The Current State of Federal Firearms Regulation [Part I]

Jeremy Lerner

In the United States, firearms are a leading public health problem.[1] Over the past decade, the total number of firearms-related fatalities has averaged approximately 31,000 deaths per year,[2] comprised largely of firearms suicides, homicides, and unintentional or accidental deaths.[3] In addition, it is estimated that almost 500,000 fatal and nonfatal violent crimes are committed each year with a firearm.[4] Compared to peer developed nations, these numbers are staggering.[5]

In order to address these problems, there has been a large movement for firearms regulation in general, and restrictions on distribution in particular. This strategy is premised on several fundamental assumptions. First, that distribution is relatively concentrated such that regulation is meaningful.[6] Second, there are classes of individuals that are deemed particularly high-risk for violence to the extent that ownership of firearms should be limited or barred. Third, in regulating distribution, these individuals can be identified and prevented from obtaining access to firearms. And fourth, such restrictions will aid in lowering the overall prevalence of firearm fatalities and crimes in which firearms are used.[7]

Federal Firearms Licensees (“FFLs”) play an integral role in this system of regulation. The United States Code, under 18 U.S.C. § 922, effectively requires a federal firearms license in order to engage in a firearms-related business by limiting the shipment, transportation and receipt of firearms in interstate and foreign commerce to licensed importers, manufacturers, and dealers.[8] With distribution limited to licensees, § 922 then places commercial and sale restrictions on the activities of federal firearms licensees.[9] Section 923 outlines the statutory requirements for obtaining a firearms license,[10] and § 924 details penalties associated with violations of these statutory requirements.[11] This complex legislative framework is complemented by a regulatory structure, comprised largely of rules, forms, and compliance agreements promulgated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (“BATF”).

This federal firearms distribution scheme is problematic in several ways. First, the qualification inspections regime is inadequate.[12] The statutory requirements under 18 U.S.C. § 923 are simply too low to effectively screen out potentially unscrupulous retailers. A prospective licensee need only not be prohibited by law from possessing a firearm, meet a minimum age requirement, certify his or her intention to comply with relevant statutes and regulations, and pay an annual fee. Because of resource constraints, qualification inspections are sometimes conducted by telephone, and BATF field divisions fail to conduct follow-up compliance inspections within twelve months, as required by BATF regulation. This enables dealers and retailers to enter the firearms industry without meaningful oversight.

Second, the BATF lacks the institutional resources to perform substantive compliance inspections within a cyclical five-year period. These compliance inspections are the primary means by which the BATF ensures responsible distribution of firearms in the United States. Not only are these inspections performed infrequently and irregularly, but when they are performed, inspections frequently reveal violations that strike at the heart of the regulatory system. Common violations include failure to verify purchaser eligibility and failure to maintain adequate records. These infractions undermine the assumptions upon which the regulatory scheme is built—identifying persons at high risk for violence, prohibiting such persons from obtaining firearms, and tracking gun ownership.

Finally, when compliance inspections reveal violations, licenses are rarely revoked. § 922(e) provides an enormous amount of process (notice, hearing, review, and petition) for those denied renewal of their license or stripped of their license entirely. In practice then, the Attorney General is hesitant to initiate revocation proceedings for the attendant time consumption and cost. Instead, the Attorney General and the BATF typically work with FFLs in implementing alternate correctional devices, such as a warning letter, warning conference or individualized agreement with the non-compliant FFL. This structure enables deviant FFLs to continue operation for several years, or indefinitely, without a credible threat of reprimand or revocation.

Thus, in sum, “the sheer volume of firearms, sellers, and transactions has swamped the BATF’s capacity to cope with its mandates fully.”[13] The scope of firearms-related activities in the United States today “is far in excess of the monitoring capacity of the public sector.”[14] Because FFLs represent the leading initial distribution point for firearms into the primary market, and retail dealers serve as the central conduit of guns from the legal to the illegal market, these regulatory deficiencies have significant implications for access to firearms in secondary gun markets.[15]

This post is the first in a two-part series. Read more here.

[1] See generally Daniel W. Webster & Jon S. Vernick, Reducing Gun Violence in America (2013).

