Section R3-9-604. Loss of Use of Service Mark

A.      A signatory shall lose the privilege to use the service mark if the signatory:

1.        Commits a flagrant violation or repeated major deviation;

2.        Fails to comply with R3-9-603;

3.        Has not paid assessments due for the prior fiscal year; or

4.        Withdraws from participation in the LGMA pursuant to Article XVI, section C of the LGMA.

B.       The first flagrant violation or repeated major deviation shall result in a suspension of the privilege to use the service mark for a minimum two-week period.

C.      A flagrant violation or repeated major deviation following the first flagrant violation or repeated major deviation shall result in an indefinite suspension of the privilege to use the service mark.

D.      A flagrant violation or repeated major deviation following a suspension pursuant to subsection (C) shall result in an indefi- nite revocation of the privilege to use the service mark. The privilege to use the service mark shall not be restored to the signatory for a minimum of two years unless the signatory demonstrates to the satisfaction of the auditor and the Commit- tee a significant change in management and brand.

E.       A signatory whose privilege to use the service mark is sus- pended or revoked pursuant to subsections (B) through (D) shall not use the service mark until the signatory has under- gone at least one new audit without the finding of any major deviations or flagrant violations and has evidenced that the signatory has corrected any minor deviations found.

F.       At least two weeks of any suspension of the privilege to use the service mark under subsections (B) through (D) shall occur between December 1 and March 31.

G.      The Committee may accelerate the progression of penalties under this Section if the signatory’s product seriously affects a person’s health and the signatory handled the product with intentional, knowing or reckless disregard for the signatory’s obligations under the LGMA and best practices.

H.      A signatory shall not lose the privilege to use the service mark under subsections (A)(1) and (2) without an opportunity for a hearing under A.R.S. Title 41, Chapter 6, Article 10, except if the Committee finds that the public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, the Committee may order summary suspension of a signatory’s privilege to use the ser- vice mark.

I.        A signatory that loses the privilege to use the mark under sub- section (A)(3) shall pay all assessments due from prior fiscal years, including penalties and interest, before regaining the privilege to use the service mark.

J.        The Committee may publish a list of signatories whose privi- lege to use the service mark has been suspended.

Historical Note

New Section made by exempt rulemaking at 16 A.A.R. 2282, effective October 28, 2010 (Supp. 10-4). Amended by exempt rulemaking at 17 A.A.R. 2569, effective November 29, 2011 (Supp. 11-4). Amended by final exempt rulemaking at 19 A.A.R. 4019, effective October 15, 2013 (Supp. 13-4).