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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) File No. EB-05-TC-040
SMC, LLC ) NAL/Acct. No. 200832170009
Apparent Liability for Forfeiture ) FRN: 0017313230
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: February 29, 2008 Released: February 29, 2008
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that SMC, LLC ("SMC") 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
eighty-six unsolicited advertisements to the telephone facsimile
machines of at least fifty-four consumers. Based on the facts and
circumstances surrounding the apparent violation, we find that SMC is
apparently liable for a forfeiture in the amount of $458,500.
II. BACKGROUND
2. 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 any telephone
facsimile machine, computer, or other device to send, to a telephone
facsimile machine, an unsolicited advertisement." 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 in writing or otherwise." Under the Commission's rules, an
"established business relationship" exception permits a party to
deliver a message to a consumer if the sender has an established
business relationship with the recipient and the sender obtained the
number of the facsimile machine through the voluntary communication by
the recipient, directly to the sender, within the context of the
established business relationship, or through a directory,
advertisement, or a site on the Internet to which the recipient
voluntarily agreed to make available its facsimile number for public
distribution.
3. On October 12, 2005, in response to one or more consumer complaints
alleging that SMC had faxed unsolicited advertisements, the
Commission's Enforcement Bureau ("Bureau") issued a citation to SMC,
pursuant to section 503(b)(5) of the Act. The Bureau cited SMC for
using a telephone facsimile machine, computer, or other device, to
send unsolicited advertisements for medical services offered by
another entity, to a telephone facsimile machine, in violation of
section 227 of the Act and the Commission's related rules and orders.
The citation, which was served by certified mail, return receipt
requested, warned SMC 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. The citation informed SMC that within thirty (30) days
of the date of the citation, it could either request an interview with
Commission staff, or could provide a written statement responding to
the citation. SMC did not request an interview or otherwise respond to
the citation.
4. Despite the citation's warning that subsequent violations could result
in the imposition of monetary forfeitures, we have received additional
consumer complaints indicating that SMC continued to engage in such
conduct after receiving the citation. We base our action here
specifically on the complaints filed by fifty-four consumers
establishing that SMC continued to send eighty-six unsolicited
advertisements to telephone facsimile machines after the date of the
citation.
5. 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. 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."
III. DISCUSSION
A. Violations of the Commission's Rules Restricting Unsolicited Facsimile
Advertisements
6. We find that SMC apparently violated section 227 of the Act and the
Commission's related rules and orders by using a telephone facsimile
machine, computer, or other device to send at least eighty-six unsolicited
advertisements to the fifty-four consumers identified in the Appendix.
This NAL is based on evidence that the consumers received unsolicited fax
advertisements from SMC after the Commission's citation. The facsimile
transmissions advertise affordable life insurance and polo shirts.
Further, according to the complaints, the consumers neither had an
established business relationship with SMC nor gave SMC permission to send
the facsimile transmissions. The faxes at issue here therefore fall within
the definition of an "unsolicited advertisement." Based on the entire
record, including the consumer complaints, we conclude that SMC apparently
violated section 227 of the Act and the Commission's related rules and
orders by sending eighty-six unsolicited advertisements to fifty-four
consumers' facsimile machines.
B. Proposed Forfeiture
7. We find that SMC is apparently liable for a forfeiture in the amount of
$458,500. Although the Commission's Forfeiture Policy Statement does not
establish a base forfeiture amount for violating the prohibition against
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. We apply that base amount
to each of seventy-three 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. Here, ten consumers specifically
requested that SMC cease sending facsimiles. Notwithstanding these
requests, SMC sent thirteen additional facsimiles to these consumers. We
therefore apply the $10,000 amount to each of these thirteen apparent
violations. Thus, a total forfeiture of $458,500 is proposed. SMC will
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.
IV. CONCLUSION AND ORDERING CLAUSES
8. We have determined that SMC, LLC apparently violated section 227 of the
Act and the Commission's related rules and orders by using a telephone
facsimile machine, computer, or other device to send at least eighty-six
unsolicited advertisements to the fifty-four consumers identified in the
Appendix. We have further determined that SMC, LLC is apparently liable
for a forfeiture in the amount of $458,500.
9. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the Act, 47
U.S.C. S: 503(b), and section 1.80 of the rules, 47 C.F.R. S: 1.80, that
SMC, LLC is hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in
the amount of $458,500 for willful or repeated violations of section
227(b)(1)(C) of the Communications Act, 47 U.S.C. S: 227(b)(1)(C),
sections 64.1200(a)(3) of the Commission's rules, 47 C.F.R. S:
64.1200(a)(3), and the related orders described in the paragraphs above.
10. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's rules, within thirty (30) days of the release date of this
Notice of Apparent Liability for Forfeiture, SMC, LLC SHALL PAY the full
amount of the proposed forfeiture or SHALL FILE a written statement
seeking reduction or cancellation of the proposed forfeiture.
11. 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 Number 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[s] 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.
12. The response, if any, must be mailed both to the Office of the
Secretary, Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554, ATTN: Enforcement Bureau, Telecommunications
Consumers Division, and to Colleen Heitkamp, Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications Commission,
445 12th Street, SW, Washington, DC 20554, and must include the NAL/Acct.
No. referenced in the caption.
13. 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.
14. 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
SMC, LLC, Attention: Greg Horne, 13612 Midway Road, #405, Farmers Branch,
TX 75244.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
APPENDIX
Complainant received facsimile Violation Date(s)
solicitations
David Brackett 5/5/07
Michael Brady 5/18/07 (2 faxes); 5/21/07 (2 faxes);
7/13/07
Greg Brown 5/4/07
Dawn Buratti 4/13/07
Glenn Cadoret 6/28/07; 7/25/07
Irene Cualoping 6/28/07
Kip DesCombes 5/22/07
Marla Goldstein 3/2/07, 3/28/07, 4/13/07, 5/6/07;
6/6/07; 6/8/07; 6/25/07; 7/27/07
Lori Hartglass 5/13/07
Stacie Hartman 7/4/07
Lee Hunt 5/30/07
Mie Ishiguro 5/7/07
Allen Kardell 5/6/07
Stephen King 5/5/07
G. Mathias Kondolf 6/5/07; 6/15/07; 6/24/07; 7/7/07;
7/24/07
Mike Kosten 7/28/07
Tim Krubsasck 7/28/07
Karen Lee 5/31/07
Jon Lehner 5/11/07
Donna Levin 5/22/07
Todd Little 5/23/07
Lorraine Loomis 7/18/07; 7/23/07
Paul Luskey 7/31/07
Alan MacIntyre 5/4/07
Ralph Marotta 6/4/07
Doreen McCarthy 5/6/07; 6/5/07
Susan McMillan 5/23/07
Dominick Morra 5/14/07; 5/28/07; 6/11/07; 6/23/07
Cecilia Park 6/9/07
Roberta Parkinson 7/12/07
Sandeep Patel 5/9/07
William Pfister 5/5/07
Susan Piscitello 5/6/07
Jessica Rafka 5/4/07
Dore Rodine 5/6/07
William Royea 5/28/07
Brian Rychlec 4/2/07, 4/21/07, 5/15/07 (2 faxes)
Peter Sobota 5/15/07
Michael Spedick 5/9/07
Gary Stacharowski 5/4/07; 7/16/07
Randall Steighorst 5/21/07
Michael Stodghill 5/4/07
Nicole Stojka 6/2/07
Lixin Tang 5/7/07
Aare Tilk 6/3/05
Thomas Walker 5/19/07
Janet Walsh 5/29/07
James D. Yundt 4/15/07
Complainant received facsimile solicitations after Violation Date(s)
requesting no more be sent
Dawn Buratti 5/6/07
Vesselin Dittrich 5/18/07
Charles Kaminski 6/7/07; 6/22/07
Jo Anne Knollman 5/19/07
Gregory Laughrin 5/15/07
Michael Lucas 6/4/07
Dominick Morra 7/27/07
William Royea 5/28/07
Shaun Stuart 5/5/07; 6/4/07
James D. Yundt 5/6/07; 6/6/07
See 47 U.S.C. S: 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. S: 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 does not hold a license, permit,
certificate or other authorization issued by the Commission or an
applicant for any of those listed instrumentalities 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).
