi ew ed as w i l l ful. M r. Backe s r es po nde d t o the l et ter w i thi nt en ded co r r ec ti ve a ct i o n, and a warni ng co nfe re n c e w as hel d i n A pri l20 05 to di sc us s th e vi o l at i o ns a nd ne ce ss ar y c orr ec ti ve a ct i o n. A f ol l ow-up l ett erfro m Dir ec tor J ar owski sum m ar i zed th e co r r ec ti ve a ct ion pro po se d b y M r . Ba ck es , i nc l udi ng havi ng a seco nd perso n check each A TF Fo rm 44 73 b e f o r e e v e r y t r a ns fe r a nd h a v i ngma na g e r S c o t tBa ckes ove rs ee and m ai ntai n the acquis i ti on a nd di sposi ti on recor ds, and aga i n w ar ned M r. Backe s o fthe possible conse quence offuture vi ol ati ons. I n M arch 2007, Ind us try O p erations Insp ector M ary Jo H olp it c on d u c te d a t h ird co m p lian c e in sp ec tio n . Th is i nspecti on re veal ed sev en vi ol ati ons, i ncl ud i ng r epeat v i o l a t i ons f ou nd du r i ngthe e a r l i e r i ns pe c t i o ns : ( 1 ) u na p-N o. 10

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A c c o r d i n g t o th e R e p o r t, S h a w a n o a c q u i r e d 3 8 9 6 fi r e a r ms 1 and di s pos ed o f29 42 fi re ar m s fro m J anu ar y 1 , 20 06 , thr ough M arch 15, 2007. prove d use o fthe Paw nm ast erco m pu terpro gr am since mov i ng the l o c a t i o n o f the b us i ne s s a nd c ha ng i ngi ts l i cense fro m a sol e pr opri eto rs hi p to an LLC ; ( 2) i naccurat e re flec tio n of in ve n to ry in t h e a c q u isit ion an d d isp os iti o n r ec o r ds an d f ai l ur e to pr i ntthe a cqui si ti o n a nd dispos i tion re cor ds f oro verni ne m onths; ( 3) f ai l ure to provi de the re quir ed Youth H andgun S afetyN oti ce t o pu rchas er s; ( 4) Shawano’s new l oca ti on w as l ess than 1000 fee t f r o m a sch ool an d w ithin a sch ool zon e; (5) fai lure to obt ai n val i d i denti fi cati on in at l eas t four i nstanc es; ( 6 ) f a i l u r e t o pr o pe r l y e x e c u t e a n d r e v i e w AT F F o r ms 4473 ; and ( 7) kno w i ngl y a ssi sting st raw purchase s by al ter i ng and r epri nti ng paw n ti cket s. M r. Backe s s i gned a thir d A TF Re po r t o fVi o l at i o ns , whi chs etf o r ththe vi ol ati ons and the co rr ecti ve acti on t o be t ake n. In re 1 s po ns e t o the v i ol a t i o n r e po r t, Mr
. Ba c k e s s ub mi t t e d a l e t t e r a ddr e s s i nge ach v i o l a t i o n a nd a l s o s ub mi t t e d a var i ance r equest to use the Pawn m ast erco m pu terpro g r a m. On Nov embe r 5 , 2 00 7, S ha wano was s er ved w i tha N otic e o fRevo cati on i ssued o n Octobe r 20, 20 07, by M ar y J o H ughes, A TF Dir ector o fInd ustr y Opera ti ons, sta ting that i ts federa lfi re ar m s l i cense w as bei ng r evok ed. The N oti ce o fR ev oc at i on l ays o ut fi ve counts of wi l l fulv i o l a t i o ns o fthe GC A a nd a pp l i c ab l e r e g ul a t i ons. Count 1 charg es that i n 200 6 a nd 20 07, S haw ano f ai l ed to8 N o. 10

