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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
)
Carolina Liquidators, Inc. ) File No. EB-00-TC-
010
)
Apparent Liability for Forfeiture ) NAL/Acct. No.
X3217-007
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: July 21, 2000 Released: July 25, 2000
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture
(NAL), we find that Carolina Liquidators, Inc. (Carolina
Liquidators)1 apparently willfully or repeatedly violated
section 227 of the Communications Act of 1934, as amended
(Act), and the Commission's rules and orders, by sending
unsolicited advertisements to telephone facsimile machines on
34 separate occasions.2 Based on the facts and circumstances
surrounding these apparent violations, we find that Carolina
Liquidators is apparently liable for forfeiture in the amount
of $230,000.3
II. BACKGROUND
2. On July 12, 1999, in response to several consumer
letters indicating that Carolina Liquidators had faxed
unsolicited advertisements to consumers' telephone facsimile
machines, the Commission staff issued a citation to Carolina
Liquidators, pursuant to section 503(b)(5) of the Act.4 The
staff cited Carolina Liquidators for allegedly using a
telephone facsimile machine, computer, or other device, to send
unsolicited advertisements to another telephone facsimile
machine, in violation of section 227 of the Act and the
Commission's rules and orders. The unsolicited advertisements
offered a ``Furniture Auction'' and ``Entire Showroom Up For
Auction.'' The citation, which the staff served by certified
mail, return receipt requested, informed Carolina Liquidators
that subsequent violations could result in the imposition of
monetary forfeitures of up to $11,000 per violation and
included copies of consumer letters that formed the basis of
the citation.5 The citation informed Carolina Liquidators that
within 21 days of the date of the citation, it could either
request a personal interview at the nearest Commission field
office, or could provide a written statement responding to the
citation. The Commission received a signed return receipt
evidencing Carolina Liquidators' receipt of the citation on
July 16, 1999. Carolina Liquidators did not respond to the
citation.
3. Despite the citation's warning that subsequent
violations could result in the imposition of monetary
forfeitures, the Commission received several consumer letters
stating that Carolina Liquidators had continued to engage in
such conduct after receiving the citation.6 We base our action
here on this information from consumers alleging that Carolina
Liquidators sent unsolicited advertisements on or after July
16, 1999.7 Although not the basis for our action, we note that
the Commission itself received several such facsimiles at its
Dallas Field Office.8
4. The VarTec Telecom Letter. Melissa A. Smith, Esq.,
Attorney for VarTec Telecom, Inc. (VarTec), states that
Carolina Liquidators faxed 14 unsolicited advertisements to
VarTec from September 29, 1999 to April 21, 2000.9 Ms. Smith
states that VarTec sent Carolina Liquidators several letters
via regular mail and certified mail requesting that it refrain
from sending additional unsolicited advertisements to VarTec.
Ms. Smith states that VarTec sent letters to Carolina
Liquidators via regular mail dated August 4, 1998, March 3,
1999, and December 14, 1999 and via certified mail dated
February 18, 1999 and November 30, 1999. Ms. Smith further
states that VarTec did not receive a response to any of its
letters but received a signed return receipt evidencing
Carolina Liquidators' receipt of the February 18, 1999
letter.10 Ms. Smith states that despite these requests,
Carolina Liquidators continued to fax unsolicited
advertisements to VarTec.11 Ms. Smith states that neither she
nor anyone else at VarTec ever gave Carolina Liquidators
permission or an invitation to send these advertisements, and
that VarTec does not have an established business relationship
with Carolina Liquidators.12
5. The Mica Calfee Letter. On October 1, 1999, Mr. Mica
Calfee filed a letter requesting Commission action and stating
that Carolina Liquidators sent an unsolicited advertisement to
his facsimile machine.13 Mr. Calfee states that after
receiving the unsolicited facsimile on October 1, 1999, he
contacted Carolina Liquidators on several occasions and sent a
registered letter to Carolina Liquidators informing the company
that its actions violated the Telephone Consumer Protection Act
and the Commission's rules. Mr. Calfee further states that he
advised Carolina Liquidators that he planned to seek legal
recourse against the company. Mr. Calfee states that he did
not receive a response to his communications. Mr. Calfee
states that he did not give Carolina Liquidators permission or
an invitation to send advertisements to his facsimile machine,
and that he does not have a prior business relationship with
Carolina Liquidators.
