author: HOLDERMAN, District Judge:

text:
    Henry HUDSON, et al., Plaintiffs, v. Edward BURKE and the City of Chicago, Defendants.
    No. 83 C 5785.
    United States District Court, N.D. Illinois, E.D.
    Sept. 24, 1985.

      Aram Hartunian, Joel M. Heilman & Benjamin A. Streeter, III, Hartunian, Futterman & Howard, Chicago, 111., for plaintiffs.
    Jerold S. Solovy, Joseph G. Bisceglia, Donald J. Rendall, Jr., Jenner & Block, Jerome H. Torshen, Mark Schoenfield & Robert J. Slobig, Jerome H. Torshen, Ltd., Chicago, 111., for defendants.
   MEMORANDUM OPINION AND ORDER

HOLDERMAN, District Judge:

Plaintiffs Lafayette Blackmon, Gwen Flowers, Henry Hudson, Ruby Thomas, John Laschiava and Whitney Valentine brought this civil rights’ action pursuant to 42 U.S.C. § 1983 for injunctive relief and damages claiming that the defendants Alderman Burke (“Burke”) and the City of Chicago (the “City”) violated plaintiffs’ First and Fourteenth Amendment rights by terminating their employment as investigators for the City Council’s Finance Committee. The terminations allegedly resulted because plaintiffs were supporters of May- or Washington and Alderman Frost, who are purportedly political “enemies” of Alderman Burke. All of the parties have filed motions for summary judgment.

Summary judgment is a drastic remedy which should be granted only when it is clear that the requirements of Rule 56, F.R.Civ.P., have been met. As the Supreme Court in Poller v. Columbia Broadcasting, 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1961) admonished:

Summary judgment should be entered only when the pleadings, depositions, affidavits and admissions filed in the case show that ... there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ... [summary judgment is appropriate only] ... where it is quite clear what the truth is, ... [and where] no genuine issue remains for trial____

All allegations and inferences are to be construed in the light most favorable to the party opposing the motion. However, “to create a question of fact, an adverse party responding to a properly made and supported summary judgment motion must set forth specific facts showing that there is a genuine issue for trial.” Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.1983). A party may not rest on mere allegations or denials of his pleadings; similarly, a bare allegation that an issue of fact exists is insufficient. Shacket v. Philko Aviation, Inc., 681 F.2d 506, 513 n. 8 (7th Cir.1982).

For the reasons set forth below, the City’s motion for summary judgment is granted. Alderman Burke’s motion is granted in part and denied in part, and the plaintiffs’ motion for summary judgment is denied.

BACKGROUND FACTS

Prior to May 1983, Alderman Frost was the Chairman of the City Council Finance Committee. (Complaint, 1110; Burke Dep., p. 27.) Pursuant to Rule 37 of the Rules of the City Council, the Finance Committee has jurisdiction:

... over the City budget, tax levies, industrial revenue bonds and revenue bond programs, revenue and expenditure orders, ordinances and resolutions, the financing of municipal services and capital developments; and matters generally affecting the Budget office, the Department of Finance, and the solicitation of funds for charitable or other purposes on the strees and other public places____ [and] all matters pertaining to the audit and review of expenditures of funds appropriated by the Council or under the custody of the City Treasurer, and all claims under the Illinois Worker’s Compensation Act.

The plaintiffs were hired as investigators on the Finance Committee staff by Frost, except for plaintiff Hudson who was hired based on Frost’s letter of sponsorship to the prior chairman. (Blackman Dep., pp. 32, 37-38; LaSchiava Dep., p. 69; Hudson Dep., pp. 24-25, 29; Thomas Dep., pp. 55-56.) During Frost’s tenure as Chairman, investigators acted principally as claims adjusters, conducting field investigations of three kinds: (a) small property damage claims brought against the City; (b) claims brought by police and firemen for work-related personal injuries and (c) workers’ compensation claims filed by city employees. (Bell Dep., pp. 18-20.) Plaintiffs conducted interviews, took witness statements and processed documents. (Flowers Dep., pp. 29-39.) Plaintiffs, most of whom were precinct captains, also performed political work for Alderman Frost and his 34th Ward Organization. (Blackman Dep. pp. 5-6; LaSchiava Dep., pp. 14-15; Hudson Dep., pp. 38-42; Flowers Dep. pp. 24-25; Valentine Dep., p. 30; Thomas Dep., pp. 41-42.)

On May 2, 1983, during a now legendary session of the City Council, Mayor Washington unsuccessfully attempted to adjourn the Council meeting to prevent the majority block of alderman (referred to in the media as the “Vrdolyak 29”) from realigning committee chairmanships and altering Council rules. Alderman Frost and a minority faction of the Council walked out of the Council chambers after the Mayor’s “adjournment”; however, a majority of the council members remained and continued to conduct Council business. During this post-“adjournment” session, Alderman Burke was elected Chairman of the Council Finance. (Complaint, ¶ 9-10; Burke Dep., pp. 15, 38, 131, 162, 168.)

