Before the

FEDERAL COMMUNICATIONS COMMISSION

# Washington, D.C. 20554 {#washington-d.c.-20554 .unnumbered}

In the Matter of )

)

21^st^ Century Fax(es) Ltd. ) File No. EB-00-TC-174

a.k.a. 20^th^ Century Fax (es) )

) NAL/Acct. No. X3217-009

Apparent Liability for Forfeiture ) FRN: 0006-0863-83

## FORFEITURE ORDER {#forfeiture-order .unnumbered}

Adopted: January 9, 2002 Released: January 11, 2002

By the Commission:

## INTRODUCTION

1.  In this Order, we issue a monetary forfeiture in the amount of
    \$1,107,500 against 21st Century Fax(es) Limited (21st Century)[^1]
    for willfully or repeatedly violating section 227 of the
    Communications Act of 1934, as amended (the Act), and the
    Commission's rules and orders.[^2] 21st Century sent unsolicited
    advertisements to telephone facsimile machines on 152 separate
    occasions.

## BACKGROUND

2.  On March 8, 2000, the Commission staff issued a citation to 21st
    Century, pursuant to section 503(b)(5) of the Act.[^3] The staff
    cited 21st Century 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(b)(1)(C) of the Act and the Commission's rules and
    orders. Despite the citation's warning that subsequent violations
    could result in the imposition of monetary forfeitures, the
    Commission received several consumer letters stating that 21st
    Century had continued to engage in such conduct after receiving the
    citation. On December 7, 2000 the Commission released a Notice of
    Apparent Liability for Forfeiture against 21st Century that proposed
    a forfeiture amount of \$1,107,500 for 152 separate violations.[^4]
    Commission rules provide that a cited party must either respond to
    the *NAL* or pay the full amount of the proposed forfeiture within
    30 days of issuance of an *NAL*. [^5] On December 14, 2000, 21^st^
    Century Fax responded to the *NAL*.[^6]

#### DISCUSSION

3.  The Commission may impose a forfeiture penalty upon any person who
    it determines, by a preponderance of the evidence, to have willfully
    or repeatedly failed to comply with any of the provisions of the
    Act, or any rule or order issued by the Commission under the
    Act.[^7] In its Response, 21^st^ Century argues: (1) that it is not
    subject to the Telephone Consumer Protection Act (TCPA) because its
    faxes are sent from the United Kingdom (UK) or, alternatively,
    because the company itself is located in the UK; and (2) that the
    TCPA violates the First Amendment to the United States Constitution.
    We have reviewed and investigated the information provided by 21^st^
    Century to determine whether a forfeiture penalty is warranted by a
    preponderance of the evidence. As discussed below, we reject 21^st^
    Century's arguments and issue a monetary forfeiture in the amount of
    \$1,107,500 against the company.

### Applicability of the TCPA to Foreign Entities and Faxes Sent from Foreign Locations 

4.  The TCPA prohibits "any person within the United States" from
    sending unsolicited fax advertisements.[^8] 21^st^ Century argues
    that it has not violated the TCPA both because its faxes originate
    in the UK and because the TCPA does not apply to faxes that
    originate outside the United States.[^9] 21^st^ Century also
    suggests that even if its faxes were sent from the United States, it
    is not liable under the TCPA because it is foreign-owned,
    registered, and located.[^10] As proof of its assertion that its
    faxes are sent from overseas, 21^st^ Century provided long distance
    telephone invoices and telephone bills on CD-ROMs dating from July
    through September 2000. 21^st^ Century states that this evidence
    shows that its fax calls originate in the UK.[^11] 21^st^ Century
    points to language in the TCPA that prohibits "any person within the
    United States" from sending unsolicited facsimile advertisements and
    claims that the Commission may not enforce the TCPA and issue a
    monetary forfeiture against the company because its faxes were not
    sent by a "person within the United States."[^12]

5.  We disagree with 21^st^ Century's arguments. The TCPA provides that

> It shall be unlawful for any person within the United States
>
> . . . to use any telephone facsimile machine, computer, or other
> device to send an unsolicited advertisement to a telephone facsimile
> machine."[^13]

