**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

**In the Matter of** ) **File No. EB-01-MA-035**

)

# Lightning Electronics, Inc. ) NAL/Acct. No. 200232700009

> )

**Miami, Florida** ) **FRN 0006-2915-95**

##  FORFEITURE ORDER

**Adopted: September 30, 2002** **Released: October 2, 2002**

By the Chief, Enforcement Bureau:

## I. Introduction

1\. In this *Forfeiture Order* ("*Order*"), we issue a monetary
forfeiture in the amount of seven thousand dollars (\$7,000) against
Lightning Electronics, Inc. ("Lightning"), for willful and repeated
violations of Section 302(b) of the Communications Act of 1934, as
amended ("Act")[^1] and Section 2.803(a)(1) of the Commission's Rules
("Rules").[^2] The noted violations involve Lightning's marketing of
unapproved long-range cordless telephones.

2\. On May 21, 2002, the District Director of the Enforcement Bureau's
("Bureau") Tampa, Florida, Office ("Tampa Office") released a *Notice of
Apparent Liability for Forfeiture* ("*NAL*") against Lightning in the
amount of \$7,000.[^3] Lightning filed a response to the *NAL* dated
June 11, 2002.

# II. Background

3\. In February of 2001, the Federal Aviation Administration ("FAA")
reported to the Bureau that it was receiving sporadic interference to an
aviation frequency in the Miami, Florida, area. In March of 2001, the
Bureau's Miami, Florida, Resident Agent Office ("Miami Office")
identified the source of the interference as a long-range cordless
telephone being operated from an electronics store in Miami. As a result
of the FAA's concerns, the Bureau launched a nationwide investigation
into the unlawful[^4] marketing and use of long-range cordless
telephones. During the investigation, the Bureau discovered that
electronics dealers are marketing long-range cordless telephones in
several states. Certain of the long-range cordless telephones marketed
by electronics dealers cause interference by transmitting spurious
emissions on aviation frequencies, while others are specifically
designed to operate in the aviation band. The investigation has resulted
in the issuance of several citations, *NAL*s and Forfeiture Orders by
the Enforcement Bureau.[^5]

4\. On July 27, 2001, agents from the Miami Office visited Lightning's
retail store located at 231 E. Flagler Street, Unit #1, Miami, Florida.
The agents saw several long-range, cordless telephones on display at the
store, including a Super Phone CT-9000, a Prolink CT-6000CID, and an
Optima OP8810. A salesperson offered to sell one of the units to the
agents. The long-range cordless telephones displayed at the store were
capable of causing serious interference to aviation communications and
were not approved[^6] by the Commission for use in the United States. On
August 24, 2001, the Miami Office issued a citation to Lightning for
violation of Section 302(b) of the Act and Section 2.803(a)(1) of the
Rules, which prohibit the marketing of unapproved radio frequency
devices.

5\. On September 26, 2001, agents from the Miami Office and from the
Tampa Office visited Lightning's retail store and purchased a Prolink
BAO-6110CID long-range cordless telephone (with antenna) for \$669.80.
The telephone the agents purchased was capable of causing serious
interference to aviation communications and was not approved by the
Commission.

6\. On October 5, 2001, Lightning responded to the citation issued on
August 24, 2001. In its response, Lightning stated that the long-range
cordless telephones had been returned to the distributor.

7\. On October 29, 2001, the Tampa Office issued a *NAL*[^7] to
Lightning for violation of Section 302(b) of the Act and Section
2.803(a)(1) of the Rules. Lightning did not file a response to that
*NAL*. On February 21, 2002, the Bureau issued a *Forfeiture Order*[^8]
affirming the forfeiture proposed by that *NAL*. On March 8, 2002,
Lightning filed a petition for reconsideration of that *Forfeiture
Order*. As indicated in the petition for reconsideration, certain
information set forth in the *NAL* issued on October 29, 2001, did not
pertain to Lightning. In a *Memorandum Opinion and Order*[^9] released
May 14, 2002, the Bureau, after reviewing the entire record, cancelled
that *NAL* pursuant to Section 503(b)(4)(ii) and (iii) of the Act.[^10]

