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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-01-MA-035
)
Lightning Electronics, Inc. ) NAL/Acct. No.
200232700009
)
Miami, Florida ) FRN 0006-2915-95
FORFEITURE ORDER
Adopted: September 30, 2002 Released: October 2,
2002
By the Chief, Enforcement Bureau:
I. Introduction
1. In this Forfeiture Order (``Order''), we issue a
monetary forfeiture in the amount of seven thousand dollars
($7,000) against Lightning Electronics, Inc. (``Lightning''), for
willful and repeated violations of Section 302(b) of the
Communications Act of 1934, as amended (``Act'')1 and Section
2.803(a)(1) of the Commission's Rules (``Rules'').2 The noted
violations involve Lightning's marketing of unapproved long-range
cordless telephones.
2. On May 21, 2002, the District Director of the
Enforcement Bureau's (``Bureau'') Tampa, Florida, Office (``Tampa
Office'') released a Notice of Apparent Liability for Forfeiture
(``NAL'') against Lightning in the amount of $7,000.3 Lightning
filed a response to the NAL dated June 11, 2002.
II. Background
3. In February of 2001, the Federal Aviation Administration
(``FAA'') reported to the Bureau that it was receiving sporadic
interference to an aviation frequency in the Miami, Florida,
area. In March of 2001, the Bureau's Miami, Florida, Resident
Agent Office (``Miami Office'') identified the source of the
interference as a long-range cordless telephone being operated
from an electronics store in Miami. As a result of the FAA's
concerns, the Bureau launched a nationwide investigation into the
unlawful4 marketing and use of long-range cordless telephones.
During the investigation, the Bureau discovered that electronics
dealers are marketing long-range cordless telephones in several
states. Certain of the long-range cordless telephones marketed
by electronics dealers cause interference by transmitting
spurious emissions on aviation frequencies, while others are
specifically designed to operate in the aviation band. The
investigation has resulted in the issuance of several citations,
NALs and Forfeiture Orders by the Enforcement Bureau.5
4. On July 27, 2001, agents from the Miami Office visited
Lightning's retail store located at 231 E. Flagler Street, Unit
#1, Miami, Florida. The agents saw several long-range, cordless
telephones on display at the store, including a Super Phone CT-
9000, a Prolink CT-6000CID, and an Optima OP8810. A salesperson
offered to sell one of the units to the agents. The long-range
cordless telephones displayed at the store were capable of
causing serious interference to aviation communications and were
not approved6 by the Commission for use in the United States.
On August 24, 2001, the Miami Office issued a citation to
Lightning for violation of Section 302(b) of the Act and Section
2.803(a)(1) of the Rules, which prohibit the marketing of
unapproved radio frequency devices.
5. On September 26, 2001, agents from the Miami Office and
from the Tampa Office visited Lightning's retail store and
purchased a Prolink BAO-6110CID long-range cordless telephone
(with antenna) for $669.80. The telephone the agents purchased
was capable of causing serious interference to aviation
communications and was not approved by the Commission.
6. On October 5, 2001, Lightning responded to the citation
issued on August 24, 2001. In its response, Lightning stated
that the long-range cordless telephones had been returned to the
distributor.
7. On October 29, 2001, the Tampa Office issued a NAL7 to
Lightning for violation of Section 302(b) of the Act and Section
2.803(a)(1) of the Rules. Lightning did not file a response to
that NAL. On February 21, 2002, the Bureau issued a Forfeiture
Order8 affirming the forfeiture proposed by that NAL. On March
8, 2002, Lightning filed a petition for reconsideration of that
Forfeiture Order. As indicated in the petition for
reconsideration, certain information set forth in the NAL issued
on October 29, 2001, did not pertain to Lightning. In a
Memorandum Opinion and Order9 released May 14, 2002, the Bureau,
after reviewing the entire record, cancelled that NAL pursuant to
Section 503(b)(4)(ii) and (iii) of the Act.10
8. On May 21, 2002, the Tampa Office issued a new NAL to
Lightning for violation of Section 302(b) of the Act and Section
2.803(a)(1) of the Rules, this time including the facts
pertaining to Lightning. In its response to the new NAL,
Lightning does not deny the violations alleged in the NAL but
contends that, in view of the cancellation of Lightning's
forfeiture in the earlier proceeding, this forfeiture proceeding
is barred by the doctrines of res judicata and ``law of the
case.''
III. Discussion
9. The Bureau assessed the proposed forfeiture amount in
this case in accordance with Section 503 of the Act,11 Section
1.80 of the Rules,12 and The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Rules to
Incorporate the Forfeiture Guidelines, 12 FCC Rcd 17087 (1997),
recon. denied, 15 FCC Rcd 303 (1999) (``Policy Statement'').
Section 503(b) of the Act13 requires that, in examining
Lightning's response, the Commission 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 other such matters
as justice may require.14
10. Section 302(b) of the Act provides that no 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. Section 2.803(a)(1) of the Rules provides that:
(a) Except as provided elsewhere in this section,
no person shall sell or lease, or offer for
sale or lease (including advertising for sale
or lease), or import, ship, or distribute for
the purpose of selling or leasing or offering
for sale or lease, any radio frequency device
unless: (1) [i]n the case of a device subject
to certification, such device has been
authorized by the Commission in accordance with
the rules in this chapter and is properly
identified and labeled as required by § 2.925
and other relevant sections in this chapter[.]
