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Federal Communications Commission FCC 06-22
8
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
)
FIRST CHOICE HEALTHCARE, INC. ) File No. EB-04-TC-116
)
) NAL/Acct. No. 200632170004
Apparent Liability for ) FRN: 0014650584
Forfeiture )
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: February 28, 2006 Released:
February 28, 2006
By the Commission: Commissioner Tate issuing a statement at a
later date.
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture
(“NAL”)1, we find that First Choice Healthcare, Inc. (“First Choice”)2
apparently willfully or repeatedly violated section 227 of the
Communications Act of 1934, as amended (“Act”), and the
Commission’s related rules and orders by delivering at least 98
unsolicited advertisements to the telephone facsimile machines of
at least 37 consumers.3 Based on the facts and circumstances
surrounding these apparent violations, we find that First Choice
is apparently liable for a forfeiture in the amount of $776,500.
II. BACKGROUND
2. On July 13, 2004, in response to consumer complaints
alleging that First Choice had faxed unsolicited advertisements,
the Commission staff issued a citation4 to First Choice, pursuant
to section 503(b)(5) of the Act.5 The staff cited First Choice
for using a telephone facsimile machine, computer, or other
device, to send unsolicited advertisements to a telephone
facsimile machine, in violation of section 227 of the Act and the
Commission’s related rules and orders. According to the
complaints, the unsolicited advertisements offered health
insurance.6 The citation, which the staff served by certified
mail, return receipt requested, informed First Choice that
subsequent violations could result in the imposition of monetary
forfeitures of up to $11,000 per violation, and included a copy
of the consumer complaints that formed the basis of the citation.7
The citation informed First Choice that within 21 days of the
date of the citation, it could either request a personal
interview at the nearest Commission office, or could provide a
written statement responding to the citation. First Choice did
not request an interview nor otherwise respond to the citation.
3. Despite the citation’s warning that subsequent violations
could result in the imposition of monetary forfeitures, the
Commission has received additional consumer complaints indicating
that First Choice continued to engage in such conduct after
receiving the citation.8 In addition, the Commission has
received similar consumer complaints filed with the Tennessee
Regulatory Authority (TRA), which has given valuable assistance
to this Commission’s enforcement efforts against First Choice.
Among other things, the TRA provided a letter it had received
from First Choice in which the company apparently admitted
sending unlawful fax advertisements to consumers in Tennessee.
The admissions in this letter provide strong supporting evidence,
in addition to the complaints, of First Choice’s illegal faxing
activities.9 We base our action here specifically on sworn
declarations from consumers establishing that First Choice sent
unsolicited advertisements to telephone facsimile machines after
the date of the citation.10
III. DISCUSSION
A. Violations of the Commission’s Rules Restricting
Unsolicited Facsimile Advertisements
4. Section 227(b)(1)(C) of the Act makes it “unlawful for any
person within the United States, or any person outside the United
States if the recipient is within the United States . . . to use
a telephone facsimile machine, computer, or other device to send
an unsolicited advertisement to a telephone facsimile machine.”11
The term “unsolicited advertisement” is defined in the Act and
the Commission’s rules as “any material advertising the
commercial availability or quality of any property, goods, or
services which is transmitted to any person without that person’s
prior express invitation or permission.” Under Commission rules
and orders currently in effect, the Commission views an
established business relationship between a fax sender and
recipient as constituting prior express invitation or permission
to send a facsimile advertisement.12
5. This NAL is based on evidence that 37 consumers received
unsolicited fax advertisements from First Choice after the
Bureau’s citation. Each of those facsimile transmissions
advertises the availability of the same commercial service:
health insurance offered by First Choice. For example, one
facsimile transmission sent by First Choice included the
following language: “American Benefits . . . $59.95 per month!
Unlimited PPO savings nationwide . . . Call now for this yearly
promotion!! This promotion ends Friday . . .”13 Another
transmission sent to the same consumer included the following
language: “Complete Medical Health Plan . . . Join today! . . .
