A federal district court judge dealt a death blow to the Bureau of Alcohol, Tobacco, Firearms and Explosives’ remaining efforts to salvage parts of its controversial “engaged in the business” (EIB) rule. On August 13, 2026, U.S. District Judge Matthew J. Kacsmaryk of the Northern District of Texas denied the Department of Justice’s motion to alter or amend his earlier final judgment, holding that the entire 2024 Final Rule remains vacated.
Under former President Joe Biden, the ATF issued a Final Rule in April 2024 that dramatically expanded who needs a federal firearms license (FFL) to sell guns. The rule relied on language in the Bipartisan Safer Communities Act (BSCA) of 2022, which amended the Gun Control Act’s definition of being “engaged in the business” of dealing in firearms. Congress replaced the prior “principal objective of livelihood and profit” standard with a requirement that a person devote time, attention, and labor to dealing in firearms “to predominantly earn a profit” through repetitive purchase and resale.
ATF Tried to Turn Private Gun Owners Into Dealers
The ATF went much further. The agency declared that the primary purpose of a sale need not be profit for an FFL to be required. Simply advertising or offering a firearm for sale could trigger the licensing mandate. The rule created a series of presumptions under which a seller was treated as a dealer unless the individual could prove otherwise. Gun rights advocates correctly labeled the regulation a back-door attempt at universal background checks that would criminalize ordinary private sales between law-abiding citizens.
Gun Owners of America (GOA), the State of Texas, and several other states and organizations sued in Texas v. ATF. In June 2024, Judge Kacsmaryk issued a preliminary injunction blocking enforcement of the rule against the plaintiffs. After the Department of Justice later voluntarily dismissed its appeal of that injunction in April 2026, the court entered final judgment on June 12, 2026, vacating the rule in its entirety under the Administrative Procedure Act. The court found that the ATF had exceeded its statutory authority and that the rule was unlawful.
Rather than accept the ruling, the ATF and DOJ filed a motion asking the judge to modify the vacatur. They argued that only certain portions of the rule should be struck down and that the agency could salvage the rest. Officials claimed a partial vacatur would ease their efforts to issue a new Notice of Proposed Rulemaking that purported to revise the definition. In short, the government wanted the court to perform surgical edits so that pieces of the Biden-era rule could remain on the books.
Judge Calls DOJ’s Argument “Too Clever by Half”
Judge Kacsmaryk rejected the request in clear terms. He described the government’s position as “too clever by half.” Vacatur, he noted, is the default remedy under the APA when an agency action is held unlawful. Applying the Fifth Circuit’s severability analysis, the court found that the remainder of the rule could not function sensibly without the provisions already declared invalid. The rule’s single animating purpose had been to expand background checks through a vastly broadened definition of commercial dealing. Without those core elements, the rest collapsed.
The judge further observed that the ATF’s newer proposed rulemaking “doubles down on the substance of the old Rule,” including language that would allow regulation of gun owners even when they never sold a single firearm. That approach directly contradicted the court’s earlier holdings that actual sales and genuine commercial intent are required.
“Defendants cannot avoid the force of those Orders by rearranging a few words between the old Rule and the new one,” Kacsmaryk wrote.
The Engaged in the Business Final Rule therefore remains vacated in its entirety.
What the Ruling Means for Gun Owners
The decision protects private citizens who occasionally sell firearms from their personal collections, liquidate inherited guns, or make occasional transfers without fear of being treated as unlicensed dealers. It restores the statutory limits Congress actually enacted and reinforces that the ATF may not rewrite federal criminal law through creative regulation.
For gun owners across the country, the August 13 order closes a chapter of bureaucratic overreach that began under the previous administration and confirms that courts remain willing to hold the agency to the text of the statute.
About John Crump
Mr. Crump is an NRA instructor and a constitutional activist. John has written about firearms, interviewed people from all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons, follow him on X at @right2bear, or at www.crumpy.com.
