Court Opinion

ID: 9375962
Source: CourtListenerOpinion
Date Created: 2023-03-01 16:00:32.092417+00
Date Added: 2024-06-11T17:17:03.194313
License: Public Domain

Appellate Case: 21-9572    Document: 010110819629   Date Filed: 03/01/2023   Page: 1
                                                                            FILED
                                                                United States Court of Appeals
                                                                        Tenth Circuit
                                     PUBLISH
                                                                       March 1, 2023
                     UNITED STATES COURT OF APPEALS
                                                                    Christopher M. Wolpert
                            FOR THE TENTH CIRCUIT                       Clerk of Court
                          _________________________________

  FIRESTORM PYROTECHNICS,
  INC.,

           Petitioner,

  v.                                                    No. 21-9572

  STEVEN M. DETTELBACH, in his
  official capacity as Director, Bureau
  of Alcohol, Tobacco, Firearms and
  Explosives and BUREAU OF
  ALCOHOL, TOBACCO, FIREARMS
  AND EXPLOSIVES,

           Respondents.
                          _________________________________

                    On Petition for Review of an
 Order from the Bureau of Alcohol, Tobacco, Firearms and Explosives
              Docket No. BATF-1:9-UT-027-51-9G-00440
                  _________________________________

 Dillon P. Olson of James Dodge Russell & Stephens, P.C., Salt Lake City,
 Utah, for Petitioner.

 Steven H. Hazel, Attorney (Brian M. Boynton, Principal Deputy Assistant
 Attorney General; Abby C. Wright, Attorney; United States Department of
 Justice; Pamela Hicks, Chief Counsel; Melissa Anderson, Associate Chief
 Counsel; Bureau of Alcohol, Tobacco, Firearms and Explosives, with him on
 the brief), Washington, District of Columbia, for Respondents.

       
        Pursuant to Fed. R. App. P. 43(c)(2), Marvin G. Richardson is
 replaced by Steven M. Dettelbach as Director of the Bureau of Alcohol,
 Tobacco, Firearms and Explosives, effective July 13, 2022.
Appellate Case: 21-9572    Document: 010110819629   Date Filed: 03/01/2023    Page: 2

                          _________________________________

 Before CARSON, LUCERO, and ROSSMAN, Circuit Judges.
                  _________________________________

 ROSSMAN, Circuit Judge.
                  _________________________________

       Petitioner Firestorm Pyrotechnics, Inc. (“Firestorm”) seeks review of a

 decision by the Acting Director (“Director”) of the Bureau of Alcohol, Tobacco,

 Firearms and Explosives (“ATF” or “Bureau”) revoking Firestorm’s license to

 import and sell fireworks. See 18 U.S.C. § 843(d). Firestorm challenges the

 revocation decision, maintaining the Director misapplied the willfulness

 standard in 27 C.F.R. § 771.42 and 27 C.F.R. § 771.5 and contending further

 the Director’s decision is unsupported by substantial evidence. Exercising

 jurisdiction under 18 U.S.C. § 843(e)(2), we deny the petition for review.

                                  BACKGROUND1

       Firestorm is a fireworks distribution and display company in Springville,

 Utah. The company was founded in 2006 by Steven Shriber, who serves as

 Firestorm’s President. A small, successful enterprise, Firestorm grew from a

 company grossing about $70,000 a year to one conducting approximately

 $1,000,000 in business annually. It has put on fireworks displays across Utah

       1We draw the facts from the administrative record (“AR”), unless
 otherwise noted.
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 and neighboring states. Firestorm has four employees, including Mr. Shriber

 and his son Scott Shriber.

       Because Firestorm handles commercial-grade fireworks, federal law

 requires the company to maintain an explosives license. 27 C.F.R.

 § 555.41(a)(1) (2023). As part of the licensure process, the ATF conducted an

 initial qualification inspection of Firestorm on May 27, 2010. That same day,

 Mr. Shriber signed an Acknowledgment of Federal Explosives Regulations

 (“Acknowledgment”). The explosives regulatory regime is comprehensive, and

 the Acknowledgment provided an index of federal regulations governing

 licensure, including all of those at issue in this case. The Acknowledgment

 stated the ATF investigator had “explained [the regulatory and compliance]

 information to [Mr. Shriber].” AR at 476. Firestorm received its explosives

 license in June 2010. AR at 4; 208.

