This article appeared in the February 2006 edition of Bench & Bar of Minnesota. The article is reprinted here with permission.
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Minnesota's OAH:
January 1, 2006, marked a significant
anniversary for Minnesota's legal system. As of that date, the Office of
Administrative Hearings (OAH) completed 30 years of service
to Minnesotans. In January of 1976, when Wendell Anderson was governor,
Robert J. Sheran was chief justice of the Minnesota Supreme Court, and
Butch Wynegar was an All-Star for the Minnesota Twins, the Office of
Hearing Examiners began with Duane Harves as its first chief hearing
examiner.1 Since then, use of
the administrative process as a method of dispute resolution has grown
significantly, and much of the growth that has occurred in Minnesota has
become a model for other states. Minnesota is nationally recognized for its
"good government" innovations in many areas, and administrative law is one
of them. In the mid-1970s,
Minnesota was a trendsetter in establishing a neutral forum for
adjudication of administrative disputes. In the succeeding three decades,
the state has continued to play a prominent role in expanding the range of
possibilities for resolving conflicts between citizens, state agencies and
political subdivisions through administrative proceedings. Hand in hand with innovations in
the use of the administrative process, the Legislature has repeatedly
emphasized its expectation of quality, accountability, and professionalism
in the services that OAH
performs. That expectation has also been a further catalyst for
innovation. The Central Panel Concept Prior to the 1970s, most state
agencies throughout the country employed their own hearing officers to
conduct the due process hearings that agencies were constitutionally or
statutorily required to provide for members of the public. Minnesota was no exception. Each individual agency conducted
its own hearings and conducted them in its own way. There was little
consistency of process from one agency to another, with some agencies
having formal rules governing the hearing process while others simply
proceeded by custom. Similarly, there was little
uniformity in the qualifications of the individuals holding the hearings.
Some agencies were authorized by statute to employ their own hearing
officers.2 Others were
precluded from using their own employees but were authorized to contract
with private individuals to preside over hearings.3 Concerns began to be raised about
the apparent lack of impartiality in the hearing process, specifically
about the unfairness inherent in having a person employed by an agency
conduct hearings to determine the propriety of that agency's actions. As
legislatures added to the number of situations requiring a due process
hearing, this agency-centric system became less and less workable. In the mid-1970s, the Minnesota
Legislature was one of a handful of state legislatures that was struggling
with these administrative hearing concerns. At the same time, concerns were
also being raised in Minnesota about agency rulemaking processes. One cause was the statutory
definition of "rule" in early versions of the Minnesota Administrative
Procedures Act. It was
ambiguous, and it appeared that agencies were taking advantage of the
ambiguities to avoid formal rulemaking. The Legislature increasingly felt
that state agencies were engaging in "informal rulemaking" — that is,
basing regulatory actions on statements of policy that were not subjected
to any formal process.4 The
Legislature was also becoming frustrated by the lack of consistency in the
rulemaking practices of the 75 or so state agencies that were promulgating
rules. All of these issues
came to a head in the 1974 and 1975 sessions of the Legislature, when
committees in both chambers conducted thorough reviews of existing
rulemaking processes. In 1946, California had
experimented with the administrative process by creating a "central panel"
administrative hearing office.
Central panels are independent agencies, usually in a state's
Executive Branch, not affiliated with any other state agency and whose
sole function is to provide administrative hearing services for other
state agencies. Since central
panel hearing officers are not employees of the agency whose actions are
being contested, the members of the public are assured of a neutral and
impartial forum for resolution of disputes with state agencies. When the Minnesota Legislature
decided to reform the administrative process in the mid-1970s, it chose,
along with three other states,5 to adopt the central panel concept. What
previously had been an experiment became a trend. Today, 27 states have some form of
central panel as do several Canadian provinces. Combining Independence and
Professionalism In 1975, the Minnesota
Legislature addressed the issues of impartiality, consistency, and
accountability by creating an independent central panel hearing office to
conduct administrative proceedings.
