A good first step: state audit to look at problem of “independent” in-house judges

In May, a story broke about the state Insurance Commissioner’s top deputy pressuring an administrative law judge to rule the way Commissioner Mike Kreidler wanted. The judge’s rulings are supposed to be independent, but Kreidler’s office clearly felt they could dictate to the judge how she should rule.

At SGW, we asked a simple question: why are “independent” judges supervised in-house? One needn’t take sides in this specific controversy to see that the very structure is problematic. A judge cannot be truly independent if the agency, which has a vested interest in her rulings, also pays her salary, gives her performance reviews, and can dismiss her.

And if the rulings are not truly independent, what is the point of ruling through a judicial process?

The Office of the Insurance Commissioner (OIC) hired an independent attorney to write a report on the controversy, which concluded that the office was blameless in the matter. It is, as the Seattle Times’ Erik Smith called it, an investigation that was “bound to satisfy no one.”

There is movement in the right direction on this issue, though. State Auditor Troy Kelley, who declined to conduct a whistleblower investigation into the OIC controversy, announced that he will look into the larger issue of administrative law judges being housed within agencies, calling for a “systemic review to determine if the practice by some state agencies of using in-house administrative law judges is good public policy.”

Kelley is asking the right questions. “Can an administrative hearing process be considered independent if it is housed within an agency and reporting to the head of the agency? If these processes are truly meant to be independent, why house them within an agency, which could intuitively raise issues about independence and impartiality?”

The performance audit will look into how independent in-house judges really are, the costs of keeping judges in-house vs. using judges in the state Office of Administrative Hearings, and best practices in other states. That’s a good start toward solving a pretty obvious problem.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.