Fifth Circuit Handgun Ruling: What FFL Dealers Do Now

A sale that was a felony on Thursday and a headline on Friday

Walk into a gun shop in Texas with an Arizona driver's license and ask to buy a Glock. Before last Friday, a dealer who rang that up committed a federal felony. Since 1968, three provisions of the Gun Control Act have made it unlawful for a licensed dealer to sell or deliver a handgun to a person who does not reside in the dealer's state, and unlawful for that out-of-state buyer to receive it — with no exception for handguns like the one Congress wrote for in-person rifle and shotgun sales.

On September 18, a divided panel of the U.S. Court of Appeals for the Fifth Circuit held that scheme unconstitutional. In Elite Precision Customs, L.L.C. v. ATF (No. 25-11206), Judge Jerry E. Smith, joined by Judge Kurt Engelhardt, found that the combined operation of 18 U.S.C. § 922(a)(3), (a)(5) and (b)(3) — the opinion calls it the Nonresident Handgun Purchase Ban — implicates the plain text of the Second Amendment and fails the historical test the Supreme Court set in Bruen. Judge Catharina Haynes dissented.

The line that will be quoted for years is the closing one: "The Ban sullies the plain text of the Second Amendment and is inconsistent with the nation's tradition of firearms regulation." You can read the full opinion here.

The part of the ruling dealers should actually read twice

The court did not rest on the idea that a handgun is somehow harder to buy. It went after the workaround that has defined nonresident handgun sales for two generations: ship the gun to a dealer in the buyer's home state, and let that dealer handle the transfer.

Judge Smith's opinion treats that system for what it is — a government-mandated detour. Nothing compels a receiving dealer to accept the transfer. The detour costs the buyer a fee on top of the price of the gun, and the court said plainly that it must "pause before endorsing a cost attached to the exercise of a fundamental constitutional right." One plaintiff in the case, New Mexico shooter Tim Herron, told reporters his intermediary transfers typically ran $30 to $40 each, plus the wait.

The decision also splits with the Second Circuit, which upheld a functionally identical challenge in United States v. Vereen last year. A circuit split on a federal statute of this age is exactly the kind of conflict the Supreme Court tends to resolve.

Why nothing changes at your counter this week

A panel opinion is not an operating rule, and this one has a calendar attached to it. The ruling has no effect until the Fifth Circuit issues its mandate. In a member alert on September 21, the National Shooting Sports Foundation said the government has 40 days — until October 28 — to seek rehearing by the full court. If it does not, the mandate should issue on November 9. NSSF's guidance to licensees is blunt: for now, do not transfer a handgun to a customer from another state. Shipping a handgun to a dealer in the buyer's state is unaffected and remains the safe path.

Two more reasons not to improvise:

• The scope of relief is unsettled. The Fifth Circuit reversed the district court and "rendered judgment" for the plaintiffs — a Texas dealer, two out-of-state customers and the Firearms Policy Coalition — but gave no parameters for the permanent injunction the plaintiffs originally sought. Whether the judgment protects only those plaintiffs or every dealer in Texas, Louisiana and Mississippi is an open question, and it is the government's call whether to argue that it is party-specific.
• ATF has not moved. ATF's published dealer guidance still describes the home-state FFL transfer as the way to complete a nonresident handgun sale, and still reserves direct over-the-counter sales for qualifying rifles and shotguns. Until the agency addresses the ruling, that guidance is what an inspector is reading.

The asymmetry should drive the decision. Waiting costs you one sale. Acting on a headline and guessing wrong on relief costs you a license.

