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Houston-area company says Biden Administration's 'ghost gun' policy will put them out of business

Houston Chronicle logo Houston Chronicle 5/10/2022 Gabrielle Banks, St. John Barned-Smith, Staff writers

A Houston area gun parts manufacturer is facing off against the Justice Department and the ATF this week in one of the first lawsuits in the country challenging what it says is an unlawful Biden administration policy that stripped the company of its livelihood in violation of the Second Amendment.

The legal team behind the federal lawsuit includes Michael Sullivan, a former acting director of the Bureau of Alcohol Tobacco, Firearms and Explosives, who served under President George W. Bush. It targets Attorney General Merrick Garland and the current head of ATF on behalf of Division 80, a company in Galveston County that makes gun kits, and just registered as a limited liability company in November. The plaintiff doesn’t appear to have a website, an address or any trappings of a business.

Manufacturers make gun parts known as “80 percenters,” “lower receivers,” or “receiver blanks” that customers can purchase to assemble their own firearms. They come in kits that shipped to gun stores across the country are sometimes called as “ghost guns” because it’s difficult for law enforcement to trace their origins. The businesses that make these parts are not regulated by the ATF and do not require a federal firearms license to sell them as do gun stores.

Sullivan, who lives in Boston, and Austin-based co-counsel Cory Liu, who previously worked as assistant general counsel to Gov. Greg Abbott and as a law clerk to Sen. Ted Cruz, said in a joint statement the aim of this suit is “to prevent the Biden Administration from politically weaponizing the ATF and adopting an unlawful (regulation, know as the) Final Rule without Congress’s approval.” The company thinks the new regulation “unlawfully seeks to put law-abiding American companies like Division 80 out of business.”

President Joe Biden had promised on the campaign trail and in subsequent statements that the White House would push Congress to close the loophole that allows the sale of the kits. But in his first year and a half in office, no such law has passed.

The lawsuit highlights what the company sees as the White House’s backdoor solution to this policy conundrum — businesses like Division 80 were forced by the Biden’s Justice Department and ATF to heed a revised federal regulation that limits their rights. The company says this new rule “unlawfully rewrites federal law and repudiates ATF’s longstanding legal position on receiver blanks.”

Businesses were forced to comply with the new mandate that the former classifications of these parts are no longer “valid or authoritative,” despite the fact that no law prevents them from operating, the company says.

“Frustrated with the constitutional process of bicameralism and presentment, President Biden politically pressured (the Justice Department and ATF) to take unilateral executive action to accomplish his failed policy agenda,” the suit says.

In April, Biden announced changes to federal rules pertaining to weapons parts kits.


Video: New 'ghost gun' rules change current definition of firearms to include unfinished parts (KHOU-TV Houston)

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“I instructed the Attorney General to write a regulation that would rein in the proliferation of ghost guns because I was having trouble getting anything passed in the Congress,” Biden said, during an April 11 announcement in the White House Rose Garden. The rule, which was published in the Federal Register two weeks later, will go into effect in about four months, in August.

Two federal statutes regulate possession and sale of firearms — the National Firearms Act of 1934 and the Gun Control Act of 1968. Weapons experts said the laws have failed to keep pace with firearms technology, which has seen explosive growth and innovation in recent years, including the creation of bump stocks, the introduction of so-called “auto-seers” or “glock switches,” which turn semi-automatic handguns into machine pistols, and the rise of 3D-printed weapons, known as privately made firearms, or, more commonly, “ghost guns.”

Over the past few years, federal investigators have recovered thousands of privately made firearms across the country and blame those weapons for helping fuel a nationwide rise in crime.

The federal agency’s change to the definitions around “firearm frame or receiver” essentially means that the agency considers an incomplete lower receiver sold with a “jig” to help customers modify the part so that it can be assembled into a full weapon as subject to regulation under federal law. The change in regulations does not prevent a person from making a privately manufactured firearm or require the maker to mark the firearm with a serial number.

However, for parts manufacturers — such as Division 80 — the new regulations could mean they are required to obtain a federal firearms license, maintain records, and perform background checks.

Others were less than convinced, arguing that ATF previously ruled lower receivers that weren’t fully manufactured were not firearms subject to regulation.

In California, for example, the ATF in December 2020 raided a company called Polymer80. An agent investigating the company said a confidential informant purchased a “Buy Build Shoot Kit” from Polymer80 and assembled a fully functional firearm in 21 minutes.

In March, a spokesman from that company denied breaking the law and said ATF’s investigation into his company was based on a false premise.

Division 80’s lawsuit is likely one of many to challenge the new rule, said Richard Vasquez, a former Firearms Enforcement Officer who helped oversee the agency’s Firearms Technology Branch before retiring in 2014.

“How can you say something is not a firearm,” he said, “but miraculously it becomes a firearm when you rewrite regulation but not the law?”

Division 80’s lawyers described the change in federal rules as an attempt to “drastically expand” ATF’s regulatory jurisdiction beyond its actual authority and criticized the agency’s move to reverse its past legal position on gun parts as “arbitrary, capricious, and an abuse of discretion.” They also said the new definitions describing gun parts that must be regulated have been written so vaguely that they will force manufacturers to withdraw from making any of their products for fear they’re breaking the law.

Officials from the ATF said they could not comment on pending litigation. Officials from the Justice Department also declined to comment.

CORRECTION: This story has been updated to correct Richard Vasquez’ title at the ATF. He was a firearms enforcement officer.

gabrielle.banks@chron.com; stjohnbs@chron.com

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