United States District Court, D. Maryland
CHARLES RICHARD ALSOP GILBERT, JR., BURGANDY PARK ASSOCIATES, LLC, INDOOR RANGE OPERATING COMPANY, LLC, trading as GILBERT'S INDOOR RANGE, BRYON GOSSARD, and GILBERT INDOOR RANGE, LLC, Plaintiffs,
UNITED STATES BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES, THE UNITED STATES OF AMERICA, GRETCHEN ARLINGTON, in her official capacity and personal capacity, ENGAGE ARMAMENT, THEODORE SABATE, ANDREW RAYMOND and GREG MILLER, Defendants.
THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE
Control Act of 1968 (“GCA”), Pub. L. No. 90-618,
82 Stat. 1213 (1968), requires any individual seeking to
engage in the business of selling firearms to first obtain a
Federal Firearms License (“FFL”) from the United
States Bureau of Alcohol, Tobacco, Firearms and Explosives
(“ATF”). 18 U.S.C. § 923(a) (2012).
Plaintiffs Charles Gilbert and Bryon Gossard, along with
limited liability corporations established to operate their
various businesses, have filed suit seeking damages for and
injunctive relief relating to the ATF's denial of
Gossard's FFL application. Plaintiffs assert a violation
of the Due Process Clause of the Fifth Amendment to the
United States Constitution and multiple state law tort
claims. Pending before the Court are two Motions to Dismiss,
one by Defendants the United States of America, the ATF, and
Gretchen Arlington, an ATF investigator (the “Federal
Defendants”), and one by Defendants Engage Armament and
Andrew Raymond (the “Private Defendants”). Having
reviewed the pleadings, briefs, and other submitted
materials, the Court finds that no hearing is necessary.
See D. Md. Local R. 105.6. For the reasons set forth
below, Defendants' Motions are GRANTED.
is the owner of the Gilbert Indoor Range (the
“Range”), a members-only shooting range located
in Rockville, Maryland. Gilbert is also a former FFL holder
whose many GCA violations cost him the ability to sell
firearms. His decade-long attempt to regain an FFL, either
for himself or for a proxy, is recounted in detail in
Gossard v. Fronczak, 206 F.Supp.3d 1053, 1055-56 (D.
Md. 2016). This case is one of a long line of legal
challenges brought by Gilbert in an effort to resuscitate his
former firearms dealing business.
2008, in an attempt to maneuver around firearms regulations
and the ATF's rescission of his businesses' FFLs,
Gilbert entered into an agreement with Defendants Raymond and
Theodore Sabate, who together owned Engage Armament LLC
(“Engage”), a business that customized and sold
firearms. Through this agreement, Gilbert would finance the
purchase of a firearm for a Range member, then Engage would
use its FFL to receive the firearm from the manufacturer or
dealer and to host the actual sale of the firearm on its
premises. For its participation, Engage would receive a
$30.00 transfer fee. Gilbert would receive the rest of the
profits. Gilbert also offered a free, week-long membership to
the Range to any person who purchased a firearm from Engage.
also in 2008, Gilbert applied for an FFL in his own name. The
ATF denied the application, finding that his businesses'
GCA violations should be imputed to him and that Gilbert
himself had violated the GCA by selling firearms after his
businesses' FFLs had been revoked. Gossard, 206
F.Supp.3d at 1056. On June 6, 2012, the United States Court
of Appeals for the Fourth Circuit affirmed ATF's
decision. Gilbert v. Bangs, 481 F. App'x 52, 55
(4th Cir. 2012).
April 2012, Plaintiff Gossard purchased one of Gilbert's
business entities, Gilbert Indoor Range, LLC
(“GIR”), for one dollar. Gossard, 206
F.Supp.3d at 1056. Gossard, who had been a Range employee
since 2009, also entered into a lease so that GIR could sell
firearms at the Range. Two days after the Fourth Circuit
affirmed ATF's denial of Gilbert's FFL application,
Gossard applied for an FFL on behalf of GIR.
applicants must list on their application all
“responsible persons” in their business.
Specifically, they must notify the ATF of “any
individual possessing, directly or indirectly, the power to
direct or cause the direction of the management, policies,
and practices of the corporation, partnership, or
association, insofar as they pertain to firearms.”
Gossard, 206 F.Supp.3d at 1061 (quoting FFL
Application Instructions). Willful failure to list a
responsible person is grounds for the application's
denial. 18 U.S.C. § 923(d)(1)(D); 27 C.F.R. §
478.47(b)(4) (2016); see Mew Sporting Goods, LLC v.
Johansen, 992 F.Supp.2d 665, 678 (N.D. W.Va. 2014).
Gossard's FFL application did not name Gilbert as a
responsible person for GIR.
Arlington was the ATF Industry Operations Investigator
charged with investigating Gossard's application. On
November 16, 2012, she gave what Gossard thought was verbal
approval of the application. Gossard immediately alerted the
Range's customers that he was now able to sell firearms.
He also told Raymond about the FFL approval. Plaintiffs have
not alleged that they expended any money or entered into any
transactions based on Arlington's statement.
anticipated FFL approval was not forthcoming. The same day
that Arlington spoke with Gossard, Raymond contacted ATF to
accuse Gossard of being a straw applicant for Gilbert and a
marijuana user. Ultimately, on August 26, 2013, ATF denied
Gossard's application on the grounds that he had not
disclosed Gilbert as a responsible person and had engaged in
unlawful drug use. Gossard, 206 F.Supp.3d at 1058.
