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May 12, 1999


The opinion of the court was delivered by: Moran, Senior District Judge.


We turn, then, to a rather detailed recitation of the allegations of the complaint. Hanania was the "Cicero town spokesman" (which we understand to be the press secretary or media representative for the town) from 1993 to the fall of 1996. That fall a newspaper reported on an FBI investigation into alleged wrongdoing by Loren-Maltese in connection with a major insurance carrier for the town. Hanania urged her to explain that situation publicly (par. 21) and refused to defend or make excuses to the media about rampant corruption in the administration (par. 11), and she fired him on the spot on October 28, 1996. The following day Resnick asked Loren-Maltese at a meeting of the Board of Trustees to explain her involvement in the insurance matter, but she declined to do so. That same day Hanania and others contacted the Cook County State's Attorney's office about their suspicions. Shortly thereafter Resnick and another Cicero trustee introduced a resolution before the Board to request an investigation by the States Attorney. Loren-Maltese, instead, announced that she planned to hire a private attorney to conduct an investigation. Resnick objected.

Resnick was the Town Collector from February 1996 until the end of 1997. She was slated for that post for the April 1997 election, but was dropped from the ticket in November 1996, shortly after she introduced the resolution, for refusing to remain quiet about corruption in the administration. Resnick then, with others, formed an opposition slate known as the Restore Honesty in Cicero party (RHC), which lost in the February 1997 Republican primary. During the campaign Resnick, Hanania and others accused Loren-Maltese and her allies of wrongdoing, much of it of a criminal nature. The complaint describes sixteen instances of alleged corruption and other transgressions they talked about during that period. Beginning in December 1996, Loren-Maltese and the Board, which she controlled, began to retaliate. They eliminated the Town Collector's authority over business and pet licenses. Loren-Maltese, from December on, refused to accept the monthly statements submitted by Resnick. In May 1997 the Town Collector's operation was moved to smaller and inadequate quarters and Resnick was denied access to various files and equipment. Her responsibilities were transferred to the Collector-elect, and on June 2 two of her three employees were terminated.

Two days later, with the Torshen defendants as her lawyers, Resnick obtained a temporary restraining order in a state court chancery action enjoining Loren-Maltese from taking any action that impeded Resnick in the performance of her duties and requiring the retention of the two terminated employees. That order was thereafter extended. The Board then, at Loren-Maltese's direction, eliminated the two positions and passed eight ordinances on June 10, 1997, that effectively transferred collection responsibilities from the Town Collector to the Treasurer, an ally of Loren-Maltese. That led Judge Foreman, the chancery judge, to issue a rule-to-show-cause order a week later. In the meantime, Loren-Maltese had successfully avoided appearing for a deposition, and her deposition date and the response date for the rule to show cause were continued from time to time thereafter. A petition for limitation of the scope of discovery was denied August 11.

About that time Torshen advised Resnick that he had worked out a settlement. If she signed, Loren-Maltese had promised to allow her to complete her term without further interference. Torshen promised to defend her if Cicero sued her. He told her all agreed that it would be best if she stayed away from the bi-monthly Board meetings. On August 20, 1997, Resnick signed the settlement agreement, although it was materially different from the prior draft, and the suit was dismissed the following day. Apparently matters went on relatively smoothly for awhile. The complaint indicates that her duties remained restricted but that she had two employees and prepared monthly statements as best she could. Then, on December 9, 1997, three weeks before the end of her term, the Board declared a vacancy in the Town Collector's position and filled it, due to Resnick's "excessive unexcused absences" from Board meetings. That cost her three weeks salary plus three weeks accrued vacation time. She called Torshen, who negotiated two weeks vacation pay, and said there was nothing else he could do. At about the same time Cicero entered into a consent decree with the federal government to settle a housing discrimination suit brought by the Housing and Civil Enforcement Section of the Department of Justice. A Cicero press release on December 9, 1997, falsely stated that Judge Zagel had indicated Cicero would have been granted summary judgment but for a discriminatory comment attributed to Resnick. The Cicero Town News repeated that substance several times in late 1997 and in 1998, and Loren-Maltese included it in a special mailer distributed July 2, 1998. In 1997 The Cicero Observer falsely stated that Hanania, in a lawsuit between Loren-Maltese's party and the RHC slate, "lied on the stand, under oath, committing perjury." The complaint alleges two other false statements as well.

From these allegations plaintiffs advance nine claims. Before discussing each of the claims, we believe the relationship between the plaintiffs and the Torshen defendants requires some additional explanation. The settlement agreement is not attached to the complaint but it is referred to therein, and plaintiffs include it as an exhibit in one of their filings. Among other provisions it states as follows: "2. Plaintiff shall serve out her Term as Town Collector through December 31, 1997. She shall come to work and Board Meetings as appropriate and assist in the transition of her elected successor, whose Term commences January 1, 1998. She shall perform all the duties and functions of her appointive Office." In a subsequent paragraph Cicero agrees to refer to the Torshen firm its defense in what appears to be a wrongful death lawsuit. Plaintiffs assert that this was a payoff and that Resnick only owed about $1200 at the time. The Torshen defendants assert that they were owed about $40,000, that Resnick could not pay, that Cicero refused to pay Resnick's fees as part of the settlement, and the referral (which was discussed with Resnick) was a way to get the fees paid without expense to Resnick. Both are unverified assertions not alleged in the complaint, and neither is relied upon here.

