Court Opinion

ID: 9498762
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:27:35.14286+00
Date Added: 2024-06-11T17:59:03.496702
License: Public Domain

MANION, Circuit Judge,
dissenting.
Because I conclude that the government is not entitled to summary judgment, I respectfully dissent. The central question here is whether Gun World’s recordkeep-ing violations were willful under 18 U.S.C. § 923(e). I agree with the court that this question is governed by Stein’s, Inc., v. Blumenthal, 649 F.2d 463, 467 (7th Cir.1980). Thus, to show willfulness and succeed in revoking Gun World’s dealer license, the government must “prove that [Gun World] knew of [its] legal obligation and purposefully disregarded or was plainly indifferent to the recordkeeping requirements.” Id. (internal quotation omitted). Gun World has taken the first half of the willfulness test, i.e., knowledge, off the table; it conceded that it knew of its duty to fully complete the government’s firearm transaction forms. It is also important to note that the government and this court regard the 1981 and 1998 reports simply as evidence of Gun World’s knowledge of the Act’s requirements. This dispute therefore turns on whether Gun World acted with purposeful disregard or plain indifference when it left a small number of boxes blank on 12 of the 880 forms it filled out between January 1999 and February 2000.
The government’s evidence on this crucial point, viewed in a light most favorable to Gun World, as it must be in this situation, fails to show that the government is *499entitled to summary judgment. See United States v. Rode Corp., 996 F.2d 174, 178 (7th Cir.1993); Fed.R.Civ.P. 56(c). The evidence supporting the government’s summary judgment motion is confined to a few spaces left blank on 12 forms. During the period in question, Gun World was responsible for some 51,240 pieces of information on the 880 forms, and it omitted 19 of those pieces. On its face, that appears to be a very positive compliance ratio: 51,221 out of 51,240 (99.96%). Gun World’s substantial compliance on the 12 forms in question and total compliance on the rest is a strong indicator that Gun World was not disregarding or being indifferent to its obligations. If, with the 12 forms, the government had submitted an affidavit from an informant, for example, attesting to the fact that Gun World left a box blank at the informant’s request, then the summary judgment would be appropriate. Here, however, there are only the forms themselves, and, in a light most favorable to Gun World, these 12 substantially-completed forms upon which the government seeks to revoke Gun World’s license, do not prove, for summary judgment purposes, that Gun World purposefully disregarded or was plainly indifferent to the recordkeeping requirements. One willful violation could put them out of business, but several inadvertent ones should not.
To bolster its case, the government cites its 1981 and 1998 inspection reports, contending that the past violations recounted therein and the corresponding warnings establish Gun World’s knowledge of its recordkeeping obligations. However, Gun World does not dispute the knowledge prong of the willfulness test, and the admission of those reports was only to evidence knowledge. In any event, these past violations as well as later Gun World lapses (i.e., after February 2000) raised by the government do not conclusively show that the 12 violations for which the government seeks to revoke Gun World’s license were triggered by purposeful disregard or plain indifference. A rational trier of fact could find, that despite other shortcomings, the 12 violations were caused by something less than purposeful disregard or plain indifference, such as a genuine mistake that, despite all diligence, slipped through undetected. Cf. Groh v. Ramirez, 540 U.S. 551, 556, 124 S.Ct. 1284, 157 L.Ed.2d 1068 (2004) (Kennedy, J., dissenting) (“Every lawyer and every judge can recite examples of documents that they wrote, checked, and doublechecked, but that still contained glaring errors.”).
The entire willfulness inquiry of § 923(e) illustrates that this is not a strict liability situation, and, thus, cases built upon nothing more than repeated omissions should not automatically result in revocation at the summary judgment stage. Here, the evidence and all reasonable inferences therefrom, viewed in a light most favorable to Gun World, do not prove that Gun World purposefully disregarded or was plainly indifferent to the recordkeeping requirements. It is a factual question to be resolved at a trial/evidentiary hearing in accordance with 18 U.S.C. § 923(f)(3). See Stein’s, 649 F.2d at 466 (explaining when a “trial de novo” is appropriate). I would thus reverse the grant of summary judgment.
I should note that apparently this case began with much more than has been tunneled into this appeal. As the court mentions, the 2000 inspection report detailed a number of violations, including two straw sales, not at issue here. These are significant accusations which may explain why the ATF engaged in such an extensive investigation. But all of these charges were effectively dropped, leaving a case involving 19 blank spaces on 880 forms. The ATF director by declaration assured *500the court that he would have revoked Gun World’s license solely on these 19 Form 4473 violations. There may be good reasons to revoke the license that Gun World has held for over 25 years, but because the Form 4473 violations are the only basis for revocation, the government must present actual evidence of willfulness, or else the trier of fact should decide.