A federal judge has ruled that U.S. Attorney Andrew Luger was wrong to move two wrongful termination lawsuits against Starkey Laboratories to U.S. District Court.
U.S. District Chief Judge John Tunheim ruled last week that the civil cases filed by Keith Guggenberger, Starkey’s former chief operating officer, and executive assistant Julie Miller should be heard in the state court system. He said the federal court “lacks jurisdiction.”
Tunheim ruled, however, that the U.S. government would not have to pay the legal expenses incurred by the two plaintiffs as a result of legal ping-ponging between courts.
Guggenberger and Miller were both fired in September 2015, among the first of several dismissed after Starkey said it discovered wrongdoing by its leadership team. Also fired were former President Jerry Ruzicka, Chief Financial Officer Scott Nelson and Miller’s husband, Human Resources head Larry Miller. Those three executives, plus two business associates, have been criminally indicted, accused of embezzling millions of dollars from the Eden Prairie-based maker of hearing aids.
The wrongful termination lawsuits filed against Starkey by Guggenberger and Julie Miller will return to Hennepin County District Court, where they were originally filed.
The two lawsuits were removed from state court in June 2016 by Luger after Hennepin County District Judge Kevin Burke denied Luger’s unusual request to halt discovery in the two civil cases. Luger had argued the fact-finding process “could disturb the integrity” of the case against Ruzicka, Nelson and Larry Miller, who at that time were not yet indicted.
On Oct. 25, Tunheim heard arguments from all sides. Starkey’s lawyers and attorneys from the U.S. attorney’s office argued that Tunheim should delay or halt discovery, because the civil case was entangled with the criminal investigation, they said.
Tunheim took the case under advisement at the time.
In his 28-page opinion and order Thursday, Tunheim also denied the motions to halt discovery. New hearings on the matter in state court, have yet to be scheduled.