Faced With Litigation (and the Election), ATF Quietly Backed Off Zero Tolerance

Last week, the end of a lawsuit over ATF’s infamous “zero tolerance” policy revealed that the agency had already begun walking back its persecutory approach to federal firearm licensee (FFL) inspections in the waning days of the Biden-Harris administration. The information indicates ATF realized its “zero tolerance” approach would not stand up in court. It also suggests ATF officials may have been hedging their bets about the possibility of a change in White House leadership, as well as an accompanying shift in the administration’s respect for the Second Amendment.

NRA-ILA has been reporting on zero tolerance since it was first announced by the Biden-Harris administration in 2021. The policy supposedly targeted “willful” violations of a specified list of infractions, including transferring a firearm to a prohibited person; failing to conduct a required background check; falsifying records, such as a firearms transaction form; failing to respond to a trace request; and refusing to permit ATF to conduct an inspection. A single such violation would, under the policy, presumably result in revocation of the FFL’s license.

Willfulness has specific meaning in the context of federal firearms licensing law and requires the government to prove “a purposeful disregard of, a plain indifference to, or a reckless disregard of a known legal obligation.” The standard was added to the law by the Firearm Owners Protection Act of 1986 (FOPA), specifically to raise the government’s burden in taking adverse actions against FFLs. This was in response to congressional findings that ATF was taking an overly harsh approach to routine inspections of FFLs, including revoking licenses for honest and harmless mistakes, instead of working with the FFLs to improve compliance. In essence, the willfulness standard was meant to require the government to prove bad faith or a gross dereliction of a known legal duty before revoking an FFL.

Yet despite the Biden-Harris administration’s contention that it was targeting “bad apple gun dealers” openly flaunting the law, it ignored its obligations under FOPA and returned to revoking FFLs and ruining livelihoods for harmless paperwork errors. ATF Order 5370.1E, issued on Jan. 28, 2022, provided insights into ATF’s revamped conception of “willfulness” under Biden-Harris’s “zero tolerance.” Indeed, rather than hold itself accountable for establishing the required mental state of the violation, it turned the law on its head by claiming the specified “zero tolerance” violations inherently demonstrated willfulness. 

In the context of “falsifying records,” for example, this could simply mean mistakenly transposing numerals in a serial number or filling in “USA” in the box identifying the transferee’s “County” of residence. In ATF’s view, FFLs knew that they must accurately fill out all the required forms. Therefore, failure to do so “inherently” showed an intention to subvert the process.

Incredibly, the order even insisted that an FFL’s (especially a longstanding FFL’s) prior record of spotless compliance could be used against the business when it later did make a mistake, because it was tantamount to an admission the FFL understood the law. “Use inspection reports to establish willfulness even if the inspection found no violations (i.e., acknowledgement of Federal firearms regulations),” the order instructed. In a similar vein, the inspectors could “[d]emonstrate that the FFL has complied with the specific regulation on other occasions.” Longtime compliance actually worked against the FFL under the scheme. “Demonstrate that the FFL has substantial experience as an FFL,” the order continued.

In its (biased) reporting on the enforcement changes, anti-gun propaganda organ The Trace (funded by gun control advocate Michael Bloomberg) admitted some licenses had been “revoked for minor infractions like writing the wrong reference number on federal forms.”  It also acknowledged, “In roughly a fifth of the cases, we found that supervisors of on-the-ground inspectors overruled recommendations for warnings and revoked the licenses instead. These supervisors often cited the Biden administration’s zero-tolerance policy as justification.”

Indeed, FFLs who hired legal counsel and challenged their revocations were often successful in saving their businesses. But the administration was counting on the fact that many FFLs were small mom and pop type operations that could not afford to take on the U.S. government in administrative or legal proceedings. “In 2024, the Bureau of Alcohol, Tobacco, Firearms and Explosives revoked more gun store licenses than in any year over at least the past two decades,” The Trace gleefully reported.

Eventually, however, the ATF’s policy was challenged in a lawsuit by the owner of a Texas gun store, Michael Cargill. The effort noted each transaction form required by federal law for the retail sale of a firearm (the so-called Form 4473) requires nearly 100 inputs, any of which could be affected by a clerical error or a misunderstanding by the customer of the information required. That means a gun shop selling a few thousand guns a year has hundreds of thousands opportunities to wind up with mistakes in its records. Just one such mistake, under zero tolerance, was all it might take for a longstanding, law-abiding business to be shuttered by ATF.

After Cargill’s suit was filed, ATF quietly revoked O 5370.1E and replaced it with ATF O 5370.1G on Aug. 29, 2024. The new order continues to insist, “Consistent with [then President Biden’s] directive on enhanced regulatory enforcement, ATF has zero tolerance for willful violations that put public safety at risk and will take appropriate administrative action.” Yet it omits O 5370.1E’s language about “inherently” willful violations and counsels a more fact specific approach to each case. In particular, it states: “Not every repeat violation is per se willful. A single, or even a few, inadvertent errors in failing to complete forms may not amount to ‘willful’ failures even where the legal requirement to complete the forms was known.”

On Jan. 15, after learning of ATF’s revised enforcement standards, Cargill voluntarily withdrew his lawsuit without prejudice. According to his counsel, Matt Miller, “The new order effectively restores the old enforcement guidance, which means gun stores don’t have to live in fear of honest mistakes.” Cargill himself stated: “Freedom wins today, and overreach has no place in a free society … Faced with defeat, the ATF decided to back down.”

Indeed, even The Trace admitted the changes were apparent in the months after ATF issued its revised order:

Gun store inspection results published by the ATF for the four months following the August change show that revocations happened slightly less often, on average, than in months during the previous two years. In December, historically a slow month for inspections, investigators revoked just six licenses — the lowest total since 2022. 

It is also perhaps more than coincidental that ATF opted for a more nuanced approach as the election loomed and the possibility arose that pandering to firearm prohibition advocates might no longer be good for an ATF official’s career prospects. Indeed, for all his talk about enforcing the law in the interest of public safety, anti-gun ATF director Steven Dettelbach voluntarily stepped aside before facing accountability for his record with the incoming Trump administration. So, as we report elsewhere this week, did anti-gun Attorney General Merrick Garland.

In any case, gun shop owners can now breathe a little easier, knowing ATF inspectors are no longer in the livelihood-hunting business for the Biden-Harris administration. It’s possible some principled ATF officials may even have renewed pride in their work as the pro-Second Amendment Trump administration refocuses the agency on the higher calling of fighting violent crime.