Under the Biden administration’s zero tolerance policy, FFLs are having licenses revoked at the highest rate in the last decade. This year alone is on pace for four-times as many revocations as 2021. And with pressure on ATF to apply stronger correction action to inspection violations in efforts to eliminate “rogue gun dealers,” there’s little reason to overturn revocation decisions.

Still, should your FFL lose its revocation hearing with ATF, your license is not yet lost. Through appeal, you may challenge ATF licensing action in federal court in an attempt to save your business.

Appealing Revocation

Within 60 days of receiving final notice of revocation following an ATF hearing, licensees may file a petition for de novo judicial review in federal district court where the licensee resides or has their principal place of business. Meaning ‘from the beginning,’ de novo judicial review is used in questions of how law was applied or interpreted. When appealing revocation, the appellate court will examine the issue from the beginning, without deferring to the prior ATF decision. 

During the appeal proceeding, the court may review evidence submitted by the licensee and ATF and determine whether such evidence was considered at the previous hearing. If the appellate court decides the ATF Director of Industry (DIO) was not authorized to revoke the license, the court shall order the DIO to reinstate the license. However, more likely is the court will uphold the revocation.

If a licensee loses at the federal district court level, FFLs can continue to appeal up the judicial ladder to the U.S. Court of Appeals. And if an FFL loses at the intermediate appellate level, one can file an application to request permission to appeal to the United States Supreme Court – though extremely rare and costly.

Should you choose to enter appeal process, it’s important to know FFLs are not permitted to continue operations during judicial review unless requested and granted permission by the DIO. But, if the DIO prohibits continuance of operations during judicial review because of the risk to public safety, the FFL can appeal to the district court.

Avoiding Appeal

While you can appeal a revocation, know the odds are stacked against you. Once ATF has decided to take licensing action, it’s difficult to overturn, and the higher you appeal, the more likely it is your revocation will be upheld. However, the best way to avoid the appeal process is to avoid revocation altogether. 

Though easier said than done, proactive compliance is the only sure way to eliminate willful violations and revocation risk. Consider the cost of legal representation and loss of sales during revocation and appeal hearings and instead use that money to bolster internal compliance controls, train employees on compliance best practices, implement compliance technologies, and seek out professional compliance services to conduct regular mock inspections, inventory audits, and operation reviews.

Running a firearms operation is neither cheap nor easy, but you can’t manage an FFL if you no longer have a license to operate.

Orchid Zero Tolerance Protection

At Orchid, our team of operations, technology and legal professionals understand the risks of today’s firearm businesses. For over a decade, we’ve worked with FFLs big and small to implement leading compliance best practices and software solutions to eliminate violations and protect licenses from revocation.

Continuing our Zero Tolerance Protection series, we’ll share our expertise and experience in proactive compliance as we look closer at Biden’s policy and its impact on the firearms industry, review how to avoid and correct violations, and suggest ways to protect your FFL from the risk of revocation. Next, we’ll look at the personal consequences of revocation.

In the meantime, learn more about a Zero Tolerance Rapid Assessment of prior ATF Reports of Violations, your A&D Bound Book, and recent ATF Forms 4473. We also encourage you to watch our webinar on ATF zero tolerance enforcement, schedule an in-person or remote mock ATF inspection, and implement leading compliance software in your retail FFL. Contact Orchid today to protect your FFL from a zero tolerance revocation.