VIII. Disposition of Appeal

The Presiding Officer's Decision (POD) was filed and mailed on May 20, 2005. CPSD filed a timely appeal on June 20, 2005.

CPSD asserts that the POD is not supported by the evidence in concluding that Respondent acted on behalf of Zhang doing business as Express Moving when she responded to phone inquiries to the previously disconnected phone numbers associated with Lucky Moving. CPSD points to evidence in the record that contradicts the POD's conclusion. The POD in fact addresses the contradictory evidence and explains the basis for its conclusion, and that discussion need not be repeated here. However, we modify the POD to acknowledge further contradictory evidence in the record, and to clarify that the fact that Zhang, not any of the Respondents, requested and obtained reactivation of the previously disconnected Lucky Moving phone numbers is a factor included in the totality of evidence supporting our conclusion.

CPSD claims that the POD factually errs by confusing "Express Moving Services," which CPSD states is the company owned by Zhang, with "Express Moving Company," which CPSD asserts is owned by Bing Yuan, an unlicensed household goods carrier. As evidence of this assertion, CPSD attaches to its appeal License Section records indicating a household goods permit application number for Bing Yuan doing business as "Luckier Moving Company" and "JiXiang Jili Moving Company," and points out that this number appears in the SBC Smart Yellow Pages advertisement for Express Moving Company. The License Section records and the facts they represent are not in the evidentiary record, and CPSD does not request that we take judicial notice of them. We note, however, that even if it were in the record, this evidence would not prove Bing Yuan's ownership of Express Moving Company. Notwithstanding CPSD's apparent understanding of such a relationship as reflected in its pleadings, in the cross-examination of its staff counsel, and in its oral argument, CPSD has not identified any record evidence that Bing Yuan owns, operates, or claims a relationship with Express Moving Company or with any company with a variation on that name. Indeed, the only record evidence on the issue is Respondent's testimony, in response to a cross-examination question that assumes the fact, that Bing Yuan is not associated with Express Moving Company. In any event, to the extent that CPSD believes that Yuan is the owner of Express Moving Company and an unlicensed household goods carrier, it may pursue an action against Yuan. We decline to find, under these facts, that Respondent has abetted Yuan's household goods operations.

CPSD asserts that the POD legally errs in finding that Respondent's actions were on behalf of Zhang because Respondent failed to rebut CPSD's evidence by virtue of (1) allegedly failing to respond to a discovery request for documentation of the sale of her business (an assertion for which CPSD identifies no record evidence), and (2) failing to file a declaration responding to CPSD's allegations as ordered by the Administrative Law Judge. There is no legal error. Respondent appeared and offered testimony at the evidentiary hearing in rebuttal to CPSD's allegations without objection from CPSD, and the POD's factual findings are based upon the evidentiary record, including the record of the evidentiary hearing. To the extent that CPSD believed it necessary to pursue a discovery request or was prejudiced by having to respond to Respondent's oral testimony, it had the opportunity to raise its concerns and pursue its remedies through proper, timely motion.

We reject CPSD's implication that the remedy for Respondent's failure to provide a declaration as ordered is to disregard the testimony given at hearing. Nor do we find it appropriate, under the circumstances of this case, to impose sanctions on Respondent. We note that Respondent's counsel at the time of the ruling moved and was granted leave to withdraw as such, that Respondent is not proficient in English, and that Respondent complied with the order to appear at hearing.

CPSD states the POD factually erred regarding the lack of support in the record for a finding that Liu and Liu's Moving were unlicensed at the time Respondent answered calls to Liu's Moving. CPSD cites to declarations attached to its earlier motion to add Liu as a respondent to this proceeding, to CPSD's statements at evidentiary hearing, and to the Complaint for Temporary Restraining Order and supporting declarations contained in the document entitled "Inv. Fan Ding (aka Ding Fan or Lisa Ding), an individual doing business as Lucky Moving Co., Lucky Movers, [etc.]."

The POD's assessment of the record in this respect is correct. CPSD's motion to add Liu as a respondent was denied, and its accompanying exhibits are not evidence in this record. CPSD offered no testimony at hearing, only the statements of counsel which are not evidence.

