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After an ATF ruling, the bottom falls out for a Minnesota firearms manufacturer

Mike Hughlett, Star Tribune on

Published in Business News

A dozen years ago, federal firearms regulators approved a new product aimed at gun owners with physical disabilities, instantly creating a new market — and Maxim Defense Industries jumped in.

Over the next decade, the St. Cloud, Minnesota-based company built a line of pistol braces, which fastened to the forearm give shooters more stability. It also developed a line of heavy-duty pistols equipped with braces, which grew to 74% of the company's firearms sales.

Then in January 2023, the market evaporated overnight after the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) changed course and issued a rule reclassifying braced pistols as highly regulated short-barreled rifles.

The ATF had concluded that, instead of using the braces to steady a weapon, they were being used and promoted as stocks, allowing gun owners to shoulder-fire pistols as is they were rifles. To the ATF, this circumvented the landmark 1934 National Firearms Act, which is aimed at keeping high-powered, concealable guns out of the hands of criminals.

The new rule — which requires braced-pistol owners to register their guns and pay a $200 tax (with a short forbearance period), dismantle them or turn them into the government — prompted an uproar in firearms circles.

Maxim Defense joined with a gun-rights groups to sue the ATF, claiming the agency overreached its authority and violated Second Amendment rights. Firearms-rights groups, individual gun owners and at least one other brace maker have filed several other similar suits against the ATF.

 

"We had already made the product, and we were stuck sitting on the inventory," said Michael Windfeldt, Maxim's founder and CEO. "We lost a ton of money last year, and it is lucky we are still here."

Maxim and its fellow plaintiffs have been mostly victorious so far: Federal courts have suspended the new ATF rule to varying degrees, including an injunction issued by one judge in Texas covering all U.S. braced-pistol owners.

But like so many pending battles over guns the court battle continues. The ATF has appealed the District Court injunctions, and the fight isn't likely to end there.

"Everytime the ATF wins a decision, the gun lobby appeals, and if the gun lobby wins, the ATF appeals," said Dan O'Kelly, a former ATF agent and founder of International Firearm Specialist Academy, a consulting firm in Florida. "None of these are going to get fully settled until the Supreme Court says, 'This is our decision, this is the bottom line.' "

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