Metrolink settles lawsuit with former chief auditor for small sum

The Metrolink commuter railroad has paid a former chief auditor $29,562 to settle her lawsuit alleging she was defamed and wrongfully terminated for revealing widespread management irregularities.

Rail officials said the settlement was reached last month with Barbara Manning, 64, of Lake Forest, who was hired in June 2013 amid an effort by Metrolink to assess and correct a variety of financial and accounting problems, which one internal agency report described as “a morass.”

Manning, a veteran auditor with government experience, was fired in December 2014. She sued in July, alleging that three Metrolink board members falsely accused her of causing safety problems at the railroad, not following audit procedures and creating an atmosphere of hostility and fear.

Both sides declined to comment on the settlement, stating the agreement contains a confidentiality provision prohibiting them from discussing the lawsuit.

The board members in the case were former state legislator Richard Katz, Moorpark City Councilman Keith Millhouse and Larry McCallon, the mayor of Highland in San Bernardino County. Also named as a defendant was the Southern California Regional Rail Authority, the government agency that operates Metrolink.

In the lawsuit, Manning stated that she found a lack of transparency and accountability, unapproved wire transfers of funds, ticket sales that could not be accounted for and discrepancies between cash collected and reported.

Her case suffered a serious setback in November when Los Angeles County Superior Court Judge Michael Stern granted a defense motion to dismiss Katz, Millhouse and McCallon from the lawsuit.

Stern held that their remarks and decisions related to Manning were protected from litigation under state law because they were made in official meetings where discussions can sometimes be frank and candid. Potentially slanderous remarks as well as inaccurate statements about someone also are protected speech in such settings.

Reacting to the dismissals, Millhouse called the lawsuit “completely meritless” and said Stern affirmed that the actions of the board members were proper. Metrolink officials, however, have declined to publicly explain why they fired Manning, saying her termination was a confidential personnel matter.

Manning’s attorney, William M. Crosby, said at the time that he was not in the practice of filing frivolous lawsuits. “The board members got out of the case because of the privilege, an unfortunate tool to use against just claims,” he added. “To my knowledge she was cleared of complaints, but they trumped up other things.”

Carolyn Cavecche, a former Metrolink board member from Orange County who helped to expose widespread management problems at the railroad, defended Manning, saying she was up against an agency that did not want to be held accountable for what happened.

“She was hired to come in and put things in order. It was such a culture shock for the operation,” Cavecche said. “The response from some board members and staff was to get her out of there. Rather than change the culture, they fought against it.”

Follow @LADeadline16 for transportation and aviation news