       In 2012, after an ATF license renewal inspection,2 Firestorm was cited

 for failing to maintain accurate magazine inventories, in violation of

 27 C.F.R. § 555.127. The ATF also identified a violation of 27 C.F.R.

 § 555.45(c)(1)(iv), requiring licensees to submit Employee Possessor

 Questionnaires for all employees who will handle explosives. After the 2012

       2 Federal law provides the ATF authority to conduct renewal and
 compliance inspections of licensees. See 18 U.S.C. §§ 843(b)(4), (f).
 Explosives licenses are valid for three-year periods. 27 C.F.R. § 555.51(b)
 (2023).
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 inspection, Firestorm signed another Acknowledgment certifying it would

 “be responsible for familiarizing [it]self with all of the laws and regulations

 governing [its] licensed/permitted business.” AR at 480.

       A few years later, in 2016, the ATF conducted another renewal

 inspection of Firestorm and again discovered compliance problems.

 Firestorm was cited for violating the same magazine inventory regulation

 as in 2012, 27 C.F.R. § 555.127. The ATF also determined Firestorm failed

 to adhere to storage requirements for thousands of pounds of explosives,

 violating 27 C.F.R. § 555.29; transferred explosives to unpermitted and

 unlicensed entities in violation of 27 C.F.R. § 555.106(a); failed to file a

 report for the theft or loss of explosive materials within 24 hours as required

 by 27 C.F.R. § 555.30(a); and failed to maintain accurate acquisition records

 of imported or acquired explosives, violating 27 C.F.R. § 555.122(b). After

 the 2016 inspection, Firestorm signed a third Acknowledgement.

       But this time, the ATF also warned Firestorm its explosives license

 might be revoked. The ATF gave Firestorm a Notice of Contemplated Denial

 of Renewal or Revocation of License or Permit (“Notice”), which formally

 advised the company that license revocation was a possibility because the

 Bureau had “reason to believe that Firestorm . . . willfully violated the

 provisions of Chapter 40, Title 18, United States Code, and the regulations

 issued thereunder, 27 C.F.R. Part 555.” AR at 496. The Notice provided

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 summary details of the 2012 and 2016 inspections and the violations

 identified by the ATF each time. The Notice further explained Firestorm

 would have an opportunity to respond but that, even “after such response,”

 the Bureau still had the authority to rescind Firestorm’s license. AR at 495.

       After receiving the Notice, Firestorm “acknowledge[d] that certain

 discrepancies and issues have been identified” and “recognize[d] its

 obligation to fully comply with the regulations.” AR at 512. Firestorm

 proposed measures to observe federal regulations going forward and

 explained how its planned efforts were intended to ensure future

 compliance. On June 15, 2017, after conferring with Steven and Scott

 Shriber and Firestorm’s counsel about the violations and discussing

 Firestorm’s proposed compliance efforts, the ATF chose not to pursue

 license revocation. During that meeting, the ATF’s Denver Field Division

 Director of Industry Operations “advised [Firestorm] that violations cited

 during [the 2016] inspection were grounds for denial of the renewal

 application.” AR at 526. The ATF warned Firestorm that, given its past

 compliance problems, “future violations, repeat or otherwise, could be

 viewed as willful [under 27 C.F.R. § 771.42] and may result in the denial of

 the renewal application.” Firestorm was advised to “anticipate further

 inspections to ensure [its] compliance.” AR at 529. Firestorm again signed—

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 as it had in 2010, 2012, and 2016—an Acknowledgment of Federal

 Explosives Regulations.

       The ATF’s inspectors returned to conduct a compliance inspection in

 June 2018.3 A three-day physical inventory at Firestorm’s facility in Delta,

 Utah was followed by several months of follow-up investigation by ATF:

 interviews with persons to whom Firestorm had distributed explosives;

 assessments of storage practices at the Delta and Springville locations;

 inventory recounts; and meetings with Steven and Scott Shriber. The ATF

 found dozens of violations, including Firestorm’s failure to comply with the

 same inventory, storage, and transfer requirements cited during past

 inspections of its facility.

