CONFERENCE 2002 SET FOR NOVEMBER 16

David Marcus, ALJ

OAALJ and Willamette University College of Law, Law and Government Program, are proud to announce a one-day CLE conference at the law school in Salem on Saturday, November 16, 2002.

This conference is the ninth such conference to be offered by the Association and Willamette as co-sponsors. Both were also co-sponsors of the highly successful 5-day Annual Meeting and Conference of the National Association of Administrative Law Judges, held in Portland in 1998.

"Administrative Hearings in Oregon: Improving the Process and the Product," offers a program that is timely and relevant, with broad appeal to ALJs and hearing officers, attorney and non-attorney practitioners, government agency administrators and staff, and law students.

The keynote address, "Fostering Public Confidence and Trust in the Administrative Justice System," will be delivered by Hon. Robert D. Durham, Associate Justice of the Oregon Supreme Court. Justice Durham brings a unique historical perspective to the issue, given his experience as a practitioner in the administrative form, and as the chair of the Oregon Commission on Administrative Hearings in the late 1980's.

"Judicial Developments" will be presented by Professor Norman Williams and Hon. Rives Kistler, Oregon Court of Appeals. In this session, selected recent appellate decisions at the state and federal level will be examined, with a comparative analysis of trends.

"Legislative Preview" will highlight those areas of administrative law most likely to receive consideration from the 2003 Legislature, including the Hearing Officer Panel sunset, judicial review, and specific subject matter areas, such as child support orders, and more. The panel members are David Kenagy, Executive Director, Oregon Law Commission; Janice Krem, Chair, OSB Administrative Law Section Legislative Committee; Sandra Hansberger, Chair, Oregon Law Commission Work Group on Administrative and Judicial Child Support Orders; and, Phil Schradle, Special Counsel to the Attorney General.

Following the lunch hour, Professor Marcia "Sam" Jacobson will present "Understanding Preclusion, Estoppel and Waiver." Participants will then choose between three breakout sessions: "Credibility: Developing the Record and Making the Finding;" "Conducting the Hearing: Practical Tips for ALJs & Party & Agency Representatives;" and, "Hearsay Evidence: 10 Years After Reguero, Where Are We?" To help overcome the frustration of having to choose, participants will be provided, upon request, with audiotapes and all materials from the two sessions not attended.

The day will conclude with "Ethics of Decisional Independence and Accountability," presented by Professor Yvonne Tamayo, PUC Chief ALJ Tom Barkin and Chief Hearing Officer Tom Ewing, Oregon Hearing Officer Panel.

Anticipated MCLE credits: 5 general credits plus 1 credit in ethics. An additional 3 general credits may be earned based on the audio taped breakout sessions, for a seminar total of 9 credits.

BOARD GRANTS SCHOLARSHIP TO LARRY SMITH

Jane Clink, ALJ

The Oregon Association of Administrative Law Judges (OAALJ) Board of Directors is pleased to announce that a National Judicial College (NJC) scholarship has been awarded to our esteemed colleague Administrative Law Judge (ALJ) Larry Smith. Several outstanding candidates applied for the scholarship but ALJ Smith was selected due to his known skills and the wide range of hearings he has conducted since becoming a hearing office in 1982. ALJ Smith has conducted administrative hearings for State of Oregon Vocational Rehabilitation Services, Workers Compensation, Employment Department and most recently with the Hearing Officer Panel. ALJ Smith is a graduate of University of Oregon Law School and has been a member of the Oregon State Bar since 1977. ALJ Smith has been a CLE presenter and an editor for a publication on the topic of Labor and Employment Law. ALJ Smith also arbitrates consumer complaints about new vehicles and he is actively involved in local theatrical productions. ALJ Smith is a long-standing OAALJ member and he exemplifies the professionalism of an administrative law judge. ALJ Smith is a worthy recipient of the scholarship and he has agreed to share his comments on points of interest after he attends the NJC course on "Advanced Administrative Law" in Reno, NV August 12-16, 2002. The OAALJ board had voted to approve an NJC tuition scholarship for an active member of the association during its regular board meeting on May 30, 2002. An announcement was mailed to all qualified members with details on how to apply for the scholarship on June 10, 2002 and ALJ Smith was chosen during the board meeting on July 10, 2002. Congratulations to ALJ Smith. We will look forward to his comments after he attends the course on Advanced Administrative Law.

