Investigation brings to light affiliation between judge, agency

Judge alleges state OIC evaluated her in biased fashion; many wonder why she’s rated by agency she judges

Staff writerMay 28, 2014 

State Insurance Commissioner Mike Kreidler ordered an outside investigation last week into actions by an administrative law judge who accused her supervisor of linking her performance reviews to how well her opinions support agency goals.

As the probe gets underway, some outsiders are asking why the judge, Patricia Petersen, is directly supervised by an agency whose actions she is making independent judgments about.

Other agencies such as the Department of Health have administrative law judges that hear specialized cases such as those involving hospital certification. But many other agencies — including the Department of Social and Health Services, Employment Security, Liquor Control Board and others — use the state’s pool of judges at the Office of Administrative Hearings.

The Office of the Insurance Commissioner (OIC) should make use of that pool, some say.

“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,” former Washington attorney general Rob McKenna wrote last week on his Smarter Government website.

McKenna suggested the Office of Administrative Hearings handle OIC disputes.

So far, the OIC is not showing interest in such a restructuring. Spokeswoman Stephanie Marquis said that insurers who have complaints about decisions Kreidler has made already have the option of going outside the agency. But since that option was written into agency rules in the 1990s, no one has taken advantage of it, she said.

Whether the insurance commissioner’s office welcomes it or not, lawmakers in the state Senate are getting ready to look at the issue. The Republican chairman of the Senate Law and Justice Committee on Tuesday added administrative judge independence to the list of topics his panel plans to discuss at its June 16 work session in Olympia.

Sen. Mike Padden of Spokane Valley said McKenna’s suggestion is one of several ideas his committee might consider.

Padden noted there is a long tradition of having administrative judges that are independent and able to decide cases without undue influence.

The Office of Administrative Hearings was created by the Legislature in 1981 to allow more independence, and it now has 74 judges on staff in offices around the state. Its website says the greatest share of its cases deal with unemployment insurance claims, public assistance and child support.

In the insurance commissioner case, Petersen was a longtime in-house judge who had outstanding reviews of her work during annual evaluations, according to documents released to The Olympian in response to a records request. But that changed last year, according to Petersen.

The OIC has rejected Petersen’s claims that her supervisor Jim Odiorne had improper contact with her about an ongoing dispute involving Seattle Children’s Hospital. Asked if Odiorne would also be investigated, Marquis said the focus initially is on whether Peterson’s claims are true.

Brad Shannon: 360-753-1688

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