RSM, INCORPORATED, d/b/a Valley Gun v.  ARTHUR W. HERBERT, Director of Industry Operations, Washington Field Division,…

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 RSM, INCORPORATED, d/b/a Valley
Gun,
Petitioner-Appellant,
v.
No. 06-1393  ARTHUR W. HERBERT, Director of
Industry Operations, Washington
Field Division, Bureau of Alcohol,
Tobacco, Firearms and Explosives,
Respondent-Appellee. 
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
William M. Nickerson, Senior District Judge.
(1:05-cv-00847-WMN)
Argued: September 18, 2006
Decided: October 26, 2006
Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.
Affirmed by published opinion. Judge Niemeyer wrote the opinion,
in which Judge Michael and Judge Motz joined.
COUNSEL
ARGUED: Richard E. Gardiner, Fairfax, Virginia, for Appellant.
Ariana Wright Arnold, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF: Rod

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J. Rosenstein, United States Attorney, Baltimore, Maryland, for
Appellee.
OPINION
NIEMEYER, Circuit Judge:
RSM, Inc. d/b/a Valley Gun ("Valley Gun"), a firearms dealer
licensed to sell firearms by the Bureau of Alcohol, Tobacco, Firearms
and Explosives ("ATF") under 18 U.S.C. § 923, commenced this
action by filing a Petition for Judicial Review of ATF’s revocation of
its license. ATF had revoked Valley Gun’s license effective March 1,
2005, because Valley Gun, "after an extended opportunity to place
[its] operations in compliance with the Gun Control Act, ha[d] com-
mitted over 900 willful violations of the Gun Control Act." In its Peti-
tion for Judicial Review, Valley Gun alleged that its violations
resulted from "inadvertent, technical record-keeping error[s]" and
therefore were not "willful" as required for a license revocation under
18 U.S.C. § 923(e).
The district court granted ATF’s motion for summary judgment,
concluding:
The undisputed evidence, including [Valley Gun’s presi-
dent’s] own testimony, conclusively establishes that [Valley
Gun] was well aware of the regulations imposed on federal
firearms dealers and yet, despite that knowledge, continued
to violate those same regulations. Thus, [Valley Gun’s] con-
duct clearly meets the definition of willful.
Because Valley Gun repeatedly violated requirements of the Gun
Control Act with knowledge of the law’s requirements and after
repeated warnings by ATF, we hold that Valley Gun’s plain indiffer-
ence toward its known legal obligations satisfies the willfulness
requirement in 18 U.S.C. § 923(e). Accordingly, we affirm.
I
Valley Gun, a firearms dealer in Baltimore, Maryland, began as a
sole proprietorship in 1954 and was incorporated in 1991. In 1996
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when his father died, Sanford M. Abrams took over as president of
the corporation.
A little less than a year after Abrams took over, in February 1997,
ATF cited the corporation for violations of the Gun Control Act of
1968, Pub. L. No. 90-618, 82 Stat. 1213, as amended by the Firearms
Owners’ Protection Act of 1986, Pub. L. No. 99-308, 100 Stat. 449.
It notified Valley Gun that Valley Gun had provided incorrect or
incomplete information on thirty-one ATF Forms 4473 (which Valley
Gun was required to complete in every over-the-counter firearms
transaction to demonstrate that the person purchasing the firearm was
qualified to be a purchaser); that nine firearms in inventory could not
be traced to the bound recordbook of acquisitions and dispositions
(the "A&D Book"); that 45 firearms recorded in the A&D Book as
present in inventory were in fact missing from inventory; and that
Valley Gun failed accurately to record dispositions of firearms trans-
ferred to other dealers. By letter dated July 21, 1997, ATF warned
Valley Gun "that your [federal firearms license] is conditioned upon
your compliance with Federal Firearms laws and regulations. Repeat
violations of those listed above will be viewed as willful, and may
result in the revocation of your license."
