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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                        )                                
                            File No.: EB-09-SE-086       
     In the Matter of   )                                
                            NAL/Acct. No.: 201132100022  
     Scottsdale Lexus   )                                
                            FRN: 0020536694              
                        )                                


                  notice of apparent liability for forfeiture

   Adopted: January 26, 2011 Released: January 26, 2011

   By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau:

   I. introduction

    1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
       Scottsdale Lexus apparently liable for a forfeiture in the amount of
       ten thousand dollars ($10,000) for apparent willful and repeated
       violation of section 301 of the Communications Act of 1934, as amended
       ("Act"), and sections 1.903(a) and 95.3 of the Commission's rules
       ("Rules"). The noted apparent violations involve Scottsdale Lexus's
       operation of a General Mobile Radio Service ("GMRS") radio system
       without Commission authority.

   II. Background

    2. The GMRS is a "land mobile radio service available to persons for
       short-distance two-way communications to facilitate the activities of
       licensees and their immediate family members." The party responsible
       for any GMRS station must obtain a license prior to transmitting on
       any channel authorized in the GMRS, and only individuals are currently
       eligible to obtain, renew, and modify GMRS systems.

    3. The Enforcement Bureau's Spectrum Enforcement Division ("Division")
       received a complaint alleging that Scottsdale Lexus, an automobile
       dealership, was operating GMRS equipment at its business address in
       Scottsdale, Arizona, without a Commission license. On January 28,
       2010, the Division issued a letter of inquiry ("LOI") to Scottsdale
       Lexus.

    4. In its February 26, 2010 response to the LOI, Scottsdale Lexus stated
       that it was unaware that it needed a license to operate the handheld
       mobile units it was using among its employees until it received the
       Bureau's LOI. Scottsdale Lexus stated that it purchased 46 mobile
       units on or about March 31, 2009 "for communications by and between
       employees of the dealership on the property only," and distributed the
       units to employees in early April 2009. Scottsdale Lexus identified
       the mobile units as Midland Radio model number GXT720VP3 36-channel
       GMRS/Family Radio Service two-way radios. The owner's manual for these
       mobile units states the "GXT720/775 Series operates on GMRS (General
       Mobile Radio Service) frequencies which require an FCC (Federal
       Communications Commission) license. You must be licensed prior to
       operating on channels 1 - 7 or 15 - 36, which comprise the GMRS
       channels of the GXT720/775 Series." Scottsdale Lexus admitted that
       between April 2009 and January 28, 2010, it operated the radios on
       channels 1 - 7. Scottsdale Lexus also asserted that it immediately
       stopped using the radios on January 28, 2010, when it received the
       Division's LOI.

   II. DISCUSSION

    5. Section 301 of the Act and section 1.903(a) of the Rules prohibit the
       use or operation of any apparatus for the transmission of energy or
       communications or signals by radio except under, and in accordance
       with, a Commission granted authorization. Section 95.3 of the Rules
       requires that, before any station transmits on any channel authorized
       in the GMRS, the responsible party obtain a license from the FCC.
       Additionally, under section 95.5(a) of the Rules, only individuals are
       currently eligible to obtain, renew, and modify GMRS systems.

    6. Scottsdale Lexus admitted in its LOI Response that it operated its
       mobile units on GMRS channels without Commission authority in
       connection with day-to-day operations at its dealership in Scottsdale,
       Arizona from early April 2009 until January 28, 2010, when the
       Division sent Scottsdale Lexus an LOI. By operating the mobile units
       on the GMRS channels without a license, Scottsdale Lexus

   apparently willfully and repeatedly violated section 301 of the Act and
   sections 1.903(a) and 95.3 of the Rules. Moreover, we note that as a
   business entity, Scottsdale Lexus is not even eligible to obtain a GMRS
   license.

    7. Under section 503(b)(1)(B) of the Act, any person who is determined by
       the Commission to have willfully or repeatedly failed to comply with
       any provision of the Act or any rule, regulation, or order issued by
       the Commission shall be liable to the United States for a forfeiture
       penalty. To impose such a forfeiture penalty, the Commission must
       issue a notice of apparent liability and the person against whom such
       notice has been issued must have an opportunity to show, in writing,
       why no such forfeiture penalty should be imposed. The Commission will
       then issue a forfeiture if it finds by a preponderance of the evidence
       that the person has violated the Act or a Commission rule. Under this
       standard, we conclude that Scottsdale Lexus is apparently liable for a
       forfeiture for its apparent willful and repeated operation on GMRS
       channels without Commission authorization.

