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New River Service Authority Board To Meet April 4, Settlement Action Likely, Federal Case Dismissed

By Jesse Wood

April 2, 2013. The New River Service Authority board will meet on Thursday, April 4, at 4 p.m. at the Watauga County Administration Building on King Street.

The last time the board met was in June of 2012.

“The New River board is still intact. We only meet when we have stuff to do, and we have stuff to do,” said board member Nathan Miller, who is chair of the Watauga County Board of Commissioners.

The New River Service Authority board is comprised of commissioners from Alleghany, Ashe, Avery, Watauga and Wilkes.

Although the New River Behavioral HealthCare existed for more than 40 years before it collapsed in 2011, an interlocal agreement between the five counties came to be in 2006, creating the New River Service Agency as a provider of mental health services, developmental disability and substance abuse services in each of those counties.

When the board met last in June 2012, it was two months after 79 former New River Behavioral HealthCare employees filed a lawsuit in U.S. District Court in Statesville alleging fraud, negligence, conspiracy and breach of contract.

That lawsuit was recently dismissed, according to Ashe County Attorney John Kilby, who said he was notified about the dismissal on Friday.

“It was dismissed for lack of subject matter jurisdiction,” Kilby said. “They vaguely alleged that there’d been a violation of the constitution and a misappropriation of federal monies. They were never able to be specific as to what federal laws or constitutional rights had been violated, so the courts didn’t have jurisdiction.”

Kilby added that he doubt the case would be appealed in federal court, however he mentioned that could bring some action to state courts similar to the 18 other small claims cases in Watauga County District Court involving former local employees who have filed separate lawsuits seeking compensation for unused vacation/annual leave time.

Kilby said it was a coincidence that the recent judgment occurred just before the New River Service Authority board was to meet.

In the comment below, Miller referred to the lump of 18 local cases as one, and the following quotes were spoken of before it was known that the federal case had been dismissed.

“There’ll be action in one of the two cases,” Miller said, declining to be specific. “In the federal court case, they are asking for $500 million, and in state court, [the 18 former employees] are asking for $90,00 [combined].”

Watauga County Finance Director Margaret Pierce said that Watauga County has spent $15,319 to date for attorney fees regarding lawsuits involving the New River Service Authority.

On Monday, Bruce Kaplan, an attorney involved in the matters, said he would review the status of the lawsuits and discuss personnel matters with the board during closed session, which the board will enter at the beginning of the meeting.


See agenda below:

  • Call to Order
  • Approval of April 4, 2013 Agenda
  • Closed Session: Attorney/Client Matters Per G. S. 143-318.11(a)(3)
  • State Audit
  • State Lawsuit 
  • Federal Lawsuit
  • Adjourn