[2] Eric W. Fleegler et al., Firearm Legislation and Firearm-Related Fatalities in the United States, JAMA Internal Med. 732, 732 (2013) [hereinafter Fleegler et al., Firearm Legislation] (noting “total number of annual firearm fatalities in the United States has been stable over the last decade” and from “2007 to 2010, the range was 31,224 to 31,672 fatalities per year”); see also Nicholas J. Johnson, Imagining Gun Control in America: Understanding the Remainder Problem, 43 Wake Forest L. Rev. 837, 843 (2008) (describing annual firearms homicide and suicide statistics); Matthew Miller, Deborah Azrael & David Hemenway, Firearms and Violent Death in the United States 3, 3 [hereinafter Miller et al., Firearms and Violent Death] (noting “[i]n 2010, there were more than 31,000 firearm deaths in the United States”) in Daniel W. Webster & Jon S. Vernick, Gun Violence in America: Informing Policy with Evidence and Analysis (2013).

[3] Miller et al., Firearms and Violent Death, supra note 1, at 1, 3 (“In 2010, there were more than 31,000 firearm deaths in the United States: 62% were suicides, 36% were homicides and 2% were unintentional.”); see also Fleegler et al., Firearm Legislation, supra note 1, at 732 (noting majority of homicides and suicides are committed by firearm).

[4] See Michael Planty & Jennifer L. Truman, Firearm Violence, 1993–2011 1 (2013) (“In 2011, a total of 478,000 fatal and nonfatal violent crimes were committed with a firearm.”).

[5] See generally Miller et al., Firearms and Violent Death, supra note 1, at 5 (“The United States has more private guns per capita (particularly more handguns) and higher levels of household gun ownership than other developed countries.”); see also David Hemenway, Private Guns Public Health 2–4 (noting higher level of gun ownership, higher rate of lethal violence and less regulation in the United States as compared to other developed nations such as Canada, Australia, and New Zealand).

[6] In essence, the assumption is that while firearms transactions do take place beyond the reach of federally licensed firearms dealers (i.e. gun shows and secondary markets), these FFL dealers account for a significant overall portion of initial exchanges such that regulation thereof could have a meaningful impact on the distribution of firearms.

[7] See Johnson, supra note 1, at 840 (describing logic behind supply-side regulation). But see James B. Jacobs, Crime Control Via Federal Dealer Regulation, 1 Criminology & Pub. Pol’y 183, 185 (2002) (“In short, there are so many ways and it is so easy for a criminal to obtain a firearm that it seems almost surreal to be asking whether reducing the number and improving the character of FFLs will produce a crime reduction.”).

[8] 18 U.S.C. § 922(a) (2012).

[9] See 18 U.S.C. § 922(b) (2012) (placing restrictions on licensees).

[10] See 18 U.S.C. § 923 (2012).

[11] See 18 U.S.C. § 924 (2012).

[12] The BATF performs two types of inspections: qualification and compliance. The purpose of qualification inspections is to ensure that the premises are safe and adequate for firearms distribution and to affirm that the owner or manager of the premises is aware of and compliant with all relevant federal, state, and local statutes. Qualification inspections are the initial hurdle in obtaining a license, and play an increasingly important role in the regulatory scheme. This important role has been reinforced by (i) the inability of the BATF to conduct substantive compliance inspections within a reasonable time period, (ii) the difficulties associated with instituting revocation proceedings, and (iii) the infrequency with which firearms licenses are revoked.

Compliance inspections, on the other hand, are conducted to “examine whether an FFL is in compliance with federal firearms laws and to verify that the FFL is accurately maintaining the required forms.” U.S. Dep’t of Justice, Office of the Inspector General, Evaluation and Inspections Div., Review of ATF’s Federal Firearms Licensee Inspection Program (2013). During these inspections, investigators “review records, inventory, and the licensee’s conduct of business.” U.S. Dep’t of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Fact Sheet: FFL Compliance Inspections (2013). Investigators also provide the FFL with instructional and educational materials concerning best practices for the industry. Id.

[13] Kevin D. Bradford, Gregory T. Gundlach & William L. Wilkie, Countermarketing in the Courts: The Case of Marketing Channels and Firearms Diversion, 24 J. Pub. Pol’y & Mktg., 284, 287 (2005) (noting “overall web of public laws and their enforcement is providing insufficient protection against diversion”).

[14] Id.

[15] Id. at 288; see also Braga et al., Interpreting the Empirical Evidence on Illegal Gun Market Dynamics, 89 J. Urban Health 779, 780 (2012) (“[L]icensed firearm retailers are disproportionately frequent sources of crime guns” and are “linked to more guns traced by ATF than would be expected from their overall volume of gun sales.”); Anthony A. Braga & David M. Kennedy, The Illicit Acquisition of Firearms by Youths and Juveniles, 29 J. Criminal Justice 379, 380 (2001) (noting “retail sales play an important role in supplying firearms to youth and juveniles”).