Comsys Inc et al v. City of Kenosha Wisconsin et al

Filing 141

ORDER signed by Judge J P Stadtmueller on 8/29/2019. 134 Defendants' Second Motion for Summary Judgment is GRANTED in part and DENIED in part. Counts One and Two of 31 Plaintiffs' Amended Complaint are DISMISSED. Defendants Frank Pacetti, Edward St Peter, and Keith G Bosman are DISMISSED from this action. See Order. (cc: all counsel)(jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
COMSYS INC. and KATHRYNE L.
MCAULIFFE,
Plaintiffs,
v.

Case No. 16-CV-655-JPS

CITY OF KENOSHA, WISCONSIN,
CITY OF KENOSHA WATER
UTILITY, FRANK PACETTI,
EDWARD ST. PETER, MERRIL A.
KERKMAN, JR., and KEITH G.
BOSMAN,

ORDER

Defendants.
1.

INTRODUCTION & PROCEDURAL HISTORY
This litigation arises from the termination by the City of Kenosha

(the “City”) and the Kenosha Water Utility (the “Water Utility”) of their
contracts with an outside information technology vendor, Comsys Inc.
(“Comsys”), a private, for-profit Wisconsin corporation based in Racine.
Comsys and its sole shareholder, Kathryne McAuliffe (“McAuliffe”),
brought a litany of claims against the City and the Water Utility, as well as
many individual defendants, including, the City’s mayor Keith Bosman
(“Mayor Bosman”), the City’s administrator Frank Pacetti (“Pacetti”), the
general manager for the Water Utility Edward St. Peter (“St. Peter”), the
City’s alderpersons, and a former Comsys employee, Merril A. Kerkman,
Jr. (“Kerkman”).

The plaintiffs brought claims under 42 U.S.C. §§ 1983, 1985, and 1986
seeking damages to remedy various First, Fourth, and Fifth Amendment
violations, as well as claims for alleged violations of several Wisconsin state
statutes. See generally (Docket #31). The allegations underlying both the
federal and state law claims concern certain IT service contracts that the
City and the Water Utility entered into with Comsys from approximately
1987 until 2015 (the “Comsys Contracts”). Id. ¶¶ 32–42. The plaintiffs claim
that the events leading up to—and ultimately culminating in—the
termination of the Comsys Contracts involved a complex conspiracy among
various government officials and a rogue former employee who now works
for the City. Id. ¶¶ 32–121.
The defendants brought a motion to dismiss under Rule 12(b)(6),
pursuant to which the Court dismissed one count of the Amended
Complaint (a Monell claim against the City and Water Utility for Fourth
Amendment violations) as well as the plaintiffs’ official capacity claims
asserted against the individually-named defendants. (Docket #41).
The defendants then filed a motion for summary judgement under
Rule 56 seeking dismissal of all claims. The Court granted it in part and
denied it in part. See generally (Docket #114). Specifically, the Court
dismissed the plaintiffs’ federal claims for civil conspiracy, failure to
protect, and Fifth Amendment takings. Id. at 32–37. It also dismissed the
plaintiffs’ state law claims for breach of the implied contractual covenant of
good faith, conversion, civil extortion, victim intimidation, injury to
business, intentional infliction of emotional distress, and, as to one
defendant, tortious interference. Id. at 37–50. The claims that remained
following summary judgment included two federal claims (for violations
of the First and Fourth Amendments) and two state law claims (a breach of
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contract claim against the Water Utility for underpayment of amounts due
under its contract with Comsys and a claim for tortious interference against
Kerkman).
The First Amendment claim is alleged against Pacetti, Mayor
Bosman, St. Peter, the City, and the Water Utility. Pacetti, Mayor Bosman,
and St. Peter argued in their Rule 56 motion that they were entitled to
qualified immunity, and the Court declined to apply the defense at the
summary judgment stage. Id. at 23–26. Similarly, as to the Fourth
Amendment claim alleged against Pacetti and Kerkman, the Court declined
Pacetti’s request for qualified immunity. Id. at 31–32.1
The defendants then filed an interlocutory appeal of the Court’s
denial of qualified immunity. (Docket #117). In light of the appeal, the Court
stayed proceedings in this case. (Docket #116). On July 12, 2018, the Court
of Appeals issued its mandate, reversing this Court’s denial of qualified
immunity as to Pacetti, Mayor Bosman, and St. Peter. (Docket #132). With
those defendants excused from liability, the only defendants remaining in
the case are the City, the Water Utility, and Kerkman.
On September 4, 2018, the remaining defendants filed a second
motion for summary judgment. (Docket #134). They ask the Court to
dismiss the First Amendment and Fourth Amendment claims in light of the
Seventh Circuit’s pronouncements in the interlocutory appeal about the
law applicable to those claims. Id. In response, the plaintiffs argue that no
legal or factual bases exist to dismiss their First Amendment claim against
the City and Water Utility, brought under Monell. (Docket #137). However,
Kerkman was not a government official during the timeframe relevant to
the Fourth Amendment claim, and therefore the defense of qualified immunity
would not be available to him on that claim.
1