SHETTERLY INTERVIEW

Steve Rissberger, ALJ

1) In general terms, what plans does the oversight committee have to attempt to obtain permanent approval for the Hearing Officer Panel during the 2003 legislative session?

The Hearing Officer Panel Oversight Committee was established under HB 2525, which created the Hearing Officer Panel, to review the performance of the panel and make recommendations to the legislature.

As chair of the Oversight Committee, I requested that the Joint Legislature Audit Committee conduct an audit of the panel, to help the Oversight Committee identify the strengths of the panel, and where it might improve its performance. That audit is still underway, and will not be concluded before October or November. The Oversight Committee probably will not make any specific recommendations until it has reviewed the audit report.

I think it is safe to say that the Oversight Committee will support the continuation of the panel. Beyond that, I hesitate to suggest what the committee will do until it has finished its work.

2) My understanding is that several legislative concepts have been drafted and now are awaiting review by legislative counsel. If this information is correct, and you’re in a position to comment on them, what are these legislative concepts and what would they do?

I am aware of some proposals, but I am sure there are plenty of others that I am not aware of. The proposals that I know about cover a wide range, from simply removing the sunset, to make the panel permanent (but making no other changes), to transferring the panel out of the Employment Department entirely. Other proposals would add or remove agencies from the panel. All of these proposals have come in from several different sources, and the fact that they may be under consideration is no indication of any particular level of support. There will be a winnowing process as we approach the session. I think the budget scenario will have a lot to do with what makes it and what doesn’t.

3) Will the proposals sent to the legislature include a move by the panel from the Employment Department to DAS, or another state agency? If so, what is the rationale for this proposed move?

One proposal under consideration would transfer the panel to DAS. The rationale is that, while the panel was designed in part to remove the hearing process from the agencies that conduct the hearings, the fact remains that the Employment Department remains the single largest "customer" of the panel. It makes sense to consider whether it would further the independence of the panel to move it to an agency, such as DAS, that does not have a hearing section. This is not a reflection of any dissatisfaction with the Employment Department. The Department has been a gracious host and supporter of the panel.

Another option under consideration would be to leave the panel in the Employment Department, but create a greater structural and management separation from Department oversight.

As with all of the proposals currently under consideration by various legislators and others, these are just proposals for now, and I am not suggesting that one or the other would have a strong chance of being enacted as things stand now. Still, we need to be willing to consider creative options that will enhance the work of the panel.

4) Will the proposals sent to the legislature include any changes in the management structure of the panel? If so, what changes will be proposed and what is the rationale for those changes?

I am aware that some consideration has been given to changing the panel to provide for the appointment of the Chief Hearing Officer for a term of years. Another would make the Chief a direct appointee of the Governor. These ideas are intended to give the Chief and the panel a greater degree of operational independence from the panel’s host agency, whether that agency be the Employment Department or DAS or some other agency entirely. Again, nothing in the consideration of these proposals should be taken as a reflection on the Employment Department, or any concern about any improper influence on the panel by the Department. We are just looking at best practices and policies.

5) Is it likely that the panel’s jurisdiction will expand to include additional agencies, or shrink and exclude some agencies that are already included?

There are proposals to go both ways. If I were to predict, it would be that the scope of the panel will be expanded, rather than constricted. But I can’t say what agencies, boards or commission are most likely to be brought into the panel. It is consistent with the experience of other states that have adopted a central panel model that, as the panel develops a track record and credibility, agencies are added. In many cases, agencies that were originally excluded from the panel seek to be added to it.

6) How is the panel performing from your perspective-better than expected, worse than expected? What is going well and what needs improvement?

I am very pleased with the performance of the panel. There have been relatively very few kinks and surprises, which is remarkable given the size and scope of the panel. I think this speaks well of the support the panel has received from the Employment Department, the Governor’s office, the Department of Justice, the private bar, and the hearing officers themselves; even many of the agencies that were cool to the idea of the panel to begin with. I think Tom Ewing, as Chief Hearing Officer, has done an outstanding job of shaping the panel and making it work in this pilot project phase. He is committed to the success of the panel.

I think there have been some concerns about timeliness of orders, and other administrative issues, but nothing of a scope that can’t be managed or would threaten the continuation of the panel. I know the legislature is still strongly supportive of the panel.

