United States v. Worldwide Indus. Enters., Inc., 16–CV–2255 (JFB) (SIL)

• Decision Date: 07 December 2016
• Docket Number: No. 16–CV–2255 (JFB) (SIL),16–CV–2255 (JFB) (SIL)
• Citation: 220 F.Supp.3d 335
• Parties: UNITED STATES of America, Plaintiff, v. WORLDWIDE INDUSTRIAL ENTERPRISES, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

220 F.Supp.3d 335

UNITED STATES of America, Plaintiff,

v.WORLDWIDE INDUSTRIAL ENTERPRISES, INC., Defendant.

No. 16–CV–2255 (JFB) (SIL)

United States District Court, E.D. New York.

Filed December 7, 2016

The government is represented by Mary M. Dickman and Jolie Apicella, Assistant United States Attorneys, on behalf of Robert L. Capers, United States Attorney, Eastern District of New York, 271 Cadman Plaza East, Brooklyn, New York 11201. Defendant is represented by Scott B. Fisher, Jaspan Schlesinger LLP, 300 Garden City Plaza, Garden City, New York 11530.

MEMORANDUM AND ORDER

Joseph F. Bianco, District Judge:

The United States of America (the "government") brought this action against defendant Worldwide Industrial Enterprises, Inc. ("Worldwide") to enforce a monetary forfeiture order issued by the Federal Communications Commission ("FCC") on January 27, 2015. Worldwide filed a motion to dismiss the complaint, arguing that it is time-barred because the violations underlying the forfeiture order occurred over five years before the complaint was filed. See 28 U.S.C. § 2462. For the reasons set forth below, the Court denies Worldwide's motion to dismiss the complaint.

I. BACKGROUND

A. Facts

For purposes of this motion to dismiss, the Court has taken the facts described below from the government's complaint ("Compl."), filed with the Court on May 5, 2016. These facts are not findings of fact by the Court but rather are assumed to be true for the purpose of deciding this motion and are construed in a light most favorable to the government, the non-moving party. See LaFaro v. N.Y. Cardiothoracic Group, 570 F.3d 471, 475 (2d Cir. 2009).

On November 9, 2009, the FCC issued a citation to Worldwide for a violation of Section 227 of the Communications Act, 47 U.S.C. § 227, for using a telephone facsimile ("fax") machine to send unsolicited advertisements based on complaints it had received from fourteen consumers. (Compl. ¶¶ 16–17.) The citation warned Worldwide that such violations could result in monetary forfeitures, but Worldwide did not respond. (Id. at ¶¶ 18, 23.)

After receiving the citation, Worldwide continued to send unsolicited advertisements to at least seventeen additional consumers between February 10, 2010 and April 27, 2010. (Id. at ¶ 24.) These consumers filed complaints with the FCC, and the FCC issued a Notice of Apparent Liability for Forfeiture ("NAL") on April 7, 2011. (Id. at ¶¶ 25, 27.) The NAL notified Worldwide that the FCC had found it to be apparently liable for a forfeiture under Section 503(b)(5) of the Communications Act for a total amount of $87,500. (Id. at ¶¶ 27, 28, 30). It also directed Worldwide to either pay the amount or file a written statement seeking reduction or cancellation of the proposed forfeiture within thirty days. (Id. at ¶ 31.) Worldwide filed a written opposition to the proposed forfeiture within this timeframe, challenging the reliability and veracity of the complaints and indicating that it could not pay the proposed amount. (Id. at ¶ 34.)

On January 27, 2015, the FCC issued a Forfeiture Order against Worldwide in the amount of $87,500 for the violations outlined in the NAL dated April 7, 2011. (Id. at ¶ 35.) The Order indicated that the FCC found Worldwide's arguments in response to the NAL unpersuasive and had determined that the consumer complaints were sufficiently reliable to establish a violation of Section 227 of the Communications Act.

(Id. at ¶ 36.) The Order directed Worldwide to pay the amount within fifteen days, but, despite receiving the order, Worldwide never paid. (Id. at ¶¶ 39, 41, 42.)

B. Procedural History

The government commenced this action on May 5, 2016 under Section 503(b) of the Communications Act, 47 U.S.C. § 503(b), to enforce the monetary forfeiture penalty. (See ECF No. 1; Compl. ¶ 49.) Worldwide filed a motion to dismiss the complaint as time-barred on August 12, 2016, briefing was completed on October 20, 2016, and the Court heard oral argument on November 16, 2016. (ECF Nos. 13–15, 17.)

