III. FITNESS, SECTIONS 5374, 5375 PUC

A. Discussion

After approving carrier's operating authority, the Commission exercises continuing oversight of the carrier's fitness. Public Utilities Code Section 5378 authorizes the Commission to "cancel", "suspend", or "revoke" a certificate or permit for failure of the carrier to comply with any of the provisions of the "Passenger Charter-Party Carriers' Act" or with any order, rule, or regulation of the Commission, failure of a carrier to perform reasonable service, including repeated violations of the Vehicle Code or of regulations contained in Title 13 of the California Code of Regulations relative to motor carrier safety. Section 5381 gives the Commission power to establish rules for the performance of any service of the character furnished or supplied by passenger charter party carriers. Paragraph (a), Section 5374 of the Public Utilities Code (PUC) provides: "Before a permit is issued or renewed, the Commission shall require the applicant to establish reasonable fitness and financial responsibility to initiate and conduct or continue to conduct the proposed or existing transportation services." Similarly, PUC Section 5375 further provides, in part:

"The Commission may, with or without a hearing, issue or refuse to issue a permit or certificate." "If the Commission finds that public convenience and necessity require the proposed transportation service and that the applicant possess satisfactory fitness and financial responsibility to initiate and conduct the proposed transportation services, and will faithfully comply with rules and regulations adopted by the Commission, it shall issue the permit or certificate to conduct the requested operations, or may issue it for the partial exercise of the privilege sought, and may attach to the permit or certificate such terms and conditions as, in its judgment, are required in the public interest; . .".

This Commission's mission in regulating passenger charter-party carriers is to ensure that transportation services provided to the public are conducted in a safe and dependable manner. To ensure that only safe and qualified drivers provide passenger service to our citizens, it is vital that all charter-party carriers fully comply with the DMV's Pull Notice Program and safety regulations contained in Title 13 CCR. These regulations require that carriers monitor the performance of their drivers. In addition, carriers are required to ensure driver logs prepared by their drivers are accurate and in compliance with applicable safety regulations. Safety regulations in 13 CCR require drivers to accurately record in their logbook all their duty and off duty status times. Falsification of such logs and requiring drivers to drive in excess of maximum duty hours without adequate rest are serious safety violations. Along with impairment from drugs or alcohol, driver fatigue is a significant additional contributing factor to highway accidents.

Very serious allegations have been made by staff against this passenger charter-party carrier. There appears sufficient cause to find that Tour Designs has failed to comply with applicable safety regulations and has continued to conduct operations after expiration of its operating authority. These allegations, if found to be true, indicate Tour Designs lacks the fitness and trustworthiness that we expect from a charter certificate holder providing passenger service. In App. of Walter Hoffman (1976) (80 Cal.P.U.C. 117) we said:

". . .'reasonable fitness' connotes more than mere adequacy or sufficiency in training, competency, or adaptability to the appropriate technical and vocational aspects of the service to be rendered.

It also includes an element of moral trustworthiness, reliance, and dependability. The standards must be based on the interests of the public and distinguished from the interests of the applicant, and the burden rests with the applicant to demonstrate that he is reasonably fit to be entrusted with a renewal of Commission authority."

In the past, we have directed staff to inform us of any unsafe carrier operations so that we may take immediate action(s) necessary to protect public safety. We have previously revoked the permits or certificates of passenger carriers for repeated violations of the Vehicle Code and Title 13 of the California Code of Regulations. We took such action in Decision 93-09-004 [50CPUC2d 613,625.], when we revoked American Transportation Enterprises' certificate of public convenience and necessity for repeated violations of the safety provisions of the Vehicle Code. Similarly, in Decision 94-11-021 [57CPUC2d 289, 299.], we found Respondent, Royya's Transportation, Inc., demonstrated a disregard of safety rules and ordered its certificate revoked. The apparent decision of this operator to continue passenger operations for an extended period after termination of its authority, along with significant safety violations, lead us to conclude that this carrier represents a possible threat to public safety.

Accordingly, today's order will direct staff to deny Tour Designs administrative request for renewal of respondents' operating authority. Under these circumstances, renewal can only be granted upon the order of the Commission after considering a petition from the respondents as well as the results of the staff's investigation and recommendation(s). Likewise, we will require the respondents to file, under penalty of perjury, evidence that all of their drivers are enrolled in the DMV Pull Notice Program. These are prudent measures for us to order in view of the compliance problems and serious nature of the alleged violations.

