Evaluations of OAH Services Unrepresented Responses 3rd Quarter 300 Jane Dee Hull Governor 500 250 200 150 100 50 Excellent 400 Excellent Good 300 Good Average 200 Average Poor 100 Poor 9 n io n Q ue st io Q ue st st Q ue st ue Q 8 7 6 n io n 5 io n 4 io st ue Q Q ue st io n 3 2 n Q ue st io n 1 io n st io ue st Q ue Q ue st io n Q 1 ue st io n Q 2 ue st io n Q 3 ue st io n Q 4 ue st io n Q 5 ue st io n Q 6 ue st io n Q 7 ue st io n Q 8 ue st io n 9 0 0 Q The All Responses 3rd Qua rter OAH Cliff J. Vanell Director Vol. 19 April 2001 www.azoah.com Official Newsletter of the Arizona Office of Administrative Hearings Questions: 1. Attentiveness of ALJ 2. Effectiveness in explaining the hearing process 3. ALJ’s use of clear and neutral language 4. Impartiality 5. Effectiveness in dealing with the issues of the case Note: The four major groups of respondents are: Represented private party; unrepresented private party; counsel for a private party; and counsel for the agency. The respondents fill out the evaluations immediately after the hearing and the evaluations are not disclosed to the ALJ involved. 6. Sufficient space 7. Freedom from distractions 8. Questions responded to promptly and com- SETTLEMENT AGREEMENTS –TAKING THE PEN OUT OF THE JUDGE’S HAND Robert I. Worth, Administrative Law Judge A Settlement is a type of contract or agreement. Most often, the concluding of such an agreement between individuals or entities will resolve a prior dispute or controversy. pletely 9. Treated courteously Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 There are three primary benefits of entering into a settlement agreement. Two of the more obvious desirable results are the “Saving of Time,” and the “Saving of Expense.” These first two categories become shared benefits, especially in matters where extensive research, preparation, interviews, depositions and presentations may be necessary, as well as a perhaps realistic potential of further appeals. Depending on the status of the case at the time any settlement is finalized, it is probable that much overall wear and tear on the parties-in-interest, as well as on their wallets, would be avoided or at least minimized. The third and perhaps most important benefit of any settlement will normally be the “Certainty of Result.” Although many ultimate decisions by judges or juries are split in varying percentages, it is usual for one party to win and the other to lose. The certain result achieved by a mutual agreement serves to eliminate the worry of possibly not being the prevailing party, and most often the settlement Director’s note: OAH is committed to fairness and making hearings accessible to all. This article is the fourth in what we at OAH plan to be a series of informational articles to educate the public and parties who appear before us about the hearing process and how to better present their cases. The following article may be found at OAH’s website at www.azoah.com along with all previous articles published in the OAH Newsletter. will be coupled with a stipulation that each party shall bear its own counsel fees, thereby also eliminating another potential exposure of the parties, corporate or individual. This aspect of achieving a known-in-advance end result is subject to at least one recognized exception: when the parties mutually agree to submit their dispute to binding arbitration. Another obvious exception would have to be the consideration that one or perhaps both parties may not perform under the terms of the agreement as anticipated. When taking part in any settlement negotiation, the parties should be constantly aware of the reality that neither the parties, their respective lawyers or the tribunal, whether judicial or quasi-judicial, are able to change history. Since the clock can never be turned back, all focus must remain on the choices presently available to the negotiating parties, which frequently is a business decision or one of expedience and not a legal determination. Frequently, the ending terms are products of give and take, and a compromise is reached. There is no requirement for a settlement agreement to be in writing and verbal settlements are just as binding and enforceable as are those reduced to writing. However, the terms or even the very existence of a verbal settlement may be far more difficult or even impossible to establish at a later date. When one or more parties are represented by counsel, it is normally anticipated that either or both advocates will seek and finalize a written memorialization of all critical settlement terms. If any difficulty is encountered in securing an adversary’s signature to a proposed writing, a useful and frequently effective alternative, whether or not attorneys are involved, is to compose an informal, perhaps self-serving letter confirming the major provisions of the oral settlement agreement. This letter should be transmitted to the other party, expressly advising that if no reply is promptly communicated then the stated terms shall be deemed to be accurate. The terms of any settlement should not be so complex and intricate that there will be a high probability of future litigation “Settlements” continued page 2 The Office of Administrative Hearings (OAH) began operations on January 1, 1996. Administrative Hearings previously provided by regulatory agencies (except those specifically exempted) are now transferred to the OAH for independent proceedings. Our statutory mandate is to “ensure that the public receives fair and independent administrative hearings.” The process of unifying the administrative hearings function in OAH-style agencies This publication is available in alternative formats. The OAH is an equal opportunity employer. began in 1961 with