$79.95 a month! . . . Offer ends Friday! ACT NOW”14 These
facsimiles, which are representative of the others on which this
NAL is based, fall within the definition of unsolicited
advertisements.15
6. Further, according to their declarations, none of the
consumers had an established business relationship with First
Choice, and the consumers did not give First Choice permission to
send the facsimile transmissions.16 In fact, 22 of these
consumers actually contacted First Choice to tell First Choice
not to send any additional facsimiles.17 Therefore, First Choice
appears to have sent each facsimile transmission without prior
express consent of the consumers.18 First Choice did not respond
to the Commission’s citation and thus has offered no evidence or
arguments to defend or justify its actions. Based on the entire
record,19 including the consumer declarations, we find that First
Choice apparently violated section 227 of the Act and the
Commission’s related rules and orders by sending 98 unsolicited
advertisements to 37 consumers’ facsimile machines.
B. Proposed Forfeiture
7. We conclude that First Choice apparently willfully or
repeatedly violated the Act and the Commission’s rules and orders
by using a telephone facsimile machine, computer, or other device
to send unsolicited advertisements to telephone facsimile
machines. First Choice apparently did not cease its unlawful
conduct even after the Commission staff issued a citation warning
that it was engaging in unlawful conduct and could be subject to
monetary forfeitures. Accordingly, a proposed forfeiture is
warranted against First Choice for its apparent willful or
repeated violations of section 227 of the Act and of the
Commission’s related rules and orders regarding the faxing of
unsolicited advertisements.
8. Section 503(b) of the Act authorizes the Commission to
assess a forfeiture of up to $11,000 for each violation of the
Act or of any rule, regulation, or order issued by the Commission
under the Act by a non-common carrier or other entity not
specifically designated in section 503 of the Act.20 In
exercising such authority, we are to 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.”21
9. Although the Commission’s Forfeiture Policy Statement does
not establish a base forfeiture amount for violating the
prohibition on using a telephone facsimile machine to send
unsolicited advertisements, the Commission has previously
considered $4,500 per unsolicited fax advertisement to be an
appropriate base amount.22 We apply that base amount to each of
37 of the apparent violations. In addition, where the consumer
requests the company to stop sending facsimile messages, and the
company continues to send them, the Commission has previously
considered $10,000 per unsolicited fax advertisement the
appropriate forfeiture for such egregious violations.23 Here, 22
consumers specifically requested that First Choice cease sending
facsimiles. Notwithstanding these requests, an additional 61
facsimiles were sent to these consumers. Thus, we apply the
$10,000 amount to each of 61 of the apparent violations. Thus, a
total forfeiture of $776,500 is proposed. First Choice shall
have the opportunity to submit evidence and arguments in response
to this NAL to show that no forfeiture should be imposed or that
some lesser amount should be assessed.24
IV. CONCLUSION AND ORDERING CLAUSES
10. We have determined that First Choice Healthcare, Inc.
apparently violated section 227 of the Act and the Commission’s
rules and orders by using a telephone facsimile machine,
computer, or other device to send at least 98 unsolicited
advertisements to the 37 consumers identified in the Appendix.
We have further determined that First Choice Healthcare, Inc. is
apparently liable for forfeiture in the amount of $776,500.
11. Accordingly, IT IS ORDERED, pursuant to section 503(b) of
the Act, and section 1.80 of the Rules, 47 C.F.R. § 1.80, 47
U.S.C. § 503(b), that First Choice Healthcare, Inc. is hereby
NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the
amount of $776,500 for willful or repeated violations of section
227(b)(1)(C) of the Communications Act, 47 U.S.C. § 227(b)(1)(C),
sections 64.1200(a)(3) of the Commission’s rules, 47 C.F.R. §
64.1200(a)(3), and the related orders described in the paragraphs
above.
12. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission’s rules,25 within thirty (30) days of the release date
of this Notice of Apparent Liability for Forfeiture, First Choice
Healthcare SHALL PAY the full amount of the proposed forfeiture
or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
13. Payment by check or money order, payable to the order of the
“Federal Communications Commission,” may be mailed to Forfeiture
Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 358340, Pittsburgh, Pennsylvania 15251.
Payment by overnight mail may be sent to Mellon Client Service
Center, 500 Ross Street, Room 670, Pittsburgh, Pennsylvania 15262-
0001, Attn: FCC Module Supervisor. Payment by wire transfer may
be made to: ABA Number 043000261, receiving bank Mellon Bank, and
account number 911-6229. The payment should note NAL/Acct. No.
200332170006.
