PER CURIAM.
Petitioner Sarco, Inc., a wholesale and retail firearms, parts, and military surplus dealer, appeals from an order of the Law Division denying its application for renewal of its retail firearms dealer license and from a final administrative decision of the New Jersey State Police Superintendent (the Superintendent) denying its application to renew its certificate of registration to wholesale and manufacture firearms. We affirm the order of the Law Division and the final agency decision of the State Police.
The genesis of this appeal was Sarco's application to the New Jersey State Police for a renewal of its certificate of registration to manufacture and wholesale firearms on November 27, 2007, and its companion application to the court for a renewal of its retail firearms dealer's license. State Police Lieutenant John M. Cunha, Unit Head, Firearms Investigation Unit (FIU), submitted an investigation report to the Law Division judge recommending denial of Sarco's retail license application. The judge reviewed the report and supporting documentation and summarily denied Sarco's retail license application on March 7, 2008. Sarco then sought de novo review by the judge.
Thereafter, the Superintendent decided that Sarco could not "continue to operate without endangering public safety, health and welfare." Cunha sent a letter to Charles Steen III, one of the owners of Sarco, denying Sarco's application to renew its certificate of registration based on the Superintendent's decision. Sarco appealed this final agency action to us on March 20, 2008.
Evidentiary hearings were held by the judge. The following facts are drawn from the evidence presented at those hearings. Sarco is owned and operated by the Steen family and has been in continuous operation for approximately forty-seven years. It sells firearms to government agencies, the military, and members of the public both by mail and at its retail store. Sarco's retail firearms dealer's license and registration to manufacture and wholesale firearms were last renewed in March or April 2005 for a three-year period.
On August 29, 2005, the Bureau of Alcohol, Tobacco and Firearms (BATF) requested a trace from Sarco on a Star Super 9mm semi-automatic firearm that had been recovered by the Plainfield Police Department on August 17. It was not until August 31 that Sarco reported the theft of this weapon to the Long Hill Police Department. Officer Chris Kisatsky investigated the theft and interviewed various Sarco employees. That October, a former employee, Ramiro Gonzalez, confessed to stealing the gun found by the Plainfield Police and, in March 2006, ultimately confessed to stealing two others as well. The BATF requested traces on these two guns after they were recovered by the Newark and Jersey City Police Departments. These three weapons had been located near Gonzalez's workstation, which had no video surveillance. Gonzalez also had access to the gun room containing unsecured weapons, although he had no license, called a pink card, permitting him to have such access.
Gonzalez had a heroin and substance-abuse problem and had prior arrests in New Jersey and elsewhere for misdemeanor drug possession, kidnapping, and threatening someone with a knife during a drug deal. Gonzalez's criminal background check had been completed for Sarco by a temporary employment agency, which had failed to uncover his drug history and past criminal conduct. As a result of these employee gun thefts, Kisatsky requested that Sarco conduct a complete inventory, but Sarco never conducted one.
In January 2006, FIU Detective Sergeant David Hill went to Sarco to conduct a regulatory inspection. Sarco had "a number of rifles on the wall." There were also glass cabinets that contained handguns and long guns, including rifles and shotguns, on the wall behind a counter on gun racks. Long guns were displayed in the center aisle in an area open to the public; the guns were not secured at all because there were no cable or trigger locks binding them to the display. This was corrected when Hill returned to the store five days later.
Hill also conducted an audit of Sarco's firearms. Because there were approximately 40,000 guns in the building, Hill could not complete a full audit. Instead, he "randomly select[ed] open entries in the acquisition and disposition ledger, and th[e]n ask[ed] that the dealer provide [him] with the gun [and] verify the serial number to the open entry information." No discrepancies were found among the forty weapons Hill selected. However, Sarco had two firearms that were listed as lost or stolen, but it had failed to so notify the State Police within forty-eight hours, as required by
Another issue that arose during Hill's inspection was the fact that Sarco "was selling high[-]capacity magazines that had been listed or made to be temporarily blocked to hold only 15 rounds." Hill informed Sarco that it should discontinue sales of temporarily blocked high-capacity magazines.
