July 29, 2014

Medina
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Magistrate: Randy Stepp’s lawsuit doesn’t belong in federal court

Randy Stepp

Randy Stepp

A federal magistrate has recommended the dismissal of a challenge to the Medina school board’s decision to rescind the contract of former Superintendent Randy Stepp.

Stepp filed a lawsuit in U.S. District Court in Cleveland in May 2013, alleging breach of contract, defamation and invasion of privacy.

In October, the school board voted to terminate Stepp after a special state audit found more than $4,000 in illegal spending by Stepp and more than $1.5 million in spending that wasn’t properly documented or had no clear public purpose.

In recommending dismissal, Magistrate Willam Baughman Jr. said the contract issues raised in the lawsuit are grounded in state law and should be handled by a common pleas court rather than federal court.

Baughman said the questions of law raised by Stepp are “issues that federal courts have historically strongly preferred to leave to the judgment of state courts in the absence of diversity or significant federal questions.”

Stepp and the school board have 14 days to file an objection to the magistrate’s conclusion before U.S. District Judge Lesley Wells issues a final ruling on the case.

The magistrate’s recommendation was cheered by Christopher Ernst, an attorney representing school officials.

“This is a great ruling,” he said. “This is the first step to showing that Stepp’s allegations are truly meritless.”

Stepp was placed on administrative leave in April 2013, pending the completion of a special state audit into his spending of district funds from a “carryover” fund at the Medina County Schools’ Educational Services Center. The board also voted to rescind a contract it approved for Stepp in January 2013, saying the contract was approved without proper publicity and in violation of open meetings laws.

Wednesday’s ruling doesn’t mean the battle is over for the school board.

While the magistrate recommended dismissal of Stepp’s claims of breach of contract, defamation and violation of due process, he requested the judge delay consideration of Stepp’s claim that his First Amendment rights were violated.

In his suit, Stepp argues the school board issued a gag order preventing him from defending himself.

The magistrate said that the federal court should not address that allegation until two related cases now working their way through Medina County Common Pleas Court are settled.

The first lawsuit was filed in July 2013 by J.R. Russell, a Medina attorney, against the Medina school board and Stepp. The suit alleges that Stepp’s contract violated Ohio open meeting laws and argues “Randy Stepp is not entitled to retain any money or benefits extended to him by the contract,” including an $83,000 signing bonus.

Stepp also faces a lawsuit from the school board for the $4,121 the state auditor found Stepp owed the district.

The two lawsuits were put on hold by a visiting judge pending the outcome of Stepp’s federal lawsuit.

Once the federal suit is dismissed, Ernst said he expects Stepp to pursue his case against the school board in county common pleas court.

Ernst said he plans to file countersuits to reclaim the $83,000 bonus and $172,000 in district funds used to pay off Stepp’s old college loans.

“The taxpayers have a right to get their money back,” Ernst said.

School board President Tom Cahalan declined to discuss specifics of the lawsuits, but said he was pleased by the magistrate’s recommendation.

“Any time an issue is dismissed, we feel like we’re making headway,” he said.

Contact reporter Loren Genson at (330) 721-4063 or at lgenson@medina-gazette.com. Follow her on Twitter @lorengenson.