III. THE INVESTIGATION

Following is a summary of the staff's findings and the alleged violations. The Staff informs us that it opened its investigation into the practices of LUCKY because of continued unlawful advertising and operations as a household goods carrier. According to staff, these unlawful activities occurred over a period of 552 days (July 23, August 8, August 29, September 12, and September 24, 2002, and November 1, 2002 through April 30, 2004), and continued even after the denial of the respondent's application on August 2, 2002 and February 20, 2003. Staff alleges LUCKY falsely held herself out to the public as a licensed mover by including unauthorized permit numbers in Yellow Pages Directories and newspaper advertisements. Staff warned this operator to cease and desist all unlawful advertising and operations as a mover without the required permit in four (4) letters dated May 24, August 20, and September 4, 2002, and September 26, 2003. Notwithstanding directives issued by CPSD's staff to cease and desist, LUCKY continued to violate the statutory and regulatory schemes applicable to household goods carriers. LUCKY conducted, or attempted to conduct moves after its application was denied and during the pendency of the application. Moreover, LUCKY has not filed evidence of adequate public liability, cargo or workers' compensation insurance with the Commission. On February 18, 2004, CPSD filed a complaint in San Francisco Superior Court to enjoin the defendant's unlicensed moving business. On April 12, 2004, the court issued the Preliminary Injunction enjoining the defendant from operating or advertising as a household goods carrier. These documents are included with CPSD Declarations supporting issuance of this order.

1. Fitness Issues

Public Utilities Code Section 5135 (e) provides that "The commission may refuse to issue a permit if it is shown that an applicant or an officer, director, partner or associate thereof has committed any act constituting dishonesty or fraud; committed any act which, committed by a permit holder would be grounds for a suspension or revocation of the permit; misrepresented any material fact on the application; or, committed a felony, or crime involving moral turpitude." Staff states its investigation disclosed the Respondent fraudulently displayed a permit number belonging to another licensed mover in its advertisements. LUCKY also displayed the Better Business Bureau (BBB) logo in its advertising, falsely convening to the public its status as a licensed mover and member of the BBB.

2. Advertising Without a Permit in Force

According to Sections 5139 and 5314.5, every corporation or person who knowingly and willfully causes or permits the issuance, publishing of any oral or written advertisement of household goods carrier operations to the public without a valid permit, is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000). Respondent LUCKY advertised household goods carrier services to the public for a total of 552 days (July 23, August 8, August 29, September 12, September 24, 2002, and November 1, 2002 through April 30, 2004.) Section 5315 states that every violation of the Household Goods Carriers' Act is a separate and distinct offense, and in case of a continuing violation, each additional day is a separate and distinct offense. Section 5314.5 authorizes $1,000 fine per violation; at 552 alleged violations, Respondent could be liable for a total fine of $ 552,000.

3. Operating Without Proper Insurance Coverage

According to Sections 5135.5, 5139 and 5161, and Commission General Orders (GOs) 100-M and 136-C, a carrier must maintain inter alia workers' compensation, public liability and property damage, and cargo insurance coverage in effect and on file with the Commission. In this case, Respondent LUCKY failed to maintain the required insurance coverage for a total of 552 days (July 23, August 8, August 29, September 12, September 24, 2002, and November 1, 2002 through April 30, 2004). Section 5313 authorizes $500 fine per violation; at 552 alleged violations, Respondent could be liable for a total fine of $276,000.

4. Operating Without Permit in Force

According to Section 5133, no household goods carrier shall engage, or attempt to engage, in the business of transportation of used household goods by motor vehicle over the public highways in this State without a permit in force issued by the Commission authorizing those operations. Respondent LUCKY conducted household goods operations for a period of 552 days (July 23, August 8, August 29, September 12, September 24, 2002, and November 1, 2002 through April 30, 2004). Section 5315 provides every violation of the Household Goods Carriers' Act is a separate and distinct offense. In case of a continuing violation, each additional day is a separate and distinct offense. Section 5313 authorizes $500 fine per violation; at 552 alleged violations, Respondent could be liable for a total fine of $276,000.

5. Relationships With The Public

According to Section 5139 and Commission Maximum Rate Tariff No. 4, household goods carriers are required to observe specified consumer protection regulations. Item 88 of MAX 4, "Relationships With The Public" reads, in part:

Printed advertising matter, including hand bills, newspaper

advertising, and classified telephone directory listings and

advertisements which advertise or solicit the intrastate

movement of used household goods shall show the household

goods carrier's "T" number as issued by the Commission. The

number shall be printed in this manner. "CAL. P.U.C. T-_____."

Carriers shall not, in any manner, misrepresent their rates nor

the scope of services offered to the public. Specifically,

carriers shall:

(a) Not advertise or otherwise represent themselves under any

name different from that under which their effective permits

are issued by the Commission.

LUCKY displayed an unauthorized permit number in its advertisements appearing in two major San Francisco area Chinese newspapers, the Sing Tao Daily and World Journal, on June 2 and July 3, 2003. Staff determined the permit number displayed in LUCKY's advertisements belongs to another licensed mover. Staff contacted this mover who confirmed he neither placed the advertisements, nor authorized anyone the use of his household goods carrier permit number. Another LUCKY advertisement, which appeared in the SBC San Francisco Yellow Pages directory, 2003 issue, displayed the Better Business Bureau (BBB) logo. Staff confirmed with BBB stated that Lucky Moving is not a member of their organization. Section 5313 authorizes $500 fine per violation; at two (2) alleged violations, Respondent could be liable for a total fine of $1,000.