We believe that this statutory language covers faxes sent to the United
States from foreign points so long as the company has a presence within
the United States. In this regard, the phrase "within the United States"
modifies "any person"[^14] and thus specifies the location of the
"person" that engages in prohibited faxing rather than the originating
and terminating points of the faxes themselves. Congress could have
written the statute to say that the device used to send the fax must be
located in the United States, as 21^st^ Century would read the language,
but it did not. Rather, consistent with the private right of action
permitted in state court to enforce the statute, 47 U.S.C. § 227(b)(3),
Congress focused on the violator having a presence in the United States
such that the state courts would have personal jurisdiction.
Interpreting the statute to cover international faxes if the person
doing the faxing has a presence in the United States is consistent with
the broad jurisdictional scope of the Communications Act which was
adopted for the purpose of regulating "all interstate and foreign
communication by wire or radio . . . ."[^15] Accordingly, we conclude
that the TCPA prohibits the faxing of unsolicited advertisements either
to or from the United States by any entity that is located "within the
United States." Moreover, the term "person" in Section 227(b)(1)
includes the individual who actually performs the faxing as well as the
corporate entity on whose behalf he or she is acting.[^16]

6.  Contrary to 21^st^ Century's suggestion, its status as a
    foreign-registered and controlled company with its principal place
    of business in the UK does not preclude a finding that the company
    also is "within the United States." The U.S. Supreme Court has
    determined that certain minimum contacts and activities that are
    systematic and continuous establish an entity's presence within a
    locality for jurisdictional purposes.[^17] 21^st^ Century admits
    that it has agents, employees, and offices in the United States and
    that it regularly faxes advertisements or "polls" to United States
    consumers.[^18] Consumers who choose to respond to 21 Century's
    "polls" lodge their responses by calling interstate 900 numbers
    operated by 21^st^ Century.[^19] In addition, 21^st^ Century's faxes
    offer recipients two means to remove their fax numbers from the
    company's distribution list:[^20] a New York City telephone number
    and an 800 number that is operated by ICN Corporation, which is
    located in Delray Beach, Florida.[^21] For over two years, 21^st^
    Century has solicited business by sending faxes throughout the
    United States. Its conduct within the United States makes it
    foreseeable that it may be subject to suits and enforcement actions
    under the TCPA. 21^st^ Century has continuous contacts with United
    States consumers, and these contacts, along with its staff,
    establish its presence within the country. As such, 21^st^ Century
    is "within the United States," and Section 227 of the Act is
    applicable to it.

B. First Amendment Issue

7.  21^st^ Century also contends that the TCPA violates the free speech
    guarantee of the First Amendment to the United States
    Constitution.[^22] The company argues that unsolicited fax
    advertisements are less intrusive than other forms of advertisements
    such as telephone calls and direct mail and that the cost of
    receiving an unsolicited fax advertisement should not be placed
    above First Amendment rights.[^23] 21^st^ Century Fax also states
    that unsolicited fax advertisements produce more complaints because
    of the cost to the recipient, which 21^st^ Century estimates at 2
    cents per fax. The company states that the "TCPA legislation as
    regards the advertising fax is denying the majority what they want
    and giving in to the stingy minority purely because they shout
    louder than the majority over this matter of 2 cents."[^24]

8.  Federal courts have previously considered similar arguments. The
    Court of Appeals for the Ninth Circuit, for example, has determined
    that the TCPA does not violate the First Amendment's protection of
    commercial speech.[^25] Moreover, administrative agencies are to
    presume that the statutes that Congress directs them to implement
    are constitutional.[^26] Accordingly, we reject 21^st^ Century's
    arguments in this regard.