- 2927 proper l y r eco rd the di sposi ti on o fatl eas t fi fty- f our fi re ar m s in the acqui si ti on a nd di sposi ti on bo ok. Th i s i s a re peat vi ol ati on fro m the 1999 and 2 00 4 c om pli ance i nspecti ons and the 20 05 w ar ni ng co nfe re nce. C ou n t 2 ch ar g es S ha wano wi thf ai l ur e to o bt ain c o m pl et e an d cor re ct re sponses to questi ons on AT F F or m s 4 473 on thi rt een o ccasi ons i n 200 6 a nd 20 07 . T h i s a l so i s a re peat v i ol ati on fro m the 1999 an d 2 004 com pli ance i nspecti ons and t h e 2 005 w ar ni ng co nfe re nce. Count 3 ch arges Sh aw an o w ith w il lfully m aking false record entr i es and ai ding and abett i ng the m aking of f al se r ec o r d e nt r i es b y a not he r o n fi ve o cc as i o ns b y a l l o wi ng fi re ar m tr ansfer s thro ugh str aw purchase s. Count 4 ch ar g es S ha wano wi ths el l i ng oro th er wi se t r an sfer r i ng fi re ar m s t o prohibi ted per sons. Thi s i s a r epeat vi ol ati onfr o m t he 2 0 0 4 c o mpl i a nc e i ns pe c t i o n a nd the 20 05 w ar ni ng confer ence. Count 5 charg es Shawano w ith wi l l fu l l y s e l l i n go r o th e r wi s e di s po s i n go ffi r e a r ms wher e th e tr an sfer ee i ndicated tha t he / sh e was no t th e actual purchaser

. S haw ano ti m el y fi l ed a r equest f oran adm i ni str ati ve hear i ng to r evi ew the re voca ti on deci si on unde r 1 8 U. S

. C. § 9 23 ( f ) ( 2) a nd 2 7 C

. F
. R. § 4 78
. 73 a nd w as gr an te d a sta y o fr evo cati on pending A TF’ s a dm i ni str at i ve r ev i ew he ar i nga nd de ci si o n. On A ugust 7, 2008 , A TF H ear i ng Offi cerM i chaelR. Pri ce conduc ted an e vi denti ar y hea ring atA TF’ s fi el d offi ce i n Mil wauk ee . Hea r i ngOffi ce r Pr i ce i ss ue d a Re po r t an d Recom m endation o n A ugust 1 5, 20 08, co ncl ud i ng tha t ATF e st ab l i sh ed ( 1) a wi l l fulf ai l ur e to pr o per l y r ec o r d the d isp os itio n of atlea st fifty -fou r fire ar m s i n t o th e a c q u isitio n an d d isp os itio n rec or d ; (2) a w illfu l fa ilu re to ob ta inN o. 10

- 2927 9

com ple te and cor re ct AT F For m s 4 473 on thi rt een o ccasi o ns ; ( 3) wi l l ful m ak i ng o f f al se r ec o r d en tr i es a nd a i di ng and abett i ng t he m aking o ff al se re cor d entr i es on fi ve occa si ons by al l owing str aw tr ansfer s; (4 ) w i l l ful tr ansfer o ffi r ea rm s to thr ee i ndi vi dual s who i ndi ca te d o n ATF F o r m s 44 73 tha t th eywer e pr o hibi te d fr o m posses sing fi re ar m s; and ( 5) wil l ful tr ansfer o f fir ear m s o n thr ee occa si ons to perso ns wh o i nd i cate d on A TF Form s 4 473 th at th ey wer e no t th e ac tu alb uy ero fthe fi r ea r m s. The w i l l fulne ss fi nd i ng was bas ed on M r. Backe s’ s a w ar eness o fhi s l eg alo bl i g at i o ns a nd i ndi ffer en ce to b ec o m i ng p e r s o n a l l y i n v o l v e d t o e n s u r e c o r r e c t i v e a c t i o n . He a r i ng Offi c e r P r i c e r e c o mm e nd e d tha tthe l i c e ns e b e r e v o k e d. A TF r ej ecte d the adm i ni str ati ve appeal and ser ved Fi nal N oti ce o fRevo cati on o n Shawano i n Decem ber20 08. I n Feb rua ry 2009, Sha w an o fi led su it in th e d istri ct cou rt unde r 1 8 U. S

