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Fulkerson v. Lynch

United States District Court, W.D. Kentucky, Owensboro Division

June 6, 2017



          Joseph H. McKinley, Jr., Chief Judge

         This matter is before the Court on cross-motions for summary judgment [DN 38, DN 39]. Fully briefed, this matter is ripe for decision.

         I. BACKGROUND

         Petitioners, Charles Fulkerson and Cindy Fulkerson, t/a Whittaker Shooting Supply, Inc., seek review of the denial of a Federal Firearm License (“FFL”) to Whittaker Shooting Supply by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). Petitioners, Charles Fulkerson and Cindy Fulkerson, applied for the FFL under the name of Whittaker Shooting Supply. On February 25, 2015, the ATF denied the license citing to multiple violations of the Gun Control Act of 1968 (“GCA”) by the Fulkersons discovered during a prior criminal investigation that had been initiated on January 4, 2007. The ATF identified the following violations of the GCA: Charles Fulkerson (hereinafter “Fulkerson”) was engaged in the business of dealing in firearms on the internet without an FFL in violation of 18 U.S.C. § 922(a)(1); Fulkerson traveled to Illinois, Pennsylvania, Indiana, and Michigan for the purposes of acquiring firearms he would sell on the internet in violation of 18 U.S.C. §§ 922(a)(1)(A) and § 924(n); Fulkerson went to Illinois on numerous occasions and transported firearms from Illinois into Kentucky in violation of 18 U.S.C. § 922(a)(3); and Cindy Fulkerson repeatedly falsified ATF 4473 Forms by certifying that she was the actual purchaser of firearms when in fact Fulkerson was the true purchaser in violation of 18 U.S.C. §§ 922(a)(6) and 924(a)(1)(A).

         Pursuant to 18 U.S.C. § 923(f)(2), the Petitioners requested a hearing. The hearing officer determined that Fulkerson violated multiple provisions of the GCA when he “engaged in business as a dealer in firearms, including traveling out-of-state to obtain firearms for sale without obtaining the necessary license.” (Administrative Record 345.) After reviewing the record and the hearing officer's report, the Director of Industry Operations (“DIO”) David Johansen issued a Final Notice of Denial of Application or Revocation of Firearms License, ATF Form 5300.13, to Whittaker Shooting Supply, Inc., on November 13, 2015. Petitioners appealed the denial by the ATF of the FFL pursuant to 18 U.S.C. § 923(f)(3). The parties have now filed cross-motions for summary judgment.


         Under 18 U.S.C. § 923(d)(1), a FFL is required for anyone “engag[ing] in the business of importing, manufacturing, or dealing in firearms.” The Attorney General has authority to deny an application for a FFL pursuant to 18 U.S.C. § 923(d)(1)(C) after notice and opportunity for a hearing if an applicant has willfully violated any provision of the GCA.[1] 18 U.S.C. § 923(e), (f). A district court's review of the Attorney General's decision to deny an FFL is de novo. 18 U.S.C. § 923(f)(3). “A reviewing court ‘may consider any evidence submitted by the parties to the proceeding whether or not such evidence was considered'” at the administrative hearing. Dick's Sporting Goods, Inc. v. Boydston, 143 F.Supp.3d 732, 740 (W.D. Tenn. 2015)(citing 18 U.S.C. § 923(f)(3)). Courts have interpreted the de novo standard of review under 18 U.S.C. § 923(f) narrowly. “‘The language of § 923(f)(3) does not call upon this Court to decide whether it would [deny the license in its] own judgment, but whether all of the evidence presented is sufficient to justify the Attorney General's [denial] of the license.'” Dick's Sporting Goods, 143 F.Supp.3d at 740 (quoting Pinion Enters., Inc. v. Ashcroft, 371 F.Supp.2d 1311, 1315 (N.D. Ala. 2005)). In other words, the district court must determine whether the decision to deny the application was “authorized.” Lumber Jack Bldg. Centers v. Alexander, 536 F.Supp.2d 804, 806-07 (E.D. Mich. 2008); Borchardt Rifle Corp. v. Cook, 727 F.Supp.2d 1146, 1158-59 (D.N.M. 2010), aff'd, 684 F.3d 1037 (10th Cir. 2012).


         A. Willful Violation

         Petitioners argue that the Respondents are unable to establish any willful violation of the Gun Control Act. An application for a FFL may be denied if the applicant has willfully violated any provision of the Gun Control Act or the regulations issued under it. 18 U.S.C. § 923(d)(1)(C). “The majority of circuits, including the Sixth Circuit, have consistently held that where a licensee understands his or her legal obligations under the GCA, yet fails to abide by those obligations, his or her license can be denied or revoked on the basis that the dealer ‘willfully' violated the GCA.” Appalachian Res. Dev. Corp. v. McCabe, 387 F.3d 461, 464 (6th Cir. 2004). An applicant “‘violates the statute when, with knowledge of what the law requires, it intentionally or knowingly violates the GCA's requirements or acts with plain indifference to them (i.e. recklessly violates them).'” Shaffer v. Holder, 2010 WL 1408829, *10 (M.D. Tenn. Mar. 30, 2010)(quoting Armalite, Inc. v. Lambert, 544 F.3d 644, 647 (6th Cir. 2008)).[2] “[A] negligent violation of the statute is not sufficient to establish a cognizable violation.” Shaffer, 2010 WL 1408829 at *10 (citing Garner v. Lambert, 2009 WL 2749709, *4 (6th Cir. Sept.1, 2009)). However, “‘[w]illfulness' under the GCA does not require a heightened showing of ‘bad purpose' or evil motive; rather, evidence of an individual's disregard of a known legal obligation is entirely sufficient.” Shaffer, 2010 WL 1408829, *10 (citing Procaccio v. Lambert, 233 Fed.Appx. 554, 558 (6th Cir. 2007)). Furthermore, “[a] single willful violation of the GCA is enough to deny a federal firearms license application or revoke a federal firearms dealer's license.” Shaffer, 2010 WL 1408829, *10 (citing Appalachian Res. Dev. Corp., 387 F.3d at 464. See also Cook v. Herbert, 2004 WL 40525, *2 (W.D. Va. Jan. 5, 2004); 3 Bridges, Inc. v. U.S. Dep't of Treasury, Bureau of Alcohol, Tobacco & Firearms, 216 F.Supp.2d 655, 659 (E.D. Ky. 2002).

