Dolly, Inc. v. State Utilities And Transportation Commission

CourtCourt of Appeals of Washington
DecidedAugust 11, 2020
Docket53388-0
StatusUnpublished

This text of Dolly, Inc. v. State Utilities And Transportation Commission (Dolly, Inc. v. State Utilities And Transportation Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Dolly, Inc. v. State Utilities And Transportation Commission, (Wash. Ct. App. 2020).

Opinion

Filed Washington State Court of Appeals Division Two

August 11, 2020

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II DOLLY, INC., No. 53388-0-II

Appellant,

v.

WASHINGTON STATE UTILITIES AND UNPUBLISHED OPINION TRANSPORTATION COMMISSION, a Washington state agency,

Respondent.

LEE, C.J. — Dolly, Inc. (Dolly) appeals the order of the Washington State Utilities and

Transportation Commission (Commission), which found that Dolly had engaged in regulated

activities without a permit and imposed penalties for numerous instances of advertising to provide

regulated activities. Dolly argues that the Commission’s order is invalid because (1) the

Commission erroneously interpreted or applied the law in finding that Dolly had engaged in

regulated activities, (2) the Commission’s finding that Dolly advertised on Yelp and through

newspaper articles was not supported by substantial evidence, and (3) the Commission failed to

follow proper procedures.

Dolly has waived its challenges based on the erroneous interpretation or application of the

law and substantial evidence by failing to raise them before the Commission. Dolly’s challenge No. 53388-0-II

based on the failure to follow procedures fails because Dolly has not met its burden to show

prejudice. Accordingly, we affirm the Commission’s order.

FACTS

A. SPECIAL PROCEEDING AND COMPLAINT

Dolly is an online platform and application that customers can use to arrange the transport,

pickup, or delivery of items. On January 10, 2018, the Commission issued an order instituting a

special proceeding and a complaint seeking to impose penalties (Order 01) against Dolly for

engaging in regulated carrier services without a required permit. Order 01 stated that the

Commission had information leading it to believe that Dolly violated Title 81 RCW “that forbid

engaging in business as a household goods carrier or advertising for the transport of property

without first obtaining the necessary permits” on 22 occasions. Administrative Record (AR) at

72. Order 01 also contained allegations that Dolly violated provisions of Title 81 RCW related to

hauling solid waste for compensation. Order 01 specifically stated that “[u]pon proof of these

allegations, RCW 81.04.510 authorizes the Commission to issue an order requiring Dolly to cease

and desist activities subject to regulation under Title 81 RCW.” AR at 72-73.

In addition to the special proceeding to determine whether Dolly engaged in activities

subject to regulation by the commission, Order 01 alleged specific violations of the law that

subjected Dolly to penalties:

The Commission alleges that Dolly violated RCW 81.80.075 a total of 11 times by engaging in business as a household goods carrier without first having obtained a permit from the Commission. Specifically, Dolly engaged in business as a household goods carrier 11 times by advertising to do so on its company website, billboards, Facebook, Instagram, Twitter, LinkedIn, iTunes, Craigslist, YouTube, Pinterest, Yelp, and newspaper articles.

2 No. 53388-0-II

Dolly violated RCW 81.80.355 a total of 11 times by advertising for the transportation of property within this state without first having obtained from the Commission a common carrier permit. Specifically, Dolly advertised for the transport of property for compensation on its company website, billboards, Facebook, Instagram, Twitter, LinkedIn, iTunes, Craigslist, YouTube, Pinterest, Yelp, and newspaper articles.

Dolly violated RCW 81.77.040 by operating for the hauling of solid waste without first having obtained from the Commission a certificate of public convenience and necessity. Specifically, Dolly operated for the hauling of solid waste a total of three times by advertising to do so on its website, YouTube, and Yelp.

AR at 78.

Order 01 also sought penalties for specific instances of advertising that subjected Dolly to

monetary penalties. Order 01 contained three separate requests for monetary penalties:

Staff requests that the Commission, pursuant to its authority under RCW 81.04.380 and RCW 81.80.075, assess penalties of up to $5,000 against Dolly for each violation of RCW 81.80.075.

Staff also requests that the Commission, pursuant to its authority under RCW 81.04.380 and RCW 81.80.360, assess penalties of up to $1,000 against Dolly for each violation of RCW 81.80.355.

In addition, Staff requests that the Commission, pursuant to its authority under RCW 81.04.380, assess penalties of up to $1,000 against Dolly for each violation of RCW 81.77.040 and RCW 81.77.090(2).

Order 01 also sought an order for “Dolly to cease and desist activities subject to regulation

under Title 81 RCW until it has obtained the necessary authority from the Commission.” AR at

78. And Order 01 required Dolly to appear,

to give testimony and evidence under oath as to its operations. The burden of proving that the alleged operations are not subject to the provisions of Title 81 RCW shall be upon Dolly as provided by RCW 81.04.510.

3 No. 53388-0-II

AR at 79. Order 01 further provided notice that a brief adjudicative proceeding regarding the

complaint for penalties would be held at the same time as the special proceeding.

B. HEARING

At the brief adjudicative hearing before an administrative law judge (ALJ), Susie Paul, a

compliance investigator for the Commission, testified regarding her investigation into Dolly’s

operations. Paul testified that she became aware of Dolly in 2015, after receiving complaints that

Dolly was operating without required permits. Paul met with staff from Dolly and was told that

Dolly simply connected drivers and customers and that the contract for services was between the

driver and the customers.

In 2017, Paul received additional information about Dolly’s operations and contacted Mike

Howell, one of the founders of Dolly. After Howell further explained the Dolly business model,

Paul determined Dolly should be classified as a household goods carrier, and she told Howell that

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