The last issue related to pink cards. Although sixteen Sarco employees had pink cards, most of the forty employees had access to guns. Hill advised Steen of the pink-card licensing requirements for any employee with access to firearms. Over the next few months, some applications slowly arrived. Subsequently, two employees were denied pink cards for past criminal histories and were charged with falsifying their applications as they did not disclose their criminal backgrounds.
Various police departments continued to recover Sarco's Star Super handguns. For example, on August 10, BATF requested a trace on another Star Super handgun that had been recovered by the Newark Police Department. On August 16, Steen called FIU Detective Sergeant Eric Baumgarten and the Long Hill Police Department to report that this handgun had been stolen.
In September 2006, BATF requested another trace of a Star Super handgun that proved to be missing from Sarco's inventory. Baumgarten asked Sarco to conduct a complete inventory in mid-September to provide "the current status of all of the Star handguns that they had originally attained to see if any more were missing." In January 2007, Steen reported that a total of fifty-seven Star Super handguns were missing, including the two reported missing in August and September 2006. Some of these were later recovered in inventory. Baumgarten worked with BATF to investigate the missing guns and some more guns were located.
Baumgarten scheduled another random inspection at the end of January 2007 and reviewed Sarco's acquisition and disposition ledger. He looked for open entries, where a gun had been acquired but not yet sold, and checked serial numbers against the inventory to confirm that the weapon was still in inventory. Of 118 weapons audited on the ledger, seven weapons were missing. The next week, Sarco located all seven weapons and accounted for three more of the fifty-seven missing handguns it had reported missing—two were inventory and one had been sold.
Baumgarten conducted another inspection on February 9 and audited approximately eighty handguns, for which Sarco could account for all. Also in February, Sarco reported that one missing Star Super handgun had been lawfully sold, and another had been recovered by the Newark Police Department. Later, Sarco reported that some more handguns had been located in inventory. As of March 12, 2007, forty-two Star Super handguns were missing.
FIU Detective Donald V. Mundorff completed a prerenewal inspection of Sarco in October 2007. Mundorff found that Sarco met the required standards pertaining to security systems and procedures required for renewal. Although there were "some minor discrepancies," he found the condition of Sarco's ledgers to be acceptable. The FIU also conducted a random audit of approximately 278 weapons around that time, which revealed that one Ballister Molina .45 caliber gun was missing, the forty-third missing weapon.
After Sarco filed its renewal applications on November 27, 2007, Cunha reviewed both applications. This entailed criminal background checks on each corporate officer and each employee seeking a pink card and an examination of firearms purchase documents, posted notices, and permit procedures.
Cunha was aware of past reports of missing guns and, in terms of public health and safety, he was concerned that it took Sarco several months to comply with Baumgarten's request to conduct an audit of its Star Super gun inventory. He was also concerned that Sarco had failed to comply with the forty-eight-hour reporting requirement for stolen or missing firearms. Moreover, Sarco had failed to comply with the requirement in
Cunha also had concerns about Sarco's ability to safeguard its inventory. Although, Sarco was in compliance with regulations concerning external security and the safeguarding of firearms and ammunition during non-business hours, it still had not resolved the known missing weapons. At the time of the renewal application, a total of forty-three firearms listed on Sarco's disposition ledger did not have disposition dates. FIU members informed Cunha that Sarco's security systems were deficient.
Cunha prepared an investigation report dated March 3, 2008, which he submitted to the Superintendent and the judge. In the "Summary of Investigation" section of his report pertaining to the wholesaleing and manufacturing registration, Cunha wrote:
The Superintendent denied Sarco's application to renew its certificate of registration because Sarco "demonstrated that it cannot continue to operate without endangering public safety, health and welfare." After reviewing the report and supporting documentation, the Law Division judge summarily denied renewal of Sarco's retail firearms dealer's license renewal on March 7, 2008, and Sarco sought de novo review.