However, we modify the POD to grant CPSD's outstanding August 30, 2004, motion to admit into evidence the document entitled "Inv. Fan Ding (aka Ding Fan or Lisa Ding), an individual doing business as Lucky Moving Co., Lucky Movers, [etc.]," as well as the "Affidavit in Support of a Probable Cause Finding for Termination of Telephone Service" and "Declaration of William G. Waldorf Re: Cost of Investigation." Accordingly, we now address CPSD's claim that the first of these exhibits includes evidence of Liu's and Liu's Moving's unlicensed status.

CPSD states that the exhibit contains numerous cease and desist letters to Liu and Ding. CPSD does not direct the Commission to a particular cite, and our review of the approximately 250 pages of the exhibit reveals numerous cease and desist letters to Ding, but none to Liu. CPSD points out that the temporary restraining order and preliminary injunction contained in the exhibit name Liu as a defendant. However, although the complaint and supporting declarations confirm Respondents' unlicensed status, they are silent on the matter of Liu's status as a household goods carrier.

CPSD attaches to its appeal Liu's recent License Section records indicating that Liu was granted a permit on May 23, 2005, and was unlicensed before that time. These documents and the facts they represent are not in the evidentiary record, and CPSD does not request that we take judicial notice of them. We note, however, that even if the record supported a finding that Respondent abetted Liu's illegal operations, we would consider a carrier's pending application and subsequent licensed status as a mitigating factor in assessing a fine against a third person for abetting the carrier's earlier illegal operations.

CPSD states that the POD is silent regarding the safety violations alleged in the OII. There is no error. The POD's discussion, findings of fact and conclusions of law indicate that the allegations in the OII are undisputed, and the POD adopts a fine and investigative costs in resolution of those allegations.

CPSD states that the POD errs in adopting a fine of $4,500 and $9,500 in investigation costs because CPSD's rationale for supporting those amounts in settlement no longer exists. There is no error. The POD adopts the fine and costs on the basis of the evidentiary record and in consideration of the parties' recommendations. Specifically, CPSD recommends, in its closing argument, that the Commission impose this $14,000 penalty for the violations alleged in the OII, and an additional $7,000 in penalties for alleged violations subsequent to the settlement. Respondent did not contest the violations alleged in the OII or the recommended penalty for them, but did contest the additional alleged violations and CPSD's recommendation that all fines and penalties be due immediately.

CPSD asserts that the POD legally errs by failing to consider economic harm to licensed carriers who lost business to Respondent, to customers who were placed at risk for Respondent's failure to maintain insurance, and to customers who may have been overcharged or whose goods may have been damaged by Respondent but who did not file a complaint with the Commission. There is no error. The penalty amount for pre-settlement violations is not in dispute. To the extent that Respondent's later violation -- abetting of Zhang's misuse of the previously disconnected Lucky Moving phone number -- led to moves by Zhang, those moves would have been conducted by a licensed mover. We are not persuaded that the harm to other licensed carriers from business lost to another licensed carrier, albeit due to the improper use of previously disconnected phone numbers, is an aggravating factor for purposes of assessing a fine against Respondent.

CPSD takes issue with the POD's reasoning that the finding of probable cause did not put Respondent on notice that the disconnected phone numbers should not be used in connection with legal moving services. CPSD notes that Pub. Util. Code § 5322(d) prohibits reconnection absent a petition or application for hearing before the Commission. We agree that the statute imposes conditions on reconnection, but the fact remains that disconnected phone numbers were reconnected at Zhang's request, not the Respondent's. Zhang was not a defendant in the phone disconnect proceeding, and is a licensed carrier. To the extent that CPSD believes that Zhang is in violation of § 5322(d), it may pursue an action against Zhang. We decline to find, under these facts, that Respondent's ability to detect the violation is an aggravating factor for purposes of assessing a fine against her.

CPSD implies that the POD errs in relying on Respondent's testimony that she could not pay the penalty if it is immediately due rather than payable over the course of a year. CPSD states that Respondent provided no evidence in support of her testimony, and attaches to its appeal evidence to rebut Respondent's testimony. This evidence is not in the record and will not be considered. Respondent's sworn testimony, which was subject to cross-examination, constitutes record evidence upon which the POD may properly rely.

