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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of )
File No. EB-05-DL-181
Love's Travel Stops and Country )
Stores, Inc. NAL/Acct. No. 200632500001
)
Oklahoma City, Oklahoma FRN 0010520286
)
)
FORFEITURE ORDER
Adopted: September 27, 2006 Released: September 29, 2006
By the Regional Director, South Central Region, Enforcement Bureau:
I. INTRODUCTION
1. In this Forfeiture Order ("Order"), we issue a monetary forfeiture in
the amount of twenty-five thousand dollars ($25,000) to Love's Travel
Stops and Country Stores, Inc. ("Loves") for willful and repeated
violation of Section 302(b) of the Communications Act of 1934, as
amended ("Act"), and Section 2.803(a) of the Commission's Rules
("Rules"). The noted violation involves Love's offering for sale
non-certified Citizens Band ("CB") transceivers.
II. BACKGROUND
2. On October 15, 2001, and November 13, 2002, Enforcement Bureau field
agents visited two Loves' retail outlets in Weatherford and Anna,
Texas. At these locations, the stores displayed and offered for sale
various models of non-certified CB transceivers marketed as Amateur
Radio Service ("ARS") transmitters, including Galaxy models DX33HML
and DX99V. The Office of Engineering and Technology of the Commission
("OET") specifically tested Galaxy models DX33HML and DX99V in 2000
and found both models to be non-certified CB transceivers. As a result
of these inspections, the Dallas Office of the Enforcement Bureau
("Dallas Office") issued two Citations directly to Loves' corporate
headquarters in Oklahoma City, Oklahoma on November 26, 2001 and
November 15, 2002. The 2001 Citation specifically cited Loves for
offering for sale non-certified CB transmitters, Galaxy models DX33HML
and DX99V, while the 2002 Citation cited the Galaxy model DX99V as the
non-Certified CB transmitter offered for sale by Loves. These
Citations advised Loves of observed violations of the Commission's
equipment authorization and marketing rules, specifically, marketing
non-certified CB transceivers in violation of Section 302(b) of the
Act and Section 2.803(a)(1) of the Rules. The Citations warned Loves
that future violations may subject Loves to substantial civil monetary
forfeitures for each such violation or each day of a continuing
violation, seizure of equipment through in rem forfeiture action, and
criminal sanctions including fines and imprisonment.
3. In response to the 2001 and 2002 Citations, Loves' Director of Risk
Management at Loves' corporate headquarters in Oklahoma City, Oklahoma
stated that the specific locations listed in the Citations would stop
selling the named devices. In addition to the response from Loves'
corporate headquarters, the Dallas Office received a letter on
December 4, 2002 from Loves' attorney, which stated "[w]e dispute all
of the legal and factual contentions set forth in the citation and ask
you to treat this letter as a formal response to the citation."
4. On February 2, 2004 and January 28, 2005, the Commission received
complaints that Loves was marketing non-certified CB transceivers.
From March 2004 through January 2005, Enforcement Bureau field agents
visited 10 Loves' retail outlets at the following locations: Norman,
Oklahoma; Oklahoma City, Oklahoma; Calumet, Oklahoma; Ranger, Texas;
Buckeye, Arizona; Casa Grande, Arizona; Gila Bend, Arizona;
Quartzsite, Arizona; and Coachella, California. At these locations,
the stores displayed and offered for sale various models of
non-certified CB transceivers marketed as ARS transmitters, including
Galaxy models DX33HML and DX99V. OET specifically tested Galaxy models
DX33HML and DX99V in 2000 and 2004 and found both models to be
non-certified CB transceivers during all tests.
