Federal Communications Commission DA 07-4099 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Red Rose International d/b/a Red Rose International LTD d/b/a Red Rose Internacional Limited d/b/a Red Rose USA, Inc. d/b/a Red Rose Sales and Marketing Corporation d/b/a Blue Jay, Inc. d/b/a Blue Jay Sales Corporation d/b/a Nationwide Chemical Corporation Apparent Liability for Forfeiture ) ) ) ) ) ) ) ) ) ) ) ) ) ) File No. EB-06-TC-113 NAL/Acct. No. 200732170068 FRN: 0016773558 NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: September 28, 2007 Released: September 28, 2007 By the Chief, Enforcement Bureau: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture (“NAL”)1, we find that Red Rose International (“Red Rose”)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 two unsolicited advertisements to the telephone facsimile machine of at least two 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 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). 2 According to publicly available information, Red Rose is also doing business as Red Rose International, Red Rose International LTD, Red Rose International Limited, Red Rose USA, Inc., Red Rose Sales and Marketing Corporation, Blue Jay, Inc., Blue Jay Sales Corporation, and Nationwide Chemical Corporation. Therefore, all references in this NAL to Red Rose encompass Red Rose International, as well as Red Rose International LTD, Red Rose Internacional Limited, Red Rose USA, Inc., Red Rose Sales and Marketing Corporation, Blue Jay, Inc., Blue Jay Sales Corporation, and Nationwide Chemical Corporation. Red Rose has offices at 4550 Ziebart Place #B, Las Vegas, NV 89103, 4620 S. Valley View Blvd., Las Vegas, NV 89103, 4057 Delos Drive, Las Vegas, NV 89103, and 9850 S. Maryland Pkwy, Ste. A5-102, Las Vegas, NV 89123. Neil S. Luxenberg and Neil Law are listed as contact persons for Red Rose. Accordingly, all references in this NAL to Red Rose also encompass the foregoing individuals and all other principals and officers of this entity, as well as the corporate entity itself. Federal Communications Commission DA 07-4099 2 consumers.3 Based on the facts and circumstances surrounding the apparent violation, we find that Red Rose is apparently liable for a forfeiture in the amount of $20,000. 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.”4 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.”5 Under the Commission’s Rules, an “established business relationship”6 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.7 3. On June 12, 2006, in response to one or more consumer complaints alleging that Red Rose had faxed unsolicited advertisements, the Commission staff issued a citation8 to Red Rose, pursuant to section 503(b)(5) of the Act.9 The staff cited Red Rose for using a telephone facsimile machine, computer, or other device, to send unsolicited advertisements for business funding and chemical products, namely Sub Zero Liquid Ice Melt, to a telephone facsimile machine, in violation of section 227 of the Act and the Commission’s related rules and orders. The citation, which the staff served by certified mail, return receipt requested, warned Red Rose 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.10 The citation informed Red Rose 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. Red Rose did not request an interview or otherwise respond to the 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 and Third Order on Reconsideration, 21 FCC Rcd 3787 (2006). 4 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3). 5 47 U.S.C. §227(a)(4); 47 C.F.R. §64.1200 (f)(13). 6 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. § 64.1200(f)(5). 7 See 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64 (a)(3)(i), (ii). 8 Citation from Kurt A. Schroeder, Deputy Chief, Telecommunications Consumers Division, Enforcement Bureau, File No. EB-06-TC-113 issued to Red Rose on June 12, 2006. 9 See 47 U.S.C. § 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). 10 Commission staff mailed the citation to 4057 Delos Drive, Las Vegas, NV 89103-2537, 4550 Ziebart Place, Las Vegas, NV 89103, P.O. Box 70477, Las Vegas, NV 89170-0477, and 9850 S. Maryland Parkway, Suite A5-102, Las Vegas, NV 89123-7146. See n.2, supra. Federal Communications Commission DA 07-4099 3 citation.11 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 Red Rose continued to engage in such conduct after receiving the citation.12 We base our action here specifically on the complaints filed by two consumers establishing that Red Rose continued to send two unsolicited advertisements to telephone facsimile machines after the date of the citation.13 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.14 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.”15 III. DISCUSSION A. Violations of the Commission’s Rules Restricting Unsolicited Facsimile Advertisements 6. We find that Red Rose 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 two unsolicited advertisements to the two consumers identified in the Appendix. This NAL is based on evidence that the consumers received unsolicited fax advertisements from Red Rose after the