According to publicly available information, SMC has its office at 13612
Midway Road, #405, Farmers Branch, TX 75244. Greg Horne is listed as the
contact person for SMC. Accordingly, all references in this NAL to SMC
also encompass the foregoing individual and all other principals and
officers of this entity, as well as the corporate entity itself. Mr. Horne
is also the contact person for The Hot Lead, LLC, which has been the
subject of prior enforcement action. See The Hot Lead, LLC, Notice of
Apparent Liability for Forfeiture, 22 FCC Rcd 15924 (2007).
See 47 U.S.C. S: 227(b)(1)(C); 47 C.F.R. S: 64.1200(a)(3); see also
Rules and Regulations Implementing the Telephone Consumer Protection Act
of 1991, Report and Order and Third Order on Reconsideration, 21 FCC Rcd
3787 (2006).
47 U.S.C. S: 227(b)(1)(C); 47 C.F.R. S: 64.1200(a)(3).
47 U.S.C. S:227(a)(4); 47 C.F.R. S:64.1200 (f)(13).
An "established business relationship" is defined as a prior or existing
relationship formed by a voluntary two-way communication "with or without
an exchange of consideration, on the basis of an inquiry, application,
purchase or transaction by the business or residential subscriber
regarding products or services offered by such person or entity, which
relationship has not been previously terminated by either party." 47
C.F.R. S: 64.1200(f)(5).
See 47 U.S.C. S: 227(b)(1)(C); 47 C.F.R. S: 64 (a)(3)(i), (ii).
Citation from Kurt A. Schroeder, Deputy Chief, Telecommunications
Consumers Division, Enforcement Bureau, File No. EB-05-TC-040, issued to
SMC on October 12, 2005.
See 47 U.S.C. S: 503(b)(5) (authorizing the Commission to issue citations
to persons who do not hold a license, permit, certificate or other
authorization issued by the Commission or an applicant for any of those
listed instrumentalities for violations of the Act or of the Commission's
rules and orders).
Commission staff mailed the citation to 13612 Midway Road, Suite 405,
Dallas, TX 75244-3410. See n.2, supra.
See Appendix for a listing of the consumer complaints against SMC
requesting Commission action.
We note that evidence of additional instances of unlawful conduct by SMC
may form the basis of subsequent enforcement action.
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. S: 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. S: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).
47 U.S.C. S: 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, 17100-01 para. 27 (1997)
(Forfeiture Policy Statement), recon. denied, 15 FCC Rcd 303 (1999).
See, e.g., complaint dated May 5, 2007, from David Brackett (stating that
he has never done any business with the fax advertiser, never made an
inquiry or application to the fax advertiser and never given permission
for the company to send the fax); complaint dated May 4, 2007, from Greg
Brown (stating that he has never done any business with the fax
advertiser, never made an inquiry or application to the fax advertiser and
never given permission for the company to send the fax). The complainants
involved in this action are listed in the Appendix below.
See 47 U.S.C. S: 227(a)(4); 47 C.F.R. S: 64.1200(f)(13) (definition
previously at S: 64.1200(f)(10)).
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, 15 Rcd 16999 (2000); US Notary, Inc., Forfeiture Order, 16 FCC
Rcd 18398 (2001); Tri-Star Marketing, Inc., Notice of Apparent Liability
For Forfeiture, 15 FCC Rcd 11295 (2000); Tri-Star Marketing, Inc.,
Forfeiture Order, 15 FCC Rcd 23198 (2000).
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).
See 47 U.S.C. S: 503(b)(4)(C); 47 C.F.R. S: 1.80(f)(3).
47 C.F.R. S: 1.80.
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Federal Communications Commission FCC 08-71