Federal judge tosses fired police chief Steve Gesell’s lawsuit against city of Cottonwood

On March 27, U.S. District Judge Dominic Lanza tossed Stephen Gesell’s lawsuit against the city of Cottonwood out of federal court.

Without a federal claim, Gesell, if he chooses to proceed, will have to file an entirely new lawsuit in Yavapai County Superior Court.

Gesell, the former Cottonwood police chief, who was fired in September 2023, filed suit in federal court in April 2024 against Mayor Tim Elinski, City Manager Scotty Douglass, City Attorney Jennifer Winkler, Human Resources Manager Amanda Wilber, City Councilwoman Helaine Kurot and Deputy City Manager Jesus “Rudy” Rodriguez, who was acting city manager when Gesell was suspended in May 2023, alleging wrongful termination, defamation, due process violations and various violations of Arizona state law.

Since the case was initially filed, Elinski and Kurot have left office, Rodriguez retired and Douglass and Winkler resigned.

Lanza’s 27-page ruling focused on Count Six of Gesell’s First Amended Complaint, which consists of a 42 U.S.C. §1983 civil rights violation claim based on the 14th Amendment of the U.S. Constitution and Arizona statutes concerning procedural and substantive due process against all the defendants but Kurot.

Following a 23-page ruling issued on Dec. 5, in which Lanza rejected Gesell’s attempt to remove the city’s attorney from the lawsuit, the new ruling was issued in response to the defendants’ motion to dismiss Count Six. The motion questioned whether Gesell had a “legitimate property interest” to his job due to being an at-will employee under city code, and asserting that the constitutional protections of procedural due process are not synonymous with violations of Arizona law.

“Because … the propriety of this court’s continued exercise of jurisdiction over this action depends on the viability of Count Six, the analysis begins there,” Lanza wrote. But for Count Six, the suit would otherwise be heard in state or superior court rather than a federal court.

Claim of Constitutional Violation

In Count Six, Gesell asserted that actions by all defendants — except Kurot — deprived him of his property interest, namely his employment as police chief, thereby violating both state law and his constitutional due process rights.

Gesell claimed these rights were established under Arizona state statutes, particularly the Peace Officer Bill of Rights, which mandates minimum due process protections for law enforcement personnel. Specifically, Gesell alleged the defendants violated his rights under Arizona Revised Statute §38-1101 “by not providing him the required notice of the investigation, the proper notice and ability to appear at the ‘executive session,’ the appeal remedy as authorized by statute, and/or due process under state and/or federal law.”

Background

The executive session cited in the suit was held May 9, 2023, by the Cottonwood City Council to discuss the findings of an Arizona Civil Rights Division discrimination complaint filed by a female detective under Gesell’s command who had been discriminated against due to her gender and disability.

Executive sessions are closed to the public and Gesell had no legal right to attend unless explicitly invited by the council — the meeting was held to discuss the ACRD settlement and had nothing to do with his employment.

As Gesell was not allowed to enter council’s executive session, Gesell later threatened Rodriguez after the meeting, resulting in his paid suspension.

Gesell was placed on leave on May 11, 2023, and shortly thereafter received a notice of investigation. Gesell filed complaints against Winkler on July 21, 2023, and Douglass on Aug. 29, 2023, though Gesell was already on paid leave before Douglass began as city manager on May 15, 2023.

Douglass fired Gesell on Sept. 14, 2023.

Legal Standard

To survive a motion to dismiss, under Rule 12(b)(6), “a party must allege sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face … a claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” Lazna wrote. “However, the court need not accept legal conclusions couched as factual allegations” and has the option to dismiss “due to ‘a lack of a cognizable legal theory.’”

Lanza wrote that a government employee has a protected property interest if there are legitimate claims of entitlement, often established through state law. Thus, Gesell needed to establish that he had a legitimate claim to continued employment.

However, “Cottonwood’s municipal code expressly provides that the position of chief of police is an at-will position: ‘The police chief shall be appointed by and shall serve at the pleasure of the city manager,’” Lanza wrote. “Where state employees serve at the will of the appointing authority … there is no such reasonable expectation of continued employment, and thus no property right.”

Procedural Due Process

To survive procedural due process, “a plaintiff must, as a threshold matter, show a government deprivation of life, liberty or property,” Lazna wrote.

The defendants argued that Gesell improperly conflated state procedural requirements with constitutional due process. The question under dispute was whether the amendments to POBOR provided Gesell with a retroactive claim to substantive protections due process because he was hired before the POBOR was amended in September 2022. Gesell argued he became entitled to all of the procedural rights created by it and therefore had a legitimate claim of entitlement to his job.

The defendants cited Blunt v. Town of Gilbert, 2024, in which the court found that “presumption against retroactivity, along with the Contract Clauses of both the United States and Arizona Constitutions, prohibit the retroactive application of the amended POBOR.”

The defendants also invoked qualified immunity, asserting that the rights Gesell claimed were not clearly established. Qualified immunity enables government officials to avoid liability unless a plaintiff can both show a violation of constitutional rights and that those rights were clearly established in law, which Gesell failed to do, Lanza wrote, and Gesell “makes no effort to identify a prior case from the Supreme Court or the Ninth Circuit [U.S. Court of Appeals] — or a robust consensus of other persuasive cases” that suggested Gesell had a protected property interest.

Lanza therefore granted the defendants’ qualified immunity against Gesell’s procedural due process claim.

Furthermore, Lanza wrote, Gesell “has not alleged any facts that plausibly suggest Cottonwood had an official policy of violating employees’ procedural due process rights,” nor did Gesell “allege sufficient facts to support liability under a ‘practice or custom’ theory.”

Lanza wrote at length that Gesell “has not made any attempt to identify any provision of state or municipal law that plausibly suggests the mayor, city manager or city attorney wielded final policymaking authority with respect to the challenged due process violations” — only the Cottonwood City Council acting as a whole could change such policy, and the council never did.

Since Count Six’s procedural due process claim failed the tests for both qualified immunity and municipal liability, “that portion of Count Six is dismissed,” Lanza wrote.

Substantive Due Process

“It is unnecessary to differentiate between the individual defendants and Cottonwood when analyzing the substantive due process component of Count Six because it fails to state a claim as to all of them,” Lanza wrote.

Gesell “has not explained how defendants’ challenged conduct ‘shocks the conscience’ in the manner required to support a substantive due process claim, nor has he cited any cases that remotely support his position,” and Lanza also agreed with the defendants that “courts in the Ninth Circuit have repeatedly declined to extend substantive due process protections to cases based on employment.”

Count and Case Dismissed

Given Lanza’s dismissal of the single federal claim in Count Six, the judge dismissed without prejudice the remaining state law claims — counts one, two, four and five. Federal courts often decline to exercise jurisdiction over state law claims once federal claims are dismissed.

Lanza wrote that amendments could be permissible for the procedural due process claim in Count Six, but denied further amendment of the substantive due process claims and state law allegations on futility grounds, as the defendants had further argued that “leave to amend should be denied” because all of the plaintiff’s claims, including Count Six, “suffer from incurable flaws.”

Gesell has 14 days to file an amended appeal or the court will formally terminate the case.