At a second inspection of Valley Gun in October 1999, ATF offi-
cials again discovered that Valley Gun improperly completed fourteen
ATF Forms 4473 and failed to record the transfer of seven firearms
in the A&D Book. ATF officials met with Abrams to communicate
the seriousness of such violations and provided Abrams with a warn-
ing letter stating, "As the result of these violations, we are contem-
plating revocation of your Federal Firearms License."
When ATF officials inspected Valley Gun’s operations for the
third time in September 2001, they again discovered numerous,
indeed an increasing number of violations. Valley Gun had made mis-
takes on no fewer than four hundred nineteen ATF Forms 4473, and
133 firearms were missing from the inventory reflected in Valley
Gun’s A&D Book. Additionally, Valley Gun transferred three fire-
arms after the related criminal-background checks for the purchasers
had expired. Valley Gun also neglected to complete nineteen ATF
Forms 3310.4, which required information in connection with the
sales to purchasers of multiple firearms. ATF again provided Valley
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Gun a letter warning that "as the result of these violations, we are
contemplating the revocation of your Federal Firearms License." ATF
officials also took the unusual step of holding a second warning con-
ference with Abrams and his management, during which Abrams
acknowledged Valley Gun’s legal obligations under the Gun Control
Act. Abrams told the ATF official that he would take a more hands-
on approach toward making the records more accurate, and he prom-
ised to comply in the future.
ATF conducted a fourth and final inspection of Valley Gun’s prem-
ises in May 2003, when it discovered yet an increased number of vio-
lations of the Gun Control Act. Twenty-nine ATF Forms 4473
contained mistakes, and Valley Gun had transferred a firearm to a
purchaser after the purchaser’s criminal-background check had
expired. More significantly, however, comparing Valley Gun’s inven-
tory with its A&D Book revealed that 287 firearms were missing. In
addition, the A&D Book failed to include dispositions of three weap-
ons subject to the special registration requirements of the National
Firearms Act (regulating especially dangerous weapons such as
machine guns and silencers, see 26 U.S.C. § 5845). In view of these
violations, ATF charged Valley Gun in five counts with violating 18
U.S.C. §§ 923(g)(1)(A) and 922(t)(1) and 27 C.F.R. §§ 478.125(e),
478.124(c), and 478.102(c), and gave Valley Gun notice, dated May
5, 2004, that its license was revoked, subject to a revocation hearing.
ATF alleged that all five counts involved repeat and willful viola-
tions.
At the revocation hearing, held on October 6, 2004, Abrams gave
various explanations for the violations, although he did not dispute
the violations themselves. He testified that he did not clearly recollect
some of the prior meetings with ATF officials, and he denied having
read some of the applicable regulations. With respect to each of the
violations charged, however, Abrams admitted he knew Valley Gun’s
obligations under the regulations. Abrams admitted he understood the
importance of filling out ATF Forms 4473 accurately and completely
and of maintaining an acquisition and disposition record in the A&D
Book for every firearm. He had been in the firearms business for
more than ten years, and he had been president of Valley Gun most
of that time. He had attended four to six ATF seminars, and indeed,
he had actually run a few of the seminars himself. He indicated that
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he relied on employees and "had no idea" about their documentary
failures. He stated that he had "no reason to believe the errors were
due to anything other than human error." Abrams expressed that he
was "extremely frustrated" by the violations but believed that they
resulted merely from "human error." At bottom, his defense was that
the violations were not "willful" as required for revocation of a
license.
After considering the evidence, the hearing officer found on the
first count:
Abrams kept repeating that he thought his employees were
doing things correctly and basically placed all blame on the
employees without accepting any responsibility or blame for
his own actions as President. Abrams could not remember
or provide even one instance where he had a meeting with
his employees and specifically went over the exact require-
ments in the regulations.
* * *
I do not find licensee’s reasoning [that] this violation was
not willful as the errors that repeatedly occurred were due
to human error and not due to some sort of bad intent by the
licensee to be acceptable.
