In April 2022, the Bureau of Alcohol, Tobacco, Firearms, and Explosives finalized a rule designed to address so-called “Ghost Guns” or “Personally Manufactured Firearms” (PMFs). PMFs are unfinished firearm parts, frequently sold as kits with a missing or incompletely finished frame or receiver. To create a working firearm, end-users must assemble the parts and typically finish machining a receiver or frame, which often requires drills, hand tools, and a basic knowledge of firearms. The previous generally recognized rule is that any frame or receiver that was no more than 80% complete was not a firearm. PMFs are popular with gun hobbyists who customize their own firearms for personal use. The rule modifies the definitions of a “firearm” and the terms “frame” and “receiver.” The rule states that the terms “frame and receiver shall include a partially complete, disassembled, or nonfunctional frame or receiver, including a firearm receiver parts kit, that is designed to or may readily be completed, assembled, restored or otherwise converted to function as a frame or receiver.” 87 Fed. Reg. at 24739. In addition, the rule changes the definition of a “firearm” to include a “weapon parts kit that is designed to or may readily be completed, assembled, restored, or otherwise converted to expel a projectile by action of an explosive.” Id. at 24728. Prior to the implementation of the rule, because the components of the kits were previously not considered firearms, the end user was not subject to background checks, and PMFs were not required to have a serial number on the frame or receiver. The United States Department of Justice contends that PMFs pose challenges to criminal investigations and prosecutions and has prioritized ghost gun prosecutions and seizures as part of its violent crime and gun violence reduction initiatives.

A collection of industry and Second Amendment advocates challenged the final rule in August of 2022 in the Northern District of Texas. The District Court vacated the rule, finding that it exceeded the agency’s congressionally-limited authority, and enjoined the ATF from enforcing the rule nationwide. The government appealed, and a split Supreme Court allowed the rule to stay in effect while legal challenges are pending.  On November 9, 2023, the Fifth Circuit Court of Appeals affirmed the Judgement of the District Court finding that the rulemaking exceeded the ATF’s statutory authority. The unanimous decision concluded that the ATF stepped in the shoes of Congress and essentially rewrote the law in violation of the separation of powers.

The regulation will remain in effect while the U.S. Supreme Court decides whether to take on the case.  This latest ruling sets the stage for the Supreme Court to consider another firearm regulation, as it has already agreed to consider the constitutionality of ATF’s 2019 “bump stock rule,” which classified bump stocks as machine guns. Both rulings will have significant implications for firearm regulations for gun owners and industry professionals, as millions of bump stocks and PMFs are in circulation. The ever-changing regulatory landscape can make compliance challenging, and we encourage anyone with questions about ATF regulations or gun laws to seek the advice of experienced and competent counsel, as the consequences of noncompliance can be costly.

The Administrative, Regulatory, and Government Law practice group has knowledge and experience helping clients navigate state, local, and federal regulations. You can learn more about our practice group here.