July 4, 2023 – On Friday, the U.S. District Court for the Northern District of Texas issued an order vacating the controversial ATF Rule that changed the statutory definition of “firearm” under the Gun Control Act of 1968 to include partially complete frames and receivers. In August of 2022, the ATF enacted Final Rule 2021-05F which was subsequently codified at 27 C.F.R. pts. 447, 478, and 479. In particular, this Rule added a new definition for a “[p]artially complete, disassembled, or nonfunctional frame or receiver,” which includes, among other things, “a frame or receiver parts kit, that is designed to or may readily be completed, assembled, restored, or otherwise converted to function as a frame or receiver…” Once the Rule was enacted, these partially complete receivers and frames were considered “firearms” by the ATF and thus subject to the same markings requirements and transfer restrictions as completed firearms. The stated intention of the “[p]artially complete, disassembled, or nonfunctional frame or receiver” definition was to address the sale of what are known as “80% receivers” that are used by non-licensees to manufacture firearms for personal use without a serial number, and are sometimes referred to as “ghost guns.”
The plaintiffs in this case challenged the ATF Rule on the ground that ATF exceeded its statutory authority under the National Firearms Act (NFA) and Gun Control Act (GCA). The plaintiffs had previously sought a preliminary injunction to enjoin the Department of Justice and ATF from enforcing the Rule, which was granted, but only as to the plaintiff manufacturer who demonstrated that it would suffer irreparable injury if the Rule was enforced against it. Additional manufacturers of unfinished frames and receivers intervened in the action and all plaintiffs subsequently moved for summary judgment seeking to vacate the Rule.
In his order granting summary judgment, Judge Reed O’Connor held that ATF exceeded its statutory authority by attempting to regulate parts and components that are not defined as a “firearm” under the GCA. Judge O’Connor specifically noted that while the ATF permissibly updated the 1978 rule providing the definition of “frame” and “receiver” with “more precise technical terminology…” the “ATF did not stop there. Rather than merely updating the terminology, ATF decided to regulate partial frames and receivers” by including incomplete components that may be made into “frames” or “receivers.” In applying a straightforward statutory interpretation, the Court noted that the statutory definition of a “firearm” intentionally includes ”frames” and “receivers,” but “parts that may become receivers are not receivers” and “a weapon parts kit is not a firearm.” In conclusion, Judge O’Connor held that “[B]ecause the Final Rule purports to regulate both firearm components that are not yet a ‘frame or receiver’ and aggregations of weapon parts not otherwise subject to its statutory authority, the Court holds that the ATF has acted in excess of its statutory jurisdiction by promulgating it.” The Court vacated the Final Rule and resulting regulations, meaning, it is no longer enforceable against any individual or entity.
It is likely that the Department of Justice and ATF will appeal this order and seek a stay from Judge O’Connor and the Fifth Circuit, and continue to defend its Rule regarding partial frames and receivers.
Renzulli Law Firm is continuing to monitor this lawsuit and other challenges to the Final Rule as well as other legislative developments and litigation that affects the firearms industry. If you have any questions about the District Court’s order and partially complete frames, please contact John F. Renzulli or Christopher Renzulli.