    8. In determining the appropriate forfeiture amount, section 503(b)(2)(E)
       of the Act directs us to consider factors, such as "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 we explain below, having considered the statutory
       factors, we propose a forfeiture of $10,000.

    9. Section 1.80(b)(4) of the Rules sets a base forfeiture amount of
       $10,000 for operation of a radio station without Commission authority.
       Based on the record in this proceeding, we propose a forfeiture of
       $10,000 for Scottsdale Lexus's unauthorized operations.

   10. We note that the base forfeiture amount is subject to adjustment,
       either upward or downward. Here, however, we find no basis for any
       downward adjustment. For example, Scottsdale Lexus asserted in its LOI
       Response that because it was unaware of the requirement to obtain a
       license, it did not "consciously or deliberately violate any FCC
       rule." Lack of specific intent to violate Commission rules (even based
       on a lack of knowledge) is not a mitigating factor that warrants a
       downward adjustment. Moreover, as noted above, the owner's manual for
       the devices at issue states prominently that operation requires an FCC
       license, and that "serious penalties could result for unlicensed use
       of GMRS channels." Thus, Scottsdale Lexus certainly should have known
       that a license was required. In addition, the fact that the company
       was not even eligible to obtain such a license could be viewed as an
       aggravating factor. Furthermore, Scottsdale Lexus's claim in its LOI
       Response that it was unaware of any public harm caused by its improper
       use of the mobile units is unavailing. It is well-established that the
       absence of harm is not considered a mitigating factor warranting a
       downward adjustment of a forfeiture. Finally, Scottsdale Lexus's
       assertion that it has not had any other issue with, or inquiry
       regarding, FCC rules or licensing over the past 15 years does not
       warrant any reduction of the proposed forfeiture. While the Commission
       recognizes history of overall compliance as a downward adjustment
       factor, there is no evidence in the record that Scottsdale Lexus has
       ever held an FCC license or authorization, and Scottsdale Lexus was
       apparently out of compliance with FCC rules for the entire ten-month
       period between April 2009 and January 2010 when it operated equipment
       subject to the FCC's jurisdiction. Thus, Scottsdale Lexus does not
       appear to have any history of compliance with the FCC's rules.
       Accordingly, we propose a $10,000 forfeiture.

   11. Based on the foregoing, we find Scottsdale Lexus in apparent willful
       and repeated violation of section 301 of the Act and sections 1.903(a)
       and 95.3 of the Rules for apparently operating a GMRS system without
       Commission authority. Therefore, Scottsdale Lexus is apparently liable
       for a forfeiture in the amount of $10,000.

   III. ORDERING CLAUSES

   12. Accordingly, IT IS ORDERED that, pursuant to section 503(b) of the Act
       and sections 0.111, 0.311 and 1.80 of the Rules, Scottsdale Lexus IS
       hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
       amount of ten thousand dollars ($10,000) for the willful and repeated
       violation of section 301 of the Act and sections 1.903(a) and 95.3 of
       the Rules.

   13. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the Rules, 
       within thirty days of the release date of this Notice of Apparent
       Liability for Forfeiture, Scottsdale Lexus SHALL PAY the full amount
       of the proposed forfeiture or SHALL FILE a written statement seeking
       reduction or cancellation of the proposed forfeiture.

   14. 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 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 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. Scottsdale Lexus will also send
       electronic notification to Katherine.Power@fcc.gov and
       Ricardo.Durham@fcc.gov.on the date said payment is made.

   15. The written statement seeking reduction or cancellation of the
       proposed forfeiture, if any, must include a detailed factual statement
       supported by appropriate documentation and affidavits pursuant to
       sections 1.80(f)(3) and 1.16 of the Rules. The written statement must
       be mailed to the Office of the Secretary, Federal Communications
       Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN:
       Enforcement Bureau - Spectrum Enforcement Division, and must include
       the NAL/Acct. No. referenced in the caption. The statement must also
       be emailed to Katherine Power at Katherine.Power@fcc.gov and Ricardo
       Durham at Ricardo.Durham@fcc.gov.

