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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. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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