The hearing officer made similar findings on each other count, noting
that Valley Gun had been repeatedly advised of its violations and
warned that it could lose its license. Addressing specifically his find-
ing of willfulness with respect to all counts, the hearing officer wrote:
The standard of willfulness in Federal Firearms License
revocation hearings includes plain indifference or inten-
tional disregard. That is the licensee knew what was
required but failed to do it either through plain indifference
or intentional disregard. The standard does not require the
Government show the licensee acted with a bad purpose. I
found all of the Counts listed to meet the standard of willful-
ness.
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The record made by the hearing officer was reviewed by Arthur Her-
bert, ATF’s Director of Industry Operations, Baltimore Division, who
thereafter gave Valley Gun final notice that its license was revoked,
effective March 1, 2005.
Valley Gun commenced this action in the district court to review
ATF’s action de novo, pursuant to 18 U.S.C. § 923(f)(3). On ATF’s
motion, the district court entered summary judgment on February 23,
2006, based on the agency record, affirming ATF’s revocation order.
The district court subsequently denied Valley Gun’s motion to sus-
pend the effective date of its order pending appeal. This appeal fol-
lowed.
II
As its principal argument on appeal, Valley Gun claims that its vio-
lations of the Gun Control Act were not willful. It argues that over
the 11-year period from June 1992 until the last inspection in May
2003, it sold approximately 30,000 firearms (roughly 225 per month)
and that the violations for which it was charged involved only a small
percentage of all of the firearms sold. It also asserts that, based on the
testimony of Abrams, it "had no reason to believe that the entries
which were not made were due to anything other than human error."
With respect to some violations, it asserts that they were in fact the
product of human error. Valley Gun argues that its conduct was not
"willful," as required for revocation of its license under 18 U.S.C.
§ 923(e), because willfulness requires proof that it acted "‘intention-
ally and purposely and with the intent to do something the law for-
bids, that is, with the bad purpose to disobey or to disregard the law.’"
Bryan v. United States, 524 U.S. 184, 190 (1998) (quoting the district
court’s jury instruction).
ATF argues that "willful" as used in § 923(e) can be demonstrated
if a firearms dealer, "with knowledge of what the regulations require,
. . . repeatedly violated these regulations." It asserts that on the record
in this case, the standard is "easily satisfied."
The statute provides in relevant part:
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The Attorney General may, after notice and opportunity for
hearing, revoke any license issued under this section if the
holder of such license has willfully violated any provision of
this chapter or any rule or regulation prescribed by the
Attorney General under this chapter.
18 U.S.C. § 923(e) (emphasis added). The regulation promulgated
under this section provides similarly:
Whenever the Director of Industry Operations has reason to
believe that a licensee has willfully violated any provision of
the Act or this part, a notice of revocation of the license,
ATF Form 4500, may be issued.
27 C.F.R. § 478.73(a) (emphasis added). Accordingly, to resolve this
case, we must interpret "willfully," as used in 18 U.S.C. § 923(e) and
27 C.F.R. § 478.73(a).
We, of course, recognize that "willfully" is "a word of many mean-
ings whose construction is often dependent on the context in which
it appears." Bryan, 524 U.S. at 191. At its core, however, the term
describes conduct that results from an exercise of the will, distin-
guishing "intentional, knowing, or voluntary" action from that which
is "accidental" or inadvertent. United States v. Illinois Central R.R.,
303 U.S. 239, 243 (1938) (internal quotation marks and citations
omitted); see also Bryan, 524 U.S. at 191 ("Most obviously, [will-
fully] differentiates between deliberate and unwitting conduct . . . .");
Prino v. Simon, 606 F.2d 449, 451 (4th Cir. 1979) (noting that "a con-
scious, intentional, deliberate, voluntary decision properly is
described as willful").