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the plaintiffs concede that their Fourth Amendment claim must be
dismissed. Id. In light of the parties’ agreement, the Court will dismiss that
claim (Counts One and Two of the Amended Complaint). Neither the
plaintiffs nor the defendants address the remaining state law claims.
2.

STANDARD OF REVIEW
The same standard announced in the Court’s order on the

defendants’ first motion for summary judgment applies to the instant
motion as well.
When a party files a motion for summary judgment, it is her
“contention that the material facts are undisputed and the movant is
entitled to judgment as a matter of law.” Hotel 71 Mezz Lender LLC v. Nat’l
Ret. Fund, 778 F.3d 593, 601 (7th Cir. 2015) (citing Fed. R. Civ. P. 56(a)).
“Material facts” are those facts which “might affect the outcome of the suit,”
and “summary judgment will not lie if the dispute about a material fact is
‘genuine,’ that is, if the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). Thus, to demonstrate a genuine dispute about a material
fact, a party opposing summary judgment “must do more than simply
show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
Rather, the non-moving party “must set forth specific facts showing that
there is a genuine issue for trial.” Fed. R. Civ. P. 56(e).
“Where. . .the movant is seeking summary judgment on a claim as
to which it bears the burden of proof, it must lay out the elements of the
claim, cite the facts it believes satisfies these elements, and demonstrate
why the record is so one-sided as to rule out the prospect of a finding in
favor of the non-movant on the claims.” Hotel 71 Mezz, 778 F.3d at 601. A
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court considering a motion for summary judgment must draw all
reasonable inferences from the materials before it in favor of the nonmoving party. See Johnson v. Pelker, 891 F.2d 136, 138 (7th Cir. 1989). A court
will deny a motion for summary judgment when “one or more material
facts are disputed or. . . the facts relied on by the motion do not entitle the
movant to judgment as a matter of law.” Hotel 71 Mezz, 778 F.3d at 602.
3.

RELEVANT FACTS
Apart from a short set of supplemental facts proposed by the

plaintiffs, the parties did not include new facts in their briefing.2 They agree
that the relevant facts are unchanged since their previous submissions.
Therefore, the Court will reproduce its summary of the relevant facts here.
Beginning in the late 1980s, Comsys began performing IT services
for the City and the Water Utility as an independent computer facilities
management provider. In that role, Comsys performed various functions
such as furnishing professional and technical assistance in connection with
IT management, information system administration, and programming
support services. Comsys had contracts with the City and the Water Utility,
each of which were amended over time. (Docket #77 at 5). Kerkman was a

The plaintiffs’ new proposed facts generally relate to the Kenosha Police
Department’s investigation of Kerkman and McAuliffe’s criminal complaint
against Kerkman; the plaintiffs point out in their proposed facts that the Comsys
Contracts did not require Comsys or McAuliffe to participate in internal police
investigations or to report public corruption. (Docket #138). The defendants do not
dispute any of the plaintiffs’ new proposed facts, but they argue the new facts are
immaterial to resolution of their motion. (Docket #140). These facts bolster the
Court’s previous finding that McAuliffe spoke as private citizen, not an employee,
during the police investigation and when filing her criminal complaint, but they
are not necessary to resolution of the instant motion.
2

