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01.17.2018 2017 Highlights the Importance of State Law Compliance in the Firearms Industry By: Camden R. Webb, Charles E. "Chuck" James, Jr. & Erica B. Zhang

The firearms industry had a strong year in 2017 and will again kick off the new year with the Shooting, Hunting, Outdoor Trade Show (SHOT Show), the global trade show for all professionals involved with the shooting sports, hunting and law enforcement industries. Last year saw the second most background checks on record, which is widely taken to mean that the market is thriving.  Anecdotal evidence also indicates that gun ownership is expanding its demographic base, another plus for the industry.

The legal front has, however, been a mixed bag.  There have been very few changes in federal law, as Congress has failed to pass any major firearms bill and the ATF has limited its rulemaking and related activity to technical matters.

At the same time, the past year has highlighted the need for industry members to focus on state law compliance.  States continue to issue interpretations of existing laws and pass new legislation that affect firearms manufacturers, distributors, and retailers.  Some examples of recent state-level actions impacting the industry are:  

Ammunition Sales:  Beginning January 2018, individuals and business are required to obtain a license from the California Department of Justice to sell ammunition in that state.  California residents are also prohibited from bringing ammunition into the state without first having the ammunition delivered to a licensed ammunition dealer.  This means out-of-state businesses selling ammunition to California residents may no longer ship product directly to a customer, but must send all purchases to a licensed vendor.  This has effectively ended the market for online ammunition sales in California.

The Mossberg Shockwave:  Mossberg introduced its “Shockwave” early in 2017, which is a shotgun with a barrel of less than 15 inches and an overall length of less than 27 inches.  Despite its short length, the Shockwave has no buttstock, which resulted in Mossberg receiving a letter ruling from the ATF that the shotgun does not meet the federal definition of a “short barreled shotgun” under the National Firearms Act.  The Shockwave went to market nationwide, but in some states, doubt arose as to whether the shotgun was legal under state law.  This led to confusion among distributors and retailers, and in some states, such as North Carolina, an Attorney General opinion letter was necessary to clarify the issue. Remington’s Tac 14 has undergone similar scrutiny.

The Integrally Suppressed Muzzleloader: As we explained in our article in our September, SilencerCo released a new product, then Maxim50, in mid-2017.  In developing this product, the company succeeded in creating a rifle with a silencer that is not a NFA-regulated item.  However, New Jersey, Massachusetts, and California challenged the legality of the sale of this firearm under state law, demonstrating that the laws of certain jurisdictions are inherently more restrictive than federal law.

Bump Fire Stocks:  In the wake of the Las Vegas shooting, the ATF solicited comments on the “Application of the Definition of Machinegun to ‘Bump Fire’ Stocks and Other Similar Devices.”  Nonetheless, under the present federal law, bump fire stocks are legal.  Meanwhile, several states have taken the position that bump fire stocks and related mechanisms are regulated by existing state law, and Massachusetts enacted legislation explicitly penalizing the possession or use of bump fire stock devices in 2017.

The above examples show a clear pattern: Items and activities that are legal under federal law might nonetheless be prohibited depending on the laws of the various states.  And, as many industry members are aware, legal classification of firearms is notoriously complex, which requires careful attention to all applicable laws.

The new year likely will bring more state-level activity that will influence industry practices, and recent events highlight the importance of staying current on proposed and enacted changes in state laws regulating firearms even if federal compliance requirements are stable.  And, as always, industry members will benefit from a thorough legal review of new products and ongoing sales practices.