5. On January 12, 2005, based on inspections conducted on January 5,
2005, the Los Angeles Office of the Enforcement Bureau ("Los Angeles
Office") issued five Citations directly to Loves' retail outlets in
Buckeye, Arizona; Gila Bend, Arizona; Quartzsite, Arizona; Coachella,
California; and Casa Grande, Arizona. All five of the 2005 Citations
specifically cited Loves for offering for sale non-certified CB
transmitters, Galaxy models DX33HML and DX99V. Each of these Citations
advised Loves of observed violations of the Commission's equipment
authorization and marketing rules, specifically, marketing
non-certified CB transceivers in violation of Section 302(b) of the
Act and Section 2.803(a)(1) of the Rules. The Citations warned Loves
that future violations may subject Loves to substantial civil monetary
forfeitures for each such violation or each day of a continuing
violation, seizure of equipment through in rem forfeiture action, and
criminal sanctions including fines and imprisonment.
6. On February 3, 2005, the Los Angeles Office received a response to the
five 2005 Citations from Loves' Director of Risk Management dated
January 26, 2005, which stated "immediately upon my receipt of your
letter, we immediately discontinued the sale of this merchandise at
each of the respective locations." Additionally, the Los Angeles
Office received a response from Loves' attorney also dated January 26,
2005, stating ". . . all the radios in question are marketed as
Amateur radios, a fact conceded in the citation. As sold, the radios
operate only on the Amateur bands. As such, the radios are governed by
Part 97 of 47 C.F.R., not Part 95. Part 97 does not require type
acceptance of Amateur radios." On February 28, 2005, the Los Angeles
Office responded to Loves' attorney informing him that his assertions
were incorrect and that selling non-certified Amateur radios that can
be easily modified to operate on CB frequencies violates the Rules.
7. On February 23 and 25, 2005, Enforcement Bureau field agents made two
visits to Loves retail stores in Oklahoma where Loves offered for sale
non-certified CB transceivers, Galaxy models DX33HML and DX99V. As
noted above, OET had already tested these specific models and
determined them both to be dual use Amateur Radio and CB transmitters.
Each of the models could be modified to allow transmit capabilities on
CB frequencies.
8. On February 9, 2006, the Dallas Office issued a Notice of Apparent
Liability for Forfeiture to Loves in the amount of twenty-five
thousand dollars ($25,000) for the apparent willful and repeated
violation of Section 302(b) of the Act and Section 2.803(a) of the
Rules. The Dallas Office increased the proposed forfeiture above the
base amount of $21,000, because "Loves' continuing violations of the
equipment authorization requirements evince a pattern of intentional
non-compliance with and apparent disregard for these rules." On March
9, 2006, Loves submitted a response to the NAL requesting cancellation
of the proposed forfeiture.
III. DISCUSSION
9. The proposed forfeiture amount in this case was assessed in accordance
with Section 503(b) of the Act, Section 1.80 of the Rules, 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) ("Forfeiture Policy
Statement"). In examining Loves' response, Section 503(b) of the Act
requires that 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.
10. 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." Section
2.803(a) of the Rules provides that: "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 such device has been
authorized by the Commission."
11. CB radio transceivers are subject to the equipment authorization
procedure known as Certification and must be certified and properly
labeled prior to being marketed or sold in the United States. Unlike
CB radio transceivers, radio transmitting equipment that transmits
solely on ARS frequencies is not subject to equipment authorization
requirements prior to manufacture or marketing. However, some radio
transmitters that transmit in a portion of the 10-meter band of the
ARS (28.000 to 29.700 MHz), just above the CB band (26.965 to 27.405
MHz), are equipped with rotary, toggle, or pushbutton switches mounted
externally on the unit, which allow operation in the CB bands after
completion of minor and trivial internal modifications to the
equipment. In an order, the Commission adopted changes to its Rules
regarding the CB type acceptance requirements by defining a "CB
Transmitter" as "a transmitter that operates or is intended to operate
at a station authorized in the CB." Section 95.655(a) of the Rules
also states that no transmitter will be certificated for use in the CB
service if it is equipped with a frequency capability not listed in
Section 95.625 of the Rules (CB transmitter channel frequencies). OET
has clarified that ARS transceivers designed "such that they can
easily be modified by the users to extend the operating frequency
range into the frequency bands" of the CB are CB transmitters, because
they are intended to operate on the CB bands.
