Click here for Adobe Acrobat version
Click here for Microsoft Word version
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
Federal Communications Commission
Washington, D.C. 20554
File No.: EB-09-SE-086
In the Matter of )
NAL/Acct. No.: 201132100022
Scottsdale Lexus )
notice of apparent liability for forfeiture
Adopted: January 26, 2011 Released: January 26, 2011
By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
Scottsdale Lexus apparently liable for a forfeiture in the amount of
ten thousand dollars ($10,000) for apparent willful and repeated
violation of section 301 of the Communications Act of 1934, as amended
("Act"), and sections 1.903(a) and 95.3 of the Commission's rules
("Rules"). The noted apparent violations involve Scottsdale Lexus's
operation of a General Mobile Radio Service ("GMRS") radio system
without Commission authority.
2. The GMRS is a "land mobile radio service available to persons for
short-distance two-way communications to facilitate the activities of
licensees and their immediate family members." The party responsible
for any GMRS station must obtain a license prior to transmitting on
any channel authorized in the GMRS, and only individuals are currently
eligible to obtain, renew, and modify GMRS systems.
3. The Enforcement Bureau's Spectrum Enforcement Division ("Division")
received a complaint alleging that Scottsdale Lexus, an automobile
dealership, was operating GMRS equipment at its business address in
Scottsdale, Arizona, without a Commission license. On January 28,
2010, the Division issued a letter of inquiry ("LOI") to Scottsdale
4. In its February 26, 2010 response to the LOI, Scottsdale Lexus stated
that it was unaware that it needed a license to operate the handheld
mobile units it was using among its employees until it received the
Bureau's LOI. Scottsdale Lexus stated that it purchased 46 mobile
units on or about March 31, 2009 "for communications by and between
employees of the dealership on the property only," and distributed the
units to employees in early April 2009. Scottsdale Lexus identified
the mobile units as Midland Radio model number GXT720VP3 36-channel
GMRS/Family Radio Service two-way radios. The owner's manual for these
mobile units states the "GXT720/775 Series operates on GMRS (General
Mobile Radio Service) frequencies which require an FCC (Federal
Communications Commission) license. You must be licensed prior to
operating on channels 1 - 7 or 15 - 36, which comprise the GMRS
channels of the GXT720/775 Series." Scottsdale Lexus admitted that
between April 2009 and January 28, 2010, it operated the radios on
channels 1 - 7. Scottsdale Lexus also asserted that it immediately
stopped using the radios on January 28, 2010, when it received the
5. Section 301 of the Act and section 1.903(a) of the Rules prohibit the
use or operation of any apparatus for the transmission of energy or
communications or signals by radio except under, and in accordance
with, a Commission granted authorization. Section 95.3 of the Rules
requires that, before any station transmits on any channel authorized
in the GMRS, the responsible party obtain a license from the FCC.
Additionally, under section 95.5(a) of the Rules, only individuals are
currently eligible to obtain, renew, and modify GMRS systems.
6. Scottsdale Lexus admitted in its LOI Response that it operated its
mobile units on GMRS channels without Commission authority in
connection with day-to-day operations at its dealership in Scottsdale,
Arizona from early April 2009 until January 28, 2010, when the
Division sent Scottsdale Lexus an LOI. By operating the mobile units
on the GMRS channels without a license, Scottsdale Lexus
apparently willfully and repeatedly violated section 301 of the Act and
sections 1.903(a) and 95.3 of the Rules. Moreover, we note that as a
business entity, Scottsdale Lexus is not even eligible to obtain a GMRS
7. Under section 503(b)(1)(B) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with
any provision of the Act or any rule, regulation, or order issued by
the Commission shall be liable to the United States for a forfeiture
penalty. To impose such a forfeiture penalty, the Commission must
issue a notice of apparent liability and the person against whom such
notice has been issued must have an opportunity to show, in writing,
why no such forfeiture penalty should be imposed. The Commission will
then issue a forfeiture if it finds by a preponderance of the evidence
that the person has violated the Act or a Commission rule. Under this
standard, we conclude that Scottsdale Lexus is apparently liable for a
forfeiture for its apparent willful and repeated operation on GMRS
channels without Commission authorization.
