House panel hears testimony on Padden bill to increase judicial independence

Today the House Judiciary Committee heard public testimony on a bill sponsored by Sen. Mike Padden aimed at increasing the independence of the state’s administrative-law judges by reducing opportunities for them to be pressured or punished by state-agency heads.

“It’s so important for the public to have confidence in the administrative-law process, as well as the judicial process,” testified Padden, R-Spokane Valley. “We have to strive to be fair in both appearance and in fact; we want the process to be impartial, unbiased and transparent, as much as we can.

“It’s really common sense that you don’t want someone in an agency telling an administrative-law judge that they have to rule a certain way. We don’t want a rubber-stamp or kangaroo court. The provisions in this bill will help restore confidence in the public and in the parties who participate in these hearings.”

Padden, who served for 12 years as a Spokane County district court judge, introduced Senate Bill 6019 in the wake of a scandal involving allegations of undue influence and retribution by the Office of the Insurance Commissioner in a case involving Seattle Children’s Hospital.

The allegations came in 2014 from Administrative Law Judge Patricia Petersen, who claimed that Chief Deputy Insurance Commissioner James Odiorne pressured her to rule in favor of the agency and then retaliated against her when she became a whistleblower. The case was settled out of court, with the agency paying Petersen $450,000.

Padden’s bill would do two things to avoid a similar situation in the future:

  1. It would require an administrative law judge in an internal agency or employed by the Office of Administrative Hearings to issue final orders, which could only be appealed to a superior court; and
  2. It would clarify that improper “ex-parte communication” includes communications with an agency employee that requires a presiding officer to decide cases according to the agency head’s unwritten policies.

Seattle attorney Tim Parker, who has 35 years of experience representing consumers in administrative hearings, testified in support of the bill.

“I have had the experience of having obtained a favorable decision from OAH, only to have the agency reverse the result – even though the agency didn’t participate in the hearing or hear testimony from witnesses,” Parker said. “That’s a blatantly unfair process. It’s not only unfair, it gives rise to a great deal of cynicism among persons and entities who are regulated by state agencies.”

Michael Temple with the Washington State Association for Justice also testified in support of the bill, as did Robert Battles with the Association of Washington Business.

“The purpose of any quasi-judicial proceeding is to provide a fair, neutral and unbiased forum for both parties,” said Battles. “We need to be able to stop these ex parte communications and this bill does that.”

Columbia Legal Services’ Robin Zukowski, who served for two years as the deputy chief administrative law judge at OAH, testified that she has represented low-income people in administrative hearings for more than 30 years.

She described for the committee members why restoring public confidence in the administrative process is so important.

“The [Administrative Procedures Act] is the way citizens can disagree and appeal a decision that a state agency has made about their lives. It’s a less formal and more accessible system, and for low-income people in Washington, this is the justice system.

“Those 69,000 hearings each year held by [the Department of Social and Health Services] or by OAH on behalf of DSHS, are all subsistence decisions – life and death decisions for those appellants. They deserve the appearance of fairness and actual fairness,” said Zukowski.

“It’s very difficult to explain to someone that the final decision in their case is going to be made by the same agency that they are disagreeing with.”

Representatives of several state agencies testified that they have concerns about some of the bill’s language. Padden acknowledged that many good ideas and opportunities for clarification were brought to his attention after the bill was approved by the Senate. He testified that he welcomed action by the House committee to perfect the bill and send it back to the Senate for agreement.

SB 6019 was approved unanimously by the Senate earlier this month.