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Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Richfield Electronics (China) Ltd.
File No.: EB-SED-13-00008819
NAL/Acct. No.: 201032100002
Adopted: November 1, 2013 Released: November 1, 2013
By the Acting Chief, Enforcement Bureau:
We issue a monetary forfeiture in the amount of eighteen thousand dollars ($18,000) to Richfield Electronics (China) Ltd. (Richfield), a manufacturer of wireless electronics products based in Hong Kong, for willfully and repeatedly violating Section 302(b) of the Communications Act of 1934, as amended (Act), and former Section 2.803(a)(1) of the Commission's rules (Rules). The noted violations involve Richfield's marketing of radio equipment in the United States that did not comply with the Commission's technical and labeling requirements.
* II. BACKGROUND
On October 29, 2009, the Enforcement Bureau's Spectrum Enforcement Division (Division) released a Notice of Apparent Liability for Forfeiture (NAL) against Richfield in the amount of $18,000 for its apparent willful and repeated violations of Section 302(b) of the Act and former Section 2.803(a)(l) of the Rules, by marketing in the United States an intentional radiator (i.e., the Whole House FM Transmitter (WH Transmitter)) that did not comply with the emission limit specified in Section 15.239(b) and the labeling requirements set forth in Section 2.925(a)(1) of the Rules. The record evidence showed that Richfield manufactured the WH Transmitter and shipped a total of 18,371 units of the transmitter to a Michigan-based company, TAW-Global, LLC (TAW), a seller and distributor of the transmitters in the United States. Although Richfield received FCC certification for the transmitter in 2002, Richfield later modified the device's antenna in an attempt (according to Richfield) to improve sound quality, but, in so doing, rendered the device noncompliant with the FCC's Rules and its authorization. In this regard, the Division found that the WH Transmitter, which operates in the 106.7 - 107.9 MHz frequency band, substantially exceeded the emission limit set forth in Section 15.239(b) of the Rules. Although Richfield could not quantify the precise number of noncompliant transmitters that it sold and shipped to TAW, it concedes that at least 2,500 transmitters had the modified antenna. Furthermore, in addition to the emission limit violation, the Division found that the devices that were available prior to December 2008 were not labeled in accordance with Section 2.925(a)(1) of the Rules.
* On November 25, 2009, Richfield submitted a response to the NAL seeking cancellation of the proposed forfeiture. In its NAL Response, Richfield does not dispute that it manufactured, sold, and shipped noncompliant transmitters to TAW; that at least a few thousand of the WH Transmitters that were shipped to TAW exceeded the emission limit set forth in Section 15.239(b) of the Rules; and that it did not label the devices in accordance with Section 2.925(a)(1) of the Rules prior to December 2008. In addition, Richfield does not dispute the apparent timing inconsistencies pointed out in the NAL relating to when the company claims to have modified the antenna that it asserts caused the transmitter to exceed the emission limits (December 2008) and when the Commission first became aware of the noncompliant transmitters (March 2008). That point is significant because it raises questions about the accuracy of Richfield's representations, and it suggests that the number of noncompliant transmitters likely was significantly higher than what Richfield was willing to acknowledge. Nonetheless, Richfield insists that it did not market the transmitters in the United States and, therefore, should not be held responsible for the violations. In addition, although it does not dispute the Division's finding that Richfield failed to label the devices that were available before December 2008, it asks that we take into consideration, as a mitigating factor, its lack of familiarity with the FCC's labeling requirements. Finally, Richfield notes that it plans to better educate its staff about FCC rules to prevent any future violation.
The proposed forfeiture was assessed in accordance with Section 503(b) of the Act, Section 1.80 of the Rules, and the Commission's Forfeiture Policy Statement. In assessing forfeitures, Section 503(b)(2)(E) of the Act requires that we take into account 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 discussed below, we are unpersuaded by Richfield's legal and equitable arguments and, thereby, affirm our conclusion in the NAL that Richfield violated Section 302(b) of the Act and former Section 2.803(a)(1) of the Rules by marketing noncompliant and unlabeled devices in the United States.
Section 302(b) of the Act provides that "[n]o person shall manufacture, import, sell, offer for sale, or ship devices or home electronic equipment and systems, or use devices, which fail to comply with regulations promulgated pursuant to this section." Former Section 2.803(a)(1) of the Rules prohibits the marketing of radio frequency devices, such as wireless FM transmitters, unless, in the case of a device subject to certification, the device has first been properly authorized, identified, and labeled in accordance with the Rules. As an intentional radiator, and pursuant to Section 15.201 of the Rules, the WH Transmitter must be authorized in accordance with the equipment certification procedures described in Sections 2.1031 - 2.1060 of the Rules prior to marketing the device in the United States. The device also is subject to the emission limit specified in Section 15.239(b) of the Rules and the labeling requirements of Section 2.925(a)(1) of the Rules.
As we found in the NAL, Richfield violated the foregoing sections of the Act and Rules by marketing in the United States transmitters that did not comply with the Commission's technical and labeling requirements. In its NAL Response, Richfield, however, disputes that it marketed the noncompliant equipment in the United States. Richfield contends that it was TAW that asked Richfield to manufacture the transmitters based on TAW's product designs, and also to ship the transmitters; and that, therefore, it was TAW -- not Richfield -- that marketed and sold the transmitters in the United States. While we agree that TAW violated the Act and our rules by marketing the unauthorized and noncompliant transmitters in the United States (which already resulted in enforcement action against TAW), we disagree with Richfield's contention that it did not also violate the equipment marketing rules. Richfield's argument turns on whether its conduct falls within the Rule's definition of marketing, which we find it does.
