Discussion

The history of this proceeding leaves two issues to be decided. How extensive should the fines imposed on the Respondents be? And what effect, if any, does the purported personal bankruptcy of the permit holder have on our decision?

In D.98-12-075 we discussed at length the criteria to be applied in determining the appropriate level of fines to impose on a regulated entity that violates our rules and regulations.⁵ The two principal considerations discussed in that decision are the severity of the offense and the conduct of the utility. In this case, the CPSD Declaration and its accompanying exhibits demonstrate a pattern of willful disregard for Commission rules, for example, by operating in corporate form without approval and operating without insurance. The record also discloses a pattern of deliberate intimidation of customers, for example, by refusing to unload household goods until the customer has paid an amount substantially in excess of the estimate presented at the time the contract was signed. The exhibits to the Crowley declaration include numerous letters from customers of the Respondents detailing their illegal strong-arm tactics and other serious violations of our rules and regulations. In D.98-12-075 we made it clear that each of these types of behavior constituted serious offenses.

The Respondents also made little, if any, effort to detect, prevent or rectify their inappropriate behavior. This type of conduct also invites a greater, rather than a lesser fine.

Against these considerations arguing for a relatively severe fine, we need to set the very limited financial resources of the Respondents. In D.98-12-075, we noted that for a fine to be effective it has to balance the financial resources of the utility, the need for deterrence, and the constitutional limitations on excessive fines:

"Some California utilities are among the largest corporations in the United States and others are extremely modest one-person operations. What is accounting rounding error to one is annual revenue to another. The Commission intends to adjust fine levels to achieve the objective of deterrence, without becoming excessive, based on each utility's financial resources." ⁶

Were we to impose all fines requested by CPSD, the total would exceed $3 million, an amount that is clearly excessive without regard to the purported bankruptcy of the permit holder. On the other hand, a nominal fine is not a sufficient response to the serious violations committed by Respondents, nor does it have a deterrent effect on others. The fines described in the order that accompanies this opinion are intended to achieve a deterrent effect without becoming excessive.

Although we have made no independent investigation to verify that Nelson-Akst has filed for personal bankruptcy nor received any notice to that effect from a bankruptcy court, we believe that our decision would be unaffected by such a filing. While the licensee may have filed for protection under the federal Bankruptcy Act, we have authority under the Bankruptcy Act, 11 U.S.C. § 362(b)(4), to continue in the exercise of our police and regulatory power. Our enforcement action against her results from violations of the California Public Utilities Code as well as from violations of our orders, decisions, rules, regulations, directions, demands, or requirements. Our enforcement action is not the result of her filing under the Bankruptcy Act, obtaining a discharge, or for any reason that is impermissible under 11 U.S.C. § 525(a).