Commission’s citation. The facsimile transmissions advertise business funding and chemical products, namely Sub Zero Liquid Ice Melt. Further, according to the complaints, the consumers neither had an established business relationship with Red Rose nor gave Red Rose permission to send the facsimile transmissions.16 The faxes at issue here therefore fall within the definition of an “unsolicited 11 Following the issuance of the citation, the Commission continued to receive complaints from multiple consumers alleging that Red Rose faxed unsolicited advertisements to them. These complaints, received after the Commission’s citation, resulted in the issuance of a Notice of Apparent Liability for Forfeiture against Red Rose on August 1, 2007 in the amount of $130,500. Red Rose International, Notice of Apparent Liability for Forfeiture, FCC-07-134 (August 1, 2007). 12 See Appendix for a listing of the consumer complaints against Red Rose requesting Commission action. 13 We note that evidence of additional instances of unlawful conduct by Red Rose may form the basis of subsequent enforcement action. 14 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). 15 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, 17100-01 para. 27 (1997) (Forfeiture Policy Statement), recon. denied, 15 FCC Rcd 303 (1999). 16 See, e.g., complaint dated April 12, 2007, from Howard J. Gordon (stating that “None of these faxes is from a company we have any business relationship with, nor have any been requested. ”); complaint dated April 18, 2007 , from Robert Caruso (stating that he has never purchased anything from the company being advertised in the fax or (continued....) Federal Communications Commission DA 07-4099 4 advertisement.”17 Based on the entire record, including the consumer complaints, we conclude that Red Rose apparently violated section 227 of the Act and the Commission’s related rules and orders by sending two unsolicited advertisements to two consumers’ facsimile machines. B. Proposed Forfeiture 7. We find that Red Rose is apparently liable for a forfeiture in the amount of $20,000. 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.18 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.19 Here, two consumers specifically requested that Red Rose cease sending facsimiles. Notwithstanding these requests, Red Rose sent two additional facsimiles to these consumers. We therefore apply the $10,000 amount to each of the two apparent violations. Thus, a total forfeiture of $20,000 is proposed. Red Rose 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.20 IV. CONCLUSION AND ORDERING CLAUSES 8. We have determined that Red Rose International 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 two unsolicited advertisements to the two consumers identified in the Appendix. We have further determined that Red Rose International is apparently liable for a forfeiture in the amount of $20,000. 9. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the Act, 47 U.S.C. § 503(b), and section 1.80 of the Rules, 47 C.F.R. § 1.80, and under the authority delegated by sections 0.111 and 0.311 of the Commission’s rules, 47 C.F.R. §§ 0.111, 0.311, that Red Rose International is hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the amount of $20,000 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. 10. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the Commission’s (...continued from previous page) made an inquiry or application to the company or given consent for the company to send the fax). The complainants involved in this action are listed in the Appendix below. 17 See 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(13) (definition previously at § 64.1200(f)(10)). 18 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). 19 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). 20 See 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3). Federal Communications Commission DA 07-4099 5 rules,21 within thirty (30) days of the release date of this Notice of Apparent Liability for Forfeiture, Red Rose International 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 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, PA 15251. Payment by overnight mail may be sent to Mellon Client Service Center, 500 Ross Street, Room 670, Pittsburgh, PA 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. 200732170068. 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. 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, SW, Washington, DC 20554.22 15. 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 Red Rose International, Attention: Neil S. Luxenberg and/or Neil Law at 4550 Ziebart Place #B, Las Vegas, NV 89103, 4620 S. Valley View Blvd., Las Vegas, NV 89103, 4057 Delos Drive, Las Vegas, NV 89103, and 9850 S. Maryland Pkwy, Ste. A5-102, Las Vegas, NV 89123. FEDERAL COMMUNICATIONS COMMISSION Kris Anne Monteith Chief, Enforcement Bureau 21 47 C.F.R. § 1.80. 22 47 C.F.R. § 1.1914. Federal Communications Commission DA 07-4099 6 APPENDIX Complainant received facsimile solicitations after requesting no more be sent Violation Date(s) Robert Caruso 4/9/07 Howard Gordon 10/31/06