I think it has been a success, and our challenge going into the next session will be to build on that success to make the panel even better.

7) The legislature recently approved a bill that extends the sunset for the panel for budgetary purposes until 2005. Is this a good sign for the panel in terms of its prospects for becoming a permanent agency? Why or why not?

The bill doesn’t have much of an impact on the future of the panel. It was passed so that the agencies, boards and commissions that are under the panel wouldn’t have to prepare two alternative budgets going into session – one presuming that the sunset would be extended and one presuming it would not be. By extending the sunset to the end of the 2003-05 biennium, agencies can budget for the biennium on the basis that the panel will be there for the biennium. But it will still be incumbent on the legislature to undertake the review of the panel, and take action to make it permanent in the next session. I am confident that will happen. ?

AVAILABILITY OF HEARSAY EVIDENCE DECLARANTS

Maurice "Skip" Russell, ALJ

Two recent cases in the criminal context may be of interest to ALJs doing an analysis of hearsay evidence under Reguero v. Teacher Standards and Practices, 312 Or 402 (1991); Cole v. DMV, 172 Or App 132 (2001) and Dinsmore v. DMV, 175 Or App 509 (2001). The cases are State v. Moore, 334 Or 328 (2002) and State v. Crain, 182 Or App 446 (2002).

It may be recalled that one of the factors to be considered in the analysis of hearsay evidence in the administrative context under Reguero, Cole and Dinsmore, is the "availability of the witness." In Reguero, the witnesses were sitting outside the hearing room, clearly available for hearing. In Cole, the court held that DMV knew that more than one police officer had been involved in the case, but did not subpoena all of them. In Dinsmore, DMV knew of the officers, and subpoenaed them, but the officers failed to appear.

While in Dinsmore, the court did not address the "availability" question directly, focusing instead on the right to cross-examine witnesses, in Cole the court held, in part, that the Department had failed to show that the witnesses were unavailable.

Crain and Moore illuminate that holding considerably. In Moore, the trial court considered an objection to admission of hearsay based upon an exception to the hearsay rule (OEC 803(2)) for "excited utterances," that is, "statements relating to a startling event or condition made while the declarant was under the stress of excitement caused by the event or condition." The trial court admitted the evidence, concluding that previous Oregon cases were not controlling because the U.S. Supreme Court had changed its opinion on the question. The Oregon Supreme Court held that this was error. Notwithstanding that the statement fit the elements of the exception, as a precondition for application of the hearsay exceptions under OEC 803, the Oregon constitution required that the State show that good faith efforts to obtain the attendance of the hearsay declarant had been made, and that the declarant was unavailable to appear at trial.

Conversely, in Crain, the declarant was not only available as a witness, but did in fact appear at the trial. The Court of Appeals held that in that event, admission of out-of-court statements by the witness did not run afoul the Right of Confrontation because the witness was subject to cross-examination regarding the substance of the hearsay.

These two cases are not, of course, of direct applicability to administrative hearings, since they hinge on Article I, Section 11 of the Constitution, a provision that only applies in criminal trials. It seems likely, however, given the stress put on the right of cross-examination in the administrative cases, that the Court of Appeals, when presented the opportunity, will adopt a similar stance.

As of now, it is likely that if declarants are clearly available but not present, hearsay statements will not be treated as "substantial evidence" regardless of the other Reguero factors. If the agency shows that the declarant is not available, then the other Reguero factors can be considered to decide whether the hearsay is "substantial evidence" for a specific finding. The question remaining is the allocation of the burden of proof. In Reguero, Cole and Dinsmore, the court considered the question of availability of the witness to be undisputed. The question is therefore still open what will happen when a declarant’s availability is subject to a conflict in the evidence, or otherwise in dispute. In other contexts (notably, right to communicate with counsel), the burden in administrative proceedings of showing a violation of the right has been placed on the Petitioner, even though the analogous right in criminal matters has been allocated to the prosecution. It is unclear how the Court of Appeals will treat this question, when (or if) it comes up.

In the meantime, it would be wise to make sure that a clear record is made on availability of any declarants of hearsay evidence presented in a case, at least if an argument as to the substantiality of the evidence is raised. ?