“Immediately after” Gossard received the denial,
Raymond contacted Gilbert, informed him of Gossard's
alleged drug use, and admitted that it was he who had spoken
to ATF about Gossard's application. Am. Compl. ¶ 78,
ECF No. 56-1. “It was at this time” that Gilbert
“realized” that Raymond, Sabate, Engage, and ATF
were conspiring against him. Id. ¶ 79.
appealed the denial of his FFL application. After an
administrative hearing, ATF issued a Final Notice affirming
its decision on January 20, 2015. On March 24, 2015, Gossard
filed a petition in this Court to contest that decision. On
June 30, 2016, this Court upheld the ATF's denial of the
application on the basis that Gossard had willfully omitted
material information from his application. Gossard,
206 F.Supp.3d at 1065. Specifically, this Court found that
Gossard should have listed Gilbert as a “responsible
person” for Gossard's business because
“Gilbert could indirectly control the management,
policies, and practices of GIR.” Id. at
1063-65. This Court reached this conclusion without
considering whether Gossard was a drug user or whether
alleged drug use was a proper basis for the FFL's denial.
On November 13, 2017, the Fourth Circuit affirmed this
Court's decision. Gossard v. Fronczak, 701 F.
App'x 266, 266 (4th Cir. 2017).
21, 2015, while Gossard's challenge was still pending
before this Court, Gossard and Gilbert filed this case. The
initial Complaint (the “original Complaint”)
listed only the United States and the Acting Director of ATF
as defendants and asserted two claims: a governmental taking
of property in violation of the Fifth Amendment and the tort
claim of intentional interference with current and
prospective business advantage/contract. The Takings Clause
claim was later voluntarily dismissed. On January 18, 2017,
Plaintiffs amended their Complaint (the “First Amended
Complaint”) to add Arlington, in her official and
personal capacities, Engage, Raymond, Sabate, and Greg Miller
as defendants. The First Amended Complaint also
substituted ATF itself in place of its Acting Director.
Complaint was amended yet again on May 3, 2017 (the
“Second Amended Complaint”) to add four
additional claims: a Fifth Amendment due process violation,
brought pursuant to 42 U.S.C. § 1983 (“§
1983”), and three state law tort claims: unjust
enrichment, intentional misrepresentation, and constructive
fraud. As relevant here, Plaintiffs allege that Arlington,
Raymond, Sabate, and Miller conspired to use Raymond's
false testimony to deny an FFL to Gossard so that Raymond and
Engage could steal Gilbert's customer base and benefit
from the lucrative business of selling firearms without
competition from Gossard. Plaintiffs allege that Gossard and
Gilbert both lost potential revenue because Gossard never
received an FFL and therefore could not sell firearms for
profit, and Gilbert was thus deprived of rent that GIR would
have paid for leasing space at the Range.
Federal Defendants seek dismissal of all counts asserted
against them on the grounds that those claims are barred by
sovereign immunity or are foreclosed by this Court's
ruling in Gossard v. Fronczak, 206 F.Supp.3d at
1063-65. The Private Defendants seek dismissal on the grounds
that (1) they are not state actors, such that the
Bivens and § 1983 claims against them are
improper; and (2) the remaining tort claims are barred by the
statute of limitations.
seek dismissal of the tort claims against Arlington under
Federal Rule of Civil Procedure 12(b)(1). It is the
plaintiff's burden to show that subject matter
jurisdiction exists. Evans v. B.F. Perkins Co., Div. of
Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir.
1999). Rule 12(b)(1) allows a defendant to move for dismissal
when it believes that the plaintiff has failed to make that
showing. When a defendant asserts that the plaintiff has
failed to allege facts sufficient to establish subject matter
jurisdiction, the allegations in the complaint are assumed to
be true under the same standard as in a Rule 12(b)(6) motion,
and “the motion must be denied if the complaint alleges
sufficient facts to invoke subject matter
jurisdiction.” Kerns v. United States, 585
F.3d 187, 192 (4th Cir. 2009). When a defendant asserts that
facts outside of the complaint deprive the court of
jurisdiction, the Court “may consider evidence outside
the pleadings without converting the proceeding to one for
summary judgment.” Velasco v. Gov't of
Indonesia, 370 F.3d 392, 398 (4th Cir. 2004);
Kerns, 585 F.3d at 192. The court should grant a
Rule 12(b)(1) motion based on a factual challenge to subject
matter jurisdiction “only if the material
jurisdictional facts are not in dispute and the moving party
is entitled to prevail as a matter of law.”
Evans, 166 F.3d at 647 (quoting Richmond,
Fredericksburg & Potomac R. Co. v. United States,
945 F.2d 765, 768 (4th Cir. 1991)).
seek dismissal of the remaining claims pursuant to Rule
12(b)(6). To defeat a motion to dismiss under Rule 12(b)(6),
the complaint must allege enough facts to state a plausible
claim for relief. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A claim is plausible when the facts pleaded allow
“the Court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. Legal conclusions or conclusory statements do
not suffice. Id. The Court must examine the
complaint as a whole, consider the factual allegations in the
complaint as true, and construe the factual allegations in
the light most favorable to the plaintiff. Albright v.
Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of
Comm'rs of Davidson Cty., 407 F.3d 266, 268 (4th
Cir. 2005). Documents attached to the complaint or motion may
be considered if “they are integral to the complaint
and authentic.” Sec'y of State for Defence v.
Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir.
2007). The court may also take judicial notice of matters of
public record. Philips v. Pitt Cty. Mem'l Hosp.,
572 F.3d 176, 180 (4th Cir. 2009). When considering a Rule