       The Bureau issued Firestorm a Notice of Revocation on March 27,

 2019. The Notice of Revocation said Firestorm “willfully violated” the law

 and collected the alleged violations into fifteen Grounds for Revocation.

 AR at 267-73. The ATF determined all fifteen violations were “willful”

       3Before the ALJ and on appeal, Firestorm expressed frustration with
 the timing of the 2018 inspection, which occurred in mid-June, weeks before
 Independence Day, during “the busiest time of the year for Firestorm.”
 AR at 441, 443; Appellant’s Br. at 12, 24. We can appreciate Firestorm’s
 position. The ATF inspector “did not factor the impact of the inspection on
 [Firestorm]’s business operations into her decision” to inspect at that time,
 and the ATF did not prevent Firestorm from moving items from magazine
 to magazine. AR at 433. We would be unsurprised to find these
 circumstances complicating for both the company and the inspectors, but,
 as we will explain, we do not pass on the inventory violations.
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 under 27 CFR §§ 771.42 and 771.5. And nine of the fifteen grounds were

 classified as repeat violations.4

       4   The Grounds for Revocation, numbered I-XV, included:

       I.      Violations of 18 U.S.C. § 842(k) and 27 C.F.R. § 555.30(a)
               (failure to report missing explosives);
       II.     Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.127 (failure
               to maintain an accurate daily summary of magazine
               transactions);
       III.    Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(b)(2)
               (failure to record manufacturer name into acquisition records);
       IV.     Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(b)(3)
               (failure to record manufacturer’s marks into acquisition
               records);
       V.      Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(b)(4)
               (failure to record correct quantity of explosives into acquisition
               records);
       VI.     Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(b)(5)
               (failure to record the description and size of acquired
               explosives);
       VII.    Violations of 18 U.S.C. § 842(j) and 27 C.F.R. §§ 555.22(b)(3),
               555.29 (failure to notify the ATF of emergency variances from
               the requirements and temporary overnight storage);
       VIII.   Violations of 18 U.S.C. § 842(j) and 27 C.F.R. § 555.29 (failure
               to properly store explosives);
       IX.     Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(b)(1)
               (failure to record dates of explosives acquisitions);
       X.      Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(c)(1)
               (failure to record dates of explosives dispositions);
       XI.     Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(c)(2)
               (failure to record manufacturer’s brand name and country of
               origin);
       XII.    Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(c)(3)
               (failure to record manufacturer’s marks of transferred
               explosives);
       XIII.   Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(c)(4)
               (failure to record quantity of transferred explosives);
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       Firestorm requested a hearing to contest the Notice of Revocation.

 27 C.F.R. § 555.71 (2023); AR at 175. A three-day hearing was conducted by

 an Administrative Law Judge (“ALJ”) in mid-September 2020. Ten

 witnesses testified—seven for the Bureau, three for Firestorm. The burden

 was on the ATF to prove, by a preponderance of the evidence, that Firestorm

 was no longer entitled to an explosives license. See 27 C.F.R. § 771.80 (2023)

 (“In hearings on the revocation . . . of a license or permit, the burden of proof

 is on the Government to show that the Director of Industry Operations had

 reason to believe that the licensee or permittee is not entitled to a permit

 or license . . . . The Government must meet this proof by a preponderance

 of the evidence.”); AR at 224.

       Here, the grounds for the revocation were Firestorm’s alleged

 “willful[] violation[s] [of] . . . 27 C.F.R. part 555,” the regulatory scheme

 governing commerce in explosives. 27 C.F.R. § 771.42 (2023). The ATF

       XIV. Violations of 18 U.S.C. § 842(f) and 27 C.F.R. § 555.122(c)(5)
            (failure to record description and size of transferred explosives);
            and
       XV. Violations of 18 U.S.C. § 842(b) and 27 C.F.R. 555.106(a) (failure
            to ensure explosives were transferred only to authorized
            persons).

 Grounds I, II, III, IV, V, VI, VIII, IX, and XV were identified as repeat
 violations for which Firestorm had previously been cited after the 2016
 inspection (and the 2012 inspection, in the case of Ground II). AR at 267-73.
 Ground VII was withdrawn by the ATF during the agency proceedings. AR
 at 15.
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 emphasized “[o]ne willful violation is sufficient to justify” revocation under

 27 C.F.R. § 771.42 and that willfulness does “not require a finding of bad

 faith or motive.” AR at 177. According to the Bureau, it could satisfy its

 burden of proof by showing Firestorm knew of, but was indifferent to, the

 applicable law. Firestorm claimed there was no evidence to show any

 violations resulted from its “purposeful disregard of known legal duties.”

