VII. Fines, Costs and Other Remedies

In view of the superseding events and allegations, we grant CPSD's petition to withdraw from the settlement. We address the merits of the parties' jointly recommended fine and costs in the context of the complete record.

Consistent with §§ 5313 and 5313.5, the Commission's guidelines for determining fines, and other Commission precedent, we conclude that a fine of $4,500 and $9,500 in costs is warranted for the violations alleged in the OII. We do not impose any further fine. Payment shall be made in quarterly payments over the course of a year. We do not order disconnection of Respondent's personal cell phone number.

A. Fines

Pub. Util. Code §§ 5311(a) and 5313 prohibit any household goods carrier and any officer, director, agent or employee of a household goods carrier from violating, or abetting a household goods carrier in violating, any provision of the Household Goods Carrier Act or any Commission rule or regulation. Pub. Util. Code § 5311(a) makes such violation a misdemeanor punishable by a fine of up $1,000 ($10,000 if the violation is willful) or one year imprisonment, while § 5313 makes the same violation subject to a civil penalty of not more than $500.

CPSD recommends a $1,000 fine for each violation of § 5311(a) since the parties entered into the settlement. CPSD does not justify applying the criminal penalty as opposed to the civil penalty.

To provide guidance in setting fines, the Commission has distilled the principles that it has historically relied upon in assessing fines and restated them such that they may form the basis for future decisions. (Rulemaking to Establish Rules for Enforcement of the Standards of Conduct Governing Relationships between Energy Utilities and Their Affiliates Adopted by the Commission in Decision 97-12-088, 84 CPUC 2d 155, 188) (D.98-12-075, App. A.) Those principles begin by stating that the purpose of fines is to deter further violations. In determining whether to impose a fine and, if so, at what level, the Commission will consider five factors, namely, the severity of the offense, the person's or entity's conduct, the person's or entity's financial resources, precedent, and the totality of circumstances in furtherance of the public interest.

Turning to the first factor, the severity of the offense includes consideration of the economic harm imposed as well as the economic benefit gained. Here, the facts show that Respondent performed over 100 moves as Lucky Moving Company. Thus we conclude that Respondent gained economic benefit over the course of her operations as a household goods carrier. On the other hand, there is no evidence that Respondent's illegal operations imposed any harm on customers.

While there is no evidence regarding whether Respondent economically benefited from the calls to the previously disconnected Lucky Moving phone numbers, we can conclude that there was the potential for such benefit. On the other hand, Zhang is a licensed mover and therefore qualified to conduct any moves that resulted from such calls. We therefore conclude that this violation is extremely minor.

CPSD argues that the severity of Respondent's further offense is aggravated by the fact that it violates the plain language and spirit of the settlement, in which Respondent agreed that she would no longer participate in the moving business. We conclude otherwise.

The settlement states that Respondent may not advertise, or hold herself out, or engage in business as a household goods carrier without a permit. Respondent's activity on behalf of other household goods carriers does not constitute operating as a household goods carrier. The settlement states that Respondent must comply with all pertinent statutes and Commission rules and regulations. To the extent that such activity is on behalf of a licensed carrier - and this record does not support a finding to the contrary -- Respondent's participation in the moving business is not in violation of the settlement.

More fundamentally, prohibiting Respondent from working for licensed household goods carriers would be unreasonable. CPSD has not shown that Respondent's actions, either before entering into the proposed settlement or since, are so egregious and harmful to the public that she should be barred from a legal means of employment. Accordingly, we do not consider the fact of Respondent's continued participation in the moving business to be an aggravating factor.

The next factor is the person's efforts to prevent, detect, and rectify the violation. In this case, the uncontested facts show that Respondent disregarded four separate letters from CPSD instructing her to cease and desist all unlawful advertising and operations without a permit, by placing numerous advertisements in various newspapers, and violated a temporary restraining order by the San Francisco Superior Court by offering to conduct a move in response to a sting call by CPSD. We conclude that this factor is an aggravation of the offenses alleged in the OII.

With respect to Respondent's offense associated with answering calls to the previously disconnected Lucky Moving phone numbers, we conclude that this violation is so subtle as to be nearly undetectable by Respondent. The phone numbers had been disconnected due to their illegal use by the unlicensed Lucky Moving, but their reactivation was by and for a licensed carrier. Although Zhang, by reactivating the phone numbers, held himself out as the unlicensed Lucky Moving, Lucky Moving was no longer in existence. We also note that Respondent's primary language is Mandarin; it is reasonable to assume that this lack of proficiency in English contributed to Respondent's inability to detect such a subtle violation. We therefore conclude that Respondent's conduct is not an aggravating factor with respect to this violation.