14. The response if any must be mailed to the Office of the
Secretary, Federal Communications Commission, 445 12th Street,
S.W., Washington, D.C. 20554, ATTN: Enforcement Bureau –
Telecommunications Consumers Division, and must include the
NAL/Acct. No. referenced in the caption.
15. 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 documentation submitted.
16. Requests for payment of the full amount of this Notice of
Apparent Liability for Forfeiture under an installment plan
should be sent to: Chief, Revenue and Receivables Operations
Group, 445 12th Street, S.W., Washington, D.C. 20554.26
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by Certified Mail Return
Receipt Requested to, Thomas Dubiel, 1670 Kettner Boulevard, San
Diego, California and to Matt Flint, Matt Ryan and Thomas Paul,
First Choice Healthcare, 1055 F Street, San Diego, California
92101.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
APPENDIX
Complainants who were sent one facsimile solicitation
Violation Date
Michael A Barasch 5/11/05
Back Yard Boutique 5/15/05
Wood Essentials 4/27/05
Pasco Kids First Inc. 6/27/05
Bob Pianka 8/28/05
Enchanted Florist Inc. 3/11/05
XTC SuperCenter 7/08/05
Waterproofing Contractors of Florida27 8/22/05
Liebig International Inc. 28 6/23/05
Marvin Shuman29 7/18/05
Half Halt Press Inc.30 7/13/05
Avant Personnel LLC31 3/03/05
Lois A. Roe32 6/15/05
John Staurulakis Inc.33 5/05/05
American Flags Express 34 3/01/05
Complainants who were sent facsimile solicitations
after requesting that no more be sent Violation
Date
Postal Plus Express 5/10/05, 7/18/05
Laurie Sieling 3/07/05, 3/08/05,
3/22/05, 3/23/05, 3/24/05
John S. Burke 10/12/05, 7/18/05,
7/21/05
Ronald Hodgins 7/13/05, 10/17/05,
10/26/05
Servisair/Globe Ground 3/10/05, 5/11/05,
5/17/05, 5/19/05, 5/25/05
Storybook Cruises, LLC 9/07/05, 10/24/05
Universal Interior 8/29/05, 10/05/05,
10/26/05
U.S. District Court Probation Office 9/09/05,
9/28/05, 10/25/05
My Music Store 8/25/05, 9/08/05,
9/20/05, 9/30/05, 10/27/05
Paper Trace Studio 9/19/05, 9/29/05
Equus Systems, Inc. 9/28/05, 10/04/05,
10/17/05
Panhandle Area Educational Consortium 10/03/05,
10/28/05
Danville Redevelopment and Housing Authority 9/22/05,
10/12/05, 10/24/05
It’s Time to Travel 7/11/05, 7/11/05
Richard Payne 10/13/05, 10/14/05, 10/18/05,
10/21/05, 11/22/05
Kim Kohner 8/21/05, 11/07/05
Performance Insulation35 7/13/05 ,7/20/05, 8/30/05,
9/09/05, 9/23/05, 9/28/05,
11/16/05
Mosetta Cohen 10/05/05, 10/07/05, 10/21/05,
11/03/05, 11/17/05
Capital Sheds, Inc. 7/27/05, 8/23/05, 8/24/05,
9/17/05, 10/12/05
Jerome Courshon 8/10/05, 8/31/05, 9/23/05,
10/06/05, 10/13/05,10/17/05,
10/19/05
Sue Berry 8/02/05, 8/15/05, 9/09/05,
9/10/05, 10/12/05
Tees & Tops Uniforms 7/14/05, 7/30/05, 11/07/05,
11/23/05
_______________________________
1 See 47 U.S.C. § 503(b)(1). The Commission has the authority
under this section of the Act to assess a forfeiture against any
person who has “willfully or repeatedly failed to comply with any
of the provisions of this Act or of any rule, regulation, or
order issued by the Commission under this Act ....” See also 47
U.S.C. § 503(b)(5) (stating that the Commission has the authority
under this section of the Act to assess a forfeiture penalty
against any person who is not a common carrier so long as such
person (A) is first issued a citation of the violation charged;
(B) is given a reasonable opportunity for a personal interview
with an official of the Commission, at the field office of the
Commission nearest to the person’s place of residence; and (C)
subsequently engages in conduct of the type described in the
citation).
