A federal judge in Texas has issued a major ruling striking down the ATF’s controversial “Engaged in the Business” rule, a regulation that expanded the circumstances under which private firearm sales could trigger federal dealer licensing requirements. The court’s decision vacates the rule nationwide, preventing its enforcement against any individual or organization.

The case, State of Texas v. Bureau of Alcohol, Tobacco, Firearms and Explosives, challenged a Biden-era regulation that critics argued effectively created a backdoor universal background check system by broadening the definition of who qualifies as a firearm dealer. Gun rights advocates claimed the rule exposed ordinary gun owners to potential federal penalties for private firearm transactions.

In its final judgment, the court concluded that the plaintiffs succeeded on their claims under the Administrative Procedure Act and formally vacated the regulation. The ruling emphasized that vacatur applies nationwide, meaning the ATF may not enforce the rule against anyone, not just the parties involved in the lawsuit.

The decision represents a significant legal setback for federal firearm regulations and could influence future challenges to agency rulemaking. While additional appeals or regulatory changes remain possible, the ATF’s rule is currently invalid nationwide.