California. The current states having adopted the model, with year of inception are: Arizona (1996), California (1961), Colorado (1976), Florida (1974), Georgia (1995), Illinois (1997), Iowa (1986), Kansas (1998), Louisiana (1996), Maryland (1990), Massachusetts (1974), Michigan (1996), Minnesota (1976), Missouri (1965), New Jersey (1979), North Carolina (1986), North Dakota (1991), Oregon (1999), South Carolina (1994), South Dakota (1994), Tennessee (1975), Texas (1991), Washington (1981), Wisconsin (1978) and Wyoming (1987). Mission Statement: We will contribute to the quality of life in the State of Arizona by fairly and impartially hearing the contested matters of our fellow citizens arising out of state regulation. Ag ency rej ects the recom men ded Ag ency am end s r eco mm end ed orde r de ci sio n on ly AL J decisi on ce rtified as fin al upo n 1.74% ag ency in actio n 2.48% 1% Ag ency am end s find ing s o f fa cts/conclu sio ns of l aw o nly 0.68% Agency Response to Recommended Decisions January 1 - M arch 31, 2001 Appeals to Superior Court: The appeal rate was 1.77% defined as appeals taken (22) over hearings concluded (1241**). Administrative Law Judges may not be of the same belief or give the same treatment whenever a Completion Rate: breach of a previously The completion rate was 111.86%, defined as cases completed concluded settlement is (1835) over new cases filed (1694). asserted. The accord Continuance: and satisfaction The average length of a first time continuance based on a analysis may well be sample of cases (first hearing setting and first continuance both more defensible, occurred in the 3rd quarter) was 46 days. The frequency of especially in adminiscontinuance, defined as the number of continuances granted trative disciplinary (159) over the total number of cases first scheduled (1698), actions. For example, expressed as a percent, was 9.36%. The ratio of first settings assume that the (1811) to continued settings on the calendar (157) was 1 to 0.08. original respective Dispositions: positions of both Hearings conducted: 67.6%; vacated prior to hearing: 29.6%; parties were substanhearings withdrawn by agency: 2.8%. tially apart on a claimed entitlement to a dollar Contrary Recommendations and Agency Response: amount, and both 21.97% of recommendations were contrary to the original agency retreat from their action where agency took a position. Agency acceptance of contrary recommendations was 83%. original positions to reach a negotiated * 1% of ALJ recommended decisions were certified as final by the OAH due to compromise amount. If agency inaction. one party commits a ** Cases which were vacated are not included breach of a payment obligation, the nonbreaching party should have choice to select between the benefits “Settlements” arising from the resulting settlement terms or continued from page 1 from the original demands or positions. with respect to compliance with or alleged The parties and their legal counsel, if breaches of the agreement. “Simplicity is a any, should be aware of the fact that any virtue.” The more complicated the terms of any tribunal, civil or administrative, should not be settlement, the more likely that there will be presented with an illusory settlement, whether future issues with respect to possible or prior to or at the hearing. If it appears that claimed breaches. As with any contractual there is merely an agreement to “hopefully, format, the settlement terms must be formulated perhaps, possibly” resolve all differences in and finalized in clear, concise and readily the future, or that the prospect of finalizing a understandable language. settlement is “almost, nearly” successful or complete, then no present resolution has been Settlement agreements may fall into concluded. If not, then no valid basis would two different categories. Perhaps the most exist for continuing or postponing any frequently encountered type of settlement is scheduled hearing, irrespective of how close one that is frequently referred to as an “Accord the parties are to finalizing the terms. Whenand Satisfaction.” The “accord” is the actual ever there are too many loose ends or tentative mutual agreement, consisting of the exchange conditions precedent for an agreement to be of promises for some substituted performance, fully and mutually confirmed, there is no binding and the “satisfaction” is the actual performance settlement as of that point in time. or the giving of the agreed consideration. Rehearings: The rehearing rate was .56%, defined as rehearings scheduled (7) over hearings concluded (1241**). There is another distinct type of settlement arrangement that, depending upon With certain cautions or limitations, the assigned Administrative Law Judge (“ALJ”) page 2 The ALJ’s participation should ideally be confined to clarifying any complex terms of an agreement, additionally confirming that the settlement is genuine and not illusory. This limited inquiry should enable an informed determination of whether the proposed terms are fair and reasonable under all the circumstances, also enabling a verification that the parties’ entry into the settlement was knowledgeable and voluntary. In the event any statements are made during this limited inquiry that would otherwise be inadmissible as being part of unsuccessful settlement negotiations, the ALJ may and should strike such statements and not consider them if the hearing on the merits is resumed. Both the parties and their counsel are generally willing to expressly waive any objections based upon a potential disqualification of an ALJ who is willing to participate in the limited inquiries. The confidentiality of all settlement talks should be stressed. As a general rule, customarily followed