. C. § 9 23 ( f ) ( 3) f o r j udi ci alr ev i ew o fthe a dmin i s t r a t i v e d e c i s i o n t o r e v o k e i t s fe d e r a lfi r e a r ms l i cense and request ed an ev i denti ar y hea ring as parto f th e de no vo j udi ci alr ev i ew. In i ts d eci si o n g r an ting sum m ar y j ud gm ent without a n evi denti ar y hea ring, the di str i ct c ourtacc epted affi davi ts fro m M r. Backe s, S ha wano ’ s co uns el, a nd the i ndi vidu al s who bo ug ht th e fi rearm s tha t a r e c h arged i n C ou nt 3 as straw pu rchases

. The di str i ct c ourtdescr ibed the fi ve c ou nts s et f or th i n the N oti ce o fRevo cati on a nd f ound that Shawano’s vi ol ati ons w er e wil l ful because the re peti ti ve nature o fthe vi ol ati ons showed purposeful d isr ega rd o r p lai n i ndi ffer en ce t o fede r alr ul es a nd r egul at i o ns . Enf o r ce m en t o fthe r ev o ca ti o n de ci si o n i s st ay ed pen di ng th is a p p ea l.10 N o. 10

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By fi nalr ul e ofthe Depar t m en tof the Tr ea s ur y a nd the 2 Depar t m en t of J us t i c e effec t i ve J anu ar y 2 4, 20 03 , the gove rn i ng r e gu l a t i on s we r e r e or ganiz e d t o r e fl e c tthe di vi s i onc r e a t e d b y the H om elan d S e c u rity A ct of 200 2 o f the B u rea u of A lcoh ol, T o b a c c o a n d F i r e a r ms , De p a r t me n to fT r e a s u r y , i n t o t wo sep ara te ag en cies: the B u rea u of A lcoh ol, To b acco , F irear m s, and Ex pl os i ves ( ATF) i n the Depar t m en tofJ us t i c e and the Alc oho l an d Tobac c o Ta x and Tr ade Bure au (TT B) i n the De pa r t m e nto fthe Tr e a s ur y. R eor ga ni z a t i ono fTi t l e 2 7, Co de ofFederal Regulati ons, 68 F ed

. Reg

. 3744- 01, 2003 W L 158517 ( J an. 24 , 20 03 )

. ATF i s ta s ke d with i ns pec t i ng a nd e xa m i ni ng the rec ords ofl ic ense d fi rearm s dealers to ensure com plianc e w ith the G un C ontrol Act’ s im plem enti ng regulati ons. 27 C.F. R

. § 478. 23. I I . Discussi on The At t o r ne y Ge ne r a l o f the Uni t e d S t a t e s may, af ter not ice and op p ortu nity for he aring, revoke a d ealer’s fed er al fire ar m s lic en se if th e d ea ler h as w i l l fu lly vi ol ate d any pro vi si on o fthe GC A o r any ru le orr egul ati on pre scr ibed by th e Attor ney Gener alther eund er . 18 U
. S. C. § 923(e )

. The deal erm ay fi l e s uiti n the dist ri ct 2 cour t for“de no vo j ud ici alr evi ew ” o fthe re voca ti on d ec isio n . Id

. at§ 923( f ) ( 3). In a proce edi ng br ought und er § 923( f ) ( 3) , the dist ri ct c ourtm ay consi der a ny ev i dence subm i tte d by the par ti es to the pr oce eding wh ethero r not such evi dence w as consi dered atthe adm i ni str ati ve hear i ng. The di str i ct c ourti s a ffor d ed dis cre ti on t o r e c e i v e e v i de nc e a ddi t i o na lto tha tc o nt a i ne d in the a dm i ni s t r a t i v e r e c o r d “ whe n s o me g o o d r e a s o n t o do so ei therappears in the ad m i ni str ati ve re cor d ori s pre sente dN o. 10