8. In determining the appropriate forfeiture amount, section 503(b)(2)(E)
of the Act directs us to consider factors, such as "the nature,
circumstances, extent, and gravity of the violation, and, with respect
to the violator, the degree of culpability, any history of prior
offenses, ability to pay, and such other matters as justice may
require." As we explain below, having considered the statutory
factors, we propose a forfeiture of $10,000.
9. Section 1.80(b)(4) of the Rules sets a base forfeiture amount of
$10,000 for operation of a radio station without Commission authority.
Based on the record in this proceeding, we propose a forfeiture of
$10,000 for Scottsdale Lexus's unauthorized operations.
10. We note that the base forfeiture amount is subject to adjustment,
either upward or downward. Here, however, we find no basis for any
downward adjustment. For example, Scottsdale Lexus asserted in its LOI
Response that because it was unaware of the requirement to obtain a
license, it did not "consciously or deliberately violate any FCC
rule." Lack of specific intent to violate Commission rules (even based
on a lack of knowledge) is not a mitigating factor that warrants a
downward adjustment. Moreover, as noted above, the owner's manual for
the devices at issue states prominently that operation requires an FCC
license, and that "serious penalties could result for unlicensed use
of GMRS channels." Thus, Scottsdale Lexus certainly should have known
that a license was required. In addition, the fact that the company
was not even eligible to obtain such a license could be viewed as an
aggravating factor. Furthermore, Scottsdale Lexus's claim in its LOI
Response that it was unaware of any public harm caused by its improper
use of the mobile units is unavailing. It is well-established that the
absence of harm is not considered a mitigating factor warranting a
downward adjustment of a forfeiture. Finally, Scottsdale Lexus's
assertion that it has not had any other issue with, or inquiry
regarding, FCC rules or licensing over the past 15 years does not
warrant any reduction of the proposed forfeiture. While the Commission
recognizes history of overall compliance as a downward adjustment
factor, there is no evidence in the record that Scottsdale Lexus has
ever held an FCC license or authorization, and Scottsdale Lexus was
apparently out of compliance with FCC rules for the entire ten-month
period between April 2009 and January 2010 when it operated equipment
subject to the FCC's jurisdiction. Thus, Scottsdale Lexus does not
appear to have any history of compliance with the FCC's rules.
Accordingly, we propose a $10,000 forfeiture.
11. Based on the foregoing, we find Scottsdale Lexus in apparent willful
and repeated violation of section 301 of the Act and sections 1.903(a)
and 95.3 of the Rules for apparently operating a GMRS system without
Commission authority. Therefore, Scottsdale Lexus is apparently liable
for a forfeiture in the amount of $10,000.
III. ORDERING CLAUSES
12. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the Act
and sections 0.111, 0.311 and 1.80 of the Rules, Scottsdale Lexus IS
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of ten thousand dollars ($10,000) for the willful and repeated
violation of section 301 of the Act and sections 1.903(a) and 95.3 of
13. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the Rules,
within thirty days of the release date of this Notice of Apparent
Liability for Forfeiture, Scottsdale Lexus SHALL PAY the full amount
of the proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
14. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the NAL/Account Number and FRN referenced above.
Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Requests for full payment under
an installment plan should be sent to: Chief Financial Officer -
Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
D.C. 20554. Please contact the Financial Operations Group Help Desk at
1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
regarding payment procedures. Scottsdale Lexus will also send
electronic notification to Katherine.Power@fcc.gov and
Ricardo.Durham@fcc.gov.on the date said payment is made.