2 According to publicly available information, First Choice is
headquartered at 1055 F Street, San Diego, California 92101; an
alternate address is provided at 1670 Kettner Boulevard, San
Diego, California. Its registered agent is Thomas Dubiel. First
Choice claims in its advertising to specialize in health
insurance. Its owners are apparently Matt Flint, Matt Ryan, and
Thomas Paul. Accordingly, all references in this NAL to “First
Choice” encompass Matt Flint, Matt Ryan and Thomas Paul, as well
as the corporate entity.
3 See 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3); see
also Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Report and Order, 18 FCC Rcd 14014, 14124
(2003) (TCPA Report and Order) (stating that section 227 of the
Act prohibits the use of telephone facsimile machines to send
unsolicited advertisements).
4 Citation from Kurt A. Schroeder, Deputy Chief,
Telecommunications Consumers Division, Enforcement Bureau, File
No. EB-04-TC-116, issued to First Choice on July 13, 2004.
5 See 47 U.S.C. § 503(b)(5) (authorizing the Commission to issue
citations to non-common carriers for violations of the Act or of
the Commission’s rules and orders).
6 See consumer complaint requesting action by the Attorney
General of the State of Florida from Larry Roth, dated April 8,
2004, which was attached to the citation (stating that he
received an unsolicited advertisement via facsimile from First
Choice, without his permission, after which he called First
Choice to request removal from their list; and subsequently
received another unsolicited advertisement via facsimile from
First Choice without his permission).
7 The U.S. Postal Service returned copies of the citation to the
Commission marked “unclaimed.” Commission staff has obtained
further confirmation, however, that First Choice is located at
the address listed on the citation (the same address is listed
above in footnote 2). See Letter from Matt Flint, First Choice
Health Care, to Kimberly Jo Moore, Tennessee Regulatory
Authority, filed December 20, 2005 (listing the address of First
Choice as 1055 F Street, San Diego, California 92101). Further,
section 503(b)(5)(A) of the Act does not require actual receipt
of the citation, but only that the Commission send the citation
to the person who is charged with the violation. 47 U.S.C.
§ 503(b)(5)(A) (requiring that the charged person be “sent a
citation of the violation charged”).
8 See Appendix for a listing of the consumer declarations from
complainants requesting Commission action.
9 Mr. Edwin Mimms, Program Manager at the Tennessee Regulatory
Authority, provided the Commission with a letter that First
Choice had written in response to 75 Notices of Alleged Violation
from the Tennessee Regulatory Authority. In the response letter,
First Choice apologized to the Tennessee recipients of the fax
advertisements, and stated that First Choice would no longer
advertise via facsimile in the state of Tennessee. See Letter
from Matt Flint, First Choice Health Care, to Kimberly Jo Moore,
Tennessee Regulatory Authority, filed December 20, 2005.
10 We note that evidence of additional instances of unlawful
conduct by First Choice may form the basis of subsequent
enforcement action.
11 47 U.S.C. § 227(b)(1)(B).
12 Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Memorandum Opinion and Order, 10 FCC Rcd
12391, 12405 (1995) (1995 TCPA Reconsideration Order); see also
Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Order, FCC 05-132 (rel. June 27, 2005).
Under the recently enacted Junk Fax Prevention Act of 2005, Pub.
L. 109-21, 119 Stat. 359 (2005), Congress amended the
Communications Act to specify, among other things, the conditions
under which an established business relationship provides an
exception to the prohibition on unsolicited fax advertising.
13 Declaration dated November 3, 2005, from Steven Duelfer, Equus
Systems, Inc., 1st facsimile attachment.
14 Declaration dated November 3, 2005, from Steven Duelfer, Equus
Systems, Inc., 2nd facsimile attachment.
15 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(10). Under
section 64.1200(f)(10), the term “unsolicited advertisement”
means “any material advertising the commercial availability or
quality of any property, goods, or services which is transmitted
to any person without that person’s prior express invitation or
permission.”
16 See, e.g., Declaration dated November 7, 2005, from Michael A.
Barasch (stating that, to the best of his knowledge, at no time
did anyone in his household give First Choice prior express
consent to deliver a facsimile advertisement, nor did anyone
engage in any business transaction with First Choice). All of
the complainants involved in this action are listed in the
Appendix, located below at pages 6-7.
