SHAWANO GUN & LOAN v. HUGHES (June 7, 2011)
Timothy Backes operates the Shawano Gun & Loan sporting goods store in northern Wisconsin. He has had a federal firearms license since 1998. Under the Gun Control Act of 1968, Backes has to make sure that the ATF Form 4473 is completed with each firearm transaction. The ATF conducted compliance inspections in 1999, 2004, in 2007. The store was cited for nine violations in 1999, six violations in 2004, and seven violations in 2007. Many of the 2007 violations were repeats of earlier violations. The ATF served Shawano with a Notice of Revocation in late 2007. After an evidentiary hearing, a hearing officer concluded that the ATF established five willful violations. The ATF revoked Shawano's license. Shawano filed suit seeking judicial review. Judge Griesbach (E.D. Wis.) granted summary judgment to the government. Although he did not hold an evidentiary hearing, he did accept affidavits from Backes, Backes's counsel, and several other individuals. Shawano appeals.
In their opinion, Circuit Judges Tinder and Hamilton and District Judge Murphy affirmed. The Court first found no error in the district court's decision not to hold an evidentiary hearing. The district court exercised its discretion to accept evidence beyond the administrative record but, because there were no credibility issues, proceeded by affidavit. He did not abuse his discretion in doing so. On the merits, the Court rejected Shawano's contention that the government had to prove an intentional act. A willful violation under the Gun Control Act does not require an intentional act or evil motive -- it only requires purposeful disregard or indifference. Finally, the Court rejected the argument that the small number of violations compared to the store’s total transactions could not support a finding of willful. First, the statute does not contain a de minimis exception. Second, Backes was given many opportunities to correct his business processes and failed to do so.