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longtime employee of Comsys, and from January 1, 2013 until March 31,
2014, he served as the company’s Chief Information Officer. Id.
The Amended Complaint alleges an elaborate conspiracy between
Pacetti, the city administrator, and Kerkman, his mole, to misappropriate
Comsys’ goodwill, confidential information, trade secrets, and employees
so that the City could create its own IT department. More specifically, the
plaintiffs allege that sometime around July 2013, Kerkman buddied up to
Pacetti, soliciting him to create a Director of IT position for the City and hire
Kerkman to fill that role. To that end, the plaintiffs claim that Kerkman
unlawfully obtained access to Comsys’ and McAuliffe’s confidential data
by unlawfully surveilling Comsys’ and McAuliffe’s email accounts and
archives, and then passed that information along to Pacetti for his use in
building an in-house IT department for the City.
Kerkman’s and Pacetti’s conspiracy was confronted with a hiccup in
February 2014, the plaintiffs claim, when Deputy Chief Daniel Miskinis
(“Miskinis”) of the Kenosha Police Department began an administrative
investigation to determine whether Kerkman had complied with a 2009
directive not to archive City Police Department emails on the City’s
computer server. Id. at 17. On March 7, 2014, Miskinis met with McAuliffe
to question her (and another Comsys employee) in connection with his
investigation into Kerkman. McAuliffe gave true and accurate responses to
Miskinis’ questions and performed actions on the City’s server at his
direction.
Miskinis met with McAuliffe again a couple of days later, and during
that interview, McAuliffe told Miskinis about a 2013 meeting between
Kerkman and Pacetti where the two men discussed the police department
emails being archived on the City’s server. She also told Miskinis that she
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had reason to believe Kerkman had accessed her email account without
authorization because in the fall of the previous year, McAuliffe discovered
a confidential email printed from her archives on Kerkman’s desk. Id. at 10–
11.
Around this time, Pacetti requested a meeting with the Police Chief
and Miskinis, wherein he expressed disagreement with Miskinis’ findings
in the Kerkman investigation at that point. Id. at 19. Pacetti also summoned
McAuliffe to his office, and during the meeting, according to McAuliffe,
Pacetti yelled at her and banged his fist on the desk, accusing her of
initiating the Kerkman investigation and threatening wholesale changes to
the IT department, leaving McAuliffe in tears. Id. at 20. Shortly afterward,
McAuliffe spoke with Kenosha Joint Services Director Thomas Genthner
who informed her that Pacetti asked him for copies of Comsys’ contract that
day and said the relationship between Joint Services and Comsys needed to
be re-examined. Id. The next day, Kerkman told McAuliffe he was ill and
went on indefinite sick leave. Id. He was hired by the City as its Director of
IT on May 1, 2014. (Docket #78 at 37).
Sometime between March 17 and March 19, 2014, Pacetti again met
with Miskinis, expressed agitation with Miskinis’ continued investigation,
and requested that Miskinis provide him with advance notice prior to
Kerkman’s arrest, which Miskinis declined. (Docket #77 at 20–21). Pacetti
told Miskinis that Kerkman had “done some things that he was not proud
of[,]” but nonetheless told Miskinis that if Kerkman was found guilty of the
charges “there would be wholesale changes in IT.” Id. at 21. Pacetti also
called another meeting with McAuliffe, wherein he threatened termination
of the Comsys contract if an adverse result occurred for Kerkman pursuant
to the investigation. Id.
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Miskinis concluded from his investigation that Kerkman had not
complied with the 2009 directive, had accessed Comsys employee emails
without consent, and had improperly deleted public records, among other
misconduct. Id. at 17–18. As a result, Miskinis recommended that Kerkman
be investigated for possible criminal computer crimes and that Kerkman’s
administrative access to the City’s and police department’s networks be
suspended. Id.
On May 1, 2014, McAuliffe filed a criminal complaint against
Kerkman with the Kenosha County Sheriff’s Department accusing him of
surveilling her email without authorization or consent. The complaint was
transferred to the Racine County Sheriff’s Department, and McAuliffe met
with a Racine County detective shortly thereafter and told the detective
about Pacetti’s threats. (Docket #77 at 23, #81 at 16–17). On May 27, 2014,
the Racine County Sheriff’s Department executed a search warrant on the
City, taking, among other things, the City’s email server. (Docket #77 at 24).
On May 30, 2014, Mayor Bosman, at the urging of Pacetti and the
City Attorney, scheduled a meeting of the Common Council to take place
June 2 “[t]o consider the service and lease agreements between the City and
COMSYS, Inc.” Id. at 25. The agenda for this special meeting of Common
Council session stated that the Common Council may go into closed session
to “discuss litigation strategies with the City’s Legal Counsel regarding
issues surrounding this action.” Id. Similarly, on the same day, St. Peter
called a meeting of the Board of Water Commissioners to take place on June
2 “[t]o consider the Management Information System Agreement,
including First Amendment, by and between the City of Kenosha Water
Utility, a Wisconsin Water Utility, and COMSYS, Inc., a Wisconsin
Corporation.” Id. The agenda for the Water Commissioners meeting also
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stated that the Board may go into closed session to discuss litigation
strategies. Id.
Late in the day on May 30, 2014, McAuliffe received emails from
Pacetti and St. Peter informing her that Comsys access to all City and Water
Utility computer systems had been temporarily disabled because,
according to St. Peter in his deposition, McAuliffe was “putting the city in
a bad light” by “[s]aying that there were illegal things going on,
inappropriate things going on.” Id. at 26.
On June 2, 2014, prior to the special meetings of the Common
Council and Board of Water Commissioners, McAuliffe emailed all
Alderpersons with (1) a copy of a letter sent by Comsys’ attorney to the City
Attorney outlining Kerkman’s and Pacetti’s dubious conduct over the prior
year, (2) a copy of the job posting for the City’s Director of IT position, and
(3) a full copy of Miskinis’ investigative report. Id. at 26–27. Most of the
Alderpersons testified that they saw and read the letter attached to
McAuliffe’s email prior to the meeting that day. Id. at 27.
At the June 2 meeting, the Common Council, along with Pacetti, St.
Peter, the City Attorney, and Mayor Bosman, went into closed session. Id.
at 28–29. When they moved back into open session, the Common Council
voted to terminate the City’s contract with Comsys. Id. at 29. After the
meeting of the Common Council, the Board of Water Commissioners held
its meeting, and voted to terminate the Water Utility contract with Comsys.
Id. at 32. After the meetings, Alderman Bogdala gave interviews to news
media outlets where he said that the termination of the Comsys contracts
was premised upon the criminal investigation into Kerkman. Id. at 32–33.
On June 4, 2014, McAuliffe received a letter signed by Mayor
Bosman providing notice of the City’s intent to terminate its contract and a
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letter signed by St. Peter providing similar notice on behalf of the Water
Utility. Id. at 32. Both contacts would terminate a year later. Id. In November
2014, as part of the 2015 budget, the City and the Water Utility added a total
of six IT positions, of which five were filled by former Comsys employees.
Id. at 33.
4.