The new Office of Hearing Examiners was given an oversight role in
the rulemaking process and was empowered to conduct many of the due
process hearings that the state agencies were required to conduct.6 There were some significant
exceptions, however, particularly with respect to high-volume hearing
functions. Although implied
consent drivers' license revocation hearings were administrative in
nature, they had been handled in the state court system, and that practice
continued after the Office of Hearing Examiners was established. Additionally, welfare benefit
hearings, unemployment compensation hearings, and workers' compensation
benefit hearings continued to be conducted by employees of the state
agencies that were responsible for those programs. The legislation creating
Minnesota's central panel indicated that the Legislature wanted to ensure
independence and professionalism in the newly created hearing office. The chief hearing examiner was to
be appointed by the governor with the advice and consent of the
Senate. To assure
independence and to minimize potential politicization of the position, the
chief was given a term of six years — two years longer than the governor's
term of four years. The
legislation also contained an explicit requirement that hearing examiners
"be free of any political or economic association that would impair their
ability to function officially in a fair and objective manner."7 Additionally, the Legislature
addressed the issue of professional competence by requiring that all
hearing examiners "have demonstrated knowledge of administrative
procedures."8 The enabling legislation also
provided that "[i]n assigning hearing examiners to conduct such hearings,
the chief hearing examiner shall attempt to utilize personnel having
expertise in the subject to be dealt with in the hearing."9 This was in accord with the
longstanding view that administrative issues are often complex and highly
technical, and therefore require adjudicators with commensurate special
expertise. Accordingly, the
new chief hearing examiner made an effort to fill the hearing officer
positions with persons having experience in a variety of areas of
administrative law in order to comply with the Legislature's
expectations. Subsequently, as the range of
hearings that OAH conducted
grew and more cases were filed, a strict separation of case assignment by
area of specialization became problematic. Ultimately, overcrowded dockets
and fewer hearing officers made it necessary to assign cases outside of
narrow specialty areas. In an
effort to respond to the Legislature's concern about expertise, the OAH now cross-trains judges to
ensure that there is more than one judge that is familiar with each type
of subject matter. This has
had an added benefit in that judges enjoy the variety and have actively
worked to acquire expertise in multiple areas of administrative law. In turn, this has fostered a
stronger sense of unity, collegiality, and mutual supportiveness that has
enhanced the professional standing of the organization as a
whole. OAH has also been mindful of the
Legislature's expectations of high ethical standards and
professionalism. Although the
initial legislation creating the agency did not include statutory
standards of ethical conduct, the OAH subsequently proposed that its
judges be bound by the same provisions of the Code of Judicial Conduct
that apply to other judges in the Executive and Judicial branches. The
Legislature amended the enabling legislation in 2000, and the Code of
Judicial Conduct now applies to all administrative law judges and workers'
compensation judges. Range of Services Over the years, the Legislature
has sought to resolve various
kinds of disputes and provide timely due process for Minnesota's citizens
by giving OAH additional hearing responsibilities. Because OAH is an independent
state agency, and not under the control of any other agency, it has been
in a unique position to implement the Legislature's efforts to provide
consistent due process, to expedite resolution of administrative issues,
and to provide a resource for cities, counties and townships.
The first significant expansion
of OAH responsibilities
after its creation was in 1981, when legislation transferred all workers'
compensation hearing functions and the compensation judges who were
performing those functions from the Department of Labor and Industry to
the now renamed Office of Administrative Hearings.10 While OAH took on this high-volume
caseload, the Department of Labor and Industry retained, for the time, the
alternative dispute resolution functions and the quasijudicial settlement
function. The Department of Labor and Industry continued to employ a cadre
of compensation judges, known as "settlement judges," who presided over
settlement conferences and certain other related prehearing proceedings.
The two quasijudicial functions continued to be done in the two different
state agencies until 1997, when the Legislature created a Settlement
Division within OAH and
transferred all of the settlement functions to OAH, along with the settlement
judges who had been performing those functions. Since that transfer of
responsibility, the rulemaking/due process hearing function and the
compensation hearing function have become separate operating divisions
within the OAH. Each division is supervised by an
assistant chief judge.
Scheduling issues make it difficult for judges to regularly handle
cases in both divisions; however, such crossover is permitted by
statute. Child Support Cases In addition to workers'
compensation, the 1980s saw further expansion of the OAH jurisdiction,
this time in response to congressional directives. In 1984 Congress required all
states to create expedited procedures for dealing with child support
orders involving persons on public assistance. In 1987 the Minnesota Legislature
saw OAH as an efficient and responsible answer to that challenge. It
directed OAH to create an administrative process for establishing child
support obligations for welfare benefit recipients. The program enabled child support
orders to be issued or modified by administrative law judges, rather than
district court judges. By
1998 OAH was performing that function in all of Minnesota's 87
counties. The state
legislation went too far, however, in the breadth of powers it gave to
administrative law judges.
