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Governor: 1-year cooling off period applies to ALJs

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The governor today fired the state's top utility regulator, citing ethical concerns about how a former Administrative Law Judge presided over cases involving a regulated energy company leading up to his taking a job there.

But even more significant for the Indiana legal community is how Gov. Mitch Daniels’ actions are telling ALJs that the spirit of a mandatory one-year cooling-off rule applies to them, and they should be careful about considering outside employment while presiding as neutral parties over these administrative matters.

Terminating David Lott Hardy as Indiana Utility Regulatory Commission chairman, the governor specifically pointed to the reason being the recent departure of general counsel Scott Storms who took a job in late September as a lawyer in Duke Energy’s regulatory division.

The attorney admitted to the practice of law in 1989 was the agency’s chief legal advisor and served as ALJ, and the governor said his taking a job somewhere directly involved in cases he’d recently presided over raised the “appearance of impropriety.”

The governor’s general counsel David Pippen sent a memo to all agency heads outlining an internal review that found Storms had been communicating with Duke about a job even while he was presiding over administrative hearings concerning the energy company.

"Additionally, the agency head was aware of the communications and did not remove the lawyer from matters for which the lawyer was now conflicted,” Pippen said in his memo, saying that Daniels has directed that administrative opinions over which Storms presided be reopened and reviewed “to ensure no undue influence was exerted in the decisions.”

In the memo, Pippen wrote that the governor considers the one-year cooling off period to apply to anyone at the ALJ level, and that this matter specifically has been referred to the Inspector General to determine if any laws were broken or whether misinformation was presented to the state Ethics Commission.

Though it’s not outlined which Duke cases are at issue, Storms had presided over a handful of matters involving Duke – most significantly one relating to cost overruns at the company’s Edwardsport generating plant. After questions arose late last month about Storms’ departure and new position, Duke said that he and the company had previously sought an advisory opinion from the state ethics commission on whether Storms would be subject to that one-year cooling-off period before being allowed to take a job at Duke. The commission found it didn’t apply because Storms wasn’t directly involved in the decision-making, but the panel also found that he couldn’t be involved as an attorney at Duke in any matters he might have presided over while working as an ALJ for the state agency.

But with this announcement, the fallout worsened as Duke said it was placing Storms on administrative leave “pending the completion of a full evaluation.” The company did the same with its president and chief executive officer of Indiana operations, Mike Reed, who had started with Duke in June after serving as commissioner of the Indiana Department of Transportation and previously serving as executive director of the IURC under Daniels from 2006 to 2009.

Hearing about the IURC-specific issues, Indianapolis attorney and longtime legal ethics advisor John Conlon said this goes to a broader issue about how state agency attorneys also function as ALJs and he said it’s ironic in this case that “the appearance of impropriety” is being cited by the governor.

“I think that there is an inherent conflict when an attorney who works for a state department also functions as a supposedly neutral ALJ,” he said. “Unfortunately, these types of situations go on routinely throughout state government.”

Conlon said he wouldn’t be surprised if disciplinary charges are explored, but that it would be up to someone to file a complaint before the Disciplinary Commission for that to happen. No formal disciplinary actions are listed on the state’s appellate court docket for Storms, and the commission is prohibited from speaking about any issue that may or may not be pending.

As part of the announcement today, Pippen reiterated that no ALJ who presides over information-gathering or order-drafting matters should engage in communications with regulated industries regarding potential jobs without recusing him or herself from cases involving that industry.

Daniels immediately appointed as the new IURC chairman Jim Atterholt, who serves on the commission and is the state’s former insurance commissioner.

Indianapolis Business Journal reporter Chris O’Malley contributed to this story.

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  1. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  2. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

  3. Hi there I really need help with getting my old divorce case back into court - I am still paying support on a 24 year old who has not been in school since age 16 - now living independent. My visitation with my 14 year old has never been modified; however, when convenient for her I can have him... I am paying past balance from over due support, yet earn several thousand dollars less. I would contact my original attorney but he basically molest me multiple times in Indy when I would visit.. Todd Woodmansee - I had just came out and had know idea what to do... I have heard he no longer practices. Please help1

  4. Yes diversity is so very important. With justice Rucker off ... the court is too white. Still too male. No Hispanic justice. No LGBT justice. And there are other checkboxes missing as well. This will not do. I say hold the seat until a physically handicapped Black Lesbian of Hispanic heritage and eastern religious creed with bipolar issues can be located. Perhaps an international search, with a preference for third world candidates, is indicated. A non English speaker would surely increase our diversity quotient!!!

  5. First, I want to thank Justice Rucker for his many years of public service, not just at the appellate court level for over 25 years, but also when he served the people of Lake County as a Deputy Prosecutor, City Attorney for Gary, IN, and in private practice in a smaller, highly diverse community with a history of serious economic challenges, ethnic tensions, and recently publicized but apparently long-standing environmental health risks to some of its poorest residents. Congratulations for having the dedication & courage to practice law in areas many in our state might have considered too dangerous or too poor at different points in time. It was also courageous to step into a prominent and highly visible position of public service & respect in the early 1990's, remaining in a position that left you open to state-wide public scrutiny (without any glitches) for over 25 years. Yes, Hoosiers of all backgrounds can take pride in your many years of public service. But people of color who watched your ascent to the highest levels of state government no doubt felt even more as you transcended some real & perhaps some perceived social, economic, academic and professional barriers. You were living proof that, with hard work, dedication & a spirit of public service, a person who shared their same skin tone or came from the same county they grew up in could achieve great success. At the same time, perhaps unknowingly, you helped fellow members of the judiciary, court staff, litigants and the public better understand that differences that are only skin-deep neither define nor limit a person's character, abilities or prospects in life. You also helped others appreciate that people of different races & backgrounds can live and work together peacefully & productively for the greater good of all. Those are truths that didn't have to be written down in court opinions. Anyone paying attention could see that truth lived out every day you devoted to public service. I believe you have been a "trailblazer" in Indiana's legal community and its judiciary. I also embrace your belief that society's needs can be better served when people in positions of governmental power reflect the many complexions of the population that they serve. Whether through greater understanding across the existing racial spectrum or through the removal of some real and some perceived color-based, hope-crushing barriers to life opportunities & success, movement toward a more reflective representation of the population being governed will lead to greater and uninterrupted respect for laws designed to protect all peoples' rights to life, liberty & the pursuit of happiness. Thanks again for a job well-done & for the inevitable positive impact your service has had - and will continue to have - on countless Hoosiers of all backgrounds & colors.

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