Pursuant to former Section 2.803(e)(4) of the Rules, the term "marketing" includes the sale or lease, offer for sale or lease (including advertising for sale or lease), distribution for the purpose of selling or leasing (or offering for sale or lease), and importation or shipment of a radio frequency device. Several critical facts are undisputed: Richfield applied for and received equipment authorization in 2002 for the transmitters and thus could sell the equipment in the United States; Richfield manufactured and sold 18,371 units of the WH Transmitter (at least 2,500 of which were noncompliant with the emission limit requirement and, therefore, the company's authorization) to TAW, a U.S. company; and Richfield shipped the equipment to TAW in the United States. Therefore, under the Rules, Richfield "marketed" the WH Transmitter in the United States in multiple ways: by offering the noncompliant equipment that it manufactured for sale, selling the equipment, and shipping the equipment to TAW in the United States. Furthermore, because the FCC certification for the WH Transmitter was granted to Richfield, it remained responsible for ensuring that the transmitters were in compliance with applicable rules and its authorization. Yet Richfield decided to modify the transmitters, causing the transmitters to substantially exceed the applicable emission limit, in violation of the Rules. Accordingly, we decline to cancel the forfeiture based on Richfield's misplaced argument that it did not market -- as "marketing" is defined under former Section 2.803(e)(4) -- the WH Transmitters in the United States.
As previously noted, Richfield does not dispute that the WH Transmitter failed to comply with the labeling requirements set forth in Section 2.925(a)(1) of the Rules. Richfield nonetheless seeks cancellation of the proposed forfeiture based on its asserted unfamiliarity with the labeling requirements. This claimed ignorance of the Rules, however, is not a valid basis for cancellation of the forfeiture. As the Commission has repeatedly held, administrative oversight, inadvertence, and unfamiliarity with the Rules are not mitigating factors. Accordingly, we decline to cancel or reduce the forfeiture on this basis.
Richfield also seeks cancellation of the proposed forfeiture based on its intention to undertake remedial measures to ensure future compliance with the Rules. Although we have adjusted forfeitures downward when a company subject to our rules makes voluntary disclosures to Commission staff and takes corrective measures after discovering its violations but prior to any Commission inquiry or initiation of enforcement action, we have not cancelled or reduced forfeitures based on a company's remedial conduct after the initiation of an investigation. The Commission has long held that corrective action taken to come into compliance with the Rules is expected, and such corrective action does not nullify or mitigate prior violations or associated forfeiture liability. Richfield's stated intention to take steps to ensure future compliance, while laudable, does not negate its willful and repeated violations of the Rules. Accordingly, we decline to cancel or reduce the forfeiture on this basis as well.
In sum, we have examined Richfield's response to the NAL pursuant to the statutory factors described above, and in conjunction with the Forfeiture Policy Statement. As a result of our review, we conclude that Richfield willfully and repeatedly violated Section 302(b) of the Act and former Section 2.803(a)(1) of the Rules by marketing noncompliant and unlabeled FM transmitters in the United States. Considering the entire record and the statutory factors, we find that a forfeiture in the amount of $18,000 is warranted.
IV. ORDERING CLAUSES
Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Communications Act of 1934, as amended, and Sections 0.111, 0.311, and 1.80 of the Commission's rules, Richfield Electronics (China) Ltd. IS LIABLE FOR A MONETARY FORFEITURE in the amount of eighteen thousand dollars ($18,000) for willful and repeated violations of Section 302(b) of the Communications Act of 1934, as amended, and former Section 2.803(a)(1) of the Commission's rules.
Payment of the forfeiture shall be made in the manner provided for in Section 1.80 of the Commission's rules by November 13, 2013. If the forfeiture is not paid within the period specified, the case may be referred to the U.S. Department of Justice for enforcement of the forfeiture pursuant to Section 504(a) of the Communications Act of 1934, as amended. Richfield Electronics (China) Ltd. shall send electronic notification of payment to Jason Koslofsky at Jason.Koslofsky@fcc.gov, Daudeline Meme at Daudeline.Meme@fcc.gov, and Samantha Peoples at Sam.Peoples@fcc.gov on the date said payment is made.
* 13. The payment must be made by check or similar instrument, wire transfer, or credit card, and must include the NAL/Account Number and FRN referenced above. Regardless of the form of payment, a completed FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, enter the Account Number in block number 23A (call sign/other ID) and enter the letters "FORF" in block number 24A (payment type code). Below are additional instructions that Richfield Electronics (China) Ltd. should follow based on the form of payment it selects:
* Payment by check or money order must be made payable to the order of the Federal Communications Commission. Such payments (along with the completed Form 159) must be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* Payment by wire transfer must be made to ABA Number 021030004, receiving bank TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on the same business day the wire transfer is initiated.
* Payment by credit card must be made by providing the required credit card information on FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment. The completed Form 159 must then be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* 14. Any request for making full payment over time under an installment plan should be sent to: Chief Financial Officer -- Financial Operations, Federal Communications Commission, 445 12th Street, S.W., Room 1-A625, Washington, D.C. 20554. If Richfield Electronics (China) Ltd. has questions regarding payment procedures, it should contact the Financial Operations Group Help Desk by phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
* 15. IT IS FURTHER ORDERED that a copy of this Forfeiture Order shall be sent by both Certified Mail, Return Receipt Requested, and UPS to Flora Cho, Operations Manager, Richfield Electronics (China) Ltd., 7/F., Unit 14&16, Shing Yip Ind. BIdg., 19-21 Shing Yip St., Kwun Tong, Kowloon, Hong Kong, SAR; and also sent to Ms. Cho via facsimile at 011 852 2344 4809.
* FEDERAL COMMUNICATIONS COMMISSION
Robert H. Ratcliffe