For example, the state legislation gave administrative law judges
all of the powers, duties, and responsibilities conferred on district
court judges for these cases, including the power to issue subpoenas and
issue warrants for failures to appear. Administrative law judges were
also given full authority to modify previously issued child support
orders, including those issued by district court judges. OAH's involvement with child
support orders came to an abrupt end in January 1999, when the Minnesota
Supreme Court held that OAH's administrative child support
hearing process amounted to an unconstitutional delegation of judicial
power to an Executive Branch agency.11 That spring, legislation was
enacted transferring that function back to the state court
system. Campaign Complaint Cases OAH responded again to the
changing needs of the state in time for the 2004 elections. Prior to 2004, Minnesota's county
attorney offices were obligated to investigate alleged violations of the
state's fair campaign practices and financial reporting requirements. This
often meant initiating grand jury proceedings and bringing criminal
prosecutions when violations appeared to be substantiated. This used
significant amounts of county attorney time and resources. Many complaints
involved relatively minor or technical infractions, and some were simply
frivolous and filed as a campaign tactic. Often, these complaints could
not be investigated before the related election was held. The county
attorneys and the Legislature were looking for a faster and more
economical method for hearing these complaints and sorting out the most
serious for criminal prosecution. In 2004 the Legislature
recognized the need for faster resolution of campaign complaints by
creating civil remedies and an administrative process for potential
campaign violations. Beginning on July 1, 2004, all complaints of alleged
violations of state statutes regulating campaigns for public office must
be filed with the OAH,
rather than with county attorneys.
The legislative change provided that those complaints must be
finally disposed of in administrative proceedings conducted by OAH before they may be the subject
of criminal prosecution by county attorneys. This new approach to addressing
violations of election campaign laws is much more expeditious and
efficient than prior practice.
There is no need to convene a grand jury unless a case is referred
by OAH for criminal
prosecution. Most hearings are held and decisions rendered prior to rather
than after the election. In the first two years after jurisdiction came to
OAH, the number of
complaints has dropped significantly and county attorney resources have
been redirected to other areas. Boundary Adjustment
Unit By Reorganization Order No. 192,
dated February 2, 2005, the governor transferred the functions, powers,
duties, and responsibility of the Department of Administration's Municipal
Boundary Adjustment Unit to OAH.12
The Municipal Boundary Adjustment Unit administers the state's
uniform system for city boundary adjustment, by exercising its
quasijudicial authority to issue administrative orders for the creation or
dissolution of cities or for the alteration of city borders through
consolidation, annexation, or detachment. Prior to the reorganization, the
Municipal Boundary Adjustment Unit had bounced from the Municipal Board to
the Office of Strategic and Long-Range Planning to the Department of
Administration. Morale was low, and the recognition of its important
functions was diminishing. Transfer of the unit to OAH consolidated all of the
administrative, alternative dispute resolution, and hearing functions
relating to municipal boundary adjustments. Combining all of those functions
under a single roof has resulted in improved communication, management
attention and focus. Services for Political
Subdivisions The Legislature has also
recognized that the state's political subdivisions are frequently required
to conduct their own adjudicative administrative hearings, such as liquor
license revocations.
Multimember governing bodies, such as county boards, city councils,
and school boards often find it difficult to conduct necessary
quasijudicial hearings efficiently as a body and to create records of
those proceedings that facilitate later judicial review. The hearings are, in many cases,
not an efficient use of time for entire boards or councils and require
expertise in legal issues that council or board members may
lack. Another innovation that sets
Minnesota apart from most other states, including those with central
panels, is OAH's statutory
authority to contract with local governments to have OAH's administrative law judges
conduct local administrative hearings. Although many county boards, city
councils, and school boards still either conduct their own administrative
hearings or hire private attorneys to conduct them, increasing numbers of
political subdivisions have been contracting with OAH for those services. OAH currently conducts licensing
hearings of various types, personnel due process hearings, and a variety
of other administrative hearings for a large number of different political
subdivisions.