- 2927 11 by the pa rt y peti ti oni ng f orj ud i ci alr evi ew . ” Ste in’s Inc. v. Blu m e nthal, 6 49 F
. 2d 46 3, 4 66 ( 7th Ci r . 1 98 0) ( affi r m i ng the dist ri ct court ’ s s um m ar y di sposi ti on o fthe case bas ed on the adm i ni str ati ve re cor d w i thout ta king add i ti onal evi dence)

. W here the dist ri ct cour t exer ci ses i ts d iscreti on t o adm i t a dd i ti onalev i dence and no s ubstant ial cr edibi l i tyque st i o ns a r e pr es en te d, it m ayr ec ei ve the evi dence i n the f or m o faffi davi ts ra th er than t est i m ony. Id

. at46 6 n. 5. [ T]he dist ri ct c ourt, co nsi ste nt with its o bl i gat i on t o review the m atter d e nov o, m ay acc ord the Sec retary’s fin d in gs su c h w eig h t a s itbe liev es t h ey d es er ve in l i g hto fthe e vi den ce i n the a dm i ni st r at i ve r ec o r d a nd th e ev i dence, i fany, the dist ri ct c ourtr ecei ves to su p p lem en t tha t record

. In th is sense, the Secret ary’s dec i si o n may b e uphe l d whenthe t r i alc o urtc o nc l ud e s i n i t s o wn j ud gm ent tha tthe e v i de nc e s up p or tin g t h e d ec isio n is “s u b st an tia l.” Once th e d istr i ct c ourthas re vi ew ed the deci si on o f the S e c r e t a r y, the r o l e o f the a pp e l l a t e c o ur ti s l i mi t e d. I t m ay re vi ew as in any o theract i on the j ud gm ent o f the di str i ct c ourtto i nsure that i t cor re ctl y a pp l i ed th e l a w in c l u d i n gth e a p p r o p r i a t e s c o p e o fr e v i e w. T he district cou rt’s find in g s as to the f acts , how ever, m ay not be upsetunl ess cl ear l y e rr oneo us. Id

. at46 7. I n thi s ca se , S ha wano do es no t di sp ut e the v i o l at i o ns ch ar g ed i n Co unt s 2, 4 , a nd 5

. W i thr es pec t to Co unt1 , the di st r i ctc ou rt acc ept ed S ha wano ’ s ex pl an at i o n tha t th e fifty -f our tr ansact i ons did notappear on the acqui si ti on12 N o. 10

- 2927

an d disp ositi on reco rd b ecau se of a com p ut er softw are er ro r. N on et h ele ss , th e d ist ric t c ou rtfou n d , an d it is und i sputed, thatS haw ano f ai l ed to pri nt the acqui si ti on a nd di s po s i t i o n r e c o r d e v e r y s i x mon ths a s r e qui r e d. W i th r es pec t to Cou nt 3 r el at i ng to st r aw pur chases , the distri ct c ourtacc epted atf ace val ue the affi davi ts subm i tte d by the purchase rs and pres um ed that they bo ug htthe fi r ea r m s f o r the m se l ve s. None theless , the dist ri ct c ourtco ncl ud ed that Shawano h ad reas on t o believe that the p u rch aser w as p urc ha sing th e fi rearm f o r a n o th e r p e r s o n b e c a u s e th e p u r c h a s e r ha d th e s a me l ast nam e and/or add re ss as a perso n w hos e app l i cati on to pu rchas e the fi re ar m was denie d e ith er thatday o r the previ ous day

. There i s no cr edibi l i ty questi on t o w arran t an evid en tiary he aring, an d th e d istri ct c o u rt did notabuse i ts disc re ti on in decl i ni ng to co nd uct o ne. SeeSte in’s , 649 F.2d at 466 n.5 , 4 67. Th e qu estion be fore th e di st r i ctc o ur t was , “ as i n mos t ac ti o ns b r o ug ht pu rs uant to 18 U
. S. C. § 9 23( f ) , ” whether Sha w an o’ s v i olat ion s w er e w illfu l. Id