   16. 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.

   17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
       for Forfeiture shall be sent by first class mail and certified mail
       return receipt requested to Tracy Moorman, General Manager, Scottsdale
       Lexus, 6905 East McDowell Road, Scottsdale, Arizona 85257.

   FEDERAL COMMUNICATIONS COMMISSION

   Ricardo M. Durham

   Acting Chief

   Spectrum Enforcement Division

   Enforcement Bureau

   47 U.S.C. S: 301.

   47 C.F.R. S:S: 1.903(a), 95.3.

   47 C.F.R. S: 95.1(a).

   47 C.F.R. S: 95.3.

   47 C.F.R. S: 95.5(a).

   See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
   Enforcement Bureau, Federal Communications Commission, to Tracy D.
   Moorman, General Manager, Scottsdale Lexus (January 28, 2010).

   See Letter from Tracy D. Moorman, General Manager, Scottsdale Lexus, to
   Katherine Power, Attorney Advisor, Spectrum Enforcement Division,
   Enforcement Bureau, Federal Communications Commission (February 26, 2010)
   ("LOI Response").

   See LOI Response at 2

   Id. at 1-2.

   The Family Radio Service ("FRS") is a private, two-way, very
   short-distance voice and data communications service for facilitating
   family and group activities. See 47 C.F.R. S: 95.401(b). No license is
   required to operate FRS radios. 47 C.F.R. S: 95.191.

   LOI Response  at 1. These radios are certified under FCC Identification
   Number MMAGXT775.

   See Midland X-TRA Talk, GXT720/775 Series GMRS/FRS Radio Owner's Manual,
   p. 4.

   See LOI Response at 2.

   Id. See also E-mail from Tracy Moorman, General Manager, Scottsdale Lexus,
   to Larry Bockius, Jim DeBoy, Doug Payne, et al. (January 28, 2010, 45:50
   PM) (directing the immediate discontinuance of hand held "walkie/talkie"
   operation by staff on channels 1-7 and 15-36).

   47 U.S.C. S: 301; 47 C.F.R. S: 1.903(a).

   47 C.F.R. S: 95.3.

   47 C.F.R. S: 95.5(a). See also 47 C.F.R. S: 95.5(b), (c).

   Section 312(f)(1) of the Act defines "willful" as "the conscious and
   deliberate commission or omission of [any] act, irrespective of any intent
   to violate" the law. 47 U.S.C. S: 312(f)(1). The legislative history of
   section 312(f)(1) of the Act clarifies that this definition of willful
   applies to both sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765,
   97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
   term in the section 503(b) context. See Southern California Broadcasting
   Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991), recon.
   denied, Memorandum Opinion and Order,  7 FCC Rcd 3454 (1992) ("Southern
   California"); see also Telrite Corporation, Notice of Apparent Liability
   for Forfeiture, 23 FCC Rcd 7231, 7237 (2008); Regent USA, Notice of
   Apparent Liability for Forfeiture, 22 FCC Rcd 10520, 10523 (2007)
   (forfeiture paid); San Jose Navigation, Inc., Notice of Apparent Liability
   for Forfeiture, 21 FCC Rcd 2873 (2006), forfeiture ordered, Forfeiture
   Order, 22 FCC Rcd 1040 (2007), consent decree ordered, Order and Consent
   Decree, 26 FCC Rcd 1494 (2010).

   Section 312(f)(2) of the Act, which also applies to forfeitures assessed
   pursuant to section 503(b) of the Act, provides that "[t]he term
   `repeated,' ... 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). See Callais Cablevision, Inc., Notice of
   Apparent Liability for Forfeiture, 16 FCC Rcd 1359, 1362 (2001),
   forfeiture ordered, Forfeiture Order, 17 FCC Rcd 22626 (2002); Southern
   California, 6 FCC Rcd at 4388.