II. STANDARD OF REVIEW

The Court treats a motion to dismiss on the grounds that an action is barred by the statute of limitations as a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). See Ghartey v. St. John's Queens Hospital , 869 F.2d 160, 162 (2d Cir. 1989). In reviewing a motion to dismiss under Rule 12(b)(6), a court must accept the factual allegations set forth in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Cleveland v. Caplaw Enter. , 448 F.3d 518, 521 (2d Cir. 2006) ; Nechis v. Oxford Health Plans, Inc. , 421 F.3d 96, 100 (2d Cir. 2005). As the Supreme Court has stated, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Furthermore, "[o]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly , 550 U.S. at 563, 127 S.Ct. 1955. The Court does not, therefore, require "heightened fact pleading of specifics, but only enough facts to state a claim for relief that is plausible on its face." Id. Further, in reviewing a motion to dismiss, "the district court is normally required to look only to the allegations on the face of the complaint." Roth v. Jennings , 489 F.3d 499, 509 (2d Cir. 2007).

III. DISCUSSION

Worldwide argues that the government's action to enforce the Forfeiture Order is time-barred because the violations underlying the Order occurred more than five years before the government brought this action. The government counters that the applicable statute of limitations did not begin to run until the FCC issued the Order in 2015, and, thus, the action is not time-barred. As set forth below, the Court agrees with the government.

A. Statutory Framework

Analysis of the statute of limitations issue first requires a summary of the statutory framework for the imposition and enforcement of penalties under the Communications Act. Under Section 503(b) of the Act, the FCC may impose monetary forfeitures for violations of the Act or the agency's rules. The Act outlines two processes the FCC may employ to carry out this function. See 47 U.S.C. § 503(b)(3)–(4). First, "[a]t the discretion of the Commission, a forfeiture penalty may be determined against a person ... after notice and an opportunity for a hearing before the Commission or an administrative law judge." Id. § 503(b)(3)(A). Determinations made in this manner are subject to review by the court of appeals pursuant to 47 U.S.C. § 402. 47 U.S.C. § 503(b)(3)(A). If a person does not pay the penalty after the FCC's determination "has become a final and unappealable order," the FCC can refer the matter to the Attorney General, who can then bring an enforcement action. Id. § 503(b)(3)(B). In such an action, "the validity and appropriateness of the final order imposing the forfeiture penalty shall not be subject to review." Id. The FCC rules, however, provide that the FCC should employ this method of penalty assessment "only when a hearing is being held for some reason other than the assessment of a forfeiture (such as, to determine whether a renewal application should be granted) and a forfeiture is to be considered as an alternative or in addition to any other Commission action." 47 C.F.R. § 1.80(g).

The second method for assessing penalties under the Communications Act involves a three-step process. See 47 U.S.C. § 503(b)(4). When a violation occurs, the FCC must first "issue[ ] a notice of apparent liability, in writing, with respect to [the alleged violator]." Id. § 503(b)(4)(A). The NAL must be issued within one year of the violation. 47 U.S.C. § 503(b)(6)(B). Next, it must grant the alleged violator "an opportunity to show, in writing, within such reasonable period of time as the Commission prescribes by rule or regulation, why no such forfeiture penalty should be imposed." Id. § 503(b)(4)(C). This showing must be made within thirty days and "shall include a detailed factual statement and such documentation and affidavits as may be pertinent." 47 C.F.R. § 1.80(f)(3). Once it receives such a response, "the Commission, upon considering all relevant information available to it, will issue an order canceling or reducing the proposed forfeiture or requiring that it be paid in full and stating the date by which the forfeiture must be paid." Id. § 1.80(f)(4). If the alleged violator still fails to pay the penalty, the FCC refers the case to the Department of Justice for enforcement of the penalty in the courts. Id. § 1.80(f)(5) ; 47 U.S.C. § 503(b)(4) ; see also 47 U.S.C. § 504(a).

Here, the FCC utilized the second method to assess the penalty. The violations occurred between February 10 and April 27, 2010. The FCC issued the NAL on April 7, 2011, received a response within thirty days thereafter, and issued the Forfeiture Order on January 27, 2015.

B. Statute of Limitations

The parties agree that 28 U.S.C. § 2462 provides the applicable statute of limitations for the Communications Act. Therefore, the question before the Court is whether a claim "accrues" under Section 2462 at the time the FCC issues the forfeiture order pursuant to 47 U.S.C. § 503(b)(4) or at the time of the violation underlying such an order.

This is a question of statutory interpretation. When interpreting a statute,

a court should always turn first to one, cardinal canon before all others. [The Supreme Court has] stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there. When the words of a statute are unambiguous, then, this first canon is also the last: judicial

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