Costa Mesa’s former city manager claims she was fired earlier this year because she was investigating allegations that Mayor John Stephens misused his office for personal gain and that he had engaged in gender and racial discrimination against city employees.
Lori Ann Farrell Harrison, whose May 6 dismissal ended a five-year run as Costa Mesa’s city manager, filed a lawsuit last month that says she was fired without notice after completing a 14-page report that showed Stephens had engaged in “inappropriate or unlawful activities.” The lawsuit did not provide a copy of that report.
Stephens declined comment Friday, Aug. 1, and other city officials did not respond to calls seeking comment.
In her lawsuit, filed July 7 in Orange County Superior Court, Farrell Harrison argues that her dismissal was made in bad faith. She is owed six months of her annual $317,000 salary, and has not yet sought more money from the city. Instead, her lawsuit says she wants records related to her termination. She also is seeking to be reinstated in her old job, and for a court judgment spelling out that the city violated California’s open meeting law when she was fired. She also wants a new city policy in which Costa Mesa agrees to tape all closed-session council meetings for at least the next three years.
The suit sums up her complaint this way: “How the City moved from trying to solve a serious liability with Mayor Stephens’s potentially illegal activity to a public firing of its well-respected, accomplished City Manager has but one answer: the City retaliated against Ms. Farrell Harrison.”
The city and Farrell Harrison agree on one thing: She was fired without a publicly stated reason. In May, the city attorney, Kim Barlow, said only that Farrell Harrison was terminated without cause in a split council vote with the mayor abstaining.
The lawsuit does not spell out any details about Farrell Harrison’s allegations against the mayor. But it claims those details are in a report that she provided to six of the seven members of Costa Mesa’s City Council titled “Formal Complaint – Mayoral Potential Conflicts of Interest, Illicit Interference, and Undue Influence in City Operations, Permitting and Contracts.”
Stephens was elected to city council in 2016 and was elected mayor in 2022. In 2023, he was fined $600 by the Fair Political Practices Commission for not timely disclosing that he’d received $700 worth of tickets to an LA Chargers game six years earlier.
It’s unclear when, or why, Farrell Harrison first came to believe that Stephens allegedly wasn’t acting in the public interest. The lawsuit says only that she first mentioned potential legal violations to three council members in March. At the time, according to her suit, Farrell Harrison warned officials that Stephens’ actions could pose a liability threat to the city.
The response to that warning apparently was mixed.
By mid-April, according to the suit, one of those councilmembers, Loren Gameros, told Farrell Harrison to consider taking an early retirement. But at the same time, the council voted to formally investigate Farrell Harrison’s allegations about the mayor, though the council did not make that decision public or disclose any information related to it.
Farrell Harrison and other members of the city’s executive team made a separate, written report “based on their interactions with the Mayor and his requests for inappropriate or unlawful activities.” That’s the report she said she presented to the council on April 29.
Days later, on May 1, an outside investigator hired to look into what the lawsuit describes as the mayor’s “potential illegal conduct” interviewed Farrell Harrison for about four hours.
During this same period, Farrell Harrison says her job performance also came under scrutiny.
According to the lawsuit, she was informed in early May that she should be prepared to identify key metrics of her job performance for a review that was slated to take place during a closed session portion of the May 6 council meeting.
But that night, as she sat in a break room while the council debated her work performance, she claims she was told by a local union official, whom she did not name, that she was likely to be fired that evening. The union official, according to the suit, told Farrell Harrison that Gameros said, ‘You watch, we’re going to switch this whole thing around – instead of this being about the Mayor, we are going to make it about Lori Ann.”
Gameros did not return calls seeking comment.
Farrell Harrison says she was never told by the council, directly, that she was being dismissed. Instead, according to the suit, after the council spent about about 90 minutes in closed session, City Attorney Barlow was dispatched to deliver the news. The suit notes that Farrell Harrison later learned that the city had hired an outside attorney to give advice on the firing.
“Ms. Farrell Harrison was stunned by these events, as was her staff, who supported her efforts to elevate the discussion about these serious challenges with Mayor Stephens, and required that (his) behaviors discontinue,” her complaint said.
The Register on July 1 filed a public records request for a copy of any legal claims made by Farrell Harrison. The city responded that it had no such records.
Calls seeking comment from a city spokesperson on the status of any investigations, or if any investigative reports or demand letters would be made public, were not returned.
The city has yet to file a response to Farrell Harrison’s lawsuit. The City Council discussed the case in closed session at its July 15 meeting, according to public documents, and they plan to do so again on Aug. 5.
Farrell Harrison is represented by San Francisco-based attorney Therese Cannata. Neither Farrell Harrison nor her attorney returned calls seeking comment.