Court Opinion

ID: 3033386
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:49:26.987955+00
Date Added: 2024-06-11T07:37:48.265634
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             FEB 19 2010

                                                                        MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                      U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

NATIONAL LENDING GROUP, LLC, an                  No. 09-15166
Arizona limited liability corporation; et al.,
                                                 D.C. No. 2:07-cv-00024-PGR
              Plaintiffs - Appellants,

  v.                                             MEMORANDUM *

ERIC H. HOLDER Jr., Attorney General,
Attorney General of the United States; et
al.,

              Defendants - Appellees.

                    Appeal from the United States District Court
                             for the District of Arizona
                    Paul G. Rosenblatt, District Judge, Presiding

                           Submitted February 11, 2010 **
                             San Francisco, California

Before: THOMPSON and McKEOWN, Circuit Judges, and ZILLY, *** Senior
District Judge.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
            The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
        ***
             The Honorable Thomas S. Zilly, Senior United States District Judge
for the Western District of Washington, sitting by designation.
      National Lending Group, LLC (“National Lending”) and Millennium Banc,

Ltd. (“Millennium”), which are or were engaged in the pawnbroker business,

appeal from the district court’s grant of summary judgment concluding that, due to

willful violations of the Gun Control Act of 1968 (“GCA”) and related regulations

by National Lending and Millennium (collectively, “Licensees”), the Attorney

General was authorized to revoke certain Federal Firearms Licenses (“FFLs”) and

deny applications for other FFLs. We have jurisdiction under 28 U.S.C. § 1291,

and we affirm the district court’s decision.

      The GCA authorizes the Attorney General, “after notice and opportunity for

hearing,” to revoke a FFL if the licensee “has willfully violated” any provision of

the GCA or the regulations promulgated thereunder. 18 U.S.C. § 923(e). Willful

violation is also a basis for the Attorney General to deny an application for a FFL.

Id. § 923(d)(1)(C). An aggrieved party may file a petition with the district court

for the district in which the party resides or does business, seeking de novo judicial

review. Id. § 923(f)(3). The district court may “consider any evidence submitted

by the parties to the proceeding whether or not such evidence was considered at the

hearing held” by an officer with the Bureau of Alcohol, Tobacco, Firearms, and

Explosives (“ATF”), to whom the Attorney General has delegated authority. Id.;

see 28 C.F.R. § 0.130(a)(1); see also 27 C.F.R. § 478.74.

                                           2                                    09-15166
      For the first time on appeal, Licensees raise a due process challenge to the

way in which hearings were conducted by ATF prior to revocation and denial of

the FFLs. By failing to present the issue to the district court, Licensees waived

their due process claim. See Broad v. Sealaska Corp., 85 F.3d 422, 430 (9th Cir.

1996). With regard to the district court’s review of the decision to revoke and

deny the FFLs at issue, Licensees assert that the administrative record contains

information the district court should not have considered because it lacked proper

foundation or constituted inadmissible hearsay.1 In making this argument,

Licensees fail to provide a single citation to the record. They complain that, during

the ATF proceeding, an ATF agent would be handed a report “from another local

law enforcement agency and ask[ed] . . . about its contents.” Opening Br. at 6-7.

They do not, however, point to any place in the record where such procedure was

followed. To the contrary, five different state or local law enforcement officers

testified and, in each instance, although the officer might not have written the

related report, the officer personally observed or participated in the events

described.

        1
          Licensees’ characterization of Exhibits 83, 84, and 85 as containing or
constituting hearsay does nothing to advance their position because the Federal
Rules of Evidence do not apply to administrative proceedings. See Fed. R.
Evid. 1101(a) & (b); see also Nationwide Jewelry & Pawn, Inc. v. United States,
455 F. Supp. 2d 1379, 1383 (M.D. Ga. 2006).

                                           3                                    09-15166
      Licensees’ related contention that, in considering the administrative record,

the district court “eviscerated” Rule 56 borders on frivolous. The rules governing

summary judgment set forth with particularity the requirements of an affidavit, see

Fed. R. Civ. P. 56(e), but contrary to Licensees’ implicit assertion, the rules do not

require that affidavits be submitted. See Fed. R. Civ. P. 56(c); see also Advisory

Committee Notes (1963) (referring to “affidavits or other evidentiary matter”).

      Licensees’ attempt to characterize Mark Brooks’s involvement as merely a

secured creditor is likewise meritless. The evidence established that Mr. Brooks

participated in the daily activities of the business, appearing behind the counter,

handling firearms, having the alarms codes, and responding to alarm incidents; that

until September 2005, he had direct ownership interest in National Lending; and

that after September 2005, he continued to have an ownership interest through his

solely owned company, Alexis J., L.L.C. The district court appropriately found an

absence of factual issues on the subject.

      Finally, with regard to willfulness, Licensees argue that the type of evidence

presented to the ATF Hearing Officer was insufficient because it did not establish

either a history of regulatory violations or an admitted failure to comply with

known regulatory requirements. Although a history of regulatory violations or an

admission of culpability constitute evidence of willfulness, Licensees provide no

                                            4                                     09-15166
authority for the contention that these are the only means by which willfulness can

be established. In this case, the evidence of willfulness was of a different nature,

but was equally or more compelling. The undisputed evidence established that

Licensees knew the requirements of the law, and not only were plainly indifferent

to, but also engaged in deliberate efforts to circumvent them. See Gen. Store, Inc.

v. Van Loan, 560 F.3d 920, 923 (9th Cir. 2009). Revocation and denial of the

FFLs at issue was authorized, and the district court properly granted summary

judgment against Licensees. See Stein’s Inc. v. Blumenthal, 649 F.2d 463, 464 n.2

(7th Cir. 1980).

      AFFIRMED.

                                           5                                    09-15166