6. The Alpha Letter. Mr. Morris Horn, Director of Field
Support, Alpha National Technologies Services, Inc. (Alpha)
states that Carolina Liquidators sent 3 unsolicited
advertisements to Alpha's facsimile machine on September 2,
1999, September 15, 1999 and October 1, 1999. Mr. Horn states
that he contacted the Texas Office of the Attorney General and
requested action against Carolina Liquidators. The Texas
Office of the Attorney General sent Alpha's request to the
Texas Public Utility Commission, which forwarded the request to
the FCC. Mr. Horn states that neither he nor anyone else at
Alpha authorized Carolina Liquidators to send the
advertisements and that Alpha does not have an established
business relationship with Carolina Liquidators.
7. The other faxes. The remaining consumer letters
supporting this NAL are factually similar to the allegations in
the consumer letters described above.14 In each case, the
consumer states that Carolina Liquidators used a telephone
facsimile machine to send an unsolicited advertisement to the
consumer's telephone facsimile machine. In each case, the
consumer states that Carolina Liquidators (a) was not
authorized to send the unsolicited facsimile to the consumer's
fax machine, and (b) does not have an established business
relationship with the consumer.
III. DISCUSSION
A. Violations Evidenced in the Letters.
8. Section 227(b)(1)(C) of the Act prohibits any person
from using ``a telephone facsimile machine, computer, or other
device to send an unsolicited advertisement to a telephone
facsimile machine.''15 An unsolicited advertisement is defined
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.''16 The Commission has determined,
however, that an established business relationship demonstrates
consent to receive telephone facsimile advertisement
transmissions.17 The mere distribution or publication of a
telephone facsimile number does not confer invitation or
permission to transmit advertisements to a particular telephone
facsimile machine.18
9. As discussed above, each facsimile transmission upon
which this NAL is based offers access to the same commercial
service, a ``Furniture Auction.'' We find that these
facsimiles clearly fall within the definition of an
``advertisement.'' Additionally, Carolina Liquidators appears
to have sent each facsimile transmission without the prior
express invitation or permission of the recipient. The record
indicates that none of the consumers at issue had an
established business relationship with Carolina Liquidators.
The record further indicates that Carolina Liquidators
continued to send facsimiles to one consumer who specifically
requested that Carolina Liquidators refrain from sending
additional unsolicited facsimiles. Such evidence, along with
the consumers' declarations, demonstrates that Carolina
Liquidators did not have any prior express permission or
invitation to send the facsimile transmissions.
B. Forfeiture Amount.
10. We conclude that Carolina Liquidators apparently
willfully or repeatedly violated the Act and the Commission's
rules and orders by using a telephone facsimile machine to send
unsolicited advertisements to other telephone facsimile
machines. Carolina Liquidators 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 Carolina Liquidators
for its apparent willful or repeated violations of section 227
of the Act and of the Commission's rules and orders regarding
the faxing of unsolicited advertisements.
11. 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.19
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.''20
12. 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, we have previously considered
$4,500 per unsolicited fax advertisement as an appropriate base
amount.21 We apply that base amount to each of 20 of the
apparent violations. We find that the other 14 violations
justify a higher proposed forfeiture because VarTec
specifically notified Carolina Liquidators to cease its
unlawful conduct and refrain from faxing additional unsolicited
advertisements, but Carolina Liquidators willfully and
repeatedly continued to violate section 227 of the Act and the
Commission's rules and orders. We believe that assessing a
higher forfeiture amount is warranted based on the nature and
gravity of the violations and the continued need to ensure
compliance with section 227 of the Act and the Commission's
rules and orders.22 For those 14 violations, we find Carolina
Liquidators apparently liable in the amount of $10,000 for each
such violation.23 This results in a proposed total forfeiture
of $230,000. Carolina Liquidators 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
13. We have determined that Carolina Liquidators
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 the 34 unsolicited
advertisements identified above. We have further determined
that Carolina Liquidators is apparently liable for forfeitures
in the amount of $230,000.
14. Accordingly, IT IS ORDERED, pursuant to section
503(b)(5) of the Act, as amended, 47 U.S.C. § 503(b)(5), and
section 1.80 of the Commission's rules, 47 C.F.R. § 1.80, that
Carolina Liquidators, Inc. IS HEREBY NOTIFIED of an Apparent
Liability for Forfeiture in the amount of $230,000 for willful
or repeated violations of section 227(b)(1)(C) of the Act, 47
U.S.C. § 227(b)(1)(C), sections 64.1200(a)(3) and 64.1200(f)(5)
of the Commission's rules, 47 C.F.R. §§ 64.1200(a)(3),
64.1200(f)(5), and the related orders described in the
paragraphs above.