   We note that Scottsdale Lexus has stated in its LOI Response that it "did
   not consciously or deliberately violate any FCC rule or law" as it was
   purportedly unaware of the requirement to obtain a license. However, in
   the forfeiture context, "willful" does not require a finding that the rule
   violation was intentional or that the violator was aware that it was
   committing a rule violation. Rather, the term "willful" means that the
   violator knew that it was taking the action in question, irrespective of
   any intent to violate the Rules. See Southern California, 6 FCC Rcd at
   4387. See also Saga Communications of New England, L.L.C., Memorandum
   Opinion and Order, 24 FCC Rcd 3289, 3291 (Enf. Bur. 2010); Five Star
   Parking d/b/a Five Star Taxi Dispatch, Forfeiture Order, 23 FCC Rcd 2649,
   2651 (Enf. Bur., Spectrum Enf. Div. 2008).

   47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).

   47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).

   See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589,
   7591 (2002).

   47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
   paragraph (b)(4): Section II. Adjustment Criteria for Section 503
   Forfeitures.

   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, 17113, recon. denied, 15 FCC Rcd 303 (1999) ("Forfeiture
   Policy Statement"); 47 C.F.R. S: 1.80(b)(4), Note to paragraph (b)(4):
   Section I. Base Amounts for Section 503 Forfeitures.

   See 47 C.F.R. S: 180(b)(4) Note to Paragraph (b)(4); Section II.
   Adjustment Criteria for Section 503 Forfeitures , Downward Adjustment
   (minor violation; good faith or voluntary disclosure; history of overall
   compliance; and inability to pay).

   See Profit Enterprises, Inc., 8 FCC Rcd 2846, 2846 (1993) (denying the
   mitigation claim of a manufacturer/distributor who thought that the
   equipment certification and marketing requirements were inapplicable,
   stating that its "prior knowledge or understanding of the law is
   unnecessary to a determination of whether a violation existed ...
   ignorance of the law is [not] a mitigating factor"); Bureau D'Electronique
   Appliquee, Inc., Forfeiture Order, 20 FCC Rcd 17893, 17896-7 (Enf. Bur.,
   Spectrum Enf. Div. 2005) (denying the mitigation claim of a
   manufacturer/distributor who admitted that "lack of actual knowledge" may
   not negate a finding of willfulness, but that such factors[s] warranted a
   downward adjustment of the proposed forfeiture amount).

   See Liberty Cable Co., Memorandum Opinion and Order, 16 FCC Rcd 16105,
   16113 (2001); Pacific Western Broadcasters, Inc., Memorandum Opinion and
   Order, 50 FCC 2d 819, 819 (1975); AGM-Nevada, LLC, Forfeiture Order, 18
   FCC Rcd 1476, 1478-9 (Enf. Bur. 2003); Bureau D'Electronique Appliquee,
   Inc., 20 FCC Rcd at 17898.

   47 C.F.R. S: 1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment
   Criteria for Section 503 Forfeitures.

   See Odino Joseph, Forfeiture Order, 18 FCC Rcd. 16522 (Enf. Bur. 2003)
   (finding that a radio broadcaster who is not a Commission licensee, could
   not have "any history with the Commission upon which a history of overall
   compliance could be based," and therefore was not entitled to a downward
   adjustment).

   While section 503(b)(6) of the Act bars the Commission from proposing a
   forfeiture for violations that occurred more than a year prior to the
   issuance of an NAL, we may consider the fact that Scottsdale Lexus's
   misconduct occurred over a period of almost a year (between April 2009 and
   January 2010) to place "the violations in context, thus establishing the
   licensee's degree of culpability and the continuing nature of the
   violations." Roadrunner Transportation Inc., Forfeiture Order, 15 FCC Rcd
   9669, 9671-72 (2000).  The forfeiture amount we propose herein relates
   only to Scottsdale Lexus's apparent violations that have occurred within
   the past year.

   47 U.S.C. S: 503(b).

   47 C.F.R. S:S: 0.111, 0.311 and 1.80.

   47 C.F.R. S: 1.80.

   47 C.F.R. S:S: 1.80(f)(3) and 1.16.

   (Continued from previous page)

   (continued....)

                  Federal Communications Commission DA 11-157

   6

                  Federal Communications Commission DA 11-157