ALJDEC decisions subject to certification as final

13F-15225-DWM · Department of Weights and Measures · 2012-12-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 14, 2012

APPEARANCES: Treasure Exchange, Inc. was represented by corporate officers Ralph Duran and Monty Blankier; the State of Arizona, Department of Weights and Measures was represented by Assistant Attorney General Marc H. Harris, Esq.

WITNESSES: Debra Rader, DWM Investigator Ralph Duran Monty Blankier

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Treasure Exchange, Inc. (“Appellant”) appeals from a Notice of Violation issued by the Arizona Department of Weights and Measures (“Department”) for using a weight scale that was not licensed by the Department, was not sealed, was not recording weight accurately (under registering), and was not positioned so that the customer could see the weight reading. The Department seeks a total of $1,200.00 in civil penalties, $300.00 for each violation. Appellant disputes the violations. The Department presented evidence at the hearing, including Exhibits through 9. This tribunal heard testimony from the witnesses noted above. Based upon the evidence, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding the violations alleged and recommending a civil penalty of $300.00 for each violation. FINDINGS OF FACT 1. All facts relate to February 2012, the time of the alleged violations. 2. Appellant operates a gold exchange business. Two of Appellant’s corporate officers are Ralph Duran and Monty Blankier.[1] Appellant was created on January 31, 2012.[2] Two of Appellant’s corporate officers, Monty Blankier and another person, are also members of M & M Gold, LLC (“M & M Gold”), a gold exchange entity that was already in existence when Appellant was created.[3] 3. In February 2012, the Department received a complaint about M & M Gold operating at 2575 E. Broadway Rd. in Tucson, Arizona. The complaint stated that “CUSTOMER TOOK IN SOME SCRAP GOLD AND BELIEVES HE WAS CHEATED.”[4] On February 14, 2012, Department Investigator Debra Rader went to that location to investigate the complaint. Upon arrival, she found the address to be a small storefront office that was home to “Duran’s Income Tax and Notary” as stated on the awning over the front of the business. Above the awning, a separate banner stated: TREASURE EXCHANGE CASH FOR GOLD We Pay Highest Prices In Town