17 See, e.g., Declaration dated December 12, 2005, from Sue Berry
(stating that First Choice continued to send her facsimile
advertisements after she called and asked First Choice to stop
sending such messages). All of the complainants who were sent
facsimile solicitations after requesting that no more be sent are
listed below at page 7.
18 Mere distribution or publication of a fax number does not
establish consent to receive advertisements by fax. 1995
Reconsideration Order, 10 FCC Rcd at 12408-09; see also Rules and
Regulations Implementing the Telephone Consumer Protection Act of
1991, Memorandum Opinion and Order, 18 FCC Rcd 14014, 14128
(2003) (concluding that mere publication of a fax number in a
trade publication or directory does not demonstrate consent to
receive fax advertising).
19 See Letter from Matt Flint, First Choice Health Care, to
Kimberly Jo Moore, Tennessee Regulatory Authority, filed December
20, 2005 (apologizing to the Tennessee recipients of the fax
advertisements, and stating that First Choice will no longer
advertise via facsimile in the state of Tennessee).
20 Section 503(b)(2)(C) provides for forfeitures up to $10,000 for
each violation in cases not covered by subparagraph (A) or (B),
which address forfeitures for violations by licensees and common
carriers, among others. See 47 U.S.C. § 503(b). In accordance
with the inflation adjustment requirements contained in the Debt
Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001,
110 Stat. 1321, the Commission implemented an increase of the
maximum statutory forfeiture under section 503(b)(2)(C) to
$11,000. See 47 C.F.R. §1.80(b)(3); Amendment of Section 1.80 of
the Commission’s Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, 15 FCC Rcd 18221 (2000); see also Amendment of
Section 1.80(b) of the Commission’s Rules and Adjustment of
Forfeiture Maxima to Reflect Inflation, 19 FCC Rcd 10945 (2004)
(this recent amendment of section 1.80(b) to reflect inflation
left the forfeiture maximum for this type of violator at
$11,000).
21 47 U.S.C. § 503(b)(2)(D); 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, 17100-17101 (1997) (Forfeiture Policy Statement),
recon. denied, 15 FCC Rcd 303 (1999).
22 See Get-Aways, Inc., Notice of Apparent Liability For
Forfeiture, 15 FCC Rcd 1805 (1999); Get-Aways, Inc., Forfeiture
Order, 15 FCC Rcd 4843 (2000); see also US Notary, Inc., Notice
of Apparent Liability for Forfeiture, 16 Rcd 18,298 (2001); US
Notary, Inc., Forfeiture Order, 16 FCC Rcd 18,398 (2001); Tri-
Star Marketing, Inc., Notice of Apparent Liability For
Forfeiture, 15 FCC Rcd 11, 295 (2000); Tri-Star Marketing, Inc.,
Forfeiture Order, 15 FCC Rcd 23, 198 (2000).
23 See Carolina Liquidators, Inc., Notice of Apparent Liability
for Forfeiture, 15 FCC 16,837, 16,842 (2000); 21st Century
Fax(es) Ltd., AKA 20th Century Fax(es), 15 FCC Rcd 24,406, 24,411
(2000).
24 See 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).
25 47 C.F.R. § 1.80.
26 Id.
27 Waterproofing Contractors asked First Choice not to send
additional faxes and received at least one additional fax, but
could not indicate when it received the fax.
28 Liebig International asked First Choice not to send additional
faxes and received additional faxes, but could not indicate when
it received them.
29 Mr. Shuman asked First Choice not to send additional faxes and
received additional faxes, but could not indicate when he
received them.
30 Half Halt Press asked First Choice not to send additional faxes
and received additional faxes, but could not indicate when it
received them.
31 Avant Personnel asked First Choice not to send additional faxes
and received additional faxes, but could not indicate when it
received them.
32 Ms. Roe asked First Choice not to send additional faxes and
received additional faxes, but could not indicate when she
received them.
33 John Starulakis Inc. asked First Choice not to send additional
faxes and received additional faxes, but could not indicate when
it received them.
34 American Flags Express asked First Choice not to send
additional faxes and received additional faxes, but could not
indicate when it received them.
35 Performance Insulation received the first three of these faxes
before it requested that First Choice not send any more faxes.
However, after requesting that it receive no additional faxes,
Performance Insulation received four more faxes on the dates
indicated above.