IV. DISCUSSION

The Commission is the agency responsible for regulation of intrastate transportation of used household goods, personal effects and furniture pursuant to Article XII of the California Constitution, the Household Goods Carriers Act (Public Utilities Code § 5101, et seq.) § 5139 authorizes the Commission to establish rules for the performance of any service of the character furnished or supplied by household goods carriers. § 5245 states that the Commission shall establish rules and regulations controlling the estimates given by a household goods carrier to a shipper. These sections provide that all household goods carriers shall observe such rules and regulations and failure to do so is unlawful. The rules and regulations established by the Commission are contained in MAX 4, G.O. 100-M, G.O. 136-C, G.O. 142, and others.

Statutes and regulations require, among other things, that household goods carriers operate in a responsible manner in the public interest; procure, continue in effect, and maintain on file adequate proof of public liability and property damage, cargo, and workers' compensation insurance; and observe rules and regulations governing: (1) acknowledgement and handling of claims for loss and damage, (2) issuance of estimates, (3) execution and issuance of shipping documents, (4) training and supervision of employees, (5) maintenance of equipment and facilities, and (6) rules pertaining to payment of regulatory fees, 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.

Section 5285(b) authorizes the Commission, upon complaint or on the Commission's own initiative and after notice and opportunity to be heard, to suspend, change, or revoke a permit for failure of the carrier to comply with any of the provisions of the Act, or with any order, rule, or regulation of the Commission, or with any term, condition, or limitation of the permit. § 5285(d) provides that the Commission may cancel, suspend, or revoke the permit of any carrier upon the conviction of the carrier of any misdemeanor under the Act while holding operating authority issued by the Commission.

We place tremendous trust in household goods carriers in granting them operating authority, a trust equaled by that of our citizens who tender their most personal and treasured belongings to movers. This carrier's pattern of violations, including operations during suspension of its permit, holding goods hostage and failure to release goods upon payment of the Not To Exceed Price, failure to maintain on file evidence of public liability and cargo insurance, failure to provide customers with properly completed shipping documents, failure to adequate train and supervise its employees, failure to provide business records to authorized representatives of the Commission, and continuing unfair business practices and abuse of consumers after staff directives to cease such unlawful activity, alarms us. These violations raise serious questions concerning this operator's willingness to meet minimum requirements, including fitness requirements, for movers operating under color of authority of a household goods carrier permit issued by the Commission.

CPSD's allegations described herein and documented in staff's reports and consumer declarations are grave and, if substantiated through hearing, may well constitute grounds for revocation for cause of Mr. Move's operating authority and/or other appropriate sanctions and remedies, including a permanent forfeiture of rights to operate as a household goods carrier in this state.

It appears that Mr. Move and Eli Galam may have:

1. Violated Public Utilities Code § 5286 by conducting operations as a household goods carrier during periods of suspension of its permit; COUNTS: 5 [Prepared Testimony of CPSD Investigator Lou Ann Smith (Prep. Test.) Pages 9-12, 13-15, 17-18. Attachments 8-10, 12, 14.]

2. Violated Public Utilities Code §§ 5139 and 5161, and G.O.s 100-M and 136-C by failing to maintain evidence of adequate public liability and cargo insurance on file with the Commission, as required by law of all carriers; COUNTS: 103 [Prep. Test. Attachment 1.]

3. Violated Public Utilities Code § 5245 and Item 104 of MAX 4, by refusing to release or unload shipments at destination upon payment of the Not To Exceed Price; COUNTS: 10 [Prep. Test. Pages 8-10, 12-13, 14-22, 23-24. Attachments 6, 7,10, 12-17, 21.]

4. Violated Public Utilities Code § 5245 and Item 108 of MAX 4, by providing an estimated cost for proposed moving services that was not in writing and not done after a visual inspection of the goods to be moved; COUNTS: 4 [Prep. Test. Pages 11-14, 16-20. Attachments: 9, 11, 13, 15.]

5. Violated Public Utilities Code § 5245 and Item 108 of MAX 4, by charging in excess of the verbal estimate given the shipper; COUNTS: 14 [Prep. Test. Pages 8-26. Attachments 6-7, 9, 11-17, 20-21, 23-24.]

