DOJ Drops Defense of ATF ‘Engaged in the Business’ Rule in Texas v. ATF

The Department of Justice has filed a motion to dismiss the landmark federal lawsuit Texas v. ATF. This is a big triumph for gun rights, as the administration appears to be dropping its defense of a controversial ATF regulation that overreached on private gun sales (EIB rule). It amounts to a significant victory in the fight to protect Americans’ constitutional right to keep and bear arms without excessive federal interference.

Gun Owners of America (GOA), a co-plaintiff, insinuated the filing is a major victory for law-abiding gun owners and clearly repudiate regulatory overreach by the previous Biden administration. This move would largely end the 2024 ATF rule, preserving the longstanding distinction between occasional private gun sales and commercial dealing that requires a Federal Firearms License (FFL).

“The DOJ’s decision to drop its appeal is all thanks to the grassroots pushing back and making their voices heard,” Erich Pratt, Senior Vice President of Gun Owners of America, said. “This Biden rule was never about safety. It was a move to disarm law-abiding Americans through bureaucratic decree. GOA and GOF [Gun Owners Foundation] have once again triumphed over ATF – and we will not stop until this rule is dead and buried.”

The final rule was released in April 2024 under then-President Joe Biden. It broadened what it means to be “engaged in the business” of selling guns, slapping on stricter background check, record-keeping, and licensing requirements. GOA warned that the vague new presumptions could turn regular hobbyists, collectors, and folks who sell a gun here and there into accidental criminals, even if they’re not running an actual gun shop.

The plaintiffs were Texas, Louisiana, Mississippi, Utah, Gun Owners of America, the Tennessee and Virginia state firearms associations, plus a handful of private citizens. They argued the ATF had gone way beyond its legal authority, broken basic administrative rules, and stepped all over Second Amendment rights protected by the Constitution.

In June 2024, Texas Federal District Court Judge Matthew Kacsmaryk issued a preliminary injunction (PI) blocking enforcement of the flawed rule against the plaintiffs. The judge would later expand his order in a subsequent filing, beginning his PI. The DOJ would appeal to the United States Court of Appeals for the Fifth Circuit. The Fifth Circuit would agree with Kacsmaryk’s main arguments by pointing out that Congress clearly meant to protect everyday private gun sales between regular folks. This created a significant roadblock to ATF enforcement of the rule.

As of early 2026, the rule was still mired in procedural fights, and the DOJ kept trying and failing to drag out the briefing schedule.

The DOJ’s motion to dismiss shows that things are shifting on some gun rules under Trump while it continues to defend other Biden-era rules. Since he took office, his team has ordered reviews of several Biden-era ATF regulations, including this “engaged in the business” rule and the stabilizing brace rule. In April 2025, the DOJ and ATF killed the old “zero tolerance” policy that was hammering dealers over tiny paperwork errors. ATF bosses are now calling it a new era of reform, saying they’d rather work with the industry than keep beating them down.

Before the EIB rule, gun owners could sell firearms from their personal collection without an FFL, as long as they weren’t doing it mainly to turn a profit through repeated sales. The new rule introduced a bunch of factors that created automatic presumptions that you were “in the business,” putting casual sellers at real risk of stricter rules and even prosecution.

Although the dismissal will not be a nationwide vacatur, unless new rulemaking occurs, the current injunction and administrative review make it unlikely the regulation will return in the same form. The ATF could further ensure this by formally rescinding the rule through additional procedures.

Despite regulatory rollback, core federal statutes remain enforced. The DOJ has said NFA provisions apply to short-barreled rifles in some braced-pistol cases, even as related rules face scrutiny. Gun rights groups persist in being concerned unless some definitions are repealed.

For millions of gun owners who were at risk of federal overreach, the DOJ’s new position is a relief. Private sales will be regulated primarily by state law, and a new layer of federal bureaucracy will be removed. Federal background checks apply only to licensed dealers. Ending the expanded definition lets collectors and sport shooters buy, sell, or trade without as much worry, unless they show clear commercial patterns.

“By forcing the DOJ to abandon its appeal, the rights of millions continue to be protected.” John Velleco, Executive Vice President of Gun Owners Foundation, said. “The government will think twice before they rewrite federal law to turn law-abiding gun owners into felons overnight.”

Gun Owners of America has long argued the rule was a backdoor move toward universal background checks without legislation. Congress debated and rejected broader requirements according to GOA. They contend that the ATF can’t do by regulation what Congress didn’t pass.

As the DOJ prepares its filing, court watchers expect the case to close within weeks, barring any unexpected objections. This development coincides with Congress’s examination of multiple Second Amendment-related bills, though executive and judicial action primarily drive the regulatory rollback.

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About John Crump

Mr. Crump is an NRA instructor and a constitutional activist. John has written about firearms, interviewed people from all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons, follow him on X at @crumpyss, or at www.crumpy.com.