CPSD argues that Respondent knew that the disconnected phone numbers should not be used for moving services because she was a defendant in the proceeding in which the Superior Court found probable cause to terminate service to those numbers. We are not persuaded. The finding of probable cause was that the phone numbers were being used by unlicensed carriers. Nothing in the finding of probable cause suggests that the phone numbers should not be used in connection with legal moving services.

The next factor is the financial resources of the carrier. Respondent has previously agreed to pay a $4,500 fine and $9,500 in costs in four payments over a one-year period, and states that she cannot afford to pay the combined amount immediately in one payment, as opposed to the four quarterly payments as provided in the proposed settlement.

Regarding Commission precedent, we have located decisions where the Commission imposed at least a $10,000 fine, but the facts of these cases show a pattern of harmful conduct to consumers, facts that are not present here. For example, D.02-05-028, Re Best Movers, involved a carrier who provided service during suspension of its permit and when it did not have required insurance coverage; the Commission had received numerous customer complaints against Best Movers for poor service, loss and damage to property, and personal injury. The Commission fined Best Movers $19,000 (with $14,000 suspended if the carrier complied with the decision), required restitution payments to customers for loss and damage to furniture, and imposed a three-year probationary period. D.01-08-035, Re Ace of Bace Moving, involved a carrier who, among other things, received numerous customer complaints, and exhibited a practice of extracting unlawful additional amounts for a move by refusing to unload household goods, and a pattern of noncompliance with applicable law and regulations. The Commission ordered Ace of Bace to make reparations to customers for the unlawful charges, and fined the mover $40,000 (reduced to $10,000 upon making all required reparations). D.02-08-052, Re Affordable Apartment Movers, involved a carrier who provided service after suspension and revocation of its permit, failed to maintain insurance, and violated MAX 4 by, among other things, overcharging on oral estimates. The Commission ordered restitution and fined Affordable Apartment Movers $26,000 (reduced to $6,500 upon making restitution payments.)

The final factor is the totality of the circumstances in furtherance of the public interest. The public interest is best served by household goods carriers that comply with applicable law and regulations. Where violations do occur, prompt remedial actions are required. The totality of the circumstances includes the fact that Respondent did not immediately comply with either CPSD's cease and desist notices or the Superior Court's temporary restraining order. It also includes the following: (1) Respondent has since ceased operations and no longer seeks operating authority; (2) the only further violation by Respondent is a relatively minor one that is difficult to detect and that, at worst, may have resulted in moves conducted by a licensed mover; and (3) the offending phone numbers have again been disconnected, eliminating the possibility of further misuse of the Lucky Moving advertisements.

Consistent with §§ 5313 and 5313.5, the Commission's guidelines for determining fines, and other Commission precedent, we conclude that a fine of $4,500 is warranted on the facts of this case. The sum reflects the fine agreed to by the parties in their settlement. We do not impose an additional fine for Respondent's additional violation of §§ 5311(a) and 5313 in consideration of the factors discussed above as well as the considerable size of the total assessment including the costs discussed below.

B. Costs

Pub. Util. Code § 5313.5 provides that the Commission may assess the costs of investigation when it finds that a person or corporation has operated or held itself out as a household goods carrier without a valid permit. CPSD provides evidence that the costs of this investigation, not including investigative work since the parties entered into the proposed settlement, totaled $13,828.75. Respondent agreed to pay $9,500 pursuant to the parties' settlement. Accordingly, Respondent is ordered to pay the sum of $9,500 in costs.

C. Timing of Payment

We make this fine and costs due and payable in four equal installments of $3,500, with the first payment due within 30 days of the effective date of this Order, and the subsequent payments due every 90 days thereafter. CPSD does not offer any justification for its recommendation that the fine and costs be immediately due and payable in one lump sum. We note Respondent's testimony that she cannot comply with the fine and costs if they are immediately due and payable. We also note that Respondent has appeared at all Commission hearings in this matter, and has testified to her intention to pay the fine and costs ordered by the Commission.

D. Disconnection of Cell Phone

Lastly, CPSD recommends that we order the disconnection of Respondent's cell phone number in order to prevent Respondent from abetting the operations of unlicensed household goods carriers. Respondent testified that some of the phone calls that she answered on behalf of Liu's Moving, Express Moving, and other carriers were phone calls that were forwarded to her cell phone. However, the evidence does not show that any of the forwarded calls are from unlicensed carriers. We reject CPSD's recommendation.