6. Violated Public Utilities Code § 5245 and Item 120 of MAX 4, by failing to complete a valid change order containing all required information for additional services and increased charges; COUNTS: 3 [Prep. Test. Pages 8-9, 14-16, 19-20. Attachments 6, 12, 15.]

7. Violated Public Utilities Code § 5139 and Item 88 of MAX 4, by failing to furnish to each prospective shipper at the time of first in person contact a copy of the booklet entitled "Important Information For Persons Moving Household Goods"; COUNTS: 9 [Prep. Test. Pages 9-12, 16-25. Attachments 7, 9, 13-17, 19, 22.]

8. Violated Public Utilities Code § 5139 and Items 128(2r), Note 3, and 136(3) of MAX 4, by failing to offer or allow shippers to select a valuation option of other than $ .60 cents per pound per article in the Declaration of Value section of shipping documents; COUNTS: 13 [Prep. Test. Pages 8-12, 13-22, 24-26. Attachments 6-9, 11-13, 15, 17-18, 22-24.]

9. Violated Public Utilities Code § 5139 and Item 128 of MAX 4, by failing to provide shippers an Agreement For Moving Services prior to performing any moving service; COUNTS: 14 [Prep. Test. Pages 8-13, 14-25. Attachments 6-7, 9-10, 12-17, 19-22.]

10. Violated Public Utilities Code § 5139 and Items 128 and 132 of MAX 4, by failing to include a "Not To Exceed Price" on its Agreement For Moving Services and Freight Bills; COUNTS: 9 [Prep. Test. Pages 8-18, 23-25. Attachments 6-10, 12-13, 20, 22.]

11. Violated Public Utilities Code § 5139 and Items 128 and 132 of MAX 4, by failing to include the required information on its shipping documents; COUNTS: 13 [Prep. Test. Pages 8-23. Attachments 6-15, 17, 19, 20.]

12. Violated Public Utilities Code § 5139 and Item 132 of MAX 4, by failing to provide shippers a freight bill; COUNTS: 2 [Prep. Test. Pages 12-13, 19-20. Attachments 10, 15.]

13. Violated Public Utilities Code § 5139 and Item 340, Note 6 of MAX 4, by improperly charging shippers for additional packing materials such as paper and packing tape; COUNTS: 2 [Prep. Test. Pages 8-9, 11-12. Attachments 6, 9.]

14. Violated Public Utilities Code § 5139 and Item 16 of MAX 4, by assessing hourly rates in lieu of distance rates for shipments transported in excess of 100 constructive miles; COUNT: 1 [Prep. Test. Pages 12-13. Attachment 10.]

15. Violated Public Utilities Code § 5139 and Item 80 of MAX 4, by failing to obtain a weighmaster's certificate or ticket prior to delivery and unloading of a shipment transported under distance rates; COUNT: 1 [Prep. Test. Pages 12-13. Attachment: 10.]

16. Violated Public Utilities Code § 5139 and Item 36 of MAX 4, by charging the customer for down time in excess of the total time spent loading, unloading and double the drive time from point of origin to point of destination; COUNT: 1 [Prep. Test. Pages 13-14. Attachment 11.]

17. Violated Public Utilities Code § 5139 and Item 92 of MAX 4, by failing to acknowledge and timely process claims for loss or damage; COUNTS: 7 [Prep. Test. Pages 9-12, 20-25. Attachments: 7-9, 16, 18-19, 22.]

18. Violated Public Utilities Code § 5139 and Item 88 of MAX 4, by failing to cross reference each of its fictitious business names to all other names listed in telephone directory advertisements; COUNTS: 13 [Prep. Test. Pages 30-31. Attachment 30.]

19. Violated Public Utilities Code § 5139 and General Order 142 by failing to properly to train and supervise employees; COUNTS: 19 [Prep. Test. Pages 8-25. Attachments: 6-22.]

20. Violated Public Utilities Code § 5226 by failing to allow inspection of records required to be maintained by household goods carriers upon request of an authorized representative of the Commission; COUNTS: 3 [Prep. Test. Pages 26-27, 31-32. Attachments 25,31.]