What you can lawfully do today with an out-of-state customer

The nonresident conversation already has legitimate lanes that do not depend on this ruling at all:

• Ship it. Dealer-to-dealer transfer to an FFL in the buyer's home state. Unchanged, and still the only option for most nonresidents.
• Dual residents. A person who genuinely maintains a home in your state can be a resident for federal purposes. ATF's definition at 27 CFR 478.11 turns on being present in a state with the intention of making a home there, and ATF Ruling 2001-5 places a person with two homes in the state where he is actually living when the transaction occurs. The documentation bar is real: ATF expects government-issued proof tied to that address. "I have a rental here" is not the same thing as "I live here."
• Active-duty military. A service member's residence includes the state of their permanent duty station under 18 U.S.C. § 921(b); electronic PCS orders plus a valid military ID have long been accepted as proof.

Dealers who already handle those cases cleanly are the ones who will adapt fastest if the handgun rule actually falls, because the underlying work — verifying residency, checking both states' laws, documenting the transaction — is the same work either way.

If the ruling survives, what really changes in the store

• The buyer's math changes, not the paperwork. Direct sales to nonresidents in the Fifth Circuit would let a visitor take possession at your counter instead of paying a second dealer. NICS, prohibited-person rules, straw-purchase rules and Form 4473 duties are all untouched; the court did not rewrite the Gun Control Act or publish a new form.
• Transfer fees are the revenue line that gets repriced. A meaningful share of FFL transfer income comes from nonresident buyers who buy elsewhere and pay a local dealer to complete the sale. If the fee disappears, the shop at the counter becomes the destination instead of the middleman. For stores near a state line or in a metro that pulls in travelers, that is a sales strategy question, not just a compliance one.
• Long guns show you the workflow. The rifle and shotgun exception already permits in-person sales to a nonresident when the sale complies with the law of both states. Same discipline: confirm residency, check both states, keep the record.
• State law does not evaporate. A buyer who is subject at home to a purchase permit, registration, roster or waiting period still is. The transaction happens where you are, and your own state's rules still govern it.

Also on the docket this week

Glock v. Griffin (D. Conn.). Glock sued Connecticut's chief state's attorney on September 21 over the state's new "convertible pistol" ban — Public Act 26-41, signed in May and effective October 1 — which makes it a Class D felony, up to five years and a $5,000 fine, to import, sell or offer for sale semiautomatic pistols with a cruciform trigger bar that can be readily converted into a machine gun. Glock argues its Slimline, V Series and Gen 6 pistols were engineered against conversion devices, citing an ATF report concluding the design changes defeated all tested machinegun conversion devices, and is seeking a declaration plus emergency relief before the law takes effect. A hearing is set for September 29 in Bridgeport; NSSF and the Second Amendment Foundation filed a parallel challenge. For Connecticut dealers, October 1 is the date that touches the shelf.

Fifth Circuit en banc. Four days before the handgun ruling, the same court granted full-court rehearings in United States v. Cordova and United States v. Squire, both aimed at the lifetime possession ban for convicted felons at 18 U.S.C. § 922(g)(1). Different question, same court, and it signals how much appetite this circuit has for reconsidering the federal firearms statutes.

Your next 45 days, in five steps

1. Do not change counter practice. A nonresident handgun request means ship it to an FFL in the buyer's state. No exceptions based on a headline.
2. Put the policy in writing. One page, with a script for the counter: we can ship it, we cannot hand it over. A verbal policy dies at shift change.
3. Call your attorney, not the internet. Whether a plaintiff-specific judgment protects your store is a legal question with license-level consequences.
4. Watch two dates and one agency. An en banc petition by October 28, a mandate around November 9, and any ATF bulletin to licensees. Agency guidance will tell you more about your counter than the opinion does.
5. Run the numbers on transfer income. Decide now what replaces nonresident transfer revenue in Texas, Louisiana and Mississippi if this sticks.

The bottom line

The Fifth Circuit said something unambiguous about a right. Your obligations are still governed by mandates, injunctions and agency guidance, and none of those have moved. A dealer who treats Friday's opinion as a to-do list takes felony exposure for the sake of one sale. A dealer who uses the next 45 days to write policy, train staff and price the transfer business will be ready on the day the rule actually changes — and if it never changes, he has lost nothing but a headline.

— Claire Eason, [email protected]