8\. On May 21, 2002, the Tampa Office issued a new *NAL* to Lightning
for violation of Section 302(b) of the Act and Section 2.803(a)(1) of
the Rules, this time including the facts pertaining to Lightning. In its
response to the new *NAL*, Lightning does not deny the violations
alleged in the *NAL* but contends that, in view of the cancellation of
Lightning's forfeiture in the earlier proceeding, this forfeiture
proceeding is barred by the doctrines of *res judicata* and "law of the
case."

**III. Discussion**

9\. The Bureau assessed the proposed forfeiture amount in this case in
accordance with Section 503 of the Act,[^11] Section 1.80 of the
Rules,[^12] and *The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines*, 12 FCC Rcd 17087 (1997), *recon. denied*, 15 FCC Rcd 303
(1999) ("*Policy Statement*"). Section 503(b) of the Act[^13] requires
that, in examining Lightning's response, the Commission 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 other such matters as
justice may require.[^14]

10\. Section 302(b) of the Act provides that no person shall
manufacture, import, sell, offer for sale, or ship devices or home
electronic equipment and systems, or use devices, which fail to comply
with regulations promulgated pursuant to this section. Section
2.803(a)(1) of the Rules provides that:

(a) Except as provided elsewhere in this section, no person shall sell
    or lease, or offer for sale or lease (including advertising for sale
    or lease), or import, ship, or distribute for the purpose of selling
    or leasing or offering for sale or lease, any radio frequency device
    unless: (1) \[i\]n the case of a device subject to certification,
    such device has been authorized by the Commission in accordance with
    the rules in this chapter and is properly identified and labeled as
    required by § 2.925 and other relevant sections in this chapter\[.\]

We find that, by marketing long-range cordless telephones (first on July
27, 2001, and again on September 26, 2001, after the issuance of a
citation on August 24, 2001), Lightning willfully and repeatedly
violated Section 302(b) of the Act and 2.803(a)(1) of the Rules.

11\. Lightning contends, without citing any legal authority or
presenting any legal or factual analysis, that the doctrine of *res
judicata* bars this proceeding. Under the doctrine of *res judicata*,
also known as claim preclusion, \"a judgment on the merits in a prior
suit bars a second suit involving the same parties or their privies
based on the same cause of action.\" [^15] A second suit is barred by
claim preclusion if: "(1) there is identity of parties (or their
privies); (2) there has been an earlier final judgment on the merits of
a claim; and (3) the second claim is based on the same set of
transactional facts as the first.\" [^16] The claim involved in the
earlier forfeiture proceeding against Lightning was based, in part, on
facts that did not pertain to Lightning. The claim involved in this
proceeding is based on a different set of transactional facts. We find,
therefore, that claim preclusion does not bar this proceeding.[^17]

12\. Similarly, Lightning contends, again without citing any legal
authority or presenting any legal or factual analysis, that the "law of
the case" bars this proceeding. Under the doctrine of law of the case,
"a court should not reopen issues decided in earlier stages of the same
litigation."[^18] This doctrine cannot apply here because the earlier
proceeding was a separate proceeding and not an "earlier stage" of this
proceeding. Furthermore, none of the issues involved in this proceeding
were decided in the earlier proceeding.

13\. We have examined Lightning's response to the *NAL* in light of the
above statutory factors and the factors set forth in the *Policy
Statement*. Taking all of these factors into account, we conclude that
neither cancellation nor reduction of the proposed forfeiture is
warranted and that the proper forfeiture amount is \$7,000.

# IV. Ordering Clauses

14\. **ACCORDINGLY,** **IT IS ORDERED THAT**, pursuant to Section 503(b)
of the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules,[^19]
Lightning **IS LIABLE FOR A MONETARY FORFEITURE** in the amount of \$
7,000 for repeated and willful violation of the Section 302(b) the Act
and Section 2.803(a)(1) of the Rules.

