A Texas Judge Wiped Out ATF’s Dealer Rule in June. On October 9, the Justice Department Filed Two Pages to Bring It Back.

Estimated reading time: 3 minutes

AMARILLO, TX — The Department of Justice is taking the fight over the ATF’s “engaged in the business” dealer rule to the Fifth Circuit. On October 9, 2026, the government filed a notice of appeal in State of Texas, et al. v. Bureau of Alcohol, Tobacco, Firearms and Explosives, et al., Case No. 2:24-cv-00089-Z, in the U.S. District Court for the Northern District of Texas, Amarillo Division. The two-page filing, Document 189, appeals the court’s Final Judgment of June 12, 2026, and a follow-on Order of August 13, 2026, to the U.S. Court of Appeals for the Fifth Circuit.

The June 12 Final Judgment is the ruling at the center of the appeal. In simple terms, as the notice describes it, the district court held that a business is “engaged in the business” of dealing firearms only if it actually makes a profit and has completed actual firearms sales, and on that reading it vacated the ATF rule in full. The notice refers to the regulation only as “the challenged ATF rule,” and it names the plaintiffs only as the State of Texas and unnamed co-plaintiffs.

The notice does not argue the case. It lists three questions the government wants the Fifth Circuit to answer. First, whether the plaintiffs have Article III standing, which in plain terms means whether they can show a real, concrete injury from the rule that gives them the right to be in federal court at all. Second, whether the district court erred in concluding that only businesses that make a profit can be “engaged in the business” of dealing firearms, and whether it erred in concluding that only businesses that have completed actual firearms sales are “engaged in the business.” Third, whether the district court erred in vacating the rule in full, meaning wiping it off the books for everyone rather than blocking it only as to the plaintiffs in this case.

Those three questions map out where the government intends to push. Standing is a threshold attack. If the plaintiffs never had the right to sue, the judgment falls without an appeals court ever reaching the merits. The second question is the merits. “Engaged in the business” is the phrase in federal law that decides who needs a federal firearms license, and the district court read it to require a profit motive that actually produces a profit and at least one completed sale. The government is asking the Fifth Circuit to say that reading was wrong. The third question is about remedy, and it asks whether full vacatur went too far even if the court got the law right.

The second question is the one I would put in front of every gun owner who has ever sold a pistol to a friend or sold off part of a collection. Strip away the procedure and the government is asking a federal appeals court whether a person can be a firearms dealer without turning a profit and without completing a sale. That is the line between a private transfer and a federal crime, and the district court drew it where most gun owners would expect it to be drawn.

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The filing is signed by Brett A. Shumate, Assistant Attorney General for the Civil Division, with Andrew I. Warden as Assistant Director of the Federal Programs Branch, Jeremy S.B. Newman as Chief Litigation Counsel, and Keri L. Berman as Trial Attorney. A notice of appeal commits the government to nothing beyond the questions it lists, and the Fifth Circuit has not ruled on any of them. For now, the district court’s judgment vacating the rule is what stands.

I will continue tracking Texas v. ATF as the appeal moves through the Fifth Circuit.

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