 AR at 196. According to Firestorm, it was “a small business . . . doing [its]

 best to comply with the regulations.” AR at 196.

       A few months later, in a written decision, the ALJ determined

 Firestorm’s license should be revoked. Based on the evidence developed at

 the hearing, the ALJ concluded Firestorm committed willful violations of

 federal explosives regulations. According to the ALJ, Firestorm had

 acknowledged its understanding of the law yet repeatedly violated its

 known legal duties:

       [S]ubstantial evidence has been developed in the hearing record
       that establishes that the President and responsible person for
       Firestorm was aware of the legal obligations, and purposely
       disregarded them or was plainly indifferent to the
       requirements. Moreover, the record has established a pattern of
       repeated violations with knowledge of the law’s requirements.
       Accordingly, it has been established that Firestorm willfully
       violated provisions of Chapter 40 of the United States Code.
       AR at 157.

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  The Director, Industry Operations (“DIO”) then entered an order confirming

  the revocation, see 27 C.F.R. § 555.76(b) (2023), and Firestorm timely

  appealed to the Director of the ATF, see 27 C.F.R. § 555.79 (2023).5

        In its appeal to the Director, Firestorm challenged the ALJ’s finding

  of willfulness and claimed the government had denied the company an

  opportunity to comply with the regulatory regime.

        In August 2021, the Director affirmed the Bureau’s decision to revoke

  Firestorm’s explosives license. Rejecting Firestorm’s contrary argument,

  the Director concluded the ALJ “used the correct willfulness standard in

  determining that Firestorm willfully” committed the violations. AR at 23.

  The Director pointed to the applicable regulations’ “Meaning of terms”

  provision, 27 C.F.R. § 771.5, which defined “willfulness” as “[t]he plain

  indifference to, or purposeful disregard of, a known legal duty” which “may

  be demonstrated by, but does not require, repeat violations involving a

  known legal duty.” AR at 20.

        5The federal explosives laws provide the Attorney General of the
  United States the authority to revoke an explosives license if they believe
  the licensee has violated any statute or regulation relating to the
  importation, manufacture, distribution, and storage of explosives. 18 U.S.C.
  § 843(d). The Attorney General’s authority under this section has been
  delegated to the Director of the ATF, 28 C.F.R. § 0.130(a)(1) (2023), who, in
  turn, has delegated revocation authority to the DIO, 27 C.F.R. §§ 555.71-
  555.83 (2023).
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        The Director referenced, too, well-developed explosives and firearms

  caselaw invoking this same willfulness standard. Here, the Director

  observed “Firestorm knew of its recordkeeping and storage obligations;

  Steven Shriber, on behalf of Firestorm, acknowledged he understood the

  Federal explosives laws and regulations on four separate occasions, in 2010,

  2012, 2016 and 2017.” AR at 23. The record showed, despite the many

  instances where Firestorm acknowledged its awareness and understanding

  of the governing federal explosives regulations, the company violated the

  law, including repeatedly violating many of the same regulations. Firestorm

  asserted its “ongoing, reasonable, and good-faith efforts to comply” should

  be factored into, and negate, the willfulness determination. The Director

  acknowledged Firestorm’s compliance efforts but concluded they were

  “wholly irrelevant” to whether Firestorm’s violations of federal explosives

  regulations demonstrated “willfulness” under the regulatory regime. AR at

  22, 25-27. The Director upheld the revocation.

        Firestorm timely petitioned for review in this court.

