Baseless and relentless
Rothman’s lawsuits at Commerce paint a ‘disturbing picture of dubious motivation and disregard for the law.’
Three legal smack-downs against the Minnesota Department of Commerce have led key legislators to demand Commissioner Mike Rothman be fired. Yet accountability continues to be elusive for the long-time DFL politico.
“Court opinions and other legal filings published in the past several months have afforded Minnesotans a stark look at the internal operations of the Minnesota Department of Commerce,” Rep. Tony Albright (R-Prior Lake) and House Commerce and Regulatory Reform Committee Vice Chair Rep. Kelly Fenton (R-Woodbury) wrote in a February letter to Gov. Mark Dayton.
“They paint a disturbing picture of dubious motivation and disregard for the law, in which the good work of public servants is overshadowed by the inappropriate behavior of a few high-level officials. These conclusions come not just from adverse parties, but from state and federal judges of high regard.”
Rothman has weathered criticism previously for brushing aside warnings over state grants to now-imprisoned Community Action of Minneapolis CEO Bill Davis and for allegedly politicizing the health insurance rate review process leading up to Dayton’s re-election.
But now legal decisions issued by a federal judge and two administrative law judges have led to accusations at the State Capitol of abuse of authority, “rogue actions” by Commerce officials and First Amendment rights violations at the regulatory agency under Rothman.
A botched investigation into Safelite AutoGlass not only cost the state agency its reputation for impartiality, but also $943,534 in federal court-ordered legal expenses to the auto glass replacement company victimized by the department’s discredited tactics.
U.S. District Court Judge Susan Nelson ruled earlier this year that staff investigators under Rothman pursued a baseless, yet relentless investigation against Safelite, violating the company’s First Amendment rights and harming Minnesota consumers
The agency pursued the inquiry despite having received no consumer complaints against Safelite or evidence of harm to consumers, according to court documents. The federal court found not only was the investigation predicated on “financially-motivated complaints from competitors” but that Rothman’s agency shared confidential investigative information with those competitors.
“On Commissioner Rothman’s watch, the Department of Commerce abused their power, bullied businesses and acted against the interest of Minnesota consumers,” Rep. Fenton said in response to the legal fees the court judgment handed down in August. “Now, taxpayers are on the hook for nearly $1 million because unelected bureaucrats believed they were above the law.”
The federal court also overturned a state order that barred Safelite from doing business in Minnesota. But Rothman shrugged it off and doubled down in a statement to KSTP-TV.
“The Commerce Department stands by its insurance company investigation to help protect consumers and small, local businesses from anti-competitive practices, and will continue to do its job even when companies hire out-of-state attorneys with fees in excess of $1,000 per hour,” the Commerce Department statement said. “…Minnesotans can trust that the Commerce Department will be on their side and take action.”
Legislators have also flagged a related administrative law case the Commerce Department brought against Safelite shortly after the company sought to defend itself against the agency in federal court.
Ultimately, Administrative Law Judge James LaFave recommended dismissal of all charges, finding “the Department’s argument is not supported by the facts.” Yet after nearly two years in court, the agency still fought to keep the case alive.
Another administrative law court slapped down an attempt by Rothman to twist department regulations to coerce insurance companies “to collect and report data on the gender and sexual orientation of their governing boards and suppliers,” according to the legislators’ letter.
Rothman insisted the insurers’ personal data was within “the Commissioner’s powers to conduct investigations” for a wide-ranging diversity program in collaboration with California, New York, Oregon, Washington and the District of Columbia.
During oral arguments, commerce officials “could not identify any particular data that the Commissioner could not demand,” according to the December 2016 final decision rebuking the regulatory agency.
“The suggestion that an insurance company does not undertake any activity that is beyond the reach of the Commissioner to inquire upon, as much as the Commissioner wishes, and as often as he wishes, is very troubling,” Administrative Law Judge Eric Lipman wrote. “…[T]he Department is unlawfully enforcing, or attempting to enforce a policy or similar pronouncement as though it were a duly adopted rule.”
Three strikes and you’re out? Not if you’re a political appointee in the Dayton administration.