IT IS ORDERED that:

1. An investigation on the Commission's own motion is instituted into the operations and practices of the respondents, Bill Dennis and Gloria Dennis, a partnership doing business as Tour Designs.

2. If the Respondents request it within 30 days after receiving this order, a public evidentiary hearing on this matter shall be held before an assigned Administrative Law Judge (ALJ) at a time and date as scheduled at the prehearing conference. At the evidentiary hearing, the respondents will have an opportunity to present evidence and may contest the staff's allegations that Tour Designs has:

a) Violated Public Utilities Code (PUC) section 5379 by conducting passenger charter party operations after termination of its Class B Charter Party Certificate (TCP 12910-B);

b) Violated PUC section 5381, 13 CCR section 1234(a), and General Order 157-C, Part 5.01, by permitting falsification of driver records;

c) Violated PUC section 5381, 13 CCR section 1212.5(1)(b), and General Order 157-C, Part 5.01, by allowing or requiring a driver to drive after being on duty for 15 hours;

d) Violated PUC section 5381, CVC section 1808.1, and General Order 157-C, Part 5.02, by failing to enroll all drivers in the DMV Pull Notice Program;

e) Violated PUC sections 5374, 5375, 5378.1, 5381, and General Order 157-C, Parts 4.02, Safety Requirements Before Operation, 5.02, Driver Record, 6.01, Charter Party Records, by falsifying or altering information contained in its CHP Terminal Inspection Report;

f) Violated PUC section 5385, and General Order 157-C, Part 4.08, by failing to immediately remove its TCP number from all vehicles upon termination of its Certificate.

3. The Respondents are placed on notice of, but not limited to, the following:

· They may be fined to the extent provided in PUC sections 5411 through 5420, for each and every violation described in this Order and adjudged as proven at an evidentiary hearing;

· They may be ordered to repay investigation costs of approximately $ ____________, or more;

· The renewal application of Class B Certificate No. TCP 12910-B may be denied with prejudice pursuant to PUC Section 5378, and/or;

· Any subsequent application by Respondents may be denied based upon the outcome of this proceeding, pursuant to PUC Sections 5374 and 5375.

4. During the pungency of this investigation, the following individuals and persons are ordered to immediately cease and desist from violating any provision of the Passenger Charter-Party Carriers' Act ¹ or any pertinent Commission rules and regulations, e.g. General Order 157-C, safety regulations in the California Vehicle Code, and Title 13 of the California Code of Regulations.

· Bill Dennis and Gloria Dennis, a partnership dba Tour Designs

5. The Consumer Protection and Safety Division may present additional evidence beyond that described in the declaration issued with this order (which comprises the staff's direct prepared testimony) either by testimony or through documentation, bearing on the operations and practices of the respondents. The additional evidence may show whether any or all of the Respondents continue to engage in improper conduct after the issuance of this Order, or after issuance of a Temporary Restraining Order, Injunction or such other orders of the Superior Court of the Tulare County. Such additional evidence may be offered to show whether improper carrier conduct continued after the issuance of this order. Such evidence if offered would have significant bearing on the type and level of sanctions the Commission may deem appropriate. At a Prehearing Conference, or as otherwise directed by the assigned Administrative Law Judge, the Respondents shall advise CPSD how many witnesses whom they wish to cross examine at the evidentiary hearing.

6. Scoping Information: This paragraph suffices for the "preliminary scoping memo" required by Rule 6(c). This enforcement proceeding is adjudicatory. Absent settlement between staff and respondents pursuant to Rule 51 et seq., this matter will be set for an evidentiary hearing. A hearing may also be held to determine whether any proposed settlement is in the public interest or to answer questions from the ALJ or the assigned Commissioner about the terms and conditions of any proposed settlement.

7. If necessary and appropriate, an evidentiary hearing may be held and the assigned ALJ may convene a Prehearing Conference to schedule a time and/or a place for such hearing. A Prehearing Conference will be scheduled and held within 40 days or as soon as practicable thereafter. Objections to the Order may be filed but must be confined to jurisdictional issues which could nullify any eventual Commission decision on the merits.

The Executive Director shall cause a copy of this order and the staff declaration to be personally served upon Respondents, Bill Dennis and Gloria Dennis dba Tour Designs, 1003 Prosperity Avenue, Tulare, CA 93274.

This order is effective today.

Dated May 8, 2003, at San Francisco, California

MICHAEL R. PEEVEY

President

CARL W. WOOD

LORETTA M. LYNCH

GEOFFREY F. BROWN

SUSAN P. KENNEDY

Commissioners