15\. Payment of the forfeiture shall be made in the manner provided for
in Section 1.80 of the Rules within 30 days of the release of this
*Order*. 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.[^20] Payment may be made 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
should note the NAL/Acct. No. 200232700009 and FRN 0006-2915-95.
Requests for full payment under an installment plan should be sent to:
Chief, Revenue and Receivables Operations Group, 445 12th Street, S.W.,
Washington, D.C. 20554.[^21]

> 16\. **IT IS FURTHER ORDERED** that a copy of this *Order* shall be
> sent by First Class and Certified Mail \-- Return Receipt Requested
> \-- to Lightning Electronics, Inc., at 231 E. Flagler Street, Unit #1,
> Miami, Florida 33131, and to Lightning's attorney, Ira S. Silver,
> Esquire, Silver & Silver, 108 S. Miami Avenue, 2^nd^ Floor, Miami,
> Florida 33130.

**FEDERAL COMMUNICATIONS COMMISSION**

David H. Solomon

Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 302a (b).

[^2]: ^?^ 47 C.F.R. § 2.803(a)(1).

[^3]: *Notice of Apparent Liability for Forfeiture*, NAL Acct. No.
    200232700009 (Enf. Bur., Tampa Office, released May 21, 2002).

[^4]: Section 302(b) of the Act and Section 2.803(a)(1) of the Rules
    prohibit marketing unapproved devices, such as long-range cordless
    telephones, in the United States. Section 301 of the Act prohibits
    their use.

[^5]: ^?^ To date, we have issued 26 citations and five *NALs* totaling
    \$45,000, resulting in three *Forfeiture Orders*. *See CTI of Miami,
    Inc.*, 17 FCC Rcd. 8724 (Enf. Bur. 2002); *New Image Electronics*,
    17 FCC Rcd. 3594 (Enf. Bur. 2002); and *Electronics Unlimited*, 17
    FCC Rcd. 3109 (Enf. Bur. 2002).

[^6]: *See* 47 C.F.R. § 15.201.

[^7]: *Notice of Apparent Liability for Forfeiture*, NAL/Acct. No.
    200232700002 (Enf. Bur., Tampa Office, released October 29, 2001).

[^8]: *Lightning Electronics, Inc.*, 17 FCC Rcd 3131 (Enf. Bur. 2002).

[^9]: *Lightning Electronics, Inc.*, 17 FCC Rcd 8694 (Enf. Bur. 2002).

[^10]: 47 U.S.C. §§ 503(b)(4)(ii) and (iii).

[^11]: 47 U.S.C. § 503.

[^12]: 47 C.F.R. § 1.80.

[^13]: ^13^ 47 U.S.C. § 503(b).

[^14]: ^14^ 47 U.S.C. § 503(b)(2)(D).

[^15]: *Parklane Hosiery Co. v. Shore,* 439 U.S. 322, 326 n. 5 (1979).

[^16]: *Jet, Inc. v. Sewage Aeration Sys.,* 223 F.3d 1360, 1362,
    (Fed.Cir.2000).

[^17]: We question whether the earlier forfeiture proceeding contained
    any judgment or law of the case that could preclude us from bringing
    this proceeding. In this instance, the Bureau's *Memorandum Opinion
    and Order* vacated the *Forfeiture Order* which found Lightning
    liable for violations of Section 302(b) of the Act and Section
    2.803(a)(1) of the Rules because the factual basis for the *NAL* and
    *Forfeiture Order* did not pertain to Lightning. However, in view of
    the arguments set forth in paragraphs 11 and 12, we need not reach
    this question.

[^18]: *Agostini v. Felton*, 521 U.S. 203, 236 (1997) ("*Agostini*");
    *Kimberlin v. Quinlan*, 199 F.3d 496, 500 (D.C. Cir. 1999), *cert.
    denied*, 531 U.S. 871 (2002).

[^19]: 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).

[^20]: 47 U.S.C. § 504(a).

[^21]: *See* 47 C.F.R. § 1.1914.