####  CONCLUSION

9.  After reviewing the information filed by 21^st^ Century Fax in its
    Response, we find that it has failed to identify facts or
    circumstances that persuade us that that there is any basis for
    reducing or rescinding the forfeiture proposed in the *NAL*. We
    therefore issue a monetary forfeiture in the amount of \$1,107,500
    against 21st Century Fax(es) Limited for willfully or repeatedly
    violating section 227(b)(1)(C) of the Act and the Commission's rules
    and orders.[^27]

#### V. ORDERING CLAUSES {#v.-ordering-clauses .unnumbered}

10. 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 21st Century Fax(es)
    Limited IS LIABLE FOR A MONETARY FORFEITURE in the amount of
    \$1,107,500 for willful or repeated violations of section
    227(b)(1)(C) of the Act, 47 U.S.C. § 227(b)(1)(C), section
    64.1200(a)(3) of the Commission's rules, 47 C.F.R. § 64.1200(a)(3),
    and the related orders.

11. Payment of the forfeiture shall be made in the manner provided for
    in Section 1.80 of the Commission\'s Rules within 30 days of the
    release of this Order.[^28] If the forfeiture is not paid within the
    period specified, the case may be referred to the Department of
    Justice for collection pursuant to section 504(a) of the Act.[^29]
    Payment may be made to the Commission\'s Credit and Debt Management
    Center by mailing a check or similar instrument, payable to the
    order of the Federal Communications Commission, to the Federal
    Communications Commission, P.O. Box 73482, Chicago, Illinois
    60673-7482. The payment MUST INCLUDE the FCC Registration Number
    (FRN) referenced above, and also should note the NAL/Acct. No.
    referenced above.

12. IT IS FURTHER ORDERED that a copy of this Forfeiture Order SHALL BE
    SENT by certified mail to Gordon Ritchie, 21st Century Fax(es)
    Limited, 20 Bourne Court, Southend Road, Woodford Green, Essex, IG8
    8HD.

> FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

[^1]: 21^st^ Century Fax (es) Ltd. lists several addresses on its faxes
    including 532 LaGuardia Place, PMB 201, New York, New York 10012 and
    331 West 57^th^ Street, New York, NY 10019. The company, through its
    British solicitors, has acknowledged having staff at 138 West
    Houston Street, New York, NY 10012. *See* Letter from Magrath & Co.,
    Solicitors, to Kurt A. Schroeder, Deputy Chief, Telecommunications
    Consumers Division, Enforcement Bureau, at 2, dated March 16, 2000
    (Magrath Letter).

[^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]: Letter from Kurt A. Schroeder to 21^st^ Century Fax(es) Ltd. *et.
    al* dated March 8, 2000 (*Citation*); *see also* 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).

[^4]: *See 21^st^ Century Fax, Notice of Apparent Liability For
    Forfeiture,* FCC 00-425 (released December 7, 2000) (*NAL*).

[^5]: 47 C.F.R. § 1.80.

[^6]: *See* Letter from Gordon Ritchie, 21^st^ Century Faxes Ltd., to
    Catherine Seidel, Chief, Telecommunications Consumers Division,
    Enforcement Bureau, dated December 10, 2000 (Response).

[^7]: 47 U.S.C. § 503. *See, e.g.*, *Tuscola Broadcasting Co.,
    Memorandum Opinion and Order*, 76 FCC 2d 367, 371 (1980) (applying
    preponderance of the evidence standard in reviewing Bureau level
    forfeiture order). *Cf*. 47 U.S.C. § 312(d) (assigning burden of
    proof in hearings to Commission).

[^8]: 47 U.S.C. § 227(b)(1)(C).

[^9]: Response at 2-3.

[^10]: Response at 3 ("\[W\]e could actually have fax broadcasting
    machines in the US as long as we ourselves were in the UK, which we
    are.")

[^11]: *Id.* at 2-3.

[^12]: *Id.*

[^13]: 47 U.S.C. § 227(b)(1)(C).

[^14]: Section 3 of the Act defines "person" as "an individual,
    partnership, association, joint-stock company, trust, or
    corporation." 47 U.S.C. § 153(32). We find that 21^st^ Century is a
    "person" within this definition.