15. The written statement seeking reduction or cancellation of the
proposed forfeiture, if any, must include a detailed factual statement
supported by appropriate documentation and affidavits pursuant to
sections 1.80(f)(3) and 1.16 of the Rules. The written statement must
be mailed to the Office of the Secretary, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN:
Enforcement Bureau - Spectrum Enforcement Division, and must include
the NAL/Acct. No. referenced in the caption. The statement must also
be emailed to Katherine Power at Katherine.Power@fcc.gov and Ricardo
Durham at Ricardo.Durham@fcc.gov.
16. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices; or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by first class mail and certified mail
return receipt requested to Tracy Moorman, General Manager, Scottsdale
Lexus, 6905 East McDowell Road, Scottsdale, Arizona 85257.
FEDERAL COMMUNICATIONS COMMISSION
Ricardo M. Durham
Spectrum Enforcement Division
47 U.S.C. S: 301.
47 C.F.R. S:S: 1.903(a), 95.3.
47 C.F.R. S: 95.1(a).
47 C.F.R. S: 95.3.
47 C.F.R. S: 95.5(a).
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to Tracy D.
Moorman, General Manager, Scottsdale Lexus (January 28, 2010).
See Letter from Tracy D. Moorman, General Manager, Scottsdale Lexus, to
Katherine Power, Attorney Advisor, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission (February 26, 2010)
See LOI Response at 2
Id. at 1-2.
The Family Radio Service ("FRS") is a private, two-way, very
short-distance voice and data communications service for facilitating
family and group activities. See 47 C.F.R. S: 95.401(b). No license is
required to operate FRS radios. 47 C.F.R. S: 95.191.
LOI Response at 1. These radios are certified under FCC Identification
See Midland X-TRA Talk, GXT720/775 Series GMRS/FRS Radio Owner's Manual,
See LOI Response at 2.
Id. See also E-mail from Tracy Moorman, General Manager, Scottsdale Lexus,
to Larry Bockius, Jim DeBoy, Doug Payne, et al. (January 28, 2010, 45:50
PM) (directing the immediate discontinuance of hand held "walkie/talkie"
operation by staff on channels 1-7 and 15-36).
47 U.S.C. S: 301; 47 C.F.R. S: 1.903(a).
47 C.F.R. S: 95.3.
47 C.F.R. S: 95.5(a). See also 47 C.F.R. S: 95.5(b), (c).
Section 312(f)(1) of the Act defines "willful" as "the conscious and
deliberate commission or omission of [any] act, irrespective of any intent
to violate" the law. 47 U.S.C. S: 312(f)(1). The legislative history of
section 312(f)(1) of the Act clarifies that this definition of willful
applies to both sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765,
97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
term in the section 503(b) context. See Southern California Broadcasting
Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991), recon.
denied, Memorandum Opinion and Order, 7 FCC Rcd 3454 (1992) ("Southern
California"); see also Telrite Corporation, Notice of Apparent Liability
for Forfeiture, 23 FCC Rcd 7231, 7237 (2008); Regent USA, Notice of
Apparent Liability for Forfeiture, 22 FCC Rcd 10520, 10523 (2007)
(forfeiture paid); San Jose Navigation, Inc., Notice of Apparent Liability
for Forfeiture, 21 FCC Rcd 2873 (2006), forfeiture ordered, Forfeiture
Order, 22 FCC Rcd 1040 (2007), consent decree ordered, Order and Consent
Decree, 26 FCC Rcd 1494 (2010).
Section 312(f)(2) of the Act, which also applies to forfeitures assessed
pursuant to section 503(b) of the Act, provides that "[t]he term
`repeated,' ... means the commission or omission of such act more than
once or, if such commission or omission is continuous, for more than one
day." 47 U.S.C. S: 312(f)(2). See Callais Cablevision, Inc., Notice of
Apparent Liability for Forfeiture, 16 FCC Rcd 1359, 1362 (2001),
forfeiture ordered, Forfeiture Order, 17 FCC Rcd 22626 (2002); Southern
California, 6 FCC Rcd at 4388.