by all tribunals, statements and admissions made during the conducting of settlement negotiations will be inadmissible in the event an agreement is not reached. This extends to any purpose at a hearing or trial on the merits, even to the impeachment of a witness. If the rule were otherwise, there would certainly be great hesitation to even begin to propose or discuss compromise solutions. Remember that the terms of the settlement agreement are to serve as a road map to guide the future actions of the partiesin-interest, and the ultimate goal for the professional drafter or for the parties themselves is to attempt to sufficiently clarify and simplify the operative language so that the matter will not be returned to the tribunal or become the subject of a subsequent separate action involving issues of whether the respective parties have complied with the settlement terms. It is certainly not uncommon for cases to be settled at the beginning or during the conduct of the hearing. In most all forums, both civil judges and administrative law judges welcome the opportunity to allow the parties to effectively take the pen out of their hands and to let them decide their own respective destinies by mutual understandings embodied in an agreement. The successful negotiation and conclusion of a settlement agreement, frequently compromising disputed or unliquidated claims, is usually a “Win-Win” situation. 1800 1600 1532 1400 Agency acc epts w ithout modific ation 95.04% 1200 1000 800 600 400 200 11 40 28 1 Agency amends findings of facts/conclusions of law only Agency amends recommended order only Agency rejects the recommended decision ALJ Decision Certif ied as Final Upon A gency Inaction 0 Agency accepts w ithout modification 123456789012345678901 123456789012345678901 123456789012345678901 Substantive Policy 123456789012345678901 Statements adopted 123456789012345678901 Average Time Between Selected Events - Appealable Agency Actions v. Contested Cases*, January 1 - March 31, 2001 60 http://www.azoah.com/Rules.htm contains two links to substantive policy statements adopted by the OAH interpreting two terms found in A.A.C. R219-108. The full text is as follows: PS 1.0 Interpretation of the terms, “signature” and “express mail” for the purposes of A.A.C. R2-19-108 Filing Documents. “Signature” includes any affirmative mark. For example, the placing of a mark in an electronic document which states that by doing so one affirms that the document has been read, that there is a good basis for the submission of the document and that it is not filed for the purpose of delay or harassment, meets the requirements of A.A.C. R2-19-108(D). “Express mail” includes e-mail, overnight mail or any other type of expedited delivery. Therefore, the filing of a document with the Office or the service of a document upon other parties by such means satisfies the requirements of A.A.C. R2-19-108(E). 49.8 50 42.34 40 Days Acceptance Rate: ALJ findings of fact and conclusions of law were accepted in 97.58% of all recommended decisions acted upon by the agencies.* ALJ decisions, including recommended orders, were accepted without modification in 95.1% of all recommended decisions acted upon by the agencies. 78.43% of all agency modification was of the order only (i.e. penalty assessed). need not always be excluded from all portions of discussions or conferences dealing with settlement negotiations. Nor is there any automatic disqualification for the same judge to resume hearing the matter if settlements talks break down. cases 3rd Quarter Statistics At A Glance the parties’ demonstrated specific intent, must and will be treated as a “Substituted Agreement.” This type of settlement envisions the accepting of the settlement contract itself as a substitute for an existing claim which is extinguished. 30 20 9.41 10 10.99 13.59 AAA CC 6.01 0.48 1.49 0 Request f or Hearing to Scheduling Scheduling to First Hearing Date Conclusion of Hearing to ALJ Decision ALJ Decision to Agency Action *Note: Appealable Agency Actions are agency actions taken before an opportunity for a hearing. A typical example would be the denial of a license. A party is entitled to a hearing before the OAH before the action becomes final. Contested Cases involve actions yet to be determined by an agency. An example would be proposed discipline on a professional license with the possibility of suspension or revocation. Parties are entitled to a hearing before the OAH prior to the agency acting. 1,694 Cases Filed January 1, 2001 - March 31, 2001 3rd Q FY 2001 Accountancy Acupuncture Board ADA Administration Admin. Parking Agriculture Ag. Emply. Rel. Bd. AHCCCS Alternative Fuel Appraisal AZ Commission on the Arts Attorney General Arizona Works Banking Behavioral Health Ex. Building/Fire Safety Charter Schools Chiropractic Clean Elections Community Colleges 14 1 0 2 108 0 0 755 7 0 0 0 0 10 0 59 0 0 0 0 41 8 0 21 310 0 0 3187 7 4 0 0 1 23 4 131 0 4 2 0 3rd Q FY 2001 3rd Q FY 2001 Cosmetology Dental Economic Security Economic Security-CPS Education Environ. Quality Funeral Gaming Health Services Insurance Land Liquor Lottery Maricopa Cty. Housing Medical Examiners Naturopathic Nursing Osteopathic Parks Peace Ofc. Standards page 3 5 4 0 34 0 54 0 4 49 31 3 28 0 0 2 0 4 0 0 4 11 7 0 146 1 107 0 9 143 87 7 78 3 0 8 0 12 0 0 9 Pest Control Physical Therapy Podiatry Psychologist Examiners Public Safety - CW Public Safety - Trans Public Safety - Adult CC Pvt. Post. Ed. Racing Radiation Regulatory Registrar of Contr. Real Estate Revenue School - Deaf & Blind Secretary of State Technical Registration Water Qual. App. Bd. Water Resources Weights and Measures 22 0 1 0 4 2 0 0 5 0 413 19 36 1 0 0 0 2 11 22 0 1 3 5 7 3 0 10 0 1170 47 83 1 1 5 0 11 24