                           STANDARD OF REVIEW

        We review the Director’s revocation under the Administrative

  Procedure Act (“APA”). See 18 U.S.C. § 843(e)(2) (providing for “judicial

  review of [the ATF’s] denial or revocation, pursuant to sections 701-706 of

  title 5, United States Code”). “The APA requires courts to consider agency

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  action in conformity with the agency’s statutory grant of power, and agency

  action is unlawful if it is ‘in excess of statutory jurisdiction, authority, or

  limitations, or short of statutory right.’” Sinclair Wyo. Refin. Co. v. EPA,

  887 F.3d 986, 990 (10th Cir. 2017) (quoting 5 U.S.C. § 706(2)(C)); cf.

  Vineland Fireworks Co. v. Bureau of Alcohol, Tobacco, Firearms &

  Explosives, 544 F.3d 509, 514 (3d Cir. 2008) (“We review the decision using

  the judicial standards of review set forth in 5 U.S.C. § 706.”).

        Review under the APA requires a “searching but careful” inquiry into

  the basis for the agency’s action, but our review is “ultimately a narrow

  one.” Maier v. EPA, 114 F.3d 1032, 1039 (10th Cir. 1997). We will not

  displace an agency action “unless it is procedurally defective, arbitrary or

  capricious in substance, or manifestly contrary to the statute.” U.S.

  Magnesium, LLC v. EPA, 690 F.3d 1157, 1164 (10th Cir. 2012) (internal

  quotation marks and citations omitted).

                                 DISCUSSION

        Firestorm advances two appellate challenges to the Director’s decision

  to revoke its explosives license. First, Firestorm argues the Director

  misapplied the willfulness standard in 27 C.F.R. § 771.42. Second,

  Firestorm contends the Director’s revocation order is not supported by

  substantial evidence. We reject both arguments.

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                                         I

        The Director Did Not Misapply The Willfulness Standard

                              In 27 C.F.R. § 771.42.

        Federal law provides anyone who seeks to import, manufacture, or

  deal in explosives must maintain a license. 18 U.S.C. § 843(a), (b). As a

  condition of licensure, each explosives dealer must follow ATF regulations.

  Id. § 843(d). If a licensee “willfully violate[s]” any federal explosives

  regulation, the ATF may revoke its license. 27 C.F.R. § 771.42 (2023); see

  18 U.S.C. § 843(d).

        Firestorm contends the Director’s application of the willfulness

  standard was erroneous, so our review must begin with the meaning of

  “willful” used in 27 C.F.R. § 771.42 and defined in 27 C.F.R. § 771.5. Where,

  as here, we review an agency’s interpretation of its own regulation, we apply

  the framework described in Kisor v. Wilkie, 139 S. Ct. 2400 (2019). Under

  Kisor, we ask first whether the regulations involved are “genuinely

  ambiguous”; if so, we will defer to an agency’s reasonable interpretation.

  139 S. Ct. at 2415. If we discern no genuine ambiguity, we go no further,

  and the “regulation then just means what it means—and the court must

  give it effect, as the court would any law.” Id.

        Here, the regulations provide the ATF may revoke the explosives

  license or permit of any holder that the agency has “reason to believe . . .

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  has willfully violated any provision of 18 U.S.C. chapter 40 or 27 C.F.R. part

  555.” 27 C.F.R. § 771.42 (2023). “Willfulness” is defined as “[t]he plain

  indifference to, or purposeful disregard of, a known legal duty. Willfulness

  may be demonstrated by, but does not require, repeat violations involving

  a known legal duty.” 27 C.F.R. § 771.5 (2023).

        Applying Kisor, we first ask if there is any “genuine ambiguity” in the

  definition of “willfulness” in 27 C.F.R. § 771.5. Neither party contends there

  is any genuine ambiguity.6 And we likewise see nothing ambiguous about

  the definition of willfulness in § 771.5. The agency specifically defined

  willfulness in its regulations and did so in a manner consistent with

  accepted common meaning. See Willfulness, Black’s Law Dictionary

  (11th ed. 2019) (“1. The quality, state, or condition of acting purposely or by

  design; deliberateness; intention. Willfulness does not necessarily imply

  malice, but it involves more than just knowledge. 2. The voluntary,

  intentional violation or disregard of a known legal duty.”). Accordingly,

  “willful,” as defined in 27 C.F.R. § 771.5 and used in 27 C.F.R. § 771.42, is

  unambiguous—it “just means what it means.” Kisor, 139 S. Ct. at 2415.