At the subsequent hearings, Kisatsky, Baumgarten, Hill, and Cunha testified on behalf of the State. Steen, Mundorff, Leslie Cole, and other witnesses testified on behalf of Sarco. Cole, owner of a security management company, testified as an expert witness on behalf of Sarco. He visited Sarco twice in April 2008 and interviewed Steen, his son, and other employees before preparing his report. He reviewed the security system, procedures, and individuals within Sarco but only audited one or two weapons. He concluded that "the security measures and procedures are . . . not only consistent with the threat level, but far exceed the threat level. [Sarco], in my professional opinion, exceed[s] the public health, safety, and welfare at all times." He also determined that Sarco was "proactive in most of the things that [it] did, and that "emphatically yes [it has] done everything humanly possible to protect [its inventory]."
Sarco called several other witnesses: Thomas J. Sciaretta, Patrick L. McCrann, Bruce Everett Hull, and Charles Steen IV. Sciaretta, an evidence technician for the Somerset County Prosecutor's Office and former police officer and employee of Sarco, testified about Sarco's security and record-keeping procedures in place prior to and subsequent to the revelation that firearms were missing from inventory. He had worked as an assistant in Sarco's gun room before being promoted to supervisor.
McCrann, a current employee and Director of Sarco's Operations and Security, testified about security procedures and employee matters. Hull is a retired state police officer who worked with the FIU and was an investigator assigned to the Security Investigations Bureau of the Motor Vehicle Commission. He provides consulting services and testified about changes to the laws and Administrative Code pertaining to firearms. He inspected Sarco on numerous occasions between 1987 and 1999 and again in April 2008. Steen IV testified about safety procedures and protocols.
At the conclusion of the hearings, the judge placed a comprehensive oral decision on the record, making extensive findings of fact. The judge noted the number of safety concerns that were adduced through witness testimony. He found that long guns on display were not secured and that, pursuant to
Next, the judge found that random audits uncovered missing weapons, and Sarco had not notified the State Police within forty-eight hours, as required. For example, although Sarco had guns that were unaccounted for in 2005, it did not report this until a 2006 audit. Moreover, the judge noted that failure to comply with the reporting requirement may result in revocation of a dealer's license pursuant to
The judge found that employees without pink cards could "move freely" and access the gun room, and Sarco resisted Hill's recommendation to secure pink cards for all employees. The licensing process ultimately revealed that two employees had falsified their applications and failed to report past criminal convictions.
The judge discussed the theft of three firearms by a former employee, BATF traces resulting from the recovery of guns on the street, and resulting audits that disclosed missing weapons. He found that Sarco did not report a number of guns missing until after BATF traces or audits. In fact, Sarco only discovered that some were missing because of the audits. He also found that "[t]he acquisition and disposition logs that are required. . . were not always made or were not timely made."
The judge stated that he was
In rendering a decision, the judge relied on
The judge found that the "statutes provide little leeway for someone in the retail business of selling and otherwise transferring handguns." Further, "lack of compliance shall . . . subject the license holder to revocation." In addition, "[t]he denial of a renewal application has nothing to do with the character or integrity of the applicant or its officers." The judge focused on whether Sarco engaged in business "without any danger to the public safety, health and welfare" and determined that "the way the business was conducted[,] which results in unaccounted firearms[,] is what presents a danger to the public. And in my view, is also fatal to the renewal application here." As a result, he found that the State met its burden of proof, and he denied Sarco's retail firearms dealer's license renewal application. An Amended Order to that effect was entered on October 24, 2008. The present appeal followed.
Sarco contends first that the judge misconstrued the phrase "any danger to the public health, safety and welfare" in such a way as to deprive Sarco of the due process afforded it by
Second, Sarco contends that the judge erred when he failed to read
Third, even without considering the statutory sections
Last, Sarco contends that the judge erred in determining that he did not have the authority to order issuance of a conditional license because the language from the
The Morris County Prosecutor and the Attorney General respond on behalf of the State and the State Police, respectively, that the judge correctly construed
A renewal application for a retail firearms dealer's license is made to a judge of the Superior Court, who grants or denies the application.
Renewal applications for registration of manufacturers and wholesale dealers of firearms are made to the Superintendent of State Police, who shall either refuse registration or issue a certificate of registration.
The scope of our review of the judge's determination on the retail firearms dealer's application is limited. A trial judge's factual findings "are considered binding on appeal when supported by adequate, substantial and credible evidence."
