Discussion

Pursuant to § 5285, this Commission may revoke a household goods carrier permit, after notice and opportunity to be heard, "for failure to comply with any provision of the [Household Goods Carrier Act] or with any order, rule, or regulation of the commission, or with any term, condition, or limitation of the permit."

In the Order Instituting Investigation (OII), and reprinted in Appendix A, CSD presented the results of an investigation of Ace and formally accused Ace of 80 distinct violations of applicable laws or regulations. Ace has submitted no evidence disputing the vast majority of those accusations.

Ace submitted no specific evidence disputing Nemhauser and Jacobson's allegations of overcharging and holding goods hostage. Nemhouser and Jacobson submitted copies of the contracts Ace provided to the check guarantee company, which they alleged Ace had altered. Ace did not explain why two contracts would be required for one move, particularly when our regulations require that customers receive a not-to-exceed price. We find that the evidence supports Nemhauser's and Jacobson's testimony regarding Ace's actions.

Ace disputed Montanez's claim that she paid $1,072 with sworn testimony of Unikov. This alleged nonpayment forms the basis for Ace's justification for retaining Montanez's antique piano. CSD has presented a series of documents, including the cancelled check and a statement from Unikov's bank that the check was deposited into his account, that convincingly demonstrates that Unikov did

in fact cash Montanez's check. We find Unikov's testimony on this point to lack credibility. Having cashed the check, Unikov had no justification for failing to return the antique piano.

In sum, the record shows that Ace has a pattern of noncompliance with applicable law and regulations, and that Ace has a practice of extracting unlawful additional amounts for a move by refusing to unload household goods, "holding goods hostage." In addition, Unikov failed to disclose his criminal history on his permit application, and has subsequently been convicted of driving under the influence.

These largely undisputed facts are more than ample to support a finding that Ace has operated in violation of applicable law and regulations. Accordingly and pursuant to § 5285, we revoke Household Goods Carrier Permit T-188,990 issued to Igor Unikov and Isay Radomyselsky doing business as Ace of Bace Moving Company (Ace) for violations of the Pub. Util. Code and our regulations.

In addition, we find that Ace's retention and disposal of Montanez's antique piano was unlawful. Ace is hereby directed to make reparations to Montanez for the reasonable value of the piano.

Similarly, Ace's attempt to collect amounts in excess of the quoted not-to-exceed price from Nemhauser and Jacobson was unlawful. Ace was not entitled to any amount over the quoted price of $390. Ace is directed to cease all attempts to collect on the check for $953. Ace is not entitled to those funds. Ace is also directed to refund to Jacobson and Nemhauser the difference between the $523 that they paid and the quoted amount, $390, or $133.

Pursuant to § 5313, this Commission is empowered to impose a fine of up to $500 per violation of law or regulations. Here, CSD has presented largely undisputed evidence of 411 violations. This could support a fine of up to $205,500.

To provide guidance in setting fines, the Commission recently 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 assessing fines. 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, D.98-12-075, App. B. Those principles begin by distinguishing reparations from fines. The purpose of reparations is to return improperly collected amounts to customers. The purpose of fines, in contrast, is to deter further violations. In determining whether to impose a fine and, if so, at what level, the Commission will consider the severity of the offense, the utility's conduct, the financial resources of the utility, the totality of circumstances in furtherance of the public interest, and the role of precedent.

Here, reparations are known to be due to Montanez, Nemhauser, and Jacobson. CSD also presented evidence that several other persons had filed complaints alleging unlawful conduct by Ace.

Turning to the factors for deciding to whether to impose a fine and, if so, for what amount, the severity of the offense is the first factor. The severity of the offense includes consideration of the economic harm imposed as well as the economic benefit gained by the public utility. Here, Ace unlawfully obtained hundreds of dollars per move. The severity of the offense also includes consideration of the effects of disregarding a Commission order because compliance is essential to the proper functioning of the regulatory process. In this case, Ace has been shown to exhibit a pattern and practice of systematically

disregarding Commission directives. On balance, and in light of the overall circumstances of this violation, we find Ace's violations were severe.

The next factor is the utility's efforts to prevent, detect, and rectify the violation. In this case, Ace did not prevent, detect, or rectify violations and actively obfuscated Commission staff's attempts to review Ace's operations. CSD also showed that Ace made several misrepresentations of fact on the record in this proceeding. Ace has stated that it made several attempts to improve its operations after its meetings with Commission staff. While we encourage improvement, the scope and depth of Ace's violations required a far greater proactive effort to seek out, understand, and implement applicable laws and regulations. Ace made no such efforts and exhibited only minimal compliance with specific staff directions.

The next factor is the financial resources of the utility. Ace appears to be a modest operation with minimal financial resources.

The role of precedent is also important in our consideration of imposing a fine. Here, CSD has provided us no citations to previous decisions imposing a fine on a household goods carrier.

The final factor is the totality of the circumstances in furtherance of the public interest. As we noted in the OII, we place tremendous trust in household goods carriers in granting them operating authority. Our citizens tender their most personal and treasured belongings to movers. Where that trust is violated, as the record here so amply demonstrates, we must take resolute action that unmistakably conveys the message that such conduct will not be tolerated.

In sum, the factors support a substantial fine. We, therefore, find that a fine of $500 for each offense specifically listed in the OII and reproduced in Appendix A of this decision. Those 80 offenses yield a fine of $40,000. Prompt

and complete payment of all reparations due to former customers is a significant mitigating factor. Should Ace make all required reparations, we will consider that in mitigation of the fine and reduce it to $10,000.

Ace shall have 45 days to make all required reparations. No later than 45 days from the effective date of this order, Ace shall submit to CSD a statement of reparations it has made. CSD shall have 15 days to file and serve a compliance filing stating whether Ace has paid all reparations. Should Ace fail to submit the required statement, CSD shall so state in a compliance filing. Unless and until a compliance filing is made stating that Ace has made all required reparations, Ace's fine shall remain at $40,000.