We find that, by marketing long-range cordless telephones (first
on July 27, 2001, and again on September 26, 2001, after the
issuance of a citation on August 24, 2001), Lightning willfully
and repeatedly violated Section 302(b) of the Act and 2.803(a)(1)
of the Rules.
11. Lightning contends, without citing any legal authority
or presenting any legal or factual analysis, that the doctrine of
res judicata bars this proceeding. Under the doctrine of res
judicata, also known as claim preclusion, "a judgment on the
merits in a prior suit bars a second suit involving the same
parties or their privies based on the same cause of action." 15
A second suit is barred by claim preclusion if: ``(1) there is
identity of parties (or their privies); (2) there has been an
earlier final judgment on the merits of a claim; and (3) the
second claim is based on the same set of transactional facts as
the first." 16 The claim involved in the earlier forfeiture
proceeding against Lightning was based, in part, on facts that
did not pertain to Lightning. The claim involved in this
proceeding is based on a different set of transactional facts.
We find, therefore, that claim preclusion does not bar this
proceeding.17
12. Similarly, Lightning contends, again without citing any
legal authority or presenting any legal or factual analysis, that
the ``law of the case'' bars this proceeding. Under the doctrine
of law of the case, ``a court should not reopen issues decided in
earlier stages of the same litigation.''18 This doctrine cannot
apply here because the earlier proceeding was a separate
proceeding and not an ``earlier stage'' of this proceeding.
Furthermore, none of the issues involved in this proceeding were
decided in the earlier proceeding.
13. We have examined Lightning's response to the NAL in
light of the above statutory factors and the factors set forth in
the Policy Statement. Taking all of these factors into account,
we conclude that neither cancellation nor reduction of the
proposed forfeiture is warranted and that the proper forfeiture
amount is $7,000.
IV. Ordering Clauses
14. ACCORDINGLY, IT IS ORDERED THAT, pursuant to Section
503(b) of the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of
the Rules,19 Lightning IS LIABLE FOR A MONETARY FORFEITURE in the
amount of $ 7,000 for repeated and willful violation of the
Section 302(b) the Act and Section 2.803(a)(1) of the Rules.
15. Payment of the forfeiture shall be made in the manner
provided for in Section 1.80 of the Rules within 30 days of the
release of this Order. If the forfeiture is not paid within the
period specified, the case may be referred to the Department of
Justice for collection pursuant to Section 504(a) of the Act.20
Payment may be made by mailing a check or similar instrument,
payable to the order of the ``Federal Communications
Commission,'' to the Federal Communications Commission, P.O. Box
73482, Chicago, Illinois 60673-7482. The payment should note the
NAL/Acct. No. 200232700009 and FRN 0006-2915-95. Requests for
full payment under an installment plan should be sent to: Chief,
Revenue and Receivables Operations Group, 445 12th Street, S.W.,
Washington, D.C. 20554.21
16. IT IS FURTHER ORDERED that a copy of this Order shall
be sent by First Class and Certified Mail -- Return Receipt
Requested -- to Lightning Electronics, Inc., at 231 E. Flagler
Street, Unit #1, Miami, Florida 33131, and to Lightning's
attorney, Ira S. Silver, Esquire, Silver & Silver, 108 S. Miami
Avenue, 2nd Floor, Miami, Florida 33130.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 302a (b).
2 47 C.F.R. § 2.803(a)(1).
3 Notice of Apparent Liability for Forfeiture, NAL Acct. No.
200232700009 (Enf. Bur., Tampa Office, released May 21, 2002).
4 Section 302(b) of the Act and Section 2.803(a)(1) of the
Rules prohibit marketing unapproved devices, such as long-range
cordless telephones, in the United States. Section 301 of the
Act prohibits their use.
5 To date, we have issued 26 citations and five NALs totaling
$45,000, resulting in three Forfeiture Orders. See CTI of
Miami, Inc., 17 FCC Rcd. 8724 (Enf. Bur. 2002); New Image
Electronics, 17 FCC Rcd. 3594 (Enf. Bur. 2002); and Electronics
Unlimited, 17 FCC Rcd. 3109 (Enf. Bur. 2002).
6 See 47 C.F.R. § 15.201.
7 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200232700002 (Enf. Bur., Tampa Office, released October 29,
2001).
8 Lightning Electronics, Inc., 17 FCC Rcd 3131 (Enf. Bur.
2002).
9 Lightning Electronics, Inc., 17 FCC Rcd 8694 (Enf. Bur.
2002).
10 47 U.S.C. §§ 503(b)(4)(ii) and (iii).
11 47 U.S.C. § 503.
12 47 C.F.R. § 1.80.
1313 47 U.S.C. § 503(b).
1414 47 U.S.C. § 503(b)(2)(D).
15Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5
(1979).
16 Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1362,
(Fed.Cir.2000).
17 We question whether the earlier forfeiture proceeding
contained any judgment or law of the case that could preclude
us from bringing this proceeding. In this instance, the
Bureau's Memorandum Opinion and Order vacated the Forfeiture
Order which found Lightning liable for violations of Section
302(b) of the Act and Section 2.803(a)(1) of the Rules because
the factual basis for the NAL and Forfeiture Order did not
pertain to Lightning. However, in view of the arguments set
forth in paragraphs 11 and 12, we need not reach this
question.
18 Agostini v. Felton, 521 U.S. 203, 236 (1997)
(``Agostini''); Kimberlin v. Quinlan, 199 F.3d 496, 500 (D.C.
Cir. 1999), cert. denied, 531 U.S. 871 (2002).
19 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
20 47 U.S.C. § 504(a).
21 See 47 C.F.R. § 1.1914.