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ISBA panel still studying ALJ issues

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Indiana Lawyer Rehearing

Gov. Mitch Daniels fired the state’s top utility regulator recently, citing ethical concerns about how a now-former administrative law judge presided over cases involving a regulated energy company leading up to his taking a job there.

The governor’s actions told those serving as state agency 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 administrative matters. That also raised more questions for an Indiana State Bar Association Legal Ethics Committee task force that’s been studying ALJ-specific issues since January.

“We are still in the information-gathering process, and this is much bigger than we all had anticipated,” said Vicki Wright, an attorney at Krieg DeVault who chairs the specialized task force.

The group has been studying the scope of ALJ duties and ethical obligations and whether those individuals should be required to have law licenses. The plan was to issue a report at the ISBA board of governors meeting Oct. 15, but it isn’t ready, Wright said. She added that the governor’s recent actions have prompted more review.

In terminating attorney 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.

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

David Pippen, the governor’s general counsel, 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, noting 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 Indiana Ethics Commission.

Though it’s not outlined which Duke cases are at issue, Storms had presided over a handful of matters involving the company – most significantly one relating to cost overruns at Duke’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 commission about 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 involved in the direct 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.

Following the governor’s 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. Reed previously served as executive director of the IURC under Daniels from 2006 to 2009.

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 company.

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

Hearing about the IURC matter, Wright said the task force is now using that issue to examine what it should do on the ALJ front.

“We’re stepping a little out of our subject matter when talking about non-lawyers,” she said. “I’m not sure where the end-product will end up, but we’re meeting with and reaching out to the executive branch to brainstorm.”

Rehearing "Unique type of judging: State bar association exploring ethical concerns about ALJs" IL Dec. 23, 2009-Jan. 5, 2010
 

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  1. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  2. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  3. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

  4. The sad thing is that no fish were thrown overboard The "greenhorn" who had never fished before those 5 days was interrogated for over 4 hours by 5 officers until his statement was illicited, "I don't want to go to prison....." The truth is that these fish were measured frozen off shore and thawed on shore. The FWC (state) officer did not know fish shrink, so the only reason that these fish could be bigger was a swap. There is no difference between a 19 1/2 fish or 19 3/4 fish, short fish is short fish, the ticket was written. In addition the FWC officer testified at trial, he does not measure fish in accordance with federal law. There was a document prepared by the FWC expert that said yes, fish shrink and if these had been measured correctly they averaged over 20 inches (offshore frozen). This was a smoke and mirror prosecution.

  5. I love this, Dave! Many congrats to you! We've come a long way from studying for the bar together! :)

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