FILED
NOT FOR PUBLICATION FEB 19 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
NATIONAL LENDING GROUP, LLC, an No. 09-15166
Arizona limited liability corporation; et al.,
D.C. No. 2:07-cv-00024-PGR
Plaintiffs - Appellants,
v. MEMORANDUM *
ERIC H. HOLDER Jr., Attorney General,
Attorney General of the United States; et
al.,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
Paul G. Rosenblatt, District Judge, Presiding
Submitted February 11, 2010 **
San Francisco, California
Before: THOMPSON and McKEOWN, Circuit Judges, and ZILLY, *** Senior
District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Thomas S. Zilly, Senior United States District Judge
for the Western District of Washington, sitting by designation.
National Lending Group, LLC (“National Lending”) and Millennium Banc,
Ltd. (“Millennium”), which are or were engaged in the pawnbroker business,
appeal from the district court’s grant of summary judgment concluding that, due to
willful violations of the Gun Control Act of 1968 (“GCA”) and related regulations
by National Lending and Millennium (collectively, “Licensees”), the Attorney
General was authorized to revoke certain Federal Firearms Licenses (“FFLs”) and
deny applications for other FFLs. We have jurisdiction under 28 U.S.C. § 1291,
and we affirm the district court’s decision.
The GCA authorizes the Attorney General, “after notice and opportunity for
hearing,” to revoke a FFL if the licensee “has willfully violated” any provision of
the GCA or the regulations promulgated thereunder. 18 U.S.C. § 923(e). Willful
violation is also a basis for the Attorney General to deny an application for a FFL.
Id. § 923(d)(1)(C). An aggrieved party may file a petition with the district court
for the district in which the party resides or does business, seeking de novo judicial
review. Id. § 923(f)(3). The district court may “consider any evidence submitted
by the parties to the proceeding whether or not such evidence was considered at the
hearing held” by an officer with the Bureau of Alcohol, Tobacco, Firearms, and
Explosives (“ATF”), to whom the Attorney General has delegated authority. Id.;
see 28 C.F.R. § 0.130(a)(1); see also 27 C.F.R. § 478.74.
2 09-15166
For the first time on appeal, Licensees raise a due process challenge to the
way in which hearings were conducted by ATF prior to revocation and denial of
the FFLs. By failing to present the issue to the district court, Licensees waived
their due process claim. See Broad v. Sealaska Corp., 85 F.3d 422, 430 (9th Cir.
1996). With regard to the district court’s review of the decision to revoke and
deny the FFLs at issue, Licensees assert that the administrative record contains
information the district court should not have considered because it lacked proper
foundation or constituted inadmissible hearsay.1 In making this argument,
Licensees fail to provide a single citation to the record. They complain that, during
the ATF proceeding, an ATF agent would be handed a report “from another local
law enforcement agency and ask[ed] . . . about its contents.” Opening Br. at 6-7.
They do not, however, point to any place in the record where such procedure was
followed. To the contrary, five different state or local law enforcement officers
testified and, in each instance, although the officer might not have written the
related report, the officer personally observed or participated in the events
described.
1
Licensees’ characterization of Exhibits 83, 84, and 85 as containing or
constituting hearsay does nothing to advance their position because the Federal
Rules of Evidence do not apply to administrative proceedings. See Fed. R.
Evid. 1101(a) & (b); see also Nationwide Jewelry & Pawn, Inc. v. United States,
455 F. Supp. 2d 1379, 1383 (M.D. Ga. 2006).
3 09-15166
Licensees’ related contention that, in considering the administrative record,
the district court “eviscerated” Rule 56 borders on frivolous. The rules governing
summary judgment set forth with particularity the requirements of an affidavit, see
Fed. R. Civ. P. 56(e), but contrary to Licensees’ implicit assertion, the rules do not
require that affidavits be submitted. See Fed. R. Civ. P. 56(c); see also Advisory
Committee Notes (1963) (referring to “affidavits or other evidentiary matter”).
Licensees’ attempt to characterize Mark Brooks’s involvement as merely a
secured creditor is likewise meritless. The evidence established that Mr. Brooks
participated in the daily activities of the business, appearing behind the counter,
handling firearms, having the alarms codes, and responding to alarm incidents; that
until September 2005, he had direct ownership interest in National Lending; and
that after September 2005, he continued to have an ownership interest through his
solely owned company, Alexis J., L.L.C. The district court appropriately found an
absence of factual issues on the subject.
Finally, with regard to willfulness, Licensees argue that the type of evidence
presented to the ATF Hearing Officer was insufficient because it did not establish
either a history of regulatory violations or an admitted failure to comply with
known regulatory requirements. Although a history of regulatory violations or an
admission of culpability constitute evidence of willfulness, Licensees provide no
4 09-15166
authority for the contention that these are the only means by which willfulness can
be established. In this case, the evidence of willfulness was of a different nature,
but was equally or more compelling. The undisputed evidence established that
Licensees knew the requirements of the law, and not only were plainly indifferent
to, but also engaged in deliberate efforts to circumvent them. See Gen. Store, Inc.
v. Van Loan, 560 F.3d 920, 923 (9th Cir. 2009). Revocation and denial of the
FFLs at issue was authorized, and the district court properly granted summary
judgment against Licensees. See Stein’s Inc. v. Blumenthal, 649 F.2d 463, 464 n.2
(7th Cir. 1980).
AFFIRMED.
5 09-15166