12. On November 26, 2001 and November 15, 2002, the Dallas Office issued
Citations to Loves' corporate headquarters for offering for sale
non-certified CB transmitters, Galaxy models DX33HML and DX99V.
Although Loves' Director of Risk Management responded to the Citations
that Loves' would cease selling the models at the locations in
question, in an additional response to the 2002 Citation, Loves'
attorney disputed that it violated the Rules and claimed that it was
legal to sell ARS radios that were not FCC certified. In its response
to the NAL, Loves claims that, because the Dallas Office failed to
respond, it assumed the Dallas Office agreed with its response to the
2002 Citation dated December 2, 2002. Similarly, Loves' attorney
claims that it assumed the Los Angeles Office agreed with its
positions because the Los Angeles Office failed to respond to its
March 15, 2005 letter, which reiterated the assertions made in its
response to one of the January 12, 2005 Citations. We find it
unreasonable for Loves to have concluded that the Dallas and Los
Angeles Offices agreed with its positions. The Field Offices at no
time stated orally or in writing that it agreed with Loves' attorney's
positions. To the contrary, the only written correspondence from the
Field Offices - the 2001, 2002, and 2005 Citations and the letter
dated February 28, 2005 - unambiguously stated that Loves violated
Section 302(b) of the Act and 2.803(a) of the Rules. Loves' conclusion
that the Field Offices agreed with it seems irrational. Indeed we find
it incredulous that Loves' attorney believed that the Commission
agreed with its positions after the Los Angeles Office specifically
wrote in a letter dated February 28, 2005 that its assertions were
incorrect. We conclude that seven Citations were more than sufficient
to provide Loves actual notice that marketing this equipment is
unlawful and that continued violations could make Loves liable for
severe sanctions.
13. In its response to the NAL, Loves does not deny that it offered for
sale Galaxy models DX33HML and DX99V. Loves alleges, however, that it
did not violate the Rules. Loves states that the Galaxy transceivers
in question, as manufactured, operate solely on Amateur Radio Service
("ARS") bands and, therefore, do not require FCC certification. Loves
argues that the Rules only require certification of transmitters that
operate or are intended to operate at a station authorized in the CB
and that it did not intend to sell these models for operation on the
CB bands. It claims that each transceiver comes packaged with a
warning that it is illegal to transmit on the equipment without the
appropriate Amateur license. It asserts that the CB Rules say nothing
about the certification of Amateur transceivers that can be easily
modified to operate on CB frequencies and that the Commission cannot
add a requirement covering such transceivers, without first complying
with the Administrative Procedures Act. It also argues that the
Commission failed to define what "easily modifiable" means and that
such language is unconstitutionally vague. It also states that whether
modifications are easy to implement depend upon the individual's
skills and experience. Finally, it claims that almost all ARS radios
may be modified to operate on CB frequencies and, thus, the Commission
effectively subjected all ARS radios to certification.
14. We reject Loves' arguments. Section 95.603(c) of the Rules states that
a CB transmitter is a "transmitter that operates or is intended to
operate at a station authorized in the CB" and that such transmitters
must be certificated. The Office of General Counsel ("OGC")
subsequently clarified that ARS transmitters that "have a built-in
capability to operate on CB frequencies and can easily be altered to
activate that capability, such as by moving or removing a jumper plug
or cutting a single wire" are intended for use in the CB frequencies
as well as the amateur service and fall within the definition of "CB
transmitter." Thus, the Commission clarified an existing Rule that was
adopted pursuant to a Notice and Comment Rulemaking and did not change
its Rules merely by making a policy change, as Loves alleges. This
Rule and the Commission's subsequent interpretation of the Rule make
clear that a device manufactured to operate on ARS frequencies and
labeled an ARS transmitter may nevertheless be a CB transmitter. The
Commission also provided a clear example of what it meant by easily
alterable, i.e., moving or removing a jumper plug or cutting a single
wire. This example does not require extensive technical knowledge and
could be accomplished by an average non-technical person if given
simple instructions. Moreover, the OGC Letter was published in the FCC
Record. Pursuant to Section 0.445(e) of the Rules, interpretations
designed to have general applicability and legal effect that are
published in the FCC Record "may be relied upon, used or cited as
precedent by the Commission" in any manner. Although the Commission
has clarified that a transmitter intended to operate in the CB band
includes ARS transmitters that can be easily modified to operate on CB
frequencies, the Commission has never stated that intent to operate in
the CB bands can be determined through the actions of a seller of an
ARS transceiver. Moreover, our Rules prohibit the sale or lease or
offering for sale or lease of non-certified CB transmitters and do not
prohibit the purchase of such devices. Therefore, it is irrelevant
whether inserts were placed in the transmitter packaging that the
transmitters in question require an Amateur license, or that other ARS
transmitters might qualify as CB transmitters. The Galaxy DX33HML and
DX99V radios have been tested by the OET and found to be CB
transmitters, because they have built-in capability to operate on CB
frequencies and can be easily altered to activate that capability.