Leader in
Quality Minnesota's OAH has also led the
way in designing systems for continuous improvement and performance
measurement of its judges and its internal operations. For example, in
1998, Chief Judge Ken Nickolai began the Judicial Development Program at
OAH. The purpose of the program was to identify for judges the things they
are doing well and also to identify those aspects of their performance
that could be improved. This was accomplished through surveys of attorneys
and parties appearing before OAH judges. The surveys asked key questions
about how the judges performed in terms of efficiency, fairness, knowledge
of the law, and other factors. The individual survey responses were kept
confidential and the individual results given to each judge. The judge
then discussed the results with a mentor, usually another judge, and set
goals for self-improvement. Those goals, and the judges' success in
achieving them, have become part of the judges' annual performance
reviews. This program was repeated in 2001 and is underway again this
year. OAH's Judicial Development Program
is unique in the U.S. and Canada. In 2001, it was a semifinalist for the
Innovations in American Government Award awarded by the Institute for
Government Innovation at the John F. Kennedy School of Government at
Harvard University. This unique approach to performance management for
judges has attracted both national and international attention and
invitations to speak to interested groups such as the National Association
of Administrative Law Judges, the Central Panel Directors' Conference, and
the British Columbia Association of Administrative Tribunals. Several states with central panels
have also requested more detailed information and design assistance from
OAH on this program as they
attempt to use it as a model for their own central panels. The office implemented another
approach to assessing the quality of judicial performance in the fall of
2005. A survey was sent to
all the agencies, commissions, and boards that utilize OAH's rulemaking, mediation, or
adjudication services. The survey asked for feedback on responsiveness,
cost, quality of work, and additional services that would be helpful, such
as mediation or training in rule writing. The results of these surveys
will be used for internal improvements and as a basis for providing
agencies with a more tailored approach to meeting their needs. The goal is to create
opportunities for better service and lower costs for the various state
agencies that utilize those services. OAH has plans to do a similar
follow-up with local units of government that contract with OAH for hearing
services. The trend in the United States
since the early 1970s has clearly been toward creating central panels as
an efficient and impartial means of dealing with administrative due
process hearings and rulemaking.
Some states conduct a narrower range of hearings than Minnesota's
OAH does, but many of those
are gaining that jurisdiction incrementally, as did Minnesota. For example, North Carolina and
Michigan acquired the rulemaking oversight function in 2005. On the other hand, other state
central panels have much wider jurisdiction than Minnesota's does. Typically, those central panels
have jurisdiction that includes unemployment compensation appeals and
welfare benefit, child support and corrections department due process
hearings. Significantly, in 33 states, implied consent hearings are
handled administratively rather than through the already overburdened
judicial system. After 30 years, Minnesota can
take some justified satisfaction in the quality and continuing innovation
at OAH. There are many
opportunities for improvement and expansion of the critical services OAH provides, but if history is
any indicator, the judges and staff of OAH will be up to the challenges
and at the forefront. c Notes 2 See, e.g., 1967 Minn. Laws ch. 864, § 4 and 1969
Minn. Laws ch. 1129, art. 4, § 5. 3 See, e.g., 1973 Minn. Laws ch. 897, § 20, 1969
Minn. Laws ch. 975, § § 11-13, and 1973 Minn. Laws ch. 688, §3. 4 In Thomas J. Triplett and James
Nobles, "Rule-making under Minnesota's Administrative Procedure Act: 1975
Amendments," Hennepin Lawyer, Jul.-Aug. 1975 at 14, the authors,
both of whom were serving as legislative staff, list a number of fairly
egregious examples of informal rulemaking by agencies. See also the discussion in Duane R.
Harves, The State of
Minnesota Office of Administrative Hearings 1975 - 1985: A Report on the
First Decade (1986) at pp.
3-4. 5 Florida,
Massachusetts, and Tennessee 6 1975 Minn. Laws,
ch. 380. 7 1975 Minn. Laws
ch. 380, § 16. 8
Id. 9 Minn. Stat.
§ 15.052, subd. 3 (1976). 10 1981 Minn. Laws
ch. 346. The title "hearing
officer" became "administrative law judge" to conform to this
change.
11 Holmberg v.
Holmberg, 588 N.W.2d 720 (Minn.
1999). 12 Minn. Stat.
§ 16B.37, subd. 2, effective on March 9, 2005. Raymond R. Krause is Chief Administrative Law Judge for the State of Minnesota. He previously held a position as a judge on the Minnesota Tax Court. |
Last Updated - February 22, 2006