II. THE INVESTIGATION

The following summarizes Tour Designs alleged violations:

A. Operations After Expiration of Certificate

PU Code Section 5379 provides that "no passenger charter-party carrier shall operate over any public highway in this State without a valid certificate or permit in force from the Commission authorizing such operations." The staff's investigation disclosed the Class B Charter Party Certificate of Tour Designs expired November 19, 2002. Tour Designs' records, California Highway Patrol (CHP) records, and other records indicate Tour Designs continues to operate after its operating certificate expired in violation of PU Code 5379. For example, on April 3 and 4, 2003 the California Highway Patrol observed Tour Designs conducting passenger operations and prepared observation reports. Misdemeanor complaints alleging unlawful charter operations by Tour Designs have been filed with the courts in Fresno and Tulare Counties.

B. Falsification of Driver Records

Rule 5.01 of General Order (GO) 157-C provides: "Every driver of a charter party vehicle shall be licensed as required under the California Vehicle Code and shall comply with the driver provisions of the Motor Carrier Safety Section of Title 13 of the California Code of Regulations" (13 CCR). State and federal regulations limit the number of hours a driver may drive and be on duty before a rest period is required. The State Regulations are found in 13 CCR, Chapter 2, and the Federal Regulations are found in Part 395, Title 49, Code of Federal Regulations (49 CFR). A driver's log must be used to record all of the driver's hours. Section 34500.1 of the California Vehicle Code (CVC) provides that the CHP shall regulate the safe operation of tour buses.

On November 7, 2002, the CHP conducted a terminal inspection of Tour Designs' Tulare Terminal. The CHP's terminal inspection program is designed to determine a motor carrier's overall compliance with State laws and regulations. Among other violations, the CHP Safety Compliance Report noted Tour Designs allowed or required a driver to drive after being on duty for 15 hours, in violation of 13 CCR Section 1212.5(1)(b). In addition, Tour Designs allowed or required its drivers to submit falsified driver logs, a violation of 13 CCR Section 1234(a).

C. Failure To Enroll Drivers in DMV Pull Notice Program

Pursuant to General Order 157-C, Part 5.02, every passenger charter-party carrier must enroll its drivers into the California Department of Motor Vehicles' (DMV) Pull Notice Program, pursuant to CVC Section 1808.1. This program tracks and monitors the driver license status of an employee/driver and reports to the employer if the driver's driving privilege has been suspended or revoked. The investigation, and CHP terminal inspection, revealed Tour Designs apparently failed to enroll seven (7) of its drivers in the DMV Pull Notice Program.

D. Falsification of CHP Inspection Report

The investigation revealed Tour Designs altered the date on a CHP inspection report dated November 26, 2001, indicating its terminal was rated as "Satisfactory". The report was altered to show a more current date of November 8, 2002 and was submitted to the carrier's insurance company in an attempt to mislead the insurance company that Tour Designs' current terminal rating from CHP was "satisfactory". To the contrary, at that time, the CHP Carrier Inspection Report, dated November 7, 2002, showed an "Unsatisfactory" rating.

E. Illegal Display of P.U.C. Identification

Pursuant to Public Utilities Code Section 5385, and Part 4.08 of General Order 157-C, immediately upon revocation or termination of any permit or certificate, the TCP number for the permit or certificate shall be removed from all vehicles. Staff's investigation disclosed Tour Designs failed to remove TCP numbers displayed on all its buses after expiration of its passenger operating authority.

F. Temporary Restraining Order, Injunction, Case 03-204714 Tulare County

Pursuant to Public Utilities Code Section 5414.5, "when the executive director of the commission determines that any charter-party carrier of passengers, or any officer, director, or agent of any charter-party carrier of passengers, has engaged in, is engaged in, or is about to engage in, any acts or practices of this chapter, or any order, decision, rule, regulation, direction, demand, or requirement issued under this chapter, the executive director may make application to the superior court for an order enjoining those acts or practices or for an order directing compliance."