. at46 7. A vio lat ion is w illfu l un d er 18 U .S.C . § 92 3(e ) if A TF sho w s tha t th e fi re ar m s deal er“ ‘ knew of[ i ts] l ega l o b l i ga tio n an d p u rp os efu lly d isr eg ar d ed or w as p lain ly i nd i ffer ent t o the r eco rdkee ping re quir em ents. ’ ” A rt icl e II G un Sh o p, Inc . v . Go nz a les , 441 F.3d 492 , 497 (7th C ir. 2006), quoting St ei n’s , 64 9 F
. 2d at 467. To a ct wil l fu lly, a fi re ar m s deal eri s no t r equi re d to act “w i th a ‘ bad purpose orev i lm oti ve. ’ ” A rt icl e II , 441 F.3d at49 7, quoti n g St ei n’s , 64 9 F.2d at4 67

. Thi s i s th e st an dar d a ppl i ed bythe dist ri ct cour t; nonethel ess , Shawano disputes th e d istr ict co u rt ’s in te rp re ta tio n of w illfu l.N o. 10

- 2927 13

The next se ntence i n the Senate Rep ort, w hich Shaw ano d oes 3 no t qu ote , st a tes: “H ow ev er, the C om m ittee w as rece p tiv e to c onc er ns ex pre s s ed by the Adm i ni s t ra t i on thatr equi ri ng a (co n tin u ed ...) Shawano ar gues that u nd erthe Fi re ar m s Ow ners ’ Pr o t e c t i o n Act ( F OP A) , Pu b

. L. No
. 9 9

- 3 0 8 , 1 0 0 S t a t
. 44 9 ( 19 86 ) , whi cha dded “wi l l ful l y ” to 1 8 U. S

. C. § 9 23 ( e) , ATF m ust s how m or e than that a l i censee act ed w i th d isregard or ind ifferenc e to th e law an d th at a licens ee’s acts wer e m or e than i nadvert ent e rr or s o r techni calm i sta k es . S ha wano s ug g es ts tha t “wi l l ful ” r equires ani nten tional act. Sha w an o rel ies on t h e Sena te R ep ort r el ating to the i nc l us i o n o f“ wi l l ful l y ” i n § 9 23 ( e) a nd co nt en ds th atthe S en at e Re po r t’ s refer en ce t o “ cur r en t case l aw ” m eans the defi ni ti on o fwil l fulne ss seto ut in R ich v. U nited Sta tes , 383 F. Sup p . 797 ( S. D

. Oh io 1974 ). See S

. R e p . No
. 9 8

- 5 8 3 , a t 1 4 ( 1 9 8 4 )

. T h e co ur t i n R ich adopted a “ pu rpos eful, i ntenti ona l condu ct” defini ti on o fwi l l ful. Shawano a l so r el i es o n B rya n v . U nited Sta tes , 524 U
. S. 18 4 ( 1998 ) , wh i ch i nvol ved a cri m i nalchar ge unde r 1 8 U. S

. C. § 9 24 ( a) ( 1) f o r de al i ngi n fi r ea r m s wi th

out a federa lfi re ar m s l i cense. S haw ano ar gues that FOPA ’ s a dd i ti on o fa w i l l fulne ss el em ent t o the c ri m i nal penal ti es provi si on o fthe GC A , 18 U
. S. C. § 924( a) ( 1) , wh i ch ac c or d in g t o th e S en at e R ep or t w as ad d ed “t o a vo id pros ecuti ons i n case s where, f ori nstance , a l i censee car eles sl y c om m i tte d a te chnic alr eco rdkee ping vi ol ati on o r othe r m i nor, i nadvertent infr acti on, ” s up port s a s p e c i fic in te n t re q u ire m en t u n d er § 92 3(e ). See S. Rep. N o. 98

- 583, at20
. S haw ano urge s co u rts t o 314 N o. 10

- 2927

(

. . . c on t i nu e d) 3

‘ wil l ful ’ s t at e ofm i nd i n s om e i ns t anc es c oul d pos e l eg i t im ate la w en fo rc em en t p ro b le m s.” S. R ep . N o . 98 -5 8 3 , at14 (19 8 4 ). N ota b l y, aft erthe par agr aph gove rn i ng j udi c i al r evi ew of 4 a decis ion to revoke a l ic ense , 18 U.S