ANALYSIS
4.1

First Amendment Retaliation
4.1.1

Background

A jaunt through history is necessary here to properly explain the
state of the plaintiffs’ First Amendment claim. The plaintiffs originally
lodged their First Amendment claim against Bosman, Pacetti, St. Peter, the
City, and the Water Utility. The plaintiffs alleged that McAuliffe (or
Comsys, through the acts of McAuliffe) engaged in protected expression
by: (1) participating in Miskinis’ administrative investigation; (2) filing a
criminal complaint against Kerkman; and (3) delivering a letter to the
Common Council objecting to Pacetti’s and Kerman’s unlawful conduct.
(Docket #31 ¶¶ 151–241, Ex. K). The defendants retaliated against them for
engaging in these speech acts, they alleged, by terminating the Comsys
Contracts.
In this Court’s order on the defendants’ first motion for summary
judgment, the Court explained that speech by government employees
receives limited First Amendment protection. See Garcetti v. Ceballos, 547
U.S. 410, 418–19 (2006) (“[G]overnment offices could not function if every
employment decision became a constitutional matter[.]”). Specifically, a
government employee’s speech is protected only when she speaks as a

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citizen, as opposed to as an employee, and her speech is on “a matter of
public concern.” Graber v. Clarke, 763 F.3d 888, 895 (7th Cir. 2014).3
To succeed on a First Amendment retaliation claim, a plaintiff must
establish that (1) her speech was constitutionally protected (meaning, in this
case, she spoke as a private citizen on a matter of public concern), (2) she
suffered an adverse employment action as a result of her protected speech
that was sufficiently adverse so as to deter the exercise of the free speech,
and (3) her speech was a “substantial” or “motivating” factor for the
adverse employment action. Graber, 763 F.3d at 894–95.
The Court conducted this analysis as to each of the three distinct
speech acts that plaintiffs allege led to termination of the Comsys Contracts.
The primary focus of this Court’s analysis was on the first element: whether
the plaintiffs’ speech was protected or not. As to each of the alleged speech
acts, the Court found that McAuliffe acted as a private citizen, as opposed
to an employee, and that she spoke on matters of public concern. The Court
also determined that the plaintiffs’ interest in delivering their message of
public concern outweighed the government’s interest in controlling their
speech to maintain the efficiency of its operations. Therefore, the Court
found that each of the speech acts satisfied the first element of a First
Amendment retaliation claim. The Court then found the second element,
an adverse employment action, was satisfied, and that the third element,
causation, presented a jury question.

