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Originally published: 2013-04-02 17:45:01
Last modified: 2013-04-02 18:41:43

New River employees' lawsuit dismissed

U.S. District Judge Richard Voorhees dismissed on Thursday a lawsuit filed last year by former employees of New River Behavioral HealthCare, the mental health agency that collapsed in fall 2011.

While the issue may not be heard in federal court, the employees and their attorney maintain that the central issue is not yet resolved.

"I know that our attorney is going to take a couple of days to weigh our options, but we are going to fight on -- that's pretty much the consensus," said Matthew Ross, who serves as a spokesman for the former employees.

New River Behavioral HealthCare began crumbling in August 2011 after managerial and financial crisis.

In April 2012, dozens of people who once worked at the organization sued the NRSA board, the five representative counties and individual board members. The group sought compensation and punitive damages because they were not paid for unused vacation time, as guaranteed in the agency's policies.

The lawsuit alleged a variety of offenses, including fraud, negligence, conspiracy and breach of contract.

Without holding a hearing on the case, Voorhees stated in an order Thursday that the plaintiffs had not identified a federal law that had been violated and that the court, therefore, did not have jurisdiction. He dismissed the case as moot.

"Plaintiffs' amended complaint fails in both instances to identify any specific federal statute or other authority defendants allegedly violated," the order reads in part.

New River board Chairman Nathan Miller, a Watauga County commissioner, offered a prepared statement Tuesday about the case.

"We appreciate the well-reasoned order of the court, which dismissed the plaintiffs' lawsuit, and are gratified that Judge Voorhees correctly noted that the lawsuit failed to identify any specific federal statute or authority which was allegedly violated," he said. "It is unfortunate that New River Behavioral HealthCare is no longer a functioning entity, and hopefully this will bring some closure to this process."

Miller wouldn't say much more about the lawsuit but restated that the counties had "stepped up to the plate" in loaning money to New River during its closure to ensure that the mentally ill received care and the employees were paid in October 2011.

"I'm very relieved to have that off of my plate," he said.

But the employees' attorney, Charles Oswald, says the matter isn't finished.

"The factual allegations remain unanswered," Oswald wrote in an email to the defendants Tuesday.
"The merits of the case are yet to be adjudicated."

Oswald further asked that the defendants provide written assurance within 10 days that the former employees will be paid the full amounts due.

"The single-minded goal here is realization of justice for these fine women and men who have served their communities so faithfully, and last week's court decision presents yet another opportunity for your clients to do the right thing," Oswald wrote.

The New River Service Authority board plans to meet at 4 p.m. Thursday at the Watauga Administration Building at 814 W. King St. in Boone.

Miller said the board did not know when it set the meeting that it would have an answer on the federal lawsuit.

The board also will likely discuss 18 small claims cases filed in Watauga County by former employees. Most of the employees were successful in their small claims, but the New River board appealed those rulings.

"There's movement on the small claims appeals, and I can't really give you any preview on that," Miller said. "Those should be taken care of at the meeting."

The board also will likely discuss the organization's audit, which the state ordered to be completed despite the board's objections that it was not possible with the finances in disarray.

"The state has agreed that an audit of this agency in its current state is not possible," Miller said. "I take that to mean an audit's not going to be necessary."

Miller said a portion of the $35,000 allocated for the audit would be refunded by the firm that attempted an audit, but he would not say how much.