         Petitioners maintain that between 2006 and 2007, Fulkerson was an agent of Ron's Sport Shop and Whittaker Guns where he was directed to purchase firearms on behalf of the these FFLs. Petitioners state that during this time period, Fulkerson would travel to auctions and other licensees to acquire firearms. Petitioners maintain that Fulkerson would then bring the firearms back to Kentucky and log them into the Acquisition and Disposition Books (“A&D Books”) of either Whittaker Guns or Ron's Sport Shop. Petitioners represent that in August of 2006, in an effort to ensure compliance with federal law, Fulkerson contacted ATF in both Louisville and Indianapolis to confirm that as an agent for both Whittaker Guns and Ron's Sport Shop, he could list firearms owned by Whittaker Guns and Ron's Sport Shop on provided he: filled out the Firearm Transaction Record (hereinafter “4473 Forms”), underwent a background check, and then returned the guns to the FFL to be shipped to another FFL. Based on this account of the facts, Petitioners argue that the Respondents are unable to establish any willful violation of the Gun Control Act.

         A review of the Administrative Record and the additional evidence submitted by the parties reflect that Petitioners committed willful violations of the Gun Control Act. Specifically, Fulkerson engaged in the business of dealing in firearms without a FFL on Special Agent Kirk Steward initiated an investigation of Fulkerson in 2007 after a confidential informant contacted ATF and reported that Fulkerson was selling firearms on under the identification of Brushfork and was trafficking firearms across state lines. An undercover ATF agent purchased a handgun from Fulkerson through the website. Payment of the handgun was sent directly to Fulkerson, and e-mail communication reflected the sale was from Fulkerson. Fulkerson had no FFL and, despite Petitioners' argument to the contrary, he did not act as an agent for Whittaker Guns or Ron's Sport Shop. Ron Marshall, the owner of Ron's Sport Shop, denied that Fulkerson acted as agent for the company. (AR 537-539.) In supplemental statements to the ATF, Ron Marshall indicated he had permitted Fulkerson to use his license to make firearms purchases, was aware of Fulkerson's sales, the firearms in question did not always come into Marshall's store, and that while his license and address was used, Fulkerson was making the sales and the shipment of the firearms. Marshall also confirmed that he did not receive money from the sales of the firearms. In fact, Ron's Sport Shop had its FFL revoked for aiding and abetting Fulkerson's activities and for falsifying its A&D Book. Similarly, Rebecca Whittaker, owner of Whittaker Guns and the mother of Cindy Fulkerson, stated that Petitioners were never employees or agents of the business during the time they conducted the internet gun sales in 2006 and 2007. (AR 786-87.) The record further reflects that Fulkerson sold hundreds of guns over the internet during the period in question. Fulkerson's bank records reflect that the Fulkersons bought the guns Fulkerson sold online; buyers paid Fulkerson directly and personally for the guns; and he deposited the money from the sales into his personal bank account. Additionally, during this period, Fulkerson packaged the guns in his garage, shipped the guns to the purchaser, and paid over $10, 000 in shipping costs personally. Rebecca Whittaker stated that the firearms sold by the Fulkersons on were not part of the business inventory of Whittaker Guns and Whittaker Guns never received any proceeds or other benefits from the sales the Fulkersons made on (AR 786.) When interviewed by ATF, United States Postal Service employee Elizabeth McKenney stated that Fulkerson began shipping firearms in 2006 and did so until 2007. McKenney informed agents that Fulkerson had told her that he was not associated with Whittaker Guns and was in business for himself.

         Additionally, Fulkerson traveled from Kentucky to Illinois (General Auction, Mattoon, Illinois) and Pennsylvania (KBI, Inc., Harrisburg, Pennsylvania) to purchase guns for his online gun sales in violation of 18 U.S.C. § 924(n). With respect to Cindy Fulkerson, the record reflects that Cindy Fulkerson acquired 94 firearms from Whittaker Guns over a four to five month period. These firearms were sold or attempted to be sold on by Fulkerson. Cindy falsified ATF 4473 forms by certifying that she was the purchaser of firearms that were actually purchased for Charles Fulkerson in violation of 18 U.S.C. §§ 922(a)(6) and 924(a)(1)(A). Significantly, eighty-three of the 94 firearms purchased from Whittaker Guns were later recorded in the A&D Book of Ron's Sport Shop, instead of back in the Whittaker Guns A& D Book.

         Finally, there is also ample evidence that Petitioners were aware they needed an FFL to conduct online gun sales. The Fulkersons have a firearms business background. They worked for Whittaker Guns from 1997 to 2005 and were familiar with federal guns laws in general by virtue of their employment. Fulkerson demonstrated in his testimony that he understood the recordkeeping and other requirements applicable to firearm transactions. Rebecca Whittaker testified that she had informed Fulkerson that he needed an FFL to conduct the online sales. (AR 467, 786-787). Additionally, ...

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