Below the awning and sitting in the sidewalk in front of the storefront was a portable, large, vertical sign that said “M & M Gold, LLC” with a large arrow pointing to the door entrance. Thus, a reasonable conclusion by a member of the public would be that three businesses operated out of that storefront: Treasure Exchange, Duran’s Income Tax and Notary, and M & M Gold. 4. Rader went inside the door, which was open to the public. She was met by a person named “John,” who came out of the back of the office. She identified herself and why she was there. On a desk, she found business cards for M & M. John stated that he would call “the owner” to report the inspection. He did so, then took Rader to the scale, told her to proceed with her investigation, and she inspected and tested it.[5] 5. Rader found four violations with respect to the scale: 1) the scale was not licensed with the Department; 2) the scale under registered the weight of objects (this is favorable to the business); 3) the calibration mechanism on the scale was not sealed, leaving it subject to tampering; and 4) the scale was positioned so that the reading could not be seen by a consumer.[6] 6. Rader asked John to sign the regulatory bill of rights for the inspection, but he said that the owner would be there soon to do so. Rader went to her vehicle and was filling out paperwork when Blankier came up and talked to her. She gave him copies of the paperwork and explained the process. John asked her to note that it was the first day of business and that she was the first person to use the scale. Rader informed them that the scale had been taken out of service and was not to be used until it was properly repaired by an authorized repairer. 7. The next day, February 15, 2012, the Department received a service report showing that the scale had been repaired that day by Pima County Scales, an authorized servicer. The name of the business on the service report was “M & M Gold LLC/Treasure Exchange.” The report was signed by Blankier as the owner.[7] 8. On February 22, 2012, the Department received another service report stating that there was a business change from M & M Gold to Treasure Exchange. That report was also signed by Blankier. 9. On August 31, 2012, the Department issued a Notice of Violation against Appellant Treasure Exchange for the four violations found on February 14, 2012. 10. The evidence shows that Treasure Exchange was operating as a business that day out of the storefront at 2575 E. Broadway Rd. in Tucson, Arizona. 11. At hearing, Appellant argued that it was not doing business on that date. However, the evidence shows by a preponderance that Appellant was open for business on that date. CONCLUSIONS OF LAW 1. The Department regulates the use of commercial devices in this State.[8] “Commercial devices” are defined by statute to include weight scales.[9] The Department may impose a civil penalty for violation of any provision relating to commercial devices.[10] The Department has the burden of showing a violation that warrants a civil penalty. The standard of proof is “preponderance of the evidence,” meaning evidence showing that a particular fact is “more probable than not.”[11] Therefore, the Department bears the burden of showing, by a preponderance of evidence, that Appellant has violated the law regulating the use of weight scales in its business. The Department has met that burden. 2. Use of all commercial devices, such as weight scales, requires that the device be licensed by the Department.[12] In addition, these devices must have a sealed calibration mechanism,[13] must give an accurate reading,[14] and must be installed in a manner such that all readings are readily visible to consumers.[15] 3. There is a statutory presumption that a device located at a place doing business is a device that is regularly used in that business.[16] That presumption is rebuttable, but Appellant has not offered any persuasive evidence that rebuts the presumption in this case. The evidence supports a conclusion that Appellant was using the device for business purposes. 4. The evidence also supports conclusions that Appellant committed violations by using weight scales for business that were not licensed by the Department, were not sealed, were not accurate (under registered to the favor of the business), and whose readings were not visible to consumers. This constitutes four violations. 8. The Department may impose a civil penalty of up to $1,000.00 per violation.[17] In addition, if a device’s lack of compliance favors the owner of the device, the Department must impose a $300.00 penalty for the first offense.[18] Also, if the weighing device violates Handbook 44, the Department must impose a $300.00 civil penalty.[19] 9. The Administrative Law Judge finds that Appellant has committed four violations of the statutes and rules regulating the use of commercial weighing devices. One of the violations is a violation of Arizona statute and three are violations of Handbook 44. Of those three, one of the violations favored Appellant by under registering the weight. 10. The Administrative Law Judge recommends that a civil penalty of $300.00 for each violation be imposed, for a total amount of $1,200.00. RECOMMENDED ORDER Based on the above findings and conclusions, IT IS RECOMMENDED that the Director of the Arizona Department of Weights and Measures impose civil penalties in the total amount of $1,200.00 against Appellant Treasure Exchange, Inc.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 5 days from the date of that certification.

Done this day, December 4, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

Kevin Tyne , Director Arizona Department of Weights and Measures ----------------------- [1] Exhibit 2. [2] Id. [3] Exhibit 3. [4] Exhibit 1 (all caps in original). [5] Id. [6] Id. [7] Exhibit 9. [8] A.R.S. § 41-2111. [9] A.R.S. § 41-2051(7). [10] A.R.S. § 41-2115(A). [11] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996); In the Matter of the Appeal in Maricopa County Juvenile Action No. J- 84984, 138 Ariz. 282, 283, 674 P.2d 836, 837 (1983). [12] A.R.S. § 41-2091(A). [13] NIST Handbook 44, Section 1.10, G-S.8, p. 1-8 (as incorporated by reference in A.R.S. § 41-2064). [14] NIST Handbook 44, Section 1.10, G-T.3, p. 1-9 (as incorporated by reference in A.R.S. § 41-2064). [15] A.R.S. § 41-2113(B)(5); see also NIST Handbook 44, Section 1.10, G- UR.2, p. 1-10 (as incorporated by reference in A.R.S. § 41-2064). [16] A.R.S. § 41-2114 (“When a weight, measure, meter, counter or commercial device is in or about any place in which or from which buying or selling is commonly carried on, there shall be a rebuttable presumption that the weight, measure, meter, counter or commercial device is regularly used for the business purpose of the place.”). [17] A.R.S. § 41-2115(A). [18] A.A.C. R20-2-104(10)(a)(i). [19] A.A.C. R20-2-104(10)(b)(i).

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