        6 At oral argument, Petitioner confirmed Firestorm was not
  contending any ambiguity exists in the meaning of willfulness as defined in
  27 C.F.R. § 771.5.
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        We next examine whether the Director’s understanding of willful, as

  applied here, correctly adhered to the unambiguous definition provided by

  law. Reviewing the ALJ’s decision, the Director determined, “the record

  establishes a pattern of repeated violations with knowledge of the law’s

  requirements. As such, I find [the ALJ] properly concluded that those

  violations were willful.” AR at 25.

        We conclude the Director used the correct willfulness standard from

  27 C.F.R. § 771.5 in applying 27 C.F.R. § 771.42. The Director explained the

  willfulness standard required “plain indifference to, or intentional

  disregard of, a known legal duty.” AR at 19-20. This tracks nearly verbatim

  the language in 27 C.F.R. § 771.5, which defines willfulness as “[t]he plain

  indifference to, or purposeful disregard of, a known legal duty.” The

  Director correctly understood and faithfully applied the definition provided

  by the appropriate regulations; therefore, we cannot describe the Director’s

  application of the regulation as “arbitrary, capricious, an abuse of

  discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).

        The Director’s understanding of willfulness in the context of federal

  explosives law also comports with our analogous firearms caselaw

  addressing similar regulations promulgated by the ATF. For example, in

  CEW Properties v. U.S. Department of Justice, 979 F.3d 1271, 1279 (10th

  Cir. 2020), which involved a challenge to the ATF’s revocation of a firearms

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  dealer’s license, we explained, “[f]or a violation to be willful, [the licensee]

  must have (1) known and (2) been plainly indifferent to its legal

  obligations.” And in Borchardt Rifle Corp. v. Cook, 684 F.3d 1037, 1042

  (10th Cir. 2012), which involved the Bureau’s interpretation of the Gun

  Control Act, we held “the willfulness requirement [of the similar Gun

  Control Act] is met by plain indifference toward known legal obligations.”

  Our sister circuits have endorsed an analogous understanding of willfulness

  in the explosives and firearms-licensing context. Vineland, 544 F.3d at 518

  (applying the same “willfulness” standard in firearms and explosives

  regulations); DCV Imps. v. Bureau of Alcohol, Tobacco, Firearms &

  Explosives, 838 F.3d 914, 917 (7th Cir. 2016) (same).

        We thus discern no error in the Director’s understanding and

  application of the willfulness standard. Firestorm makes several contrary

  arguments, but none is persuasive.

        First, Firestorm contends the company’s compliance efforts refute a

  finding of willfulness as a matter of law. This argument is unavailing.

        The agency record confirms the Director acknowledged Firestorm

  attempted to comply with federal explosives regulations but concluded, in

  this case, compliance efforts were “irrelevant” to determining willfulness

  under 18 U.S.C. § 843(b)(2) and (d) and 27 C.F.R. § 771.42. AR at 22 (citing

  Vineland, 544 F.3d at 519). The Director did not err.

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        What Firestorm appears to read into the regulation is a rule obliging

  the Director to perform a balancing test where proof of compliance efforts

  necessarily “negates” a finding of willfulness. Appellant Br. at 20-23.

  Firestorm has cited no authority to support its position. And nothing in 27

  C.F.R. § 771.42 aligns with Firestorm’s interpretation. It is true a different

  regulation, 27 C.F.R. § 555.71, guarantees licensees “an opportunity to

  demonstrate or achieve compliance with all lawful requirements.” But that

  regulation, as the Director and the Bureau observed, begins with the

  carveout, “[e]xcept in cases of willfulness.” 27 C.F.R. § 555.71 (2023); AR

  25-28; Appellee Br. at 2. This suggests the compliance inquiry—one focused

  on   potential   future   compliance—is      distinct   from    the   willfulness

  determination—one oriented toward past action.7 In other words, a licensee

        7We find persuasive the Third Circuit’s reasoning, cited by the
  Director:

        [The willfulness] determination is not based on the future
        conduct of the licensee, i.e., whether it will ‘willfully violate’ the
        laws, and it is not based on a combination of the past, present,
        and future conduct of the licensee, i.e., whether the licensee has
        ‘willfully violated’ the laws, is continuing to ‘willfully violate’
        the laws, and will ‘willfully violate’ the laws tomorrow. Instead,
        the inquiry turns on the past conduct of the licensee. Based on
        [the] statutory language, the Director’s conclusion—that the
        likelihood that the licensee will correct the violations is not
        relevant to whether the licensee has ‘willfully violated’ the
        regulations—is reasonable.