IT IS ORDERED that:

1. An investigation on the Commission's own motion is instituted into the operations and practices of Mr. Move Moving & Storage, Inc. and its president Eli Galam (Respondents), to determine whether Respondents have violated the laws and regulations that govern household goods carriers, and whether:

a. Respondents' household goods carrier permit should be revoked, or other sanctions imposed, pursuant to Public Utilities Code § 5285.

b. Respondents should be ordered to:

1. Review the 19 consumer declarations,

2. Satisfy all of those consumers' claims of overcharges including any outstanding court judgments, arising from violation of the Commission's estimating rules and maximum rates, and

3. Provide its contentions, assumptions, and calculations on each of the 19 consumer complaints.

c. Respondents Mr. Move, Eli Galam, its principals or any entity in which respondents hold a financial or management interest should be prohibited from obtaining a permit.

d. Any other orders are appropriate in the Commission's exercise of its lawful jurisdiction.

2. Respondents shall respond fully to staff's testimony and each allegation in this investigation, by written testimony. The testimony will be tendered no later than 45 days after the effective date of this order, unless that due date is modified by the assigned commissioner or administrative law judge. The testimony shall respond to all factual allegations, and shall provide all reasons why Respondents contend that revocation of operating authority, and all other remedies and relief raised in this investigation, are unlawful or otherwise inappropriate.

3. A public hearing on this matter shall be held expeditiously before an Administrative Law Judge (ALJ) at a time and date to be set at the prehearing conference. At the hearing, Respondents shall appear and demonstrate why its household goods carrier permit should not be revoked for cause and lack of fitness in view of the above listed allegations made by Staff, and the criminal convictions in Los Angeles Superior Court Case No. 3CR02706.

4. During the pendency of this investigation, it is ordered that Respondents shall cease and desist from any violations of the terms of probation ordered by the Superior Court for the County of Los Angeles as part of the sentence imposed in criminal complaint Case No. 3CR02706.

5. Staff, if it elects to do so, may present additional evidence beyond that described in the declaration issued with this order, either by testimony or through documentation, bearing on the operations of Respondents.

6. Staff may propose to amend the OII to add additional respondents or to raise additional issues. Any such proposal should be presented to the Commission in the form of a motion to amend the OII and should be supported by Staff declarations supporting the additional named respondents and/or proposed amendments.

7. Scoping Information: This paragraph suffices for the "preliminary scoping memo" required by Rule 6 (c).

8. This enforcement proceeding is adjudicatory, and, absent settlement between staff and the Respondents, will be set for evidentiary hearing. A hearing may also be held on any settlement for the purpose of enabling parties to justify that it is in the public interest or to answer questions from the ALJ about the settlement terms. Given the seriousness of the allegations asserted by Staff, the Commission therefore has determined that it is reasonable to have an expedited prehearing conference to be scheduled and hearings will be held as soon as practicable thereafter in the Commission Los Angeles office. Objections to the OII may be filed but must be confined to jurisdictional issues, which could nullify any eventual Commission order on the merits of the issues about violations of statutes, rules, regulations or orders.

9. Respondents are hereby ordered to cease and desist any and all violations of MAX 4, California statutes, general orders, and Commission regulations until the Commission has an opportunity to review and pass judgment on their fitness to hold operating authority from this Commission to conduct operations as a mover within California.

10. Respondents are hereby placed on notice that if staff's allegations are proven during the evidentiary hearing, the Commission may impose fines and penalties according to those authorized by law.

The Executive Director shall cause a copy of this order, the staff declarations and other related documents to be served by certified mail upon respondents, Eli Galam, President and Mr. Move Moving & Storage, Inc., 7040 Darby Avenue, Reseda, CA 91335-4417. A copy of this order and the staff declaration shall also be sent by certified mail to: Roger Browning, Attorney at Law, Counsel for Respondents, Law Offices of Glassman, Browning and Saltsman, 360 North Bedford Drive, Suite 204, Beverly Hills, CA 90210-5157.

This order is effective today.

Dated April 21, 2005, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

SUSAN P. KENNEDY

DIAN GRUENEICH

Commissioners