. C. § 923( f ) ( 3) , paragraph ( 4) states: “I f c rim ina l pr oce ed ing s are institu ted ag ain st a lic en s ee . . . . ” Th i s l ang uage hi ghl i ght s the dec i dedl y c i v il n a tu re o f § 9 2 3 (f)(3). apply the s i ngl e m eani n g ru l e s uch that “w i l l ful” has the s am e defi ni ti on under the ci vi land cr i m i n al prov i s i o n s o fth e G C A. 4 S h a w an o’s arg u m en t b u c ks th is C ou rt ’s h old in g in A rt icl e II that the appropri ate sta nd ar d for w i l l fulne ss f orpurposes o fr evo ki ng a fi re ar m s deal er ’ s l i cense is p u rp os efu l d isr eg ar d of, or p lain ind iffer en c e t o, a known l ega lo bl i gat i on. 44 1 F

. 3d at 497. Othercir cui ts si m i l ar l y a pp l y thi s s tandard. S ee generally Arm alit e, Inc. v. La m bert, 544 F.3d 6 4 4 , 647(6t h C ir. 20 08 ); O n Ta rget Sp o r t i ng Goods , Inc . v. At t or ney Ge ne r al , 4 7 2 F
. 3 d 5 7 2 , 57 5 (8t h C ir. 20 07 ); R SM , Inc. v. Herbert, 46 6 F

. 3d 316, 32 1- 22 (4t h C ir. 20 06 ); Wil li ngha m Sports, Inc. v. Bu re a u o f Alcohol, To ba cco , Firearm s an d E xp lo sives , 41 5 F
. 3d 1274, 12 77 (11 th C ir. 20 05 ); P erry v . D epa rtm ent o f the Treasu ry, 63 7 F.2d 133 2, 1336 ( 9th Cir. 1981). Shawano’s as ser ti on that i t i s no t a sking thi s Courtto o ver rul e A rt icle IIi s puzzl i ng. N ot onl y di d thi s Courtdefi ne “ w il l fulne ss” f or pu rpos es of§ 923( e)

— afte r e na ct m en t o fF OPA and th e S upr eme Co ur t’ s dec i si o n in Brya n

—bu t t h e Cou rt al so rej ecte d the Brya n arg um ent pr ess ed by Shawano. A rt icl e II

, 44 1 F

. 3d at 487- 98.N o. 10

- 2927 15 I n Brya n , the de fen dan t ha d b een c o nv i ct ed o fc o nspi r i ngt o s el lfi r ea r m s wi th o uta l i ce ns e an d en ga gin g in th e s ale o ff i r e ar m s w ith ou t a lice n se , in vi ol ati on o fthe provi si ons ofthe G un ControlA ct th at co n ta i n ed a w illfu ln es s re q u ire m en t. See 18 U
. S

. C. § § 9 2 2 ( a ) ( 1 ) a nd 9 2 4

. T he de fe nd a ntc l ai m ed th at he ha d no kno w l edge o fthe A ct’ s r equi re m ents, so tha t his viol atio n s c ou ld n ot be w il lful. T he Cou rt he l d tha t th e defen dan t’ s ba d pu rp o se was s uffi ci en t to sat i sfy t he wil l fulne ss re quir em ent under the f acts ofthatcas e, wh er e the defendant had used str aw p u rc h as es , fi led off gu n s’ s er ial n u m b e r s, an d so ld guns o n the bl ack m ar ke t. Brya n , 52 4 U.S

. at18 9, 19 4- 96, 11 8 S

. Ct. 19 39. The Bry an C ou rtrec og n ize d th at th is C ou rtin Ste in’s “s tat ed that w i l l fulne ss i n § 9 23 (d )(1) i s s ati sfi ed by a di sr ega rd o fa known l ega lob l i gat i on. ” Id

. at 19 6-9 7, 11 8 S . C t
. 1 9 3 9. T h e C ou rtfou n d th at w h ile case s l i ke Ste in’s “su p p ort the n o t ion tha t d isregard ofa know n l ega lo bl i gat i on i s s uffi ci ent t o est abl i sh a wil l ful vi ol ati on, theyi n no way st and fo r the pr oposi ti on th at it i s r equi re d.” Id

