City settles ex-department head lawsuit

Steve Shaya

Steve Shaya


By Charles Sercombe
The city has settled a four-year lawsuit filed by a former director of public services.
The final part of a two-part settlement was reached several weeks ago between the city and Steve Shaya.
The total payments amount to $300,000. The first settlement was reached a year ago for $75,000, and the recent settlement was for $225,000.
On top of that, the city spent $350,000 in its own legal fees handling the case.
Shaya, who is an Iraqi-American, made several claims against the city, including having to endure ethnic slurs and being retaliated against for allegedly exposing wrongdoing in city hall.
But at one time a magistrate judge overseeing the case recommended dismissing Shaya’s case, saying that none of Shaya’s allegations of ethnic slurs or other comments and actions failed “to rise to the level he (Shaya) perceives them to be.”
Citing case law, the magistrate said Shaya “has simply failed to
show conduct so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency and to be regarded as atrocious and utterly intolerable in a civilized community.”
In one instance he was allegedly called an “Arab prince,” in another he was called “ghetto,” and in another he was chastised for being “too busy with your sand meetings.”
The magistrate said the comments — if they were truly made — were “mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.”
As for the city’s alleged retaliations against Shaya, in one instance he said that two water department employees shut off water service to his sister, who at the time lived in the city, in response to his allegation that the department head, Cheryl Karpinski, committed water billing fraud.
As it turned out, Shaya admitted in a deposition that his sister had been behind in paying her water bill at the time.
Karpinski was also let go by Emergency Manager Cathy Square, who refused to disclose publicly why she left.
In another incident, Shaya accused the Police Department of falsely claiming he was involved in a hit-and-run accident involving an off-duty Detroit police officer.
His employment with the city has had a rocky history. He was first hired in 2002 when the city was under the control of a state-appointed emergency financial manager, Lou Schimmel, when the city had tailspinned into a financial crisis.
He was let go by Schimmel when city employees claimed he assigned them to work on a house he owned and that he failed to disclose he had been convicted of a felony fraud charge.
Shaya came back several years later, after Schimmel had left, during a politically-charged council meeting. Shaya’s supporters on the council of that time pushed his hiring through.
But three years after that, in 2014, when the city was in another financial crisis and under state control, Shaya was fired by former state-appointed Emergency Manager Cathy Square after Shaya admitted he was the uncle of a contractor who did work for the city and whom he supervised and authorized billings to the city.
Shaya had not previously informed city officials of that relationship.
There were also questions about whether Shaya had paid his income taxes.
City Attorney James Allen said the settlement prevents Shaya from filing any other lawsuit regarding his time employed here.
He also said that settling the case is far less expensive than going through a trial and continued depositions, some of which he said would include possible hostile – or inconsistent — interviews with city employees who are either no longer or still employed by the city.
Out of the total settlement, the city’s insurance company will cover $80,000. The settlement also includes Shaya’s legal fees.
“Enough blood has been shed,” said City Attorney Allen of the money spent by the city to defend the lawsuit.
Most of the legal fees are for the work performed by the former city attorney hired by former Emergency Manager Cathy Square.
Allen said his portion of the fees amounted to $60,000.
Councilmember Ian Perrotta said it is unfair that the city has to pay the settlement for actions allegedly taken against Shaya that happened while the city was under the control of a state-appointed emergency manager.
“It’s bull—-,” he said.

Sept. 14, 2018

2 Responses to City settles ex-department head lawsuit

  1. Nasr Hussain

    September 14, 2018 at 3:51 pm

    One of his “allegations” was “selective” sign ordinance enforcement against Bengali & Yemeni Businesses. A problem that is still going on.

    Hopefully the new sign ordinance being discussed will be less restrictive preventing this “selective” enforcement from going on and saving the city hundreds of thousand of dollars in lawsuits.

    It’s a great opportunity for our new city manager to show that the city is abandoning its discriminatory practices and to enforce equal treatment of all city’s residents and businesses regardless of race, wealth and/or political connections.

  2. Greg

    September 14, 2018 at 8:10 pm


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