SW Legal studies in Business

Agency Can Enhance Enforcement of Existing Regulations Without Notice-and Comment
Description Appeals court held that an agency did not have to engage in notice-and-comment rulemaking to issue new "demand letters" that were sent to firms that were failing to comply with existing regulations. Since there was no expansion of substantive rules, no additional administrative procedure was required to justify the letters.
Topic Administrative Law
Key Words Rulemaking; Notice; Letters
C A S E   S U M M A R Y
Facts The Gun Control Act requires the BATF to operate a firearms tracing system for the production, distribution and sale of firearms to assist in law enforcement. When the BATF initiates a trace request on a firearm, federal firearms licensees (FFLs) must provide information within 24 hours, such as the buyer's name, address, and firearm license number. Concerned that some FFLs were not responsive to trace requests, the BATF issued a "demand letter" to 41 FFLs (of the 80,000 FFLs nationwide) requiring them to submit information about their firearms purchases and sales for the past three years and on a monthly basis thereafter. Such a demand letter was sent to RSM. It sought declaratory and injunctive relief against the demand letter, contending that it exceeded the authority of the BATF. The district court agreed that the BATF had not acted properly. The BATF appealed.
Decision Reversed. The BATF was not required to engage in notice-and-comment rulemaking in order to effect its statutory authority to require FFLs to comply with existing regulations. The demand letter did not expand the scope of regulations, it is an effort to make existing regulations more effective. The fact that the BATF cooperates with the National Tracing Center in such matters does not affect the substantive rights of the FFLs. The demand letter is not an unreasonable request for information in violation of the Fourth Amendment.
Citation RSM, Inc. v. Buckles, - F.3d - (2001 WL 618234, 4th Cir., 2001)

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