15. IT IS FURTHER ORDERED, pursuant to section 1.80 of
the Commission's rules, 47 C.F.R. § 1.80, that within thirty
(30) days of the release of this Notice, Carolina Liquidators,
Inc. SHALL PAY the full amount of the proposed forfeiture25 OR
SHALL FILE a response showing why the proposed forfeiture
should not be imposed or should be reduced.
16. IT IS FURTHER ORDERED that a copy of this Notice of
Apparent Liability for Forfeiture SHALL BE SENT by certified
mail to Cory Pierce, Owner, Carolina Liquidators, Inc., 2722
West Irving Blvd, Irving, Texas 75061.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
Se-
cretary
_________________________
1 Carolina Liquidators, Inc. is headquartered at 2722 West
Irving Blvd., Irving, Texas 75061.
According to Dun & Bradstreet Business Information Report,
Carolina Liquidators began operations in 1997. Carolina
Liquidators is a closely held corporation whose president, Mr.
Cory Pierce, owns 100% of the capital stock. See Dun &
Bradstreet Business Information Report, May 16, 2000.
2 See 47 U.S.C. § 227; 47 C.F.R. § 64.1200(a)(3); see also
Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Report and Order, 7 FCC Rcd 8752, 8779,
¶ 54 (1995) (TCPA Report and Order) (stating that Section 227
of the Act prohibits the use of telephone facsimile machines to
send unsolicited advertisements).
3 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 (A) such person 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 resident; and (C) subsequently engages in
conduct of the type described in the citation).
4 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).
5 The following consumer letters requesting Commission
action were attached to the citation: (1) Julian E. Armstrong,
Request for Commission Action (April 27, 1999) (stating
facsimiles were received on a weekly basis from Carolina
Liquidators); (2) Max A. Robertson, Request for Commission
Action (May 24, 1999) (stating that an unsolicited
advertisement was received via facsimile from Carolina
Liquidators); (3) Melissa A. Smith, Litigation Counsel, VarTec
Telecom., Request for Commission Action ( March 8, 1999)
(stating that VarTec Telecom. received unsolicited
advertisements via facsimile from Carolina Liquidators ); and
(4) Will Harris, A.O. Smith Water Products Company, Request for
Commission Action (April 26, 1999) (stating that the company
received several unsolicited advertisements via facsimile from
Carolina Liquidators).
6 See (1) Melissa A. Smith, Esq., Attorney for VarTec
Telecom, Inc. (VarTec), Request for Commission Action (October
12, 1999 and December 15, 1999) (stating that VarTec received
14 unsolicited facsimile advertisements from Carolina
Liquidators); (2) Maher Maso, Vice President of Maso, Inc.
(Maso), Request for Commission Action (December 10, 1999)
(stating that Maso received 4 unsolicited advertisements by fax
from Carolina Liquidators on December 9, 1999, April 7, 2000 at
approximately 7:03 a.m., April 7, 2000 at approximately 1:23
p.m. and May 19, 2000 ); (3) Mica Calfee, Request for
Commission Action (October 1, 1999) (stating that Carolina
Liquidators used a telephone facsimile machine to send 1
unsolicited advertisement to his fax machine on October 1,
1999); (4) Morris Horn, Director of Field Support, Alpha
National Technologies Services, Inc. (Alpha) via Texas Public
Utility Commission, Request for Commission Action (August 3,
1999) (stating that Carolina Liquidators faxed 3 unsolicited
advertisements to Alpha's fax machine on September 2, 1999,
September 15, 1999 and October 1, 1999); (5) David J. Nowacki,
Request for Commission Action (February 14, 1999) (stating that
he received 1 unsolicited advertisement by facsimile from
Carolina Liquidators on February 8, 1999); (6) Orissa
Harrington via the Texas Attorney General's Office, Request for
Commission Action (stating that she received 2 unsolicited
advertisements from Carolina Liquidators on October 19, 1999
and October 28, 1999); (7) Stuart Weibel, Request for
Commission Action (December 31, 1999) (stating that he received
1 unsolicited advertisement via facsimile from Carolina
Liquidators on December 7, 1999); (8) Mary A. Pecan, Request
for Commission Action (May 26, 2000) (stating that she received
5 unsolicited advertisement via facsimile from Carolina
Liquidators on October 6, 1999, April 6, 2000, May 5, 2000, May
19, 2000, and June 16, 2000); (9) David Cathey, Request for
Commission Action (March 15, 2000) (stating that he received 2
unsolicited advertisements from Carolina Liquidators on
February 24, 2000 and on March 3, 2000); and (10) Thomas M.
