OIC allegations raise question: why are “independent” judges supervised in house?

Insurance Commissioner Mike Kreidler

You may have seen the allegations: an administrative law judge in the state Office of the Insurance Commissioner (OIC) is accusing Commissioner Mike Kreidler’s top deputy, Jim Odiorne, of pressuring her to make rulings that align with what Mr. Kreidler wants.

Kreidler’s office has suspended the judge, Patricia Petersen, while the matter is investigated. OIC did not suspend Chief Deputy Odiorne. The State Auditor’s Office yesterday chose not to look into Petersen’s claim, but the head of the state employee union said “I believe [the OIC] is trying to influence cases. I don’t think by any stretch of the imagination is that appropriate.”

It will take time to sort through this matter, which came to a boil after Children’s Hospital in Seattle was left out of some health insurers’ provider networks. Kreidler’s office approved the health plans that excluded Children’s, and Petersen accused Odiorne of pressuring her to rule that those plans can continue to be sold without patient access to the hospital.

As an administrative law judge, Petersen’s rulings are supposed to be independent, though she is an employee of OIC. The agency has pointed out that Odiorne is Petersen’s direct supervisor and so communication between them is expected.

That is precisely the problem. At this stage, the accusations are flying and the facts will be determined later. Regardless of the outcome of this specific incident, the obvious question must be asked: why is an administrative law judge making independent decisions about OIC priorities an employee of OIC in the first place?

The very structure of this arrangement is problematic. Parties in these disputes expect the administrative law judge to make determinations without improper pressure. The position is one in which independence is paramount, yet the judge is directly supervised by the commissioner’s top deputy. With that kind of arrangement, they are practically setting up this kind of unfortunate situation.

We don’t yet know all of the facts in this story, but we do know that housing these hearings within OIC itself, with a judge who is expected to make independent judgments but is not independent of OIC, is a recipe for trouble. One idea would be to permanently move these disputes to the Office of Administrative Hearings. Severing the direct relationship between OIC and those making these important rulings would be better for the judge, better for OIC, and fairer to the parties involved who expect a fair hearing no matter the circumstances.
-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.