The appeal from final agency action denying renewal of Sarco's certification of registration is even more limited. "An administrative agency's final quasi-judicial decision will be sustained unless there is a clear showing that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the record."
Further, the court "should generally defer to the interpretations of a state agency of the statutes and implementing regulations it administers, unless the interpretation is `plainly unreasonable.'"
With respect to the interpretation of
We need not decide whether we subscribe to
Thus, the statutory provisions and the regulations require that wholesalers, manufacturers, and dealers (1) register with the Superintendent,
One of those standards and qualifications is a requirement that every person "engage[d] in the purchase or sale or offering for sale of firearms or parts of firearms" must be of a certain age and must complete Application Form NJSP 641, provide two complete sets of fingerprints, and consent to disclosure of mental health records.
Almost all of Sarco's forty employees had access to uncontrolled guns, whereas only about sixteen employees had submitted themselves to State Police investigation to ensure public safety by applying for a license.
Another regulatory requirement deals with recordkeeping and provides in pertinent part:
These statutory and regulatory requirements are clearly designed to allow law enforcement authorities to identify weapons hoarding by licensed purchasers and to trace recovered firearms to their purchasers, thus assisting in the apprehension of criminals. In many instances, Sarco did not comply with these long-standing statutory and regulatory requirements. A fair number of guns recovered by police in Newark and other cities could not be traced to their owners as a result of Sarco's noncompliance, making apprehension of criminals difficult or impossible. These many instances of noncompliance presented a significant threat to public safety, health, and welfare.
Additionally, numerous handguns had been recovered by local police departments that had not been the subject of any forty-eight-hour notice to local police of their theft, at least not until after a BATF trace made Sarco aware of their loss from inventory. Even after all the audits, inventories, and searches, forty-three handguns were still missing after almost two years. This situation was a direct result of Sarco's failure to adequately investigate the criminal histories of its employees, its failure to limit access to weapons to those employees with pink cards, and its failure to comply with recordkeeping requirements. This situation existed despite Sarco's forty-seven-year history as a firearms dealer, wholesaler, and manufacturer; it bespeaks a callous disregard of Sarco's responsibilities. Sarco's reputation and positive contributions to the community, as well as any improvements in its safety measures, as beneficial as they might have been, simply did not ameliorate its extremely careless handling of lethal weapons.
We also note that large capacity ammunition magazines, as defined in
We need not delve into the niceties of statutory construction, because this is not a case of whether a retail dealer can conduct its business "without any danger to the public safety, health and welfare."
There is substantial, credible evidence in the record to support the denial of Sarco's retail firearms dealer's license renewal.
We turn to Sarco's argument that
Before reading two statutes together, a court must determine whether both "were included in one enactment, whether the proofs required overlap, and whether they are designed to serve the same purpose and objective."
Sarco's argument that these statutes should be read
There is nothing in
In light of our determinations above, we need not address Sarco's argument that the judge failed to "weigh and balance all of the evidence presented." The judge clearly considered all of the evidence and made fact-findings respecting evidence presented by Sarco, but that evidence simply did not rebut the numerous safety violations established by the State.
Even the application of a "balancing" test, as Sarco urges, would not alter this result—Sarco is responsible for forty-three missing lethal weapons, which overwhelmingly illustrates that it is not operating its business without danger to the public safety, health, and welfare. This is not a close case that turns on whether Sarco can ameliorate the danger it caused by otherwise benefiting the community; forty-three missing guns presents an alarming threat to the public's safety.
Last, Sarco argues that "rather than deny [Sarco's] applications. . . in their entirety, the [c]ourt was empowered to issue a conditional renewal, that is renew [Sarco's] licenses with stipulations designed to ensure [Sarco's] legal compliance and promotion of the public safety, health and welfare." We are not persuaded by this argument. We agree with the panel in
Subsequent to our initial grant of a stay pending appeal, a Law Division judge vacated the stay on a remand from this court. Sarco immediately applied to us on an emergent basis for a further stay. Our decision herein constitutes a denial of that emergent stay because Sarco cannot show a likelihood of success on the merits.
Affirmed.