Some of those contentions need be only briefly discussed; others are more problematic. We believe that allegations of retaliation by both the town president and the Board trustees, the official policy makers of Cicero, provide a sufficient basis for asserting municipal liability. A § 1983 claim is not subject to a heightened pleading standard. Sledd v. Lindsay, 102 F.3d 282, 288-89 (7th Cir. 1996). The claims of political corruption clearly are related to matters of public concern. The disclosure of crime is a matter of great public concern. Gorman v. Robinson, 977 F.2d 350, 355 (7th Cir. 1992). Hanania's speech (or non-speech) is less obviously about matters of public concern, but whether or not the president of Cicero was going to respond to charges of political corruption could be a matter of public concern, and that is enough for now. Gustafson v. Jones, 117 F.3d 1015, 1018-19 (7th Cir. 1997). And if it is such, the fact that it was privately expressed does not negate protection. Givhan v. Western Line Consol. School District, 439 U.S. 410, 415 fn. 4, 99 S.Ct. 693, 58 L.Ed.2d 619 (1979). Defendants say Resnick was removed from office for failure to attend Board meetings, but she claims that was a pretext, and we cannot decide who is right on a motion to dismiss. While we have no reason to doubt that The Cicero Town News and The Cicero Observer are not legal entities, we cannot dismiss them solely on the say-so of attorneys in a brief.

On the other hand, Hanania has alleged a § 1983 claim based on defamation. As he recognized, defamation does not become a constitutional tort unless the governmental libel so impugns or stigmatizes his reputation as to inhibit future employment opportunities. He suggests, in plaintiffs' response, that it so happened here, but he does not so allege in his complaint and we look solely to the allegations of the complaint in ruling upon a motion to dismiss. We grant, of course, leave to amend.

That leaves three issues respecting Count I unresolved. One is immunity. We see no basis for qualified immunity. Retaliatory harassment and deprivation of employment in 1996 and 1997 violated clearly-established rights. Defendants are not entitled to qualified immunity. Termination is ordinarily an administrative matter, and there is no absolute immunity with respect to Hanania's termination. But the alleged means of harassing Resnick and then ending her tenure were, at least in part, through the enactment of legislation. Ordinarily a state or regional legislator cannot be called upon in court to answer for his or her vote on a particular measure. Lake Country Estates, Inc. v. Tahoe Regional Planning Agency, 440 U.S. 391, 403, 99 S.Ct. 1171, 59 L.Ed.2d 401 (1979). But here the legislation is local and plaintiffs allege in substance that this was special legislation specifically tailored to affect only Resnick. For now we do not dismiss on the basis of absolute legislative immunity, but it is a subject that needs to be revisited.*fn1

Another open issue is that of collateral estoppel. All matters complained of that occurred after the date of the settlement agreement survive for now, although the acceptance of the two weeks vacation pay may ultimately be determined to be an accord and satisfaction. But what about the matters prior to the settlement agreement? The chancery action sought to void the June 10 ordinances but it also sought to enjoin interference with Resnick's operation, with an emphasis upon the reduction in her staff, interference she attributed to her political campaign and efforts to uncover financial wrongdoings in Cicero. That case was settled, and we have serious doubts that those claims can be resurrected. After all, Resnick signed the settlement agreement and the complaint does not indicate that she suffers any disabilities. Still, collateral estoppel is an equitable doctrine, the application of which is governed by principles of equity and fairness. We must determine that Resnick had a full and fair opportunity, as well as an incentive, to litigate the issue in the prior proceeding. Sarno v. Akkeron, 292 Ill. App.3d 80, 225 Ill.Dec. 973, 684 N.E.2d 964, 968 (Ill.App.1st 1997).*fn2 She alleges she did not, and we cannot determine to the contrary on a motion to dismiss.

The third and final issue respecting the motion to dismiss Count I relates to the application of the Pickering/Connick balancing test, and here again we deny the motion for now, but with a recognition that the issue must be revisited.

Resnick was not an employee but we do not believe that materially changes the analysis. See Board of County Commissioners, Wabaunsee County, Kan. v. Umbehr, 518 U.S. 668, 116 S.Ct. 2342, 135 L.Ed.2d 843 (1996). If Loren-Maltese and the Board trustees were involved in public corruption, that was a matter of heightened public concern, Gorman v. Robinson, 977 F.2d at 355, and, in applying the Pickering/Connick balancing, the greater the public concern the greater the need to justify restrictions. Givhan v. Western Line Consolidated School District, supra; Jefferson v. Ambroz, 90 F.3d 1291 (7th Cir. 1996); Kukla v. Village of Antioch, 647 F. Supp. 799 (N.D.Ill. 1986). But what if plaintiffs were lying about Loren-Maltese and the Board trustees, or were negligently or innocently in error? Their speech in those circumstances does not survive a Pickering/Connick analysis. Wright v. Illinois Dept. of Children & Family Services, 40 F.3d 1492, 1505 (7th Cir. 1994); American Postal Workers Union v. U.S. Postal Service, 830 F.2d 294 (D.C.Cir. 1987). The same is true when the employer reasonably believes that the employee has ...

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