Kenneth Karwacki, a former soldier who received a bad-conduct discharge after a special court martial convicted him of delivering peyote to fellow soldiers, sued Wisconsin Attorney General Josh Kaul when the state denied his application for a concealed-carry permit. Wisconsin law prohibits firearm possession by anyone convicted of a crime that would be a felony in the state, and delivering peyote is a Class E felony in Wisconsin, even though the military court classified Karwacki's offense as a misdemeanor.

The appeals court, led by Judge Frank Easterbrook, rejected Karwacki's Full Faith and Credit argument by noting that a federal court martial is not a 'judicial Proceeding in any other State,' and that Wisconsin was not depriving the court martial's decision of its effect. 'The main function of this Clause is to ensure that judgments retain their primary effects,' Easterbrook wrote, explaining that states must determine 'what collateral consequences' convictions carry under state law.

The Eastern District of Wisconsin had previously granted summary judgment for the state in July 2025. Karwacki appealed, arguing that Wisconsin's treatment of his military misdemeanor conviction as equivalent to a state felony violated both the Full Faith and Credit Clause and the Second Amendment.

The Seventh Circuit also rejected Karwacki's Second Amendment challenge, noting that drug distribution is too closely linked to firearm violence to warrant constitutional protection. The court cited recent Supreme Court precedent from United States v. Rahimi, stating that governments may disarm those who 'present a credible threat to the physical safety of others,' and noted that no federal appeals court has accepted an as-applied Second Amendment challenge from a convicted drug distributor.