Loves had actual knowledge that the Galaxy DX33HML and DX99V radios
had been tested by OET and found to be CB transmitters prior to
February 2005.
15. Based on the evidence before us, we find that Loves willfully and
repeatedly violated Section 302(b) of the Act and Section 2.803(a) of
the Rules by offering for sale non-certified CB transmitters on three
instances -- two on February 23, 2005, and one on February 25, 2005.
16. We have examined Loves' response to the NAL pursuant to the statutory
factors above, and in conjunction with the Forfeiture Policy
Statement. As a result of our review, we find no basis for
cancellation or reduction of the $25,000 forfeiture proposed for this
violation.
IV. ORDERING CLAUSES
17. 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(f)(4) of the Commission's Rules, Loves Travel Stops and Country
Stores, Inc. IS LIABLE FOR A MONETARY FORFEITURE in the amount of
twenty-five thousand dollars ($25,000) for willfully and repeatedly
violating Section 302(b) of the Act and 2.803(a) of the Rules.
18. 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. 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/Acct. No.
and FRN No. referenced above. Payment by check or money order may be
mailed to Federal Communications Commission, P.O.
Box 358340, Pittsburgh, PA 15251-8340. Payment by overnight mail may
be sent to Mellon Bank /LB 358340, 500 Ross Street, Room 1540670,
Pittsburgh, PA 15251. Payment by wire transfer may be made to ABA
Number 043000261, receiving bank Mellon Bank, and account
number 911-6106. Requests for full payment under an installment plan
should be sent to: Associate Managing Director, Financial Operations,
445 12th Street, S.W., Room 1A625, Washington, D.C. 20554.
19. IT IS FURTHER ORDERED that a copy of this Order shall be sent by First
Class and Certified Mail Return Receipt Requested to Loves at its
record of address and to its attorney, Michael C. Olson, 4400
MacArthur Boulevard, Suite 23C, Newport Beach, California 92660.
FEDERAL COMMUNICATIONS COMMISSION
Dennis P. Carlton
Regional Director, South Central Region
Enforcement Bureau
ATTACHMENT
1. February 23, 2005, Loves center #213, Tomkawa, Oklahoma. Non-certified
CB transceiver Galaxy models DX33HML displayed and offered for sale.
2. February 23, 2005, Loves center #213, Tomkawa, Oklahoma. Non-certified
CB transceiver Galaxy models DX99V displayed and offered for sale.
3. February 25, 2005, Loves center #202, Pauls Valley, Oklahoma.
Non-certified CB transceiver Galaxy models DX33HML displayed and
offered for sale.
47 U.S.C. S 302a(b).
47 C.F.R. S 2.803(a).
CB radio operation is confined to forty specified channels from 26.965 MHz
to 27.405 MHz (carrier frequency).
See 47 C.F.R. S 1.80(b)(3).
See 47 U.S.C. SS 501, 503(b), 510.
See Letter from Carl Martincich, Director of Risk Management for Loves to
Agent Brock, Federal Communications Commission Dallas Field Office
(November 27, 2002).