[^15]: 47 U.S.C. § 151. *See also* 47 U.S.C. § 152(a) ("The provisions
    of this act shall apply to all interstate and foreign communications
    by wire or radio and all interstate and foreign transmission of
    energy by radio, which originates and/or is received within the
    United States. . . ."). The TCPA also covers intrastate
    communications. 47 U.S.C. § 152(b); 47 U.S.C. § 227(e), (f).

[^16]: *See* fn. 14, *supra*. Furthermore, section 217 of the Act
    provides that "\[i\]n construing and enforcing the provisions of
    this Act, the act, omission, or failure of any officer, agent, or
    other person acting for or employed by any common carrier *or user*,
    acting within the scope of his employment, shall in every case be
    also deemed to be the act, omission, or failure of such carrier *or
    user* as well as that of the person." 47 U.S.C. § 217 (emphasis
    added).

[^17]: *See* *International Shoe Co. v. State of Washington*, 326 U.S.
    310 (1945) (*International Shoe*) (finding that a company
    incorporated in Delaware with its principal place of business in
    Missouri was subject to jurisdiction of Washington State because of
    its significant and continuous activities within the state); s*ee
    also Burnham v. Superior Court of California, County of Marin*, 495
    U.S. 604, 605-18 (1990); *Kernan v. Kurz-Hastings*, 175 F.3d 236,
    242-4 (2d. Cir. 1999) (*Kernan*). In *Kernan*, the court found it
    was reasonable and consistent with due process to subject a foreign
    manufacturing company that was organized under the laws of Japan and
    did not transact or solicit business in New York, to personal
    jurisdiction in New York. The court found that the company had
    sufficient minimum contacts with New York to support jurisdiction,
    stating that the due process clause "permits a state to exercise
    personal jurisdiction over a non-resident defendant with whom it has
    'certain minimum contacts \... such that the maintenance of the suit
    does not offend traditional notions of fair play and substantial
    justice.'" 175 F.3d at 242 (citing *Calder v. Jones*, 465 U.S. 783,
    788 (1984) (quoting *Milliken v. Meyer*, 311 U.S. 457, 463 (1940)
    and *International Shoe*, 326 U.S. 310, 316 (1945))).

[^18]: *See* Response at 2-3; Magrath Letter at 2. At the company's
    request, the Commission staff held a teleconference with 21^st^
    Century's New York City staff on March 28, 2000.

[^19]: *See NAL* at ¶ 10.

[^20]: As we have noted previously, some consumers have continued to
    receive 21^st^ Century's faxes after following instructions for
    removing their fax numbers and even after receiving a message that
    no more faxes would be sent. *NAL* at ¶ 5.

[^21]: *See Citation* at 4; *NAL* at n. 11.

[^22]: Response at 4-5.

[^23]: *Id.*

[^24]: *Id*.

[^25]: *See Destination Ventures v. FCC*, 46 F.3d 54, 55-57 (9^th^ Cir.
    1995). The Court determined that the TCPA's ban on unsolicited fax
    advertisements does not violate the advertiser's First Amendment
    rights given that the TCPA restrictions reasonably fit the
    government's interest in preventing the shifting of advertisement
    costs to consumers. *See also Kenro, Inc. v. Fax Daily, Inc.*, 962
    F.Supp. 1162, 1167-69 (S.D. Ind. 1997). The Court determined in
    *Kenro* that the TCPA's ban on unsolicited fax advertisements is
    narrowly tailored to achieve the government's intended purpose and
    does not violate the First Amendment guarantee of commercial free
    speech*.*

[^26]: *Johnson v. Robison*, 415 U.S. 361, 368 (1974) quoting
    *Oestereich v. Selective Service Board*, 393 U.S. 233, 242 (1968)
    (Harlan, J., concurring in result) ("Adjudication of the
    constitutionality of congressional enactments has generally been
    thought beyond the jurisdictions of administrative agencies.")

[^27]: *See* 47 U.S.C. § 227; 47 C.F.R. § 64.1200(a)(3); *see also TCPA
    Report and Order*, 7 FCC Rcd 8752, 8779 ¶ 54 (1995).

[^28]: 47 C.F.R. § 1.80(f)(4).

[^29]: 47 U.S.C. § 504(a).