Red Wing won a major legal victory against a disgruntled former employee Wednesday when a federal jury absolved the city from paying damages to the once high-ranking public works official.

Wednesday's verdict trumps the results of a June 2008 trial, in which a jury ordered the city of Red Wing to pay Dan Hemmah $250,000 in damages.

It's the latest development in a seesaw legal battle between the city and the employee of 28 years who had risen to the rank of public works deputy utilities director before he was fired in 2006.

"From my perspective this indicates the city took the appropriate action," City Council Administrator Kay Kuhlmann told the Red Wing City Council Wednesday evening.

City officials fired Hemmah after they alleged he undermined and lied to his superiors. Later that year Hemmah, who denies any wrongdoing, filed a lawsuit against the city claiming the city denied him a name clearing hearing.

Name clearing hearings are a guaranteed right for terminated public employees subjected to stigmatizing allegations by their employers. The hearings give the fired employees a chance to refute claims made against them.

Hemmah also made other claims against the city that were dismissed before the matter reached trial.

After the 2008 trial, U.S. District Judge Joan Erickson slashed the amount to be paid to Hemmah to $50,000. She agreed with the city's post-trail argument that the evidence presented at the trial didn't support the hefty damages.

In response to the judge's post-trial ruling, Hemmah pursued a second jury trial to re-argue damages.

Erickson limited the scope of the second trial to consider damages Hemmah may have incurred between May and August 2006.

The trial focused on those months because the original jury found that Hemmah asked for a hearing in May 2006 and the city initially failed to offer him one. But Erickson ruled that by August 2006 the city had offered Hemmah a hearing.

"Obviously Dan is disappointed," Hemmah's attorney Bill Mavity of Red Wing said.

He said Wednesday's verdict is inconsistent with the findings of the previous trial and is "contrary to law."

That's in part because the scope of the trial was too limited, Mavity said.

"The court would not let us tell this jury anything at all about the city's bad conduct in making false allegations about Hemmah's conduct," Mavity said in a statement Wednesday to the R-E. He added, "How am I going to show causation if I can't show what the bad conduct was?"

Mavity said it's too early to know if his client will seek an appeal. That will depend largely on whether or not Erickson accepts the jury's verdict.

To date, Red Wing's legal cost for the case is $1,000 -- which covers the deductible it must pay to its legal insurance trust with the League of Minnesota Cities. The lawsuit will, however, increase the city's future premiums.