. at19 7- 98, 11 8 S

. Ct. 1939

. The Brya n Cou r t di d no t ho l d tha t a sh o wi ng of“ba d pu rpos e” i s r equi re d before A TF can re vok e the l i cense ofa g u n d eal erwh o vi ol ate s the A ct d es p ite kn ow led ge of its req u ire m en ts
. Id

. Rat he r, the Cour t s i m plyhel d that a bad purpose m ay be su ffi ci ent t o dem onst ra te pu rpos eful disr ega rd f or o r pl a i n i n d i ffe r e n c e t o th e l a w, wh e r e th e r e i s no ev i de nc e a pa r t y wa s a wa r e o f the r e qu i r e men ts of16 N o. 10

- 2927
th e l a w. In th i s c a s e , i ti s c l e a r th a t[ th e fi r e a r ms deal er ] was aware o fi ts obl i gat i ons und erthe A ct. A rt icl e II

, 44 1 F

. 3d at 487- 98. Fi nal l y, we rej ect Shawano’s ar gum en t that i ts vi ol ati o ns wer e no t wi l l fulb as ed upo n the infr eque nc y o fthe er r o r s in c o m par i so n t o the numbe r o ft r an sa ct i o ns c o nd u c te d , th e fa c t t h a t a c om p u te r glit c h p re ve n te d it fro m sho w i ng atthe ti m e o fthe com pli ance inspecti on th e di spos i ti o n o ffi fty
- f o urfi r ea r m s, a nd the s ho wi ng that the a l l ege d str aw purch ase s were propertr ansfer s. T h er e is n o d e m in im is e x c ep tio n to § 92 3(e ). SeeArti cleII , 441 F. 3d at 498 ( “The r evo cati on provisi on a pp l i es re g a r d l e s s o fw h e th e r a fi r e a r ms de a l e r ’ s f a i l u r e t o c o mplywith the A ct a ctual l y r esul ts i n i l l ega lposs essi on or usag e of a fi rearm or an i na bil ity to t r a c k a firearm that has be en s ol d.” )

. M or eov er, any com pu term al function d uring the in s p e c tion d oes not exp lai n Sh aw an o’s fai lure to print t h e a cq uisition and disp ositi on rep ort eve rysi x m onths as re quir ed. S i m i l ar l y, wh ethercer ta in pu rchas es w er e s tr aw purchase s is b esi de the poi nt: S ha w an o ha d r ea so n t o b el i ev e, a t th e ti m e th e se co nd p u rc h a s e r a p p lied to p u rc h as e t h e fire ar m , th at th e in d ividu al w as no t the i nt en d ed pu rch aser. S ha wano a l so po i nt s to Ins pec to r M l ec zk o ’ s te st i m o ny at the a dm i ni str ati ve hear i ng tha t h e saw no i nd i cati on of w illful ori ntenti onaldi sr ega rd o fA TF r egul ati ons by M r. Ba c k e s o r o the r e mpl o y e e s a tS ha wa no . Mr
. Backe s disputes thathe was g i ven r egul ato rym ate ria lwh en he a pp l i e d f o r the l i c e ns e . Th e r e c o r d i s c l e a r tha t i t was M r. B ac ke s w h o a p p lied for th e lic en se in 1 99 8, p ar tic i-N o. 10

