DOJ Reverses Course and Appeals Win Against Biden's Dealer Rule
The Justice Department wants Biden's "engaged in the business" rule back on the books. On October 9, 2026, DOJ filed a notice of appeal in Texas v. ATF, asking the Fifth Circuit to overturn a federal court's decision to vacate the rule in full. Brett A. Shumate, assistant attorney general for the Civil Division, signed the notice. It targets a final judgment dated June 12, 2026, and a follow-up order dated August 13, 2026. Earlier in the case, DOJ had asked the appeals court to dismiss its own appeal, which left gun owners assuming the rule was finished. That assumption no longer holds. Gun Owners of America, which won the case, called the new filing a betrayal of President Trump's pledge to scrap the rule on day one. The fight now moves to the Fifth Circuit, and the government is defending the rule's replacement in public.
Key Details
The notice spells out three questions DOJ intends to press on appeal. Each one attacks a different piece of the district court's reasoning.
- Standing: DOJ asks whether the plaintiffs had Article III standing to bring the challenge at all.
- Definition of "engaged in the business": DOJ challenges the lower court's conclusion that only businesses earning a profit qualify, and that only businesses completing actual firearm sales fall under the term.
- Scope of vacatur: DOJ questions whether the court erred in striking the entire ATF rule rather than only parts of it.
GOA posted about the appeal the same day the notice was filed. The group accused DOJ of defending "every part" of the Biden rule and asked why the department still works against Trump's stated position. ATF Director Robert Cekada then answered the criticism directly, telling News2A.com that ATF's proposal strips out the Biden-era presumptions and replaces them with the definition Congress wrote into federal law. Under that approach, the government would carry the burden of proving a person is unlawfully engaged in the business. Cekada said ATF would keep three pieces: definitions of "purchase" and "sale," guidance for licensees winding down operations, and codified guidance for auctioneers handling estate sales. He also said ATF would drop two provisions. One treats former business inventory as permanently commercial, even after a former licensee makes an occasional private sale. The other removes the exclusion for firearms held for personal protection from the definition of a personal collection.
Background
The "engaged in the business" phrase comes from federal statute. Under 18 U.S.C. 921(a)(21)(C), a person who deals in firearms as a regular course of trade, with the principal objective of livelihood and profit through repetitive purchase and resale, must hold a federal dealer license. Congress wrote that test, and it has always centered on profit and regular commerce. Biden's ATF moved away from that frame. Its 2024 final rule added presumptions that critics argued could turn occasional or private sellers into unlicensed dealers. Gun-rights groups and states sued, arguing the rule rewrote the statute rather than clarifying it. A federal court sided with the challengers and vacated the rule. Under the Supreme Court's Bruen decision from 2022, any firearms regulation must fit within the nation's historical tradition of firearm regulation, which gives the challengers a strong argument against an expansive dealer definition. DOJ's current filing does not argue the rule matches history. It argues about standing and remedy, which signals that the government would prefer to avoid a full merits debate.
Why It Matters for Gun Owners
Anyone who sells firearms outside a licensed shop should pay attention. Private sellers at gun shows, people selling a few guns to fund a purchase, heirs handling estate sales, and collectors who thin their safes all fall within the zone this rule could reach. If the Fifth Circuit reverses the vacatur, the rule's text returns to federal law, and the effects would not stop at Texas's border. A vacated rule that gets reinstated applies everywhere again. Gun owners in states with their own universal background check laws, including California, New York, Colorado, and Washington, already live under tighter transfer rules. Federal dealer definitions still shape who needs a license and who can sell without one. Sellers should keep written records of every transfer, including date, buyer details, and firearm description. Anyone who has inherited a collection or sold a former business's inventory should consult a firearms attorney before the next transaction. Watch the Fifth Circuit docket in Texas v. ATF, and watch the public comment process on ATF's replacement proposal. Those documents determine what the rule says once the litigation ends.
DownRange Analysis
DOJ's standing argument deserves a close look. The plaintiffs are gun owners and businesses who face the rule's burdens directly, so a standing dismissal would be a procedural win for the government, not a finding that the rule is sound. The merits question is where the rule dies. Under Bruen, the government has to point to historical analogues for a regulation that burdens private transfers. ATF's own director conceded that the Biden presumptions went too far, which tells you the agency knows the rule is weak. The proposal to restore the statutory definition is the right direction. The appeal is the wrong one, and it puts gun owners in limbo for another year or more. Here is what to do now. Document your private sales. Avoid selling in volume without legal advice. Submit comments on ATF's proposal and ask your representatives where they stand. Keep your eye on the Fifth Circuit docket. The gun community won this case once. It can win it again, but only if it stays loud until the appeal is decided.