Baird, Sr., Owner, Planning Services, Request for Commission
Action (April 20, 2000) (stating that he received 1 unsolicited
advertisement via facsimile from Carolina Liquidators on April
12, 1999).
7 We note that evidence of additional instances of unlawful
conduct by Carolina Liquidators may form the basis of
subsequent enforcement action.
8 Federal Communications Commission, Dallas Field Office
(Carolina Liquidators faxed 22 unsolicited advertisements to
the Commission's fax machine on March 22, 2000, March 8, 2000,
February 16, 2000, February 9, 2000, January 28, 2000, January
18, 2000, January 6, 2000, December 21, 1999, December 10,
1999, November 22, 1999, November 18, 1999, October 29, 1999,
October 15, 1999, October 14, 1999, October 6, 1999, October 5,
1999, September 29, 1999, September 24, 1999, September 15,
1999, August 25, 1999 and August 10, 1999).
9 See Declaration of Melissa A. Smith, Esq., Attorney,
VarTec Telecom. Ms. Smith states that VarTec received
unsolicited advertisements via facsimile from Carolina
Liquidators on the following dates: (1) September 29, 1999; (2)
October 6, 1999; (3) November 23, 1999 (three unsolicited
advertisements); (4) December 8, 1999; (5) December 14, 1999;
(6) December 29, 1999; (7) January 13, 2000; (8) February 25,
2000; (9) March 22, 2000 (three unsolicited advertisements);
and (10) April 21, 2000.
10 Id.
11 Id.
12 Id.
13 See Declaration of Mica Calfee.
14 See supra note 6 (listing the consumer letters that form
the basis for this NAL).
15 47 U.S.C. § 227(b)(1)(C). Section 227 defines a telephone
facsimile machine as ``equipment which has the capacity (A) to
transcribe text or images, or both, from paper into an
electronic signal and to transmit that signal over a regular
telephone line, or (B) to transcribe text or images (or both)
from an electronic signal received over a regular telephone
line onto paper.'' Id. § 227(a)(2). This blanket prohibition
applies to all unsolicited advertisements transmitted by
telephone facsimile machines. The Act does not permit the
sending of unsolicited advertisements by facsimile to either
business or residential telephone facsimile machines.
16 47 C.F.R. § 64.1200(f)(5).
17 See Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, Memorandum Opinion and Order,
10 FCC Rcd 12391, 12408, ¶ 37 (1995) (TCPA Memorandum Opinion
and Order).
18 Id.
19 Section 503(b)(2)(C) provides for forfeitures up to
$10,000 for each violation by cases not covered by
subparagraphs (A) or (B), which address forfeitures for
violations by licensees and common carriers, among others. See
47 U.S.C. § 503(b). The Commission amended its rules by adding
a new subsection to its monetary forfeiture provisions that
incorporates by reference the inflation adjustment requirements
contained in the Debt Collection Improvement Act of 1996, Pub.
L. 104-134, Sec. 31001, 110 Stat. 1321, enacted on April 26,
1996. Thus, the maximum statutory forfeiture pursuant to
section 503(b)(2)(C) increased from $10,000 to $11,000. See
Amendment of Section 1.80 of the Commission's Rules, 12 FCC Rcd
1038 (1997).
20 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, ¶ 27 (1997), recon. denied, 15 FCC Rcd
303 (1999) (Forfeiture Policy Statement).
21 See Get-Aways, Inc., Notice of Apparent Liability For
Forfeiture, 15 FCC Rcd. 1805 (1999); Get-Aways, Inc, Forfeiture
Order, FCC 00-67 (released March 2, 2000). See also Tri-Star
Marketing, Inc., Notice of Apparent Liability For Forfeiture,
FCC 00- 219 (released June 22, 2000).
22 See Tri-Star Marketing, Inc., Notice of Apparent Liability
For Forfeiture, FCC 00- 219 (released June 22, 2000).
23 Id.
24 See 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).
25 The forfeiture amount should be paid by check or money
order drawn to the order of the Federal Communications
Commission. Reference should be made on Carolina Liquidators,
Inc.'s check or money order to ``NAL/Acct/ No. X3217-007.''
Such remittances must be mailed to Forfeiture Collection
Section, Finance Branch, Federal Communications Commission,
P.O. Box 73482, Chicago, Illinois 60673-7482.