  AR at 20 (quoting Vineland, 544 F.3d at 519) (internal citations omitted).
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  accused of willful violations—like Firestorm—is not guaranteed an

  opportunity for compliance under 27 C.F.R. § 555.71.8 We thus cannot find

  it was legal error for the Director to determine, notwithstanding its

  compliance    efforts,   Firestorm   was    indifferent   to,   or   intentionally

  disregarded, a known legal duty.

        Next, Firestorm continues to emphasize it “has never been accused of

  engaging in deliberate wrongdoing, let alone found to have been engaged in

  intentional misconduct.” Appellant Br. at 1. We agree with Firestorm: the

  record does not support it engaged in intentional wrongdoing. But as the

  Director correctly observed, willfulness for license revocation purposes does

  not demand bad intent. AR at 20 (quoting DCV Imps., 838 F.3d at 917 (“[N]o

  showing of bad purpose or evil motive is required to establish willfulness,

  and no de minimis exception is available.”)). What willfulness does require

  is indifference to, or disregard of, a known legal duty; and willfulness “may

  be demonstrated by, but does not require, repeat violations of a known legal

  duty.” 27 C.F.R. § 771.5 (2023). Here, the Director observed Firestorm had

  confirmed the existence of its legal duties and understood its obligation to

  comply on four separate occasions. The Director also pointed out many of

        8Certainly, there are occasions when compliance efforts will be
  relevant. See 27 C.F.R. § 555.71. In any case, Firestorm was afforded
  opportunities for compliance following the 2012 and 2016 inspections.
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  the fifteen Grounds for Revocation identified by the ATF in 2018 involved

  repeat violations of the very regulatory provisions for which Firestorm was

  cited after previous inspections.

        Firestorm is correct “a licensee’s repeated violations . . . do not

  necessarily compel a finding of willfulness as a matter of law.” Appellant

  Br. at 20-21 (quoting Jim’s Pawn Shop, Inc. v. Bowers, No. 7:05-cv-142, 2008

  WL 11380095, at *2 (E.D.N.C. Jan. 2, 2008)). Though repeated violations of

  federal explosives regulations do not “compel” a finding of willfulness under

  27 C.F.R. § 771.42, the regulatory scheme provides that repeated regulatory

  violations may demonstrate willfulness. See 27 C.F.R. § 771.5 (2023).

        The Director correctly understood that under 27 C.F.R. § 771.42 and

  27 C.F.R. § 771.5 willfulness means disregarding or behaving with

  indifference to known legal duties and may be evidenced by repeated

  violations of federal explosives regulations. We thus reject Firestorm’s

  contention that the Director misapplied the willfulness standard.

                                        II

    The Director’s Decision Is Supported By Substantial Evidence.

        We next consider Firestorm’s claim that the Director’s revocation

  decision is unsupported by substantial evidence. “For the evidence to be

  ‘substantial,’ the agency’s record must contain enough facts supporting the

  decision that a ‘reasonable mind’ could accept it as ‘adequate to support

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  [the] conclusion.’” Blanca Tel. Co. v. FCC, 991 F.3d 1097, 1120 (10th Cir.

  2021) (alteration in original) (quoting Olenhouse v. Commodity Credit

  Corp., 42 F.3d 1560, 1581 (10th Cir. 1994)). Our review for substantial

  evidence proceeds under a “highly deferential” standard, Wiransane v.

  Ashcroft, 366 F.3d 889, 897 (10th Cir. 2004), and asks only whether the

  Bureau’s evidence meets the threshold of “more than a scintilla but less

  than a preponderance.” U.S. Cellular Tel. of Greater Tulsa, LLC v. City of

  Broken Arrow, 340 F.3d 1122, 1133 (10th Cir. 2003) (internal quotations

  omitted). “We will uphold the agency’s conclusion that [the licensee] acted

  willfully if it is supported by substantial evidence.” DCV Imps., 838 F.3d

  at 917.