We note that Scottsdale Lexus has stated in its LOI Response that it "did
not consciously or deliberately violate any FCC rule or law" as it was
purportedly unaware of the requirement to obtain a license. However, in
the forfeiture context, "willful" does not require a finding that the rule
violation was intentional or that the violator was aware that it was
committing a rule violation. Rather, the term "willful" means that the
violator knew that it was taking the action in question, irrespective of
any intent to violate the Rules. See Southern California, 6 FCC Rcd at
4387. See also Saga Communications of New England, L.L.C., Memorandum
Opinion and Order, 24 FCC Rcd 3289, 3291 (Enf. Bur. 2010); Five Star
Parking d/b/a Five Star Taxi Dispatch, Forfeiture Order, 23 FCC Rcd 2649,
2651 (Enf. Bur., Spectrum Enf. Div. 2008).
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,12
FCC Rcd 17087, 17113, recon. denied, 15 FCC Rcd 303 (1999) ("Forfeiture
Policy Statement"); 47 C.F.R. S: 1.80(b)(4), Note to paragraph (b)(4):
Section I. Base Amounts for Section 503 Forfeitures.
See 47 C.F.R. S: 180(b)(4) Note to Paragraph (b)(4); Section II.
Adjustment Criteria for Section 503 Forfeitures , Downward Adjustment
(minor violation; good faith or voluntary disclosure; history of overall
compliance; and inability to pay).
See Profit Enterprises, Inc., 8 FCC Rcd 2846, 2846 (1993) (denying the
mitigation claim of a manufacturer/distributor who thought that the
equipment certification and marketing requirements were inapplicable,
stating that its "prior knowledge or understanding of the law is
unnecessary to a determination of whether a violation existed ...
ignorance of the law is [not] a mitigating factor"); Bureau D'Electronique
Appliquee, Inc., Forfeiture Order, 20 FCC Rcd 17893, 17896-7 (Enf. Bur.,
Spectrum Enf. Div. 2005) (denying the mitigation claim of a
manufacturer/distributor who admitted that "lack of actual knowledge" may
not negate a finding of willfulness, but that such factors[s] warranted a
downward adjustment of the proposed forfeiture amount).
See Liberty Cable Co., Memorandum Opinion and Order, 16 FCC Rcd 16105,
16113 (2001); Pacific Western Broadcasters, Inc., Memorandum Opinion and
Order, 50 FCC 2d 819, 819 (1975); AGM-Nevada, LLC, Forfeiture Order, 18
FCC Rcd 1476, 1478-9 (Enf. Bur. 2003); Bureau D'Electronique Appliquee,
Inc., 20 FCC Rcd at 17898.
47 C.F.R. S: 1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment
Criteria for Section 503 Forfeitures.
See Odino Joseph, Forfeiture Order, 18 FCC Rcd. 16522 (Enf. Bur. 2003)
(finding that a radio broadcaster who is not a Commission licensee, could
not have "any history with the Commission upon which a history of overall
compliance could be based," and therefore was not entitled to a downward
While section 503(b)(6) of the Act bars the Commission from proposing a
forfeiture for violations that occurred more than a year prior to the
issuance of an NAL, we may consider the fact that Scottsdale Lexus's
misconduct occurred over a period of almost a year (between April 2009 and
January 2010) to place "the violations in context, thus establishing the
licensee's degree of culpability and the continuing nature of the
violations." Roadrunner Transportation Inc., Forfeiture Order, 15 FCC Rcd
9669, 9671-72 (2000). The forfeiture amount we propose herein relates
only to Scottsdale Lexus's apparent violations that have occurred within
the past year.
47 U.S.C. S: 503(b).
47 C.F.R. S:S: 0.111, 0.311 and 1.80.
47 C.F.R. S: 1.80.
47 C.F.R. S:S: 1.80(f)(3) and 1.16.
(Continued from previous page)
Federal Communications Commission DA 11-157
Federal Communications Commission DA 11-157