The Court applied this principle to Comsys as independent government
contractor, relying on Board of County Commissioners, Wabaunsee County, Kansas v.
Umbehr, 518 U.S. 668, 675 (1996). (Docket #114 at 15). In its order on the
interlocutory appeal in this case, the Seventh Circuit did the same. (Docket #132 at
4–5).
3

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Finally, the Court considered whether Bosman, Pacetti, or St. Peter
were entitled to qualified immunity as to the First Amendment claim and
held in the negative. In its interlocutory appeal order, the Seventh Circuit
reversed this Court’s denial of qualified immunity to those three men,
thereby absolving them of liability for damages. (Docket #132 at 3–8).
Therefore, the only remaining defendants facing liability for the alleged
First Amendment violations are the City and the Water Utility.
4.1.2

Seventh Circuit’s Decision on Appeal

The Seventh Circuit’s decision regarding qualified immunity focuses
solely on the first element of the First Amendment claim—whether the
plaintiffs’ speech was protected (and, then, whether the law regarding the
status of that speech was clearly established). Despite the limited nature of
the court’s decision, it provides relevant insights about the facts and law
applicable to the remaining claim in this case.
First, the Seventh Circuit found that McAuliffe’s email to the
Common Council is not protected speech, because McAuliffe did not send
it in her capacity as a citizen speaking on a matter of public concern. Instead,
the letter “spoke for Comsys as a contractor trying to keep business.”
(Docket #132 at 5).
That leaves McAuliffe’s participation in the Miskinis investigation
and her criminal complaint about Kerkman. As to these speech acts, the
appellate court observed that “[t]he law does not clearly put [them] on
either the protected or the unprotected side.” Id. at 7. This necessitates a
“balanc[ing of] interests (the City’s interest in having an efficient IT
operation versus McAuliffe’s interest in protecting her business and
reporting someone she believed to be a thief of her emails) to decide
whether the First Amendment overrides the City’s position.” Id. In the
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original summary judgment order, this Court resolved the balancing of
interests in the plaintiffs’ favor.
The Seventh Circuit did not opine as to the remaining elements of
the plaintiffs’ First Amendment claim.
4.1.3

Monell Liability
Amendment

for

Violation

of

the

First

With this background in mind, the Court turns back to the plaintiffs’
First Amendment claim against the City and the Water Utility to determine
its viability at this stage of the proceedings.
The claim against the City and Water Utility is lodged under Monell
v. New York City Dep’t of Social Services, 436 U.S. 658 (1978). (Docket #31 at
¶¶ 146–150, 233–241). Monell teaches that municipalities are answerable
only for their own decisions and policies; they are not vicariously liable for
the constitutional torts of their agents. 436 U.S. at 691–94. Municipal liability
exists only “when [the] execution of a government’s policy or custom,
whether made by its law-makers or by those whose edicts or acts may fairly
be said to represent official policy, inflicts the injury.” Id. at 694.
There are three ways in which a municipality can violate an
individual’s civil rights: “(1) an express policy that, when enforced, causes
a constitutional deprivation; (2) a widespread practice that, although not
authorized by written law or express municipal policy, is so permanent and
well settled as to constitute a custom or usage with the force of law; or (3)
an allegation that the constitutional injury was caused by a person with
final policymaking authority.” McTigue v. City of Chicago, 60 F.3d 381, 382
(7th Cir. 1995) (internal citations and quotations omitted).4

The Court pauses to note that although the plaintiffs have pursued the City and
Water Utility as separate defendants in this case, they are one in the same for purposes of
4