See Letter from Michael C. Olson, counsel for Loves, to James Wells,
District Director, Federal Communications Commission Dallas Field Office
(December 2, 2002).
See 47 C.F.R. S 1.80(b)(3).
See 47 U.S.C. SS 501, 503(b), 510.
See Letter from Carl Martincich, Director of Risk Management for Loves to
Catherine Deaton, District Director, Federal Communications Commission Los
Angeles Field Office (January 26, 2005).
See Letter from Michael C. Olson, counsel for Loves, to Catherine Deaton,
District Director, Federal Communications Commission Los Angeles Field
Office (January 26, 2005).
See Letter from Catherine Deaton, District Director, Federal
Communications Commission Los Angeles Field Office to Michael Olson,
counsel for Loves (February 28, 2005).
See ATTACHMENT for a listing of the Loves stores visited and the models
observed.
Notice of Apparent Liability for Forfeiture, NAL/Acct. No. 200632500001
(Enf. Bur., Dallas Office, February 9, 2006) ("NAL").
47 U.S.C. S 503(b).
47 C.F.R. S 1.80.
47 U.S.C. S 503(b)(2)(D).
47 U.S.C. S 302a(b).
47 C.F.R. S 2.803(a).
See 47 C.F.R. SS 2.907, 2.927(a).
47 C.F.R. S 95.603(c) [FCC 88-256], amended changing "type acceptance" to
"certification" [FCC 98-58]. See also Extended Coverage High Frequency
Transceivers, Public Notice 62882, 1996 WL 242469, available at
<>
(OET, rel. May 13, 1996) ("Public Notice").
47 C.F.R. S 95.655(a).
See Public Notice. See also Letter from Christopher Wright, General
Counsel, FCC to John Atwood, Chief Intellectual Property Rights, US
Customs Service, 14 FCC Rcd 7797 (OGC, 1999) ("OGC Letter") (noting that
ARS transmitters that "have a built-in capability to operate on CB
frequencies and can easily be altered to activate that capability, such as
by moving or removing a jumper plug or cutting a single wire" fall within
the definition of "CB transmitter").
Loves makes the same argument with respect to the Citation sent to the
retail location in Gila Bend, AZ. Loves is incorrect, however, that the
Los Angeles Office failed to respond to its response to the January 12,
2005 Citation. The Los Angeles Office responded to Loves' attorney that
his assertions were incorrect in a letter dated and mailed on February 28,
2005. In response to the Los Angeles Office's letter dated February 28,
2005, Loves' attorney sent a letter dated March 15, 2005, which reiterated
its original assertions.
47 C.F.R. S 95.603(c).
See OGC Letter. See also Public Notice (clarifying that ARS transceivers
designed "such that they can easily be modified by the users to extend the
operating frequency range into the frequency bands" of the CB are CB
transmitters, because they are intended to operate on the CB bands).
See also Hightech CB Shop, Memorandum Opinion and Order, 20 FCC Rcd 19,269
(Enf. Bur. 2005), Pilot Travel Centers, LLC, Order, 21 FCC Rcd 5308
(2006).
47 C.F.R. S 0.445(e).
Section 312(f)(1) of the Act, 47 U.S.C. S 312(f)(1), which applies to
violations for which forfeitures are assessed under Section 503(b) of the
Act, provides that "[t]he term `willful,' ... means the conscious and
deliberate commission or omission of such act, irrespective of any intent
to violate any provision of this Act or any rule or regulation of the
Commission authorized by this Act ...." See Southern California
Broadcasting Co., 6 FCC Rcd 4387 (1991).
The term "repeated," when used with reference to the commission or
omission of any act, "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).
Although Loves offered for sale non-certified CB transmitters on days
prior to February 23, 2005, the Commission is barred from enforcing those
violations by the statute of limitations contained in Section 503(b)(6) of
the Act.
47 U.S.C. S 504(a).
See 47 C.F.R. S 1.1914.
Federal Communications Commission DA 06-1936
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Federal Communications Commission DA 06-1936