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Biden-Era “Engaged in the Business” Rule (Again) Ruled Illegal

Monday, August 31, 2026

Biden-Era “Engaged in the Business” Rule (Again) Ruled Illegal

The anti-gun programs and policies of the Biden-Harris administration have been falling like dominoes, lately.

On August 17, a Biden-era rule that expanded the regulatory authority of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) over “frames and receivers” to sweep in certain unfinished frame and receiver blanks and firearm-parts kits was ruled invalid in the case of Defense Distributed v. Blanche. The rule inhibited the making of firearms by private individuals by restricting access to the necessary components, and the U.S. District Court for the Northern District of Texas held it was unconstitutional. In the context of the Second Amendment, the court (quoting NRA-ILA’s Joseph Greenlee, Director of the Office of Litigation Counsel) found that far from comporting with America’s historical gun regulations, the rule “contradicts the actual historical tradition of personal gunsmithing. Self-manufacture of firearms in America was common and indeed foundational to establishing our Nation.”

Another recent ruling out of the same court concerned the ATF’s 2024 “Engaged in the Business as a Dealer in Firearms” Final Rule, which greatly expanded the interpretation of dealing in firearms for the purposes of federal licensing and regulation as an FFL. The Biden administration not only attempted to implement policy changes that went far beyond the underlying regulatory framework, but the rule stood much of the statutory text on its head. Where the statute directed that “engaged in the business” required a “regular course of business or trade” based on “the repetitive purchase and resale of firearms” to “predominantly earn a profit” (to obtain pecuniary gain), the rule stated there was no minimum number of transactions required; a single sale, or even just an offer to sell (or to engage in a transaction) could cross the line into unlicensed dealing. The uncertainty this rule created effectively banned private firearms sales, as law-abiding gun owners refrained from engaging in or facilitating private gun transactions for fear of being federally prosecuted as unlicensed dealers.

On June 12, 2026, the Texas court had issued a final judgment vacating that rule entirely. The ATF then moved to have that judgment amended to leave parts of the rule intact, arguing that invalidating the entire rule was not necessary to remedy the harms alleged by the plaintiffs, and because otherwise, it was “unduly burdensome to the [ATF] as [the agency] seeks to replace the Rule through [a pending] Notice of  Proposed Rulemaking (the “NPRM”).” On August 13, the court denied the ATF’s motion.

Preserving parts of the Final Rule was not only legally indefensible but practically unworkable. The court determined that ATF would not have promulgated the rule without the provisions the court struck down. As the ATF conceded in its court filings, the rule “had one goal: universal background checks,” and “the Rule as a whole was intended to serve [this] overarching policy goal.”

Given that sole objective, the rule could not function absent the key provisions that the court had specifically invalidated. Addressing the argument that the current new rulemaking relied on parts of the invalidated rule, the court observed that this, too, was problematic. “ATF’s new NPRM even doubles down on the substance of the old Rule, retaining, for example, language from the old Rule that said ATF can regulate gun owners even when they never sell a single firearm.” ATF, it concluded, could not “avoid the force of [the previous judgments] by rearranging a few words between the old Rule and the new one.”

As noted by the court, the ATF had embarked on replacing the Final Rule through a NPRM, in which a draft of a proposed replacement rule was made available for public comment earlier this year. As we explained in a previous alert, NRA filed extensive comments on this NPRM (and many others) on behalf of its members. The comment on the EIB rulemaking recommended that both the existing Final Rule and the proposed new rule be scrapped, as neither are legally or practically supportable.

Will the ATF take these comments and court rulings seriously? ATF’s Director, Robert Cekada, sworn in on April 30, penned an August 5 article in The Hill responding to misinformation regarding the NPRMs and other reforms his agency has undertaken. Much of the coverage, including that from entrenched gun-control advocates like New York Attorney General Letitia James, “has inaccurately portrayed the scope and intent of the rules. The public deserves a clear statement of the facts.” The aim of the changes, he emphasized, was to “align[] agency practice with recent court decisions,” “reduce unnecessary burdens on law-abiding citizens and businesses while preserving — and sometimes enhancing — safeguards,” and allow the agency to focus its law enforcement resources on fighting willful violators and violent criminals.

Past experience has given law-abiding citizens good reason to be guarded as to the government in relation to guns, and it’s a welcome day indeed as the ATF reorients itself to the protection of Second Amendment rights and rebuilding trust with FFLs and ordinary Americans. The dismantling of the illegal anti-gun bulwarks of the Biden regime is encouraging news for more than just the gun community, though, as it realigns government practices with what the law of the land demands, reaffirms respect for constitutional rights, and bolsters public confidence in the rule of law.

But when it comes to Biden-Harris’s noxious “EIB” rule, ATF may have run out of room for rehabilitation and fine-tuning. The concept, courts have rule, is flawed through and through.

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Established in 1975, the Institute for Legislative Action (ILA) is the "lobbying" arm of the National Rifle Association of America. ILA is responsible for preserving the right of all law-abiding individuals in the legislative, political, and legal arenas, to purchase, possess and use firearms for legitimate purposes as guaranteed by the Second Amendment to the U.S. Constitution.