Court Opinion

ID: 49732
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:35:00+00
Date Added: 2024-06-11T17:18:42.403161
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT                     FILED
                       ________________________          U.S. COURT OF APPEALS
                                                           ELEVENTH CIRCUIT
                                                                June 7, 2006
                             No. 05-14350                     THOMAS K. KAHN
                         Non-Argument Calendar                    CLERK
                       ________________________

                               Agency Nos.
                           1-AL-089-20-2J-00120
                             1-BL-000-19-OH

LUNA TECH, INC.,

                                                                     Petitioner,

                                   versus

BUREAU OF ALCOHOL, TOBACCO AND FIREARMS,

                                                                   Respondent.

                       ________________________

                   Petition for Review of a Decision of the
                             Department of Justice
                        _________________________

                               (June 7, 2006)

Before MARCUS, WILSON and PRYOR, Circuit Judges.

PER CURIAM:
      Luna Tech, Inc., petitions for review of the revocation by the Bureau of

Alcohol, Tobacco, Firearms and Explosives of its license to manufacture high

explosives and the decision of the ATF not to renew its licenses to manufacture

binary explosives and import low explosives. We deny the petition.

                                I. BACKGROUND

      After an explosion and fire at the facilities of Luna Tech, ATF investigators

discovered a previously unknown laboratory magazine attached to the Luna Tech

laboratory. Based on its investigation, the ATF issued Notices of Contemplated

Denial or Revocation of License or Permit to Luna Tech on December 13, 2001.

The Notices charged Luna Tech with 12 violations of the Safe Explosives Act and

federal regulations. On December 17, 2001, Luna Tech responded to the Notices

and requested a hearing and a stay of action pending the hearing. The stay was

granted. Six months later, Luna Tech explained in writing changes that it had

made to achieve compliance with federal law. On July 3, 2002, the ATF issued to

Luna Tech a Notice of Revocation of License or Permit and two Notices of Denial

of Application for License or Permit. The Notices again listed twelve violations.

      A hearing on the revocation and denials of renewal was held before an

Administrative Law Judge. The ALJ upheld the revocation and denials of renewal

on the first six counts for violations of reporting requirements, storage of

explosives, and record-keeping, but dismissed counts seven through twelve. On
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the first six counts, the ALJ found that Luna Tech willfully violated federal

explosive laws and regulations when it failed to notify the ATF of the attached lab

magazine, stored explosive materials in the lab magazine, and failed to keep

required records. Luna Tech petitioned for review to the ATF Director, who

affirmed the revocation and denials. The Director found that the factual findings of

the ALJ were supported by substantial evidence, the violations were not barred by

the statute of limitations, and the ATF was not required to permit Luna Tech an

opportunity for compliance because the violations were willful.

                           II. STANDARD OF REVIEW

      “We review decisions of [the ATF] in accordance with [section] 706 of the

Administrative Procedure Act, see 5 U.S.C. § 7123(c), and will set aside only those

. . . actions that are ‘arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.’” Fed. Labor Relations Auth. v. Nat’l Aeronautics &

Space Admin., 120 F.3d 1208, 1211 (11th Cir. 1997) (quoting 5 U.S.C. §

706(2)(A)). We review findings of fact to determine whether they are supported

by substantial evidence. 5 U.S.C. § 706(2)(E).

                                  III. DISCUSSION

      Luna Tech makes four arguments. Each argument fails.

      First, Luna Tech argues that the revocation of its license and denial of

permits based on a finding of willfulness is inconsistent with the fact that the ATF
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has permitted Luna Tech to continue its operations under a stay. Luna Tech relies

on regulation 555.76, which permits the ATF to withdraw the approval of a stay in

cases in which the director finds that it is contrary to the public interest for the

licensee to continue. 27 C.F.R. § 555.76(c). Luna Tech argues that, because it has

been allowed to continue its operations, the ATF necessarily has not made a

finding that the continued operation was a threat or harmful to the public, and the

finding by the ATF that Luna Tech willfully violated federal law is arbitrary and

capricious.

      This argument is a non sequitur. The ATF revoked the license of Luna Tech

and denied renewals because it concluded that Luna Tech had committed multiple

violations and was not likely to comply with the law or regulations. That finding is

not inconsistent with the grant of a stay pending a final determination.

      Second, Luna Tech erroneously argues that the ATF abused its discretion

when it refused to allow Luna Tech to demonstrate compliance with the

regulations. Under section 558(c) of the Administrative Procedure Act, a party is

not entitled to an opportunity to achieve compliance with all lawful requirements if

the party is guilty of a willful violation. 5 U.S.C. § 558(c). Because Luna Tech

was found to have violated multiple requirements willfully, the ATF was not

required to permit Luna Tech an opportunity to demonstrate compliance and did

not abuse its discretion.
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      Third, Luna Tech argues that the ALJ erred by admitting evidence that fell

outside the statute of limitation. This argument fails. Statutes of limitation bar

claims for relief, not the admission of relevant evidence.

      Finally, Luna Tech argues that the evidence was insufficient to support a

finding that its violations were willful. A willful violation is “an intentional

disregard of, or plain indifference” to the statutory requirements. J.A.M. Builders,

Inc. v. Herman, 233 F.3d 1350, 1355 (11th Cir. 2000). Willfulness can be

established by repeated violations with knowledge of the regulations. See

Willingham Sports, Inc. v. Bureau of Alcohol, Tobacco, Firearms & Explosives,

415 F.3d 1274, 1277 (11th Cir. 2005).

      The finding of willfulness is supported by substantial evidence. With regard

to count one, which involved the failure of Luna Tech to report the existence of a

lab magazine, the ATF presented evidence that the location of the magazine was

hidden from view, documents of Luna Tech did not disclose the addition of the

magazine, multiple inspectors asked to see all explosive magazine storage but were

not shown the laboratory magazine, and Luna Tech knew that it was required to

report the magazine to the ATF.

      With regard to counts two through six, which involved the location of the

lab magazine, the storage of explosive materials and black powder in the lab

magazine, and the failure of Luna Tech to maintain records of the transactions in
                                           5
the lab magazine, the evidence established that Luna Tech was aware of the

regulations regarding construction and storage of explosives in magazine facilities;

Luna Tech knowingly stored black powder and explosives in the magazine without

notifying the ATF as required; and Luna Tech failed to keep transaction records on

the magazine in question, but kept records about its other magazines used for long-

term overnight storage of explosive materials.

                               IV. CONCLUSION

      The petition for review is

      DENIED.

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