        The Director observed, “it only takes one willful violation to sustain a

  revocation.” AR at 11 n.6. Before this court, the ATF invites us to deny

  Firestorm’s petition on the storage violations alone. Appellee Br. at 18-19

  (citing 27 C.F.R. § 555.29). According to the Bureau, “Firestorm’s leaders

  worked at a site ‘littered’ with ‘active explosives’—yet failed to secure them.

  It is difficult to imagine a clearer case of ‘plain indifference to . . . a known

  legal duty.’” Id. (quoting AR at 172, 1249; 27 C.F.R. § 771.5). Firestorm,

  however, contends remand is required unless we affirm the Director on

  every violation.

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        We agree with the ATF. The plain language of 18 U.S.C. § 843(d)

  permits revocation if the agency finds a willful violation of “any rule or

  regulation,” (emphasis added), and 27 C.F.R. § 771.42 provides for

  revocation “[w]henever the [Director] has reason to believe that any holder

  of a license or permit has willfully violated any provision of 18 U.S.C.

  chapter 40 or 27 C.F.R. part 555 . . .” (emphasis added). We thus review for

  substantial evidence only the Director’s determination that Firestorm

  willfully violated the regulatory provision governing storage requirements

  in 27 C.F.R. § 555.29, which commands “No person shall store any explosive

  materials in a manner not in conformity with this part [555].”9

        Under 27 C.F.R. § 771.5, willful violations sufficient to warrant

  license revocation may be shown by “repeat violations involving a known

  legal duty.” We therefore ask whether substantial evidence supports the

  Director’s determination that Firestorm committed “repeat violations” of

  27 C.F.R. § 555.29 and whether these repeat violations “involve[d] a known

  legal duty.”

        9  We thus need not, and do not, pass on the alleged inventory,
  acquisition, or transfer violations. Because we affirm on the storage
  violations, even if we were to reach and find unlawful the Director’s
  decisions on the inventory, acquisition, and transfer violations, we would
  still be compelled to deny the petition.
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        First, the agency record confirms Firestorm repeatedly stored

  explosive material not in conformity with the storage requirements in

  27 C.F.R. § 555.29. In 2016 and 2018, the ATF inspected Firestorm and

  found unsecured “quick match remnants, igniters, and display shells” and

  “strewn about” explosives in the garbage, “under the [loading] dock” and

  outside magazines. Both times, Firestorm was cited for violating 27 C.F.R.

  § 555.29. AR at 230, 503, 512, 1244-49. After the 2016 inspection, the

  citation identified four instances of § 555.29 violations involving hundreds

  of cases of fireworks containing over nine tons of explosives and thousands

  of igniters. And in 2018, the citation included eight instances of § 555.29

  violations involving at least sixty pounds of explosives and thousands of

  igniters.

        Second, the agency record further confirms Firestorm knew of its legal

  duty to comply with the storage requirements mandated by federal

  explosives law. By the time of the 2018 inspection, it had signed four

  Acknowledgments         of   Federal    Explosives     Regulations.       These

  Acknowledgments specifically alerted Firestorm to its federally mandated

  legal duty concerning storage of explosive material and, in signing these

  Acknowledgments, Firestorm certified its “responsib[ility] for familiarizing

  [itself] with all of the laws and regulations” governing its business. AR

  at 494. After the 2016 inspection, when it was cited for violating 27 C.F.R.

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  § 555.29, Firestorm “acknowledge[d] that certain discrepancies and issues

  ha[d] been identified . . . [and] recognize[d] its obligation to fully comply

  with the regulations” of which it was indisputably aware. AR at 512.

        We thus conclude substantial evidence supports the Director’s

  findings that Firestorm knew of its obligation to store explosives in

  accordance with 27 C.F.R. § 555.29, that Firestorm repeatedly violated

  these regulatory storage requirements, and that these repeated violations

  were willful.

                                 CONCLUSION

        We are sympathetic to Mr. Shriber, his employees, and the manifold

  challenges faced by small businesses like Firestorm. The governing law,

  however, confines us to a careful, but narrow, review of the basis for the

  agency’s action. Under 5 U.S.C. § 706, we may ask only whether the

  Director’s revocation decision was in accordance with law and supported by

  substantial evidence. Finding it was, we DENY Firestorm’s petition for

  review of the Director’s order.

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