In a landmark ruling that signals a victory for law-abiding gun owners, a federal court ruled against the Biden administration’s 2024 rule, Definition of “Engaged in the Business” as a Dealer in Firearms—an expansive reinterpretation of who must register as a federal firearms dealer. The decision, issued this week by the U.S. District Court for the Northern District of Alabama in Butler v. Bondi, found that the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) had overstepped its authority and effectively rewritten federal law without congressional approval.
At the heart of the case was the ATF’s Final Rule, announced in April 2024, which attempted to “clarify” the criteria for determining when an individual is considered “engaged in the business” of dealing in firearms. The court, however, saw it differently. The court ruled that the ATF’s interpretation wasn’t a clarification at all, but an unlawful expansion of the definition Congress established nearly four decades ago and amended in 2022 with the Bipartisan Safer Communities Act.
Federal law has long required anyone “engaged in the business” of dealing firearms to obtain a federal firearms license (FFL). Under the Firearms Owners’ Protection Act (FOPA) of 1986, that phrase was specifically defined to apply to those who buy and sell guns “as a regular course of trade or business with the principal objective of livelihood and profit.” Congress also made sure to carve out explicit protections for private gun owners—stating that those who make “occasional sales, exchanges or purchases” for a hobby or personal collection are not considered to be in the business of selling firearms.
In 2022, the Bipartisan Safer Communities Act (BSCA) amended the statute slightly, changing the phrase “livelihood and profit” to “predominantly earn a profit.” However, even that change preserved protection for collectors, hobbyists and individuals selling items from their personal collections. Nothing in the BSCA suggested that Congress intended to erase the distinction between a commercial dealer and a private gun owner.
Despite the plain text of the law, the ATF’s April 2024 Final Rule declared that there is “no minimum threshold number of firearms purchased or sold that triggers the licensing requirement.” It further stated that “even a single firearm transaction or offer to engage in a transaction may require a license.” The rule also prohibited individuals from selling firearms they had purchased for personal protection as part of their private collections—effectively narrowing the definition of what constitutes a lawful personal sale.
This sweeping language alarmed gun owners nationwide. Under the ATF’s interpretation, an individual selling a single firearm, even once, could be viewed as a commercial dealer subject to strict federal licensing and potential criminal penalties. Violating that requirement carries a penalty of up to five years in prison, a $250,000 fine and permanent loss of gun-ownership rights.
The NRA and two individual members promptly challenged the rule in court, arguing that the ATF’s action “redefined the law beyond its statutory limits” and “threatened the rights of law-abiding citizens.”
In early October, the Alabama court ruled decisively in favor of the NRA and the plaintiffs. The ruling held that the ATF had “exceeded its statutory authority” and effectively usurped Congress’s legislative role by attempting to impose new requirements not authorized by law.
In plain terms, the judge concluded that the ATF cannot criminalize conduct that Congress explicitly exempted. “An agency cannot rewrite clear statutory terms to suit its own policy preferences,” the court stated, echoing long-established principles of administrative law.
The injunction is significant—not only for its immediate protection of NRA members but also for the precedent it sets in reining in agency overreach. Beyond striking down a single rule, the ruling reasserts a fundamental principle: that the power to make or change laws lies with Congress, not unelected bureaucrats.
For the firearm community, Butler v. Bondi is more than a courtroom win. It is a reaffirmation that the boundaries of federal power must be respected, and that constitutional rights cannot be redefined by agency decree.