Moreover, "willfully" has been held to denote a mental state of
greater culpability than the closely related term, "knowingly." See Illi-
nois Central R.R., 303 U.S. at 242-43 (explaining that "‘[w]illfully’
means something not expressed by ‘knowingly’" (citation omitted)).
"Knowingly" typically refers only to one’s knowledge of the facts that
make his conduct unlawful, not to one’s knowledge of the law. See
Bryan, 524 U.S. at 193; United States v. Bailey, 444 U.S. 394, 404
(1980) (finding that a prison escapee acted "knowingly" because he
"knew his actions would result in his leaving physical confinement").
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Whereas "willfully," especially when used in a criminal statute, usu-
ally requires a showing of a "bad purpose" — proof that "‘the defen-
dant acted with knowledge that his conduct was unlawful.’" Bryan,
524 U.S. at 192 (emphasis added) (quoting Ratzlaf v. United States,
510 U.S. 135, 137 (1994)).1
Accommodating the fundamental principle that ignorance of the
law is no excuse, the Supreme Court in Bryan — construing "will-
fully" in § 924(a)(1)(D) — rejected a definition of "willfully" that
required the defendant to have knowledge of the law which he is
accused of violating. 524 U.S. at 196. Rather, a more general knowl-
edge "that the conduct is unlawful is all that is required."2 Id. The
Court recognized, though, that the willfulness requirement was also
1In a civil action, "willful" generally requires a showing of a disregard
for the law, see Illinois Cent. R.R., 303 U.S. at 243-44, or a "reckless"
lack of concern for an action’s potential illegality, see e.g., McLaughlin
v. Richland Shoe Co., 486 U.S. 128, 134 (1988) (interpreting "willfully"
in the Fair Labor Standards Act to describe an employer that "knew or
showed reckless disregard for the matter of whether its conduct was pro-
hibited by statute"); Trans World Airlines, Inc. v. Thurston, 469 U.S.
111, 126 (1985) (using the same standard of "willfully" in the Age
Employment Discrimination Act). Although this is a civil action to con-
test the revocation of a firearms license, we construe "willfully" in
§ 923(e) in accordance with Bryan’s construction of the term in the crim-
inal context of § 924(a)(1)(D). Congress added "willfully" to both sec-
tions by enacting the Firearm Owners’ Protection Act of 1986, Pub. L.
No. 99-308, 100 Stat. 453, and we presume that Congress intended the
same word used multiple times in a single act to carry a consistent mean-
ing. See Ratzlaf, 510 U.S. at 143 ("A term appearing in several places in
a statutory text is generally read the same way each time it appears.").
Moreover, "willful" violations of the Gun Control Act can lead to either
a license revocation under § 923(e) or a criminal penalty under
§ 924(a)(1)(D).
2The Bryan Court characterized the few cases which construed "will-
fully" to require a showing that the defendant "knew the specific law he
was violating" to be narrow exceptions to this general rule. 524 U.S. at
194-95 (emphasis added). These cases involved criminal violations of the
tax laws, see e.g., Cheek v. United States, 498 U.S. 192, 199-200 (1991),
and the structuring of cash transactions to avoid a reporting requirement,
see Ratzlaf, 510 U.S. at 137.
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satisfied by a showing of, among other things, a disregard of or an
indifference to known legal obligations. Id. at 197-99; see also Article
II Gun Shop, Inc. v. Gonzales, 441 F.3d 492, 497 (7th Cir. 2006)
(finding "willfulness" when a licensee "knew of his legal obligation
and purposefully disregarded or was plainly indifferent to the record-
keeping requirements"); Appalachian Res. Dev. Corp. v. McCabe,
387 F.3d 461, 464-65 (6th Cir. 2004) ("[W]here a licensee under-
stands 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"); cf. Wil-
lingham Sports, Inc. v. Bureau of Alcohol, Tobacco, Firearms &
Explosives, 415 F.3d 1274, 1277 (11th Cir. 2005) ("[A] showing of
purposeful disregard of or plain indifference to the laws and regula-
tions imposed on firearms dealers shows willfulness for purposes of
§ 923(d)(1)(C)").