AN IDEA WHOSE TIME HAS COME

OAALJ Board

This is legislative concept season. A time when proposed legislation that is likely to be presented to the 2003 legislature undergoes review in the legislative counsel’s office. While there are a number of proposals that are likely to find their way onto the legislative floor that could effect the future of Oregon’s new Hearing Officer Panel, one proposal in particular has attracted our attention, and garnered our support.

This is a proposal not only to make the Hearing Officer Panel a permanent agency, but also to transfer the Hearing Officer Panel out of the Employment Department and place it in another state agency—most likely the Department of Administrative Services (DAS). This strikes us as a good idea for a number of reasons.

To start, let’s look at fundamental policy objectives. The primary purpose for adoption of House Bill 2525 was to promote good government fairness by ensuring that Oregon Citizens who participate in administrative hearings do not appear before administrative law judges who are employees of the same agency that issued the underlying decision that they had appealed. As things now stand, Oregon citizens who request hearings following adverse decisions by the Employment Department still confront this unfortunate situation. The Employment Department remains the Panel’s single largest customer. Indeed, the Employment Department generates several times more hearing requests than any other state agency. Employers and individuals who obtain work related benefits through the Employment Department should receive the same fundamental fairness guarantees as other Oregon citizens. This would be best accomplished by moving the Panel out of the Employment Department.

A second advantage of moving the Hearing Officer Panel out of the Employment Department is that it completes a process that is still only half-done. It creates a specialized and independent entity with the primary function of conducting and deciding administrative hearings. This, of course, is what a central panel concept is all about. And, in our view, it is also good policy for Oregon. A centralized and truly independent hearing agency is more likely to be equally responsive to the interests of all the players in administrative hearings—private citizens, their advocates, state agencies and ALJs. Further, a truly independent Hearing Officer Panel is more likely to serve the interests of state government, as a whole, as opposed to the interests of just one agency.

The Employment Department has been an effective, generous and supportive host agency for the Hearing Officer Panel over the past three years. Both Rep. Lane Shetterly, chairman of the Panel’s oversight committee and Chief Hearing Officer, Tom Ewing, have stressed this point in recent interviews with representatives from OAALJ’s governing board. Shetterly and Ewing have been particularly effusive in their praise of the Employment Department’s new director, Debbie Lincoln. However, it is no secret that the relationship between the Panel and Employment Department managers has, at times, been a rocky one. Recent conflicts have entailed such fundamental issues as hiring decisions, training policies, and educational standards for ALJs. If the Hearing Officer Panel is going to successfully perform its statewide mission, then these decision cannot be resolved based solely on internal policies developed by one state agency prior to the establishment of the Panel. Rather, hiring and training decisions should be made based on the criteria espoused by the Legislature in HB 2525, and the interests of the state administrative hearings process as a whole, with opportunity for significant input from organizations that have an interest in these issues, such as the Employment Department, and other state agencies who generate the hearings decided by Panel ALJs.

A final and salient point here is the will and wisdom of our membership. At OAALJ’s annual meeting in 1998, our membership overwhelmingly approved the following resolution:

• "RESOLUTION: OAALJ supports impartial adjudication of contested case hearings in the public interest and believes the most appropriate structure to assure impartial adjudication is established of a central office of administrative hearings as a separate agency in the Executive Branch, rather than any consolidation of hearings’ functions in any existing agency."

The notion of a centralized hearing agency was still a new and untested idea in Oregon in 1998. As a result, placing this new centralized agency within the Employment Department was an understandable and perhaps necessary expediency. However, much has been accomplished over the past three years. What was once an untested idea, has become a flourishing reality. The Hearing Officer Panel has demonstrated that it is capable of deciding Oregon’s administrative caseload in a fair, efficient and economical manner.

Obtaining permanent approval of the Hearing Officer Panel remains a legislative priority in 2003. However, we think that the time is also ripe to find a permanent and more suitable home for the Panel. While creation of a new stand-alone agency for the Panel remains our preference, moving the Panel to DAS strikes us as an eminently workable alternative. Unlike the Employment Department, DAS has never had its own hearing unit. As an agency, DAS generates relatively few hearings and presumably has little interest in the Panel’s internal affairs. Placement of the Panel in DAS should insulate the Panel from the political and policy pressures that might otherwise hamper the Panel’s ability to fulfill its statewide role.

In our view, this is an idea whose time has come.