CPSD suggests that affirmation of the POD would discourage staff from pursuing enforcement actions and signal that the Commission is not serious about enforcing the Household Goods Carriers' Act. We disagree. We see this investigation and CPSD's related work as successful, both by virtue of having stopped Respondent's illegal operations and, according to CPSD's representation in its appeal, by Liu's achievement of legal status for his household goods operations. We nevertheless remind CPSD that it bears the burden of proving its allegations in enforcement proceedings. The Commission's refusal to find violations of the Act in the absence of proof does not indicate our indifference to enforcing the Act.

Assignment of Proceeding

Susan P. Kennedy is the Assigned Commissioner and Hallie Yacknin is the assigned Administrative Law Judge and the Presiding Officer in this investigation.

Findings of Fact

1. In the OII, CPSD accuses Respondent of unauthorized operation as a household goods carrier.

2. Respondent does not dispute the allegations in the OII.

3. Respondent admits to over 100 unauthorized household goods moves.

4. Respondent and CPSD jointly moved for Commission adoption of a proposed settlement imposing a $4,500 fine and $9,500 in costs in resolution of the allegations in the OII. CPSD has petitioned to withdraw from the proposed settlement.

5. Upon entering into the proposed settlement, Respondent ceased operating as a household goods carrier.

6. After entering into the proposed settlement, Respondent answered inquiries for household goods moving services on behalf of other household goods carriers.

7. The record does not support a finding that any of the household goods carriers for whom Respondent provided services were unlicensed.

8. Zhi Yuan Zhang, an individual doing business as Express Moving Company, requested and obtained reactivation of phone numbers listed in SBC Smart Yellow Pages advertisements for Lucky Moving that had been disconnected pursuant to court order.

9. Respondent answered inquiries to the previously discontinued phone numbers listed in the Lucky Moving advertisements on behalf of Zhang doing business as Express Moving Company.

Conclusions of Law

1. Respondent should pay $4,500 fine and $9,500 in costs as agreed to by the parties in resolution of the undisputed allegations in the OII.

2. After entering into the proposed settlement, Respondent violated §§ 5311(a) and 5313 by abetting Zhi Yuan Zhang in holding himself out as the unlicensed household goods carrier Lucky Moving Company. CPSD's petition to withdraw from the proposed settlement should be granted.

3. Due to the minor nature of this violation, the difficulty of its detection, and the totality of the circumstances, Respondent should not be further fined for her violation of §§ 5311(a) and 5313.

4. Respondent's payment of the fine and costs should be made in equal quarterly payments of $3,500, with the first payment due within 30 days of the effective date of this decision and the subsequent payments due every 90 days thereafter.

5. Investigation 04-07-003 should be closed, effective immediately.

ORDER

IT IS ORDERED that:

1. Fan Ding, a.k.a. Ding Fan or Lisa Ding, is fined $4,500 and assessed $9,500 in investigative costs. Respondent shall pay the fine plus costs in four equal payments of $3,500, the first being due no later than 30 days after the effective date of this decision, and the subsequent payments being due every 90 days thereafter. Payment shall be made payable to the California Public Utilities Commission and remitted to the Commission's Fiscal Office at 505 Van Ness Avenue, Room 3000, San Francisco, CA 94102. The number of this decision shall be included on the face of the checks.

2. CPSD's petition to withdraw from the proposed settlement agreement is granted.

3. CPSD's August 30, 2005, motion to admit into evidence (1) the "Affidavit in Support of a Probable Cause Finding for Termination of Telephone Service;" (2) a collection of documents consisting of the court case printout, preliminary injunction, temporary restraining orders, and filings and supporting declarations on behalf of the California Public Utilities Commission in San Francisco Superior Court, Case No. 04-428873; and (3) the "Declaration of William G. Waldorf Re: Cost of Investigation" is granted, and the exhibits are admitted into evidence.

4. Investigation 04-07-003 is closed.

This order is effective today.

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

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