Thus, when determining the willfulness of conduct, we must deter-
mine whether the acts were committed in deliberate disregard of, or
with plain indifference toward, either known legal obligations or the
general unlawfulness of the actions. But when applying such a formu-
lation of willfulness to an omission — the failure to act — there is
seldom direct evidence that a person intentionally failed to do some-
thing that was legally required. Thus, when evaluating omissions
alleged to be deliberate, it is often necessary to ascertain whether the
failure to act resulted from a conscious consideration of the legal
requirement to act. While evidence of willfulness in this context may
be more elusive than in the context of affirmative actions, a court may
infer willful omission from a defendant’s plain indifference to a legal
requirement to act if the defendant (1) knew of the requirement or (2)
knew generally that his failure to act would be unlawful.
Because most of Valley Gun’s violations in this case were omis-
sions and in the absence of direct evidence establishing intentionality,
we must evaluate the evidence to determine whether Valley Gun
showed plain indifference towards known legal requirements to act or
a more generalized knowledge that its failure to act would be unlaw-
ful.
Valley Gun argues that its violations were not willful but were
accidental and inadvertent human errors. It asserts that it tried to com-
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ply with the statutory and regulatory requirements, but because it con-
ducted so many transactions, human errors were virtually inevitable.
For instance, it points to ATF’s inspection in May 2003 when errors
were found on just twenty-nine of three hundred forty-five ATF
Forms 4473 examined, an 8% error rate.
To be sure, a single, or even a few, inadvertent errors in failing to
complete forms may not amount to "willful" failures, even when the
legal requirement to complete the forms was known. Yet at some
point, when such errors continue or even increase in the face of
repeated warnings given by enforcement officials, accompanied by
explanations of the severity of the failures, one may infer as a matter
of law that the licensee simply does not care about the legal require-
ments. At that point, the failures show the licensee’s plain indiffer-
ence and therefore become willful.
The record is essentially undisputed in this case, and from it we
conclude that the long history of repeated failures, warnings, and
explanations of the significance of the failures, combined with knowl-
edge of the legal obligations, readily amounts to willfulness as used
in 18 U.S.C. § 923(e). While we need not here delineate at what point
in the course of Valley Gun’s repeated failures willfulness could have
been inferred, their number and seriousness in this case in the face of
repeated warnings undoubtedly satisfy the willfulness requirement.
As the ATF hearing officer found, based on evidence presented at the
administrative hearing:
This licensee received one warning letter and has been to
two warning conferences, which is reflected in the testi-
mony presented by [ATF Officer] Fronszak and the docu-
ments entered into evidence. These occurred prior to the
inspection by [ATF Officer] Dickinson, which ultimately
resulted in the Notice of Revocation. The violation cited in
the previous inspections and noted on the Warning Letter,
warning conference letters and warning conferences are
repeat violations, which are again found by Dickinson in his
most recent inspection. In my opinion, this clearly meets the
level of at least plain indifference, which is a willfulness
standard for firearms revocation hearings. The licensee was
told of the errors and violations, and knew what was
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required yet they continue to make the same types of errors
and violations over and over.
In ultimately revoking Valley Gun’s license, Arthur Herbert, ATF’s
Director of Industry Operations, Baltimore Division, summarized his
reasons:
In this case, the licensee, after an extended opportunity to
place his operations in compliance with the Gun Control
Act, has committed over 900 willful violations of the Gun
Control Act. As such, his license is subject to revocation.
The district court concluded that Valley Gun was "well aware" of
the law’s requirements and "despite that knowledge, continued to vio-
late" them. The court concluded that Valley Gun’s conduct "clearly
meets" the definition of willfulness.
