Virginia Gun Owners Forum - VGOF

BROUGHMAN v. CARVER
ALLAN BROUGHMAN, Plaintiff-Appellant,
v.
LARRY S. CARVER, Industry Operations Investigator, Bureau of Alcohol, Tobacco, Firearms and Explosives, Defendant-Appellee.

No. 09-2095.

United States Court of Appeals, Fourth Circuit.

Argued: September 23, 2010.

Decided: November 15, 2010.
ARGUED: Richard E. Gardiner, Fairfax, Virginia, for Appellant.
Thomas Linn Eckert, OFFICE OF THE UNITED STATES ATTORNEY, Roanoke, Virginia, for Appellee.
ON BRIEF: Timothy J. Heaphy, United States Attorney, Roanoke, Virginia, for Appellee.
Before GREGORY and AGEE, Circuit Judges, and Richard L. VOORHEES, United States District Judge for the Western District of North Carolina, sitting by designation.
Affirmed by published opinion. Judge Agee wrote the opinion, in which Judge Gregory and Judge Voorhees joined.

OPINION
AGEE, Circuit Judge.
Allan Broughman operated a gun shop pursuant to a dealer's license issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"). After performing a routine inspection of Broughman's shop in 2006, ATF investigator Larry Carver issued a report of violations concluding, among other things, that in order to lawfully conduct his business Broughman needed to obtain a manufacturer's license from ATF. Although Broughman administratively challenged Carver's finding, it was upheld by Carver's supervisor.

Broughman subsequently filed suit in the United States District Court for the Western District of Virginia, seeking a declaratory ruling that he is a "dealer," not a "manufacturer," within the meaning of the Gun Control Act of 1968 ("GCA" or "the Act"). Concluding that Broughman met the GCA's definition of a firearms "manufacturer," the district court granted summary judgment in favor of ATF. For the reasons set forth below, we affirm the judgment of the district court.

Read the entire background and case law associated with this case at leagle.com:
http://www.leagle.com/xmlResult.aspx?xm ... -2007-CURR

2. 18 U.S.C. § 921(a)(11) provides as follows:

The term "dealer" means (A) any person engaged in the business of selling firearms at wholesale or retail, (B) any person engaged in the business of repairing firearms or of making or fitting special barrels, stocks, or trigger mechanisms to firearms, or (C) any person who is a pawnbroker. The term "licensed dealer" means any dealer who is licensed under the provisions of this chapter.

According to this definition, he's a dealer.

The terms, "manufacture", "manufacturing", and "manufacturer" are not defined in such a way as to exclude the concept of "assembly":

18 usc 921
...
(10) The term "manufacturer" means any person engaged in the business of manufacturing firearms or ammunition for purposes of sale or distribution; and the term "licensed manufacturer" means any such person licensed under the provisions of this chapter.
...
(21) The term "engaged in the business" means -
(A) as applied to a manufacturer of firearms, a person who devotes time, attention, and labor to manufacturing firearms as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the firearms manufactured;
...

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However, the United States makes a distinction between "assembly" and "manufacture":

27CFR478:

Sec. 478.39 Assembly of semiautomatic rifles or shotguns.

(a) No person shall assemble a semiautomatic rifle or any shotgun
using more than 10 of the imported parts listed in paragraph (c) of this
section if the assembled firearm is prohibited from importation under
section 925(d)(3) as not being particularly suitable for or readily
adaptable to sporting purposes.

=====
But manufacturing includes assembly of parts:

27CFR53:

Manufacturer. Includes any person who produces a taxable article
from scrap, salvage, or junk material, or from new or raw material, by
processing, manipulating, or changing the form of an article or by
combining or assembling two or more articles. The term also includes a
``producer'' and an ``importer.'' Under certain circumstances, as where
a person manufactures or produces a taxable article for another person
who furnishes materials under an agreement whereby the person who
furnished the materials retains title thereto and to the finished
article, the person for whom the taxable article is manufactured or
produced, and not the person who actually manufactures or produces it,
will be considered the manufacturer.
A manufacturer who sells a taxable article in a knockdown condition
is liable for the tax as a manufacturer. Whether the person who buys
such component parts or accessories and assembles a taxable article from
them will be liable for tax as a manufacturer of a taxable article will
depend on the relative amount of labor, material, and overhead required
to assemble the completed article and on whether the article is
assembled for business or personal use.

Well, there ya' are, then.

Something that sets him apart from simply "assembling", I think, is the fact that he actually taps and threads some parts, which really entails "machining". Since the act of machining is a manufacturing technique, I think that's really where he crosses the line from Dealer to Manufacturer.

This has been an issue in the trade for a couple of years now. Some of ATF's bright-eyed new Justice Department lawyers determined after reading the Gun Control Act that virtually any modification to a firearm (like painting) constituted manufacturing. This was a major issue, both due to licensure issues and taxation issues (gotta pay that FAET) and resulted in a series of modifications to the original ruling backing off a bit. The long and short is, if you do something to a customer-furnished gun at the customer's request, that's gunsmithing. If you do a limited range of modifications to firearms acquired as business inventory, that's gunsmithing. If you do more than what's considered kosher, that's manufacturing.

It's still kind of tangled and the industry groups are still working to get things resolved more favorably. Things like this will be more common in the future as a consequence of ATF being part of DOJ.