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Plaintiffs’ theory rests on the third theory of municipal liability
described above. “[W]hether a particular official has ‘final policymaking
authority’ is a question of state law.” City of St. Louis v. Praprotnik, 485 U.S.
112, 123 (1988) (emphasis in original). The final policymakers with respect
to approval of a termination of vendor contracts for the City and Water
Utility are the Common Council and the Board of Water Commissioners.
See Wis. Stat. § 62.11(5); City of Kenosha Code of General Ordinances §
1.06H. On this point, the parties agree. See (Docket #135 at 7, #137 at 6).
In the instant motion, the defendants argue that the Monell claim
must be dismissed for several reasons. The first is non-starter. The
defendants open their briefing by arguing, mistakenly, that the Monell claim
must fail because all of the individual defendants have now been dismissed
from the case (having been immunized). While it is true that Monell liability
cannot lie where the plaintiff fails to prove a violation of her constitutional
rights in her underlying claims against the individual defendants, see City
of Los Angeles v. Heller, 475 U.S. 796, 799 (1986), a grant of immunity does
not equate to a failure to prove an underlying constitutional violation. See
Matthews v. City of E. St. Louis, 675 F.3d 703, 709 (noting that a city can be
held liability even if its officers are acquitted on the defense of good faith
because “there is still an argument that the city’s policies caused the harm,
though the officer was acting in good faith.”). Therefore, the immunization
of the City employees and alderpersons in this case does not foreclose
Monell liability against the City itself.

Monell liability. If either the City’s Common Council or the Water Utility’s Board of Water
Commissioners, as final policymakers, violated the plaintiffs’ First Amendment rights,
Monell allows the plaintiffs to collect from the municipality itself—the City.

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In their reply brief, the defendants try another argument founded on
mistaken principles. They argue, as if it were dispositive, that “[w]hile
Plaintiffs have identified a final policymaker in the City/KWU, they have
not identified a ‘policy’ that violates First Amendment rights.” (Docket #139
at 2). All the plaintiffs have shown, the defendants say, is that the City and
Water Utility, through their final policymakers, voted to terminate the
Comsys Contracts. Id. at 3. This is a one-off vendor decision, not
promulgation of a policy, which the defendants apparently believe is a
necessary component of a “final policymaker” Monell claim.
Because it is raised for the first time in their reply brief, this argument
is waived. United States v. Kennedy, 726 F.3d 968, 974, n.3 (7th Cir. 2013).
Waiver aside, the argument also fails on its merits. The Supreme Court
rejected it long ago in Pembaur, holding that “it is plain that municipal
liability may be imposed for a single decision by municipal policy-makers
under appropriate circumstances.” Pembaur v. City of Cincinnati, 475 U.S.
469, 480 (1986). The Court explained:
To be sure, “official policy” often refers to
formal rules or understandings—often but not
always committed to writing—that are
intended to, and do, establish fixed plans of
action to be followed under similar
circumstances consistently and over time....
However, as in Owen [v. City of Independence, 445
U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673 (1980) ]
and Newport [v. Fact Concerts, Inc., 453 U.S. 247,
101 S.Ct. 2748, 69 L.Ed.2d 616 (1981)], a
government frequently chooses a course of
action tailored to a particular situation and not
intended to control decisions in later situations.
If the decision to adopt that particular course of
action is properly made by that government’s
authorized
decision-makers,
it
surely
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represents an act of official government
“policy” as that term is commonly understood.
More importantly, where action is directed by those
who establish governmental policy, the municipality
is equally responsible whether the action is to be
taken only once or to be taken repeatedly. To deny
compensation to the victim would therefore be
contrary to the fundamental purpose of § 1983.
Id. 475 U.S. at 480–81 (footnote omitted) (emphasis added); see also City of
St. Louis v. Praprotnik, 485 U.S. 112, 123 (1988) (“In the years since Monell,
the Court has considered several cases involving isolated acts by
government officials and employees. We have assumed that an
unconstitutional governmental policy could be inferred from a single
decision taken by the highest officials responsible for setting policy in that
area of the government's business.”) (citations omitted). Therefore, the
defendants’ contention that the City’s termination of the Comsys Contracts
was an isolated contractual decision, not a policy, does not save the City
from liability.5
Finally, the defendants argue that the Monell claim should be
dismissed because the Seventh Circuit held that McAuliffe “was acting as a
public employee and speaking on public matters at the time.” (Docket #135
at 9). The “time” to which defendants refer is when she sent an email to the
Common Council apprising them of Kerkman’s and Pacetti’s alleged
misconduct. Indeed, as noted earlier, the Seventh Circuit found that
McAuliffe’s June 2 email to the Common Council was not protected speech
because she sent it in her capacity as a government employee trying to
protect her job. On this point, therefore, the Court agrees with the
Without a doubt, the defendants actually know this to be true; they cited
Pembaur for this very principle in their opening brief. (Docket #135 at 8).
5