The Illinois Appellate Court upheld the legality of the City Council meeting at which Alderman Burke was elected Finance Committee Chairman. Roti v. Washington and Rush v. Kozubowski, 114 Ill.App.3d 958, 71 Ill.Dec. 30, 450 N.E.2d 465. However, Alderman Frost refused to vacate the Finance Committee office or to allow Alderman Burke access for approximately two months. (Burke Affidavit, ¶ 7.) Alderman Frost finally relinquished the Chairman’s office after the Illinois Supreme Court refused to review the Appellate Court’s decision. (Burke Dep., pp. 109-110.)

After Alderman Burke was elected Chairman of the Finance Committee, he determined that the Committee should take a more aggressive and active role than before to monitor City government activities and financial affairs. (Burke Dep., pp. 26, 61, 62, 67, 72, 75.) Burke therefore allegedly decided to change the duties of the Finance Committee investigators. In addition to investigations of workmen’s compensation claims and injured-on-duty claims of police and firefighters, the investigators were to gather factual information concerning needs for and delivery of City services. Burke claims that under his leadership, the upgraded responsibilities of the investigators’ work have included:

Discovery that City departments had cars in excess of those provided in the City budget, which led to passage of an ordinance limiting the number of City vehicles. (Burke Dep. at 73-74, 91; Kubasiak affidavit at 4a.)
Discovery that an ex-City employee was being chaufferred around the City by a City employee using a City car. This information helped lead to a requirement in the 1984 ordinance that each City agency report its utilization of each vehicle to the Finance Committee. In addition, there is a current investigation of the excessive use of City employee chauffers and City vehicles by City administrators after normal working hours. (Kubasiak affidavit at 4b; Burke Dep. at 74, 83-85, 88, 91.)
Investigation and evaluation of actual and potential recipients of community block grant funds including site visits, interviews, examinations of records, after which a community development grant budget was created with line items which track annual appropriations ordinance and demonstrate the specific use of funds. (Burke Dep. at 77-78, 114-15, 117; Kubasiak Dep. at 70.)
On-site inspections of work by persons under contract to perform City functions (Burke Dep. at 111, 123), as well as proposed contracts (Kubasiak Dep. at 101-102) and gathering of factual information to determine whether those persons are capable of performing properly (Kubasiak affidavit at 4c.)
Investigations of complaints regarding the efficiency of City departments’ operations, including use of motor fuels tax revenue, since the City Department of Public Works must receive specific allocations from the City Council, as well as because the Finance Committee is mandated by ordinance to determine whether all appropriations are being used efficiently and in accord with the appropriations. (Burke Dep. at 111, 119-20.)
Examination of the delivery of services by various City departments to provide information concerning whether they are efficient and for use in establishing priorities and needs in the budget and appropriations process. (Kubasiak affidavit at 4d.)
A survey and analysis of abandonded buildings, which was used in determining needs and priorities for various City services and appropriations. (Kubasiak affidavit at 4e.)
Factual research regarding other legislative issues, including the use of motor fuels tax revenue since the Finance Committee is mandated by ordinance to determine whether such funds are being used efficiently and in accord with City Council appropriations. (Kubasiak affidavit at 4f.)

These duties, it is contended, include investigations of matters which are politically sensitive, because the results could reflect well or poorly on various elected officials and politicians. (Kubasiak Dep., pp. 98-99.)

Upon assuming the Chairmanship of the Finance Committee, Alderman Burke met with Edward Bell, who was then serving as the committee’s Chief Administrative Officer. Among the topics discussed were the nature of the job responsibilities performed by the employees of the Finance Committee, and the identities of the employees of political sponsors. (Bell Dep., pp. 44-46, 49-54, 78-79.) Burke learned that plaintiffs were politically affiliated with Aider-man Frost. (Burke Dep., 249-250.)

During July, 1983, plaintiffs were fired from their positions as investigators for the Finance Committee by Alderman Burke. Plaintiffs allege that the “sole motive, purpose and reason” for their firings was their political beliefs and associations — namely, their association with Frost and Washington. (Complaint, ¶ 11.)

Mr. Burke explained his reasons for terminating the plaintiffs’ employment as follows:

