II. Background
On April 21, 2005, the Commission opened this investigation to determine whether Mr. Move and its president Eli Galam (collectively, respondents) have violated the laws and regulations that govern household goods carriers. Respondents were informed that should such violations be proven, appropriate sanctions, including revocation of the household goods carrier permit, could be imposed. As set forth in the Commission's order opening this investigation, the Commission's Consumer Protection and Safety Division (CPSD) conducted a thorough investigation of respondents' operations, including regulatory and legal history. CPSD specified 20 violations of the Public Utilities Code and our regulations, most with multiple counts. These include allegations of holding goods hostage, charging in excess of verbal estimate, and failing to have required insurance.
A prehearing conference (PHC) was held on June 24, 2005. At the PHC, CPSD indicated that respondents had violated a September 10, 2004, Stipulation to Sentencing Order entered in Los Angeles County Superior Court (criminal court stipulation). CPSD agreed to provide copies of the evidence to respondents' counsel on an expedited schedule. CPSD also stated that it intended to convey the information to the Los Angeles City Attorney's office, which brought the charges that led to the Stipulation. The assigned Administrative Law Judge (ALJ) directed the parties to report any developments in the Superior Court case.
A procedural schedule for this proceeding was also set at the PHC that included written direct and rebuttal testimony. Evidentiary hearings were held September 21-23, 2005.1 The record was closed and this proceeding submitted for consideration by the Commission with the filing of reply briefs on November 21, 2005.
On December 9, 2005, CPSD moved to reopen the record. It stated that new evidence in the form of declarations from two customers showed that respondents were engaged in "continued, serious violations of the law," including allegations of property theft, major property damage, criminal vandalism, and inadequate supervision. Respondents opposed receiving the declarations into evidence on several procedural and substantive grounds. CPSD filed additional supplemental information on January 20, 2006, and requested that it also be included in the record.
On February 16, 2006, the assigned ALJ granted CPSD's motion. Submission was set aside and the record reopened. Additional written testimony was presented, and another day of evidentiary hearings was held on March 14, 2006. The proceeding was again submitted for consideration by the Commission on April 28, 2006, with the filing of final briefs.
Los Angeles Superior Court Criminal Case No. 3CR02706
On August 1, 2003, the Los Angeles City Attorney's Office filed the above-referenced criminal complaint against Mr. Move and Eli Galam. Based on evidence gathered through a joint investigation with CPSD, the complaint alleged violations of the Public Utilities Code, MAX 4,2 and the Penal Code, including attempted extortion, failure to follow Commission rules, and vandalism.
On September 10, 2004, the parties filed the criminal court stipulation which included Mr. Move's nolo contendere plea to 12 misdemeanor counts, with a sentence of 36 months probation, a fine of $1,000 plus a penalty assessment of $3,200, and restitution of $22,335 to 18 victims. Eli Galam pleaded nolo contendere to 11 misdemeanor courts, for which he was sentenced to 45 days in jail or CalTrans duty, with 36 months probation. The criminal court stipulation also required Mr. Move and Eli Galam to obey all laws, rules, and orders of the court.
In this proceeding, CPSD relied on some of the evidence also included in the criminal proceeding, and collected evidence of additional violations by Mr. Move. CPSD provided the City Attorney's office with new evidence CPSD gathered in preparation for and during this proceeding. CPSD concluded that the evidence showed "multiple violations of the Commission's rules and regulations, and hence of the probation agreement" and inquired about the City Attorney's intentions on seeking probation revocation.
In a letter dated February 28, 2006, Mark Lambert, Deputy City Attorney, informed CPSD counsel that he would investigate whether a probation violation should be noticed in the criminal case. Lambert also cautioned CPSD that the court had full discretion over any sentence for probation violations, and, in Lambert's experience, was "hesitant to close down a business if any part of it seems legitimate."
No further communication has been forthcoming since that letter, and no evidence has been presented showing that a probation violation has been sought by the City Attorney.
1 For the convenience of the parties and the consumer witnesses, all evidentiary hearings were held in the hearing room of the Commission's Los Angeles Office.
2 Pursuant to Pub. Util. Code § 5191, the Commission sets maximum rates for household goods carriers to charge as well as other rules and regulations applicable to transporting household goods. The "MAX 4 tariff" is the version of the tariff currently applicable to household goods carriers. Statutory references are to the Public Utilities Code, unless otherwise indicated.