On April 9, 2003, Plaintiff State of California (Public Utilities Commission) filed a Complaint For Temporary Restraining Order, Preliminary Injunction, and Actions For Recovery of Civil Penalties (Pursuant to Public Utilities Code Sections 5371, 5413, 5414, 5416, 5415.5, 5417, 5415, 5418), against Defendants Bill Mitchell Dennis, Gloria Maria Dennis, dba Tour Designs, a Partnership. On April 9, 2003 the Superior Court, County of Tulare, granted an order to show cause for a preliminary injunction and granted a Temporary Restraining Order. The Court scheduled a further hearing for April 29, 2003. The Order of the Court restrained and enjoined the Defendants from any and all of the following acts:

    1. Operating directly or indirectly as a charter-party carrier within the State of California until such time they have been granted a permit duly issued by the California Public Utilities Commission;

    2. Soliciting, advertising, or otherwise holding themselves out as a licensed charter-party carrier, authorized to conduct or carry out such business activities anywhere within the State of California;

    3. Entering into contracts with any persons or entities to transport passengers for hire to and from points within the State of California;

    4. Misrepresenting their status as a licensed charter-party carrier to existing and/or prospective customers;

    5. Stating, implying, directly or indirectly, that they have or are about to be issued a charter-party carrier permit from the California Public Utilities Commission;

    6. Operating any buses, vehicles, or equipment designed to carry passengers for hire to and from points within the State of California;

    7. Directly or indirectly accepting payments, soliciting payments, accepting credit cards, billing for account receivables, and/or selling tickets for the purposes of carrying passengers for hire to and from points within the State of California;

    8. Displaying on any vehicles, buses, or equipment, designed to carry passengers for hire their permit, permit number, or any indicia of licensed status during periods when defendants charter-party carrier permit is expired, revoked, or suspended;

    9. Directly or indirectly engaging in any act(s), business, or activities that violate any provision of the Public Utilities Code and/or the "Passenger Charter-party Carriers Act";

    10. Engaging in any act(s), business, or activities that violate any rules, orders, regulations, or decisions of the California Public Utilities Commission

In its regulatory and enforcement capacity, the Commission has authority to commence civil actions in the courts of competent jurisdiction to enjoin violations of the laws of the State of California within its jurisdiction.

CPSD's investigation specifically allege over 96 violations of the Public Utilities Code, the California Vehicle Code, Title 13 of the California Code of Regulations, General Order 157-C, and other Commission rules and regulations. The nature of these offenses, their counts, and the resulting potential fines include the following:

1. Conducting operations as a charter-party carrier of passengers after expiration of its certificate. CPSD alleges 83 violations of Public Utilities Code Section 5379, each offense involving a $1,000 fine, which would result in a total potential penalty of $83,000;

2. Failing to ensure accuracy of entries in its drivers' logbooks and permitting falsification of driver records. CPSD alleges 1 violation of Public Utilities Code Section 5381, 13 CCR Section 1234(a) and General Order 157-C, Part 5.01, subject to a $1,000 fine;

3. Allowing or requiring a driver to drive after being on duty for 15 hours. CPSD alleges one (1) violation of Public Utilities Code Section 5381, 13 CCR Section 1212.5(1)(b), CVC Section 1808.1, and General Order 157-C, Part 5.01, subject to a $1,000 fine;

4. Failing to enroll all drivers in the DMV Pull Notice Program. CPSD alleges 7 violations of Public Utilities Code Section 5381, CVC Section 1808.1, and General Order 157-C, Part 5.02, each offense subject to a $1,000 fine;

5. Falsifying information, by altering the date on a prior year CHP terminal inspection report and submitting to an insurance company in an attempt to mislead the insurance company as to Tour Designs' current CHP terminal rating. The CHP Carrier Inspection Report dated November 7, 2002, indicated an "Unsatisfactory" Rating. The CHP may recommend denial of a passenger charter-party carrier application for operating authority from the Commission pursuant to Public Utilities Code Section 5378.6. CPSD alleges a violation of Public Utilities Code Section 5381, General Order 157-C, Parts 4.02, 5.02 and 6.01, each offense is subject to a $1,000 fine, resulting in a total potential penalty of $3,000. These violations raise fitness issues as described in Public Utilities Code Sections 5374 and 5375;

6. Failing to remove its TCP number from all vehicles upon termination of its certificate. CPSD alleges a violation of Public Utilities Code Section 5385, and General Order 157-C, Part 4.08, resulting in a potential fine of $1,000.

If the record of evidence produced at an administrative hearing proves these or any other allegations, the Respondents would be subject to fines, restitution of investigative costs, revocation, and/or denial with prejudice of their application for a charter-party carrier certificate.

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