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defendants. McAuliffe’s act of sending an email to the Common Council to
complain about colleagues’ misconduct cannot, in this case, form the basis
of her First Amendment claim.
But she has also put forward evidence that her company’s contracts
were terminated because of two other speech acts. The defendants say
nothing (in their opening brief) about the other two. In reply, they argue
that only the June 2 email could possibly be relevant to the City’s and Water
Utility’s liability because the alderpersons had no knowledge of the other
speech acts until they received the email. (Docket #139 at 7–8).
As with their other argument made for the first time in their reply
brief, this one is waived. Kennedy, 726 F.3d at 974, n.3. And again, waiver
aside, the argument fails. This Court concluded in its first summary
judgment order that McAuliffe’s participation in the Miskinis investigation
and her filing of a criminal complaint both amounted to protected speech.
Nothing in the Seventh Circuit’s interlocutory appeal decision changed that
conclusion. Therefore, the relevant inquiry is whether the plaintiffs have
created a jury question as to the other two elements of their prima facie claim
against the City and Water Utility—that the plaintiffs suffered an adverse
employment action (which the defendants have never meaningfully
contested, apart from conflating this element with causation) and that the
plaintiffs’ protected speech acts caused the City and Water Utility to
terminate the contracts.6

In addition to the prima facie elements discussed herein, there are other
showings required to ultimately prove the First Amendment claim. Once the
plaintiffs make their prima facie case, the burden of proof shifts to the defendants
“to demonstrate that [they] would have taken the same action in the absence of the
protected speech.” Valentino v. Vill. of S. Chi. Heights, 575 F.3d 664, 670 (7th Cir.
2009). If the defendants carry this burden, the plaintiffs must then show that the
6

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Even without the June 2 email, the third element rests on a morass
of disputed facts. A reasonable jury could find, as the plaintiffs would like,
that the alderpersons learned about the plaintiffs’ participation in the
investigation and criminal complaint (the protected speech acts), decided
McAuliffe’s complaints about her colleagues were giving the City a bad
name, and voted to end the Comsys contracts to shut her up. On the other
hand, this scenario may seem too attenuated for the jury to believe. They
may find that something else, such as performance issues or the
administrative efficiency of bringing IT in-house, motivated the City’s and
Water Utility’s decision.
As the Court noted in its first summary judgment order, the
persuasiveness

of

an

employer’s

non-retaliatory

explanation

for

discharging an employee ordinarily is for the finder of fact to assess, and in
light of the fact issues underlying this element of the claim, the Court will
not grant judgment in the defendants’ favor at this stage. See Massey v.
Johnson, 457 F.3d 711, 719 (7th Cir. 2006) (in a First Amendment retaliation
claim, summary judgment should be granted only when the court can say
without reservation that a reasonable finder of fact would be compelled to
credit the employer’s case as to its motivation for taking adverse
employment action).
5.

CONCLUSION
In light of the foregoing, the defendants’ second motion for

summary judgment will be granted insofar as the plaintiffs’ Fourth
Amendment claim (Counts One and Two) will be dismissed. The motion
defendants’ reasons for taking the employment action were pretextual. Id. Because
disputed facts underlie the plaintiffs’ prima facie case, and because the parties did
not brief these issues, the Court does not delve into them.

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will be denied in all other respects. In light of the Seventh Circuit’s mandate,
defendants Pacetti, St. Peter, and Bosman will be dismissed from this case.
Finally, an amended trial scheduling order will follow, setting a date for a
trial on the remaining First Amendment, breach of contract, and tortious
inference claims.
Accordingly,
IT IS ORDERED that the defendants’ second motion for summary
judgment (Docket #134) be and the same is hereby GRANTED in part and
DENIED in part as reflected in this Order;
IT IS FURTHER ORDERED that Counts One and Two of the
Amended Complaint (Docket #31 at 45–49) be and the same are hereby
DISMISSED; and
IT IS FURTHER ORDERED that defendants Frank Pacetti, Edward
St. Peter, and Keith G. Bosman be and the same are hereby DISMISSED.
Dated at Milwaukee, Wisconsin, this 29th day of August, 2019.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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