We agree with each of these rulings and conclude that because Val-
ley Gun had "willfully violated" the Gun Control Act and regulations
promulgated under it, ATF was authorized to revoke its license under
18 U.S.C. § 923(e).
III
Valley Gun also contends that some of its omissions occurred more
than five years before May 5, 2004, when ATF gave it notice of
license revocation and that therefore ATF’s enforcement effort with
respect to violations before May 1999 is barred by the five-year stat-
ute of limitations contained in 28 U.S.C. § 2462 (providing that an
enforcement proceeding may not be "entertained unless commenced
within five years from the date when the claim first accrued"). With-
out deciding here whether § 2462 applies, we conclude that Valley
Gun’s argument nonetheless lacks merit, because it misunderstands
the grounds for which ATF revoked its license. The conduct charged
in the five counts filed to support revocation of Valley Gun’s license
took place within five years of May 5, 2004. Indeed, the cited conduct
occurred after the 2002 inspection and thus occurred within two years
of the May 5, 2004 notice date.
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While it is true that the hearing officer relied on the long history
of violations and warnings extending back to 1997 to find willfulness,
he based the revocation only on violations that occurred within the
five-year period. Those violations, even if supported by evidence of
intent that dated from 1997, did not "accrue" until the elements of
each violation occurred. See Article II Gun Shop, 441 F.3d at 496
(distinguishing between "acts that are prosecuted and acts that would
be barred by the statute of limitations but are admissible to show that
an act being prosecuted actually occurred"). In this case, each of the
violations of the Gun Control Act and its regulations occurred within
the five-year period and could not have been enforced before they
occurred — until transfers of guns were made without proper docu-
mentation.
IV
Arguing at a more generalized level, Valley Gun would have us
accept that its violations of the Gun Control Act were inadvertent
human errors of a small magnitude, constituting only technical viola-
tions of the Act, such that the violations do not justify a license revo-
cation under 18 U.S.C. § 923(e). This argument, however, loses sight
of the larger picture and the need for strict compliance with the Gun
Control Act.
Repeatedly, Valley Gun failed to complete ATF Forms 4473,
which must accompany each over-the-counter firearm sale. This form
goes to the core of the Gun Control Act’s requirements. It is a form
by which the purchaser must certify, subject to punishment for false
statements, facts demonstrating that the purchaser is entitled to own
a gun. See 27 C.F.R. § 478.124(c)(1). The purchaser must show that
he is not, for example, a felon, a fugitive, a drug addict, or an illegal
alien. Valley Gun also failed to account for 287 guns, any one of
which, as ATF pointed out during oral argument, could have "gone
out the back door" to an illegal purchaser for a high price. Valley Gun
failed to document properly three especially dangerous weapons
required for special registration under the National Firearms Act.
These and other requirements that were violated help ensure that per-
sons entitled to have guns may have them and that persons not enti-
tled to have guns are denied them. When a firearms dealer cannot
account for guns or fails to ensure that guns are sold to authorized
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persons, the public safety is directly and meaningfully implicated. In
enacting the Gun Control Act in 1968, Congress found:
[T]he ease with which any person can acquire firearms other
than a rifle or shotgun (including criminals, juveniles with-
out the knowledge or consent of their parents or guardians,
narcotics addicts, mental defectives, armed groups who
would supplant the functions of duly constituted public
authorities, and others whose possession of such weapons is
similarly contrary to the public interest) is a significant fac-
tor in the prevalence of lawlessness and violent crime in the
United States.
Omnibus Crime Control & Safe Streets Act of 1968, Pub. L. No. 90-
357, § 901(a)(2), 82 Stat. 197, 225.
As ATF officers repeatedly explained to Abrams, Valley Gun’s
violations were not technical; they were serious, and public safety
required their correction. Preventing Valley Gun from continuing its
history of significant failures goes to the core of ATF’s responsibili-
ties under the Gun Control Act. Not only was ATF authorized to
revoke Valley Gun’s license, ATF meaningfully served the public
safety in doing so.
The judgment of the district court is
AFFIRMED.
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