- 2927 17 pat ed i n the c o m pl i an ce i ns p ecti o ns i n 1 99 9, 2 00 4, a nd 2007, and a tte nd ed the w ar ni ng co nfe re nce in 200 5. A fterea ch i nspe c ti on, he a cknowle dged the co rr ecti ve acti on that nee ded to be tak en. M r. B acke s t est i fi ed at th e a d m in i s t r at ive h ea rin g a n d su b m itt ed an affid av it f ort h e d i str i ct c ourt ’ s co nsi derat i on. H i s a ffi davi t e stabl ish es that he hi re d counselafterr ecei vi ng the 20 07 N oti ce o fR ev oc atio n and that, since that t i m e, he ha s i m posed m any work pla ce c hanges to ensu re co m pli ance w i th federa lfir earm s l aw s. These m eas ures co m e t oo l ate
. Despi te bei ng g i ven m ult i ple o pp or tuni ti es to tak e cor re cti ve acti on, S haw ano continued t o re peat i ts vi ol ations. T h e s u ggestion i n its briefand i n M r. Ba ckes ’s affi dav i t th at, b as i ca l l y, S ha wa no g et s th e m es sa g e l o ud an d cle ar an d w ill d o b et te r if give n an ot h er ch an c e is no t ana r gu m en t th atr ea ch es the mer i ts o fthe c as e. ATF h a s th e a u th o r i t y t o r e v o k e S h a wa n o ’ s f e d e r a lfi r e a r ms l i c e ns e , a nd i t s de c i s i o n t o do so inthi s c a s e i s ful l y s up port ed, as a m att ero fl aw , b y the r eco rd subm i tte d to the di str i ct c ourt
. W e m ake o n e f inal com m en t regard ing Shaw an o’s evi denti ar y hea ring ar gum ent. S h aw ano subm i tte d m ater i al s t o t h e dist ri ct c ourtthatwere not subm i tte d to the Hearing Offi cer, and t h e dist ri ct c ourtacc epted thos e m ate ri al s. S haw ano now ar gues that it w as denie d requ e sted discov ery

— sp ecifi cally, other insta nc es w he re A TF has re vok ed fi re ar m s dea ler s’ li censes to enabl e a com parat i ve anal ysi s o fthe hi sto ryo fvi olati ons i n each i nstance

— an d th at, ha d a h ea rin g b ee n h eld , it c ou ld ha ve a sk ed wi tn es se s ab o ut thi s i nf o r m at i o n. S uppo r ting i t s c o mpa r a t i v e a nal ys i s a r g ume nt, S ha wa no c o nt e nd s18 N o. 10

- 2927 that i ts sco re f orco rr ect com ple ti on o fA TF Fo rm s 4 473 w as 99. 2 per cent and that, co m parat i vel y s peaki n g, such a hi gh pe r ce nt age doe s no t war r an t r ev o ca ti o n. S ha wano furtherar gues that the di str i ct cou rt w as re quir ed to ev alua te M r . Ba ck es ’ s cr edibi l i tyi n pe r so n before d ec id in g t h at h e p u rp os ely d isr e g ar d ed or w as p lain ly i nd i ffer ent t o federa lr ule s a nd r egul ati ons. T he district cou rt ent e r e d a sch ed uling an d discov ery o r dero n Au g us t 7, 2 00 9, s et tingthe di sc o ve r y de adl i ne for N ov em b er 6, 20 09 . Sh aw an o n ev er so u g h t re lief in the di str i ct c ourtr el ating to its di sco ver y r equest f or com parabl e case s th at A TF al l ege dlyr efused to pro vi de. I t c an n ot now ar gue that the di str i ct c ourtabuse d i ts di sc r et i o n in f ai l i ngt o c o nduc t ane vi den ti ar y he ari ng to c o ns i ders uche vi den ce wheni t fai led t o pur su e su ch eviden ce d u r in g d iscovery. Th e d istri ct cou rt accepte d M r. Backe s’ s a ffi davi t a nd di d not abuse i ts d isc re tio n by co n sid er in g t h e a ffi d av it ra th er th an te st im on y. SeeSte in’s , 46 9 F
. 2d at 466 n. 5.

I I I . Concl usio n The dis tr i ct c ourtp ro p er l y c oncl ud ed, as a m att ero f l aw a nd wi th o uta n e vi den ti ar y he ar i ng, tha t S hawano w i l l full y vio l ate d the GCA and that A TF w as author i zed to re vok e S haw ano’ s federa lfi re ar m s l i cense. T h e d i str i ct cour t’s j ud gm ent a ffi rm i ng AT F’ s fi naladm i ni str ati ve deci si on i s A FFI RMED .
6- 7- 11