Before the Public Utilities Commission of the State of California

In the matter of the Order Instituting Investigation and Order to Show Cause on the Commission's own motion into the operations and practices of All State Moving and Storage, Inc., a California corporation doing business as (dba) California Transportation Systems, dba Prime Movers, dba All State Moving & Storage, dba City Transportation System, and its President, Jacob (aka Yacov) Sudai, and Secretary, Israel Lerner; Washington Mini-Storage, Inc., a Maryland corporation dba Prime Movers, dba Washington Moving and Storage, and its President, Yacov Sudai; and VIP Relocation, Inc., a California corporation and its President, Israel Lerner, and Vice President, Kfir Cohen, Applicants/Respondents.

FILED PUBLIC UTILITIES COMMISSION AUGUST 19, 2004 SAN FRANCISCO OFFICE I.04-08-022

ORDER INSTITUTING INVESTIGATION AND ORDER
TO SHOW CAUSE WHY RESPONDENTS' APPLICATIONS
SHOULD NOT BE DENIED WITH PREJUDICE

The California Public Utilities Commission (Commission) is the agency responsible for regulating the intrastate transportation of used household goods, personal effects and furniture, pursuant to Article XII of the California Constitution, the Household Goods Carriers' Act (Act) (Public Utilities Code §§ 5101 et seq.),¹ the Commission's Maximum Rate Tariff 4 (MAX 4), and Commission General Orders (GOs) 100-M, 136-C, 142, and others. These statutes and regulations require, among other things, that household goods carriers operate only in a responsible manner in the public interest; procure, continue in effect, and maintain on file adequate proof of public liability/property damage, cargo, and workers' compensation insurance; and observe rules and regulations governing: (1) acknowledging and handling claims for loss and damage, (2) issuing estimates, (3) executing and issuing documents, (4) training and supervising employees, (5) maintaining equipment and facilities, and (6) rates and charges. The Commission is the primary agency responsible for enforcing these and other statutes and regulations governing household goods carriers. These other statutes and regulations include general consumer protection and public safety provisions.

We have directed the Consumer Protection and Safety Division (formally in D. 92-05-028) to use all tools at its disposal to enforce the laws and regulations against illegal operations - both carriers operating without a permit, and permitted carriers not in compliance with the law, and our rules and regulations - and to bring cases to district attorneys and before the Commission for prosecution as appropriate. In response to our directives, staff has brought such investigative proceedings before us as Starving Students [I. 92-11-029, 02-02-005], Best Move [I. 91-11-002], Nice Jewish Boy/Father and Son [I. 90-12-010], Reginald Duncan [I. 90-09-009], Dave's Quality Movers [I. 91-10-011], Ronald Zammito [I. 91-01-011], Harrington Brothers, Inc. [I. 94-03-022], Arnold Baeza dba Best Movers [I. 01-06-021], All America Express Moving and Storage [I. 02-09-001] and Affordable Apartment Movers [I. 01-11-052]. All these cases involved a pattern of egregious violations.

Consumer Protection and Safety Division (CPSD) investigators (Staff) advise us, through the declarations supporting the issuance of this investigatory proceeding, that staff became aware of consumer complaints, unlawful operations and advertising for moving services by Respondents All State Moving and Storage Inc., a California corporation, and its officers Jacob Sudai and Israel Lerner (hereinafter All State Moving); Washington Mini-Storage, Inc., a Maryland corporation, and its officer Yacov (aka Jacob) Sudai (hereinafter Washington Mini-Storage); and VIP Relocation, Inc., a California corporation, and its officers Israel Lerner and Kfir Cohen (hereinafter VIP Relocation). All State operates under various fictitious business names including California Transportation Systems, Prime Movers, All State Moving & Storage, and City Transportation System. "Washington" also operates under various fictitious business names including Prime Movers and Washington Moving and Storage. Staff then initiated an investigation into the business practices of All State Moving and Washington Mini-Storage, which operate a moving and storage business in Los Angeles County. Staff's investigation of All State Moving and Washington Mini-Storage found numerous alleged violations of the "Household Goods Carriers' Act" and Commission rules and regulations, including violations of numerous MAX 4 rules, use of "bait and switch" estimating practices as part of a scheme to overcharge its customers, operations and advertising during an extended period without either required evidence of insurance (public liability, cargo and workers' compensation) on file or a permit in force from the Commission authorizing those operations. Although All State Moving and VIP Relocation filed applications for operating authority, they failed to meet the requirements for issuance of a household goods carrier (HHG) permit.

I. ENFORCEMENT HISTORY

A. Temporary Restraining Order and Preliminary Injunction - Case No. BC303987 - Superior Court, County of Los Angeles

On October 10, 2003, Commission staff filed a complaint for temporary restraining order, preliminary injunction, permanent injunction, and action for recovery of civil penalties in the Superior Court of the County of Los Angeles. A hearing was held on October 30, 2003 in which the PUC was granted a temporary restraining order. Further hearing was held on November 19, 2003, when the court issued a preliminary injunction, which provides that during the pendency of the civil action, All State Moving, Washington Mini-Storage and its officers are restrained and enjoined from operating or advertising as a household goods carrier within the State of California, until such time defendants have been granted a permit duly issued by the California Public Utilities Commission.