Judge dismisses suit filed by former Henderson city manager

By Jeremy Twitchell

Thursday, Oct. 15, 2009 | 12:37 p.m.

A U.S. District Court judge this morning dismissed former Henderson city manager Mary Kay Peck’s wrongful termination suit against the city.

Judge James C. Mahan dismissed Peck’s federal claim against the city without prejudice, meaning that Peck and her attorney, Norman Kirshman, have the option of either amending their complaint under a different law or appealing the judge’s ruling to 9th Circuit Court.

The Henderson City Council fired Peck in April, accusing her of mismanaging the city’s finances and creating a culture of fear at City Hall. Peck filed federal and state claims against the city and the City Council members, accusing them of impugning her character and denying her the right to respond to the allegations leveled at her.

The dismissal of the federal claim effectively dismisses the state claims as well, unless they are amended and refiled.

Attorney William Cooper, who represents the city in the procedures, had asked the court to dismiss Peck’s lawsuit because City Council members acted within their rights according to the employment agreement between Peck and the city.

Kirshman argued that the City Council had the option to dismiss Peck by issuing her 90- and 30-day written notices before the anniversary of her hiring in October, but failed to do so. By failing to follow the procedure outlined in the agreement, he said, the city had deprived her of her employment rights.

Cooper countered that the written notice was simply one option stated within the employment agreement, and that firing Peck without notice for cause, as the Council voted to do, was also outlined in the employment agreement as an acceptable termination procedure.

In agreeing with Cooper and issuing the dismissal, Mahan said Peck and Kirshman failed to prove their federal claim, which was that the city had acted in a manner that deprived Peck of her constitutional rights.

“A simple charge of incompetence or intimidating co-workers does not rise to a claim under (federal law),” Mahan said.

Mahan also granted qualified immunity to the City Council members who unanimously voted to fire Peck, which means they cannot be held individually accountable for punitive damages. Mahan said Council members could only be held liable for punitive damages if they were following an unfair stated practice of the city, which he said did not appear to be the case.

In arguing the point, Kirshman created a new wrinkle in the case: alleging publicly for the first time that Peck was fired as a retaliatory move for speaking out against the city’s plan to give $21 million from its land fund to the nonprofit committee the City Council created to build a space and science center in Henderson. Former Mayor James B. Gibson and former City Councilman Jack Clark, whose terms ended in June, both appointed themselves to the committee and were part of a 3-2 vote in their final council meeting that gave the money to the committee.

“The Council was following a practice, and the practice happened to be a new practice,” Kirshman said. “The practice happened to be terminating a city manager because she raised concern about using $21 million from the city’s land fund as a donation to a nonprofit corporation started by two retiring members of the City Council.”

After the council changed hands following the June, its new members voted to hold onto the $21 million as an emergency fund for the city, but earmark it for the space and science center if not otherwise needed.

Cooper was quick to argue against Kirshman’s assertion.

“There’s nothing in the complaint about that and all we can look at at this point is what’s in the complaint,” Cooper said. “If (Kirshman) wants to bring that up and try to prove it, then he has an opportunity to amend his motion. But that matter is not appropriate to discuss at this point.”

Following Mahan’s ruling, Cooper said the city of Henderson will have to wait and see how Kirshman responds.

“It’s a big day and we’ll seek what Norman Kirshman wants to do,” Cooper said. “If he wants to appeal it, then it goes up to the 9th Circuit Court for several years. If he wants to amend, then it will come back and the city will have a chance to move for dismissal again.”

Kirshman could not be immediately reached for further comment.