Q. You felt that you were better off if those appointees were out of the office for confidentiality and security reasons, is that correct?
A. Well, I think that it is reasonable to assume if they were tied to Alderman Frost, and their loyalty was to Alderman Frost, that we could expect that we would not receive from them the confidentiality and dedication that would be required of employees to the new chairman.
Q. In fact, you did anticipate that problem, is that correct?
A. That was one of the reasons they were dismissed.
Q. What other reasons?
A. It would appear from our examination of what was going on that many of them were incompetent. The police and fire claims were in a total mess. There were claims dating back for years that hadn’t been acted on. Some were buried in drawers someplace.
The unions were complaining about the treatment that the police and fire members were getting from the committee. Bills would go unpaid. Firemen and policemen were being sued for nonpayment of bills. There was a lack of recovery from third party payers in cases that were pending in court, and that’s been rectified. The record speaks for itself. There is an increase in tens of thousands of dollars in recoveries from third party payers on liens that should have been collected years ago.
Q. What other reasons?
A. I felt that, first of all, they were exempt from the Shakman ruling. There was no obligation on our part to continue their employment. They constituted a group of people that were loyal to the prior chairman who would impede our desire to put the committee on a new footing.
They just didn’t seem to be capable of devoting themselves and their time to that function. Moreover, some of them had other jobs. And I felt it was important to start with a new team.
Q. Of people personally loyal to you?
A. Loyal to the chairman, who would not breach the confidentiality and security that was necessary in my opinion to the functioning of the committee.
Q. How did you think that the plaintiffs in this case were going to impede your desire to put the committee on a new footing?
A. They apparently were political functionaries of Alderman Frost who were put on the payroll by Alderman Frost, who did political work for Aider-man Frost, who belonged to his political organization, and as near as we could tell did little or nothing in terms of their City jobs other than work the precincts for Alderman Frost.

(Burke Dep. pp. 159-161.)

The Pending Motions

All of the parties have filed motions for summary judgment. The City’s motion is predicated upon the Supreme Court’s decision in Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), which precludes the imposition of liability upon a municipality under 42 U.S.C. § 1983 based solely upon principles of respondeat superior. For the purposes of his motion, Alderman Burke assumes arguendo that plaintiffs’ political affiliation was in fact the sole cause for their termination, but argues that, as a matter of law, political affiliation is a constitutionally permissible criterion for the jobs in question. Aider-man Burke has also moved for summary judgment arguing that plaintiffs’ action is barred by the doctrines of legislative immunity, and/or a qualified “good faith” immunity to Section 1983 liability. Plaintiffs’ motion for summary judgment argues that plaintiffs were victims of political firings, political affiliation was not an appropriate requirement of plaintiffs’ jobs, and that Burke has no legislative or “good faith” immunity from liability.

These motions are discussed below.

I.

UNDER SECTION 1983, THE CITY MAY NOT BE HELD VICARIOUSLY LIABLE FOR THE CONDUCT OF ALDERMAN BURKE, ABSENT PROOF OF A CITY CUSTOM OR PRACTICE

The Supreme Court recently reiterated the elements of a claim under 42 U.S.C. § 1983. Plaintiff must plead that (1) a person (2) acting under color of state law (3) subjected the plaintiff or caused the plaintiff to be subjected (4) to the deprivation of a right secured by the Constitution or laws of the United States. City of Oklahoma v. Tuttle, — U.S. -, 105 S.Ct. 2427, 85 L.Ed.2d 791 (1985) (Brennan, J. concurring at p. -, 105 S.Ct. 2439). Section 1983 creates no substantive rights: “it merely provides remedies for deprivations of rights established elsewhere.” Id., (plurality opinion at -, 105 S.Ct. at 2441).

A municipality can be found liable under Section 1983 only if a plaintiff has been injured by reason of a governmental policy or custom. A simple employment relationship between the primary offender and a municipality is not a sufficient basis for a city’s liability. Monell, supra, 436 U.S. at 694, 98 S.Ct. at 2037. Moreover, the liability of a city cannot be premised upon proof of a single incident of unconstitutional activity. To do so would essentially impose liability upon a city “simply because the municipality hired one ‘bad apple.’ ” Tuttle, supra.

In the instant case, plaintiffs do not allege that their firings resulted from any City policy or custom. It is undisputed that the decision to terminate the plaintiffs’ employment was Alderman Burke’s alone. (Burke, Dep., pp. 129, 139,142, 158-60,178, 180.) Burke received no input from other members of the City Council with respect to his decision. (Burke Dep., pp. 266-67.) He did not consult with the mayor’s office or the Department of Personnel prior to firing the plaintiffs. (Hill Aff. ¶ 5.) The positions held by plaintiffs were exempt from the career service rules contained in the Municipal Code and the personnel rules and regulations established by the City Department of Personnel. (Hill Aff., 11113, 4.) In short, the City’s only involvement with plaintiffs’ firing is that the decision to terminate them was made by an Alderman. Under the reasoning of Monell and Tuttle, that relationship alone is not enough.

The case of Reed v. Village of Shorewood, 704 F.2d 943 (7th Cir.1983) does not alter this result. In Reed, a factual question was presented as to whether the actions of the mayor and other village officials constituted “a policy orchestrated at the highest level of government in the Village of Shorewood. If so ... the Village would be liable.” (Id., at 953; emphasis supplied.) Here, there is no evidence whatsoever that the actions of Alderman Burke amounted to “a policy orchestrated at the highest levels of [City] government.” The mere fact that an action is taken by an individual Alderman does not ipso facto make the decision one of City “policy”. Accordingly, the City’s motion for summary judgment must be granted.

II.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT MUST BE DENIED

Although public employees such as the plaintiffs here have no entitlement to public employment, such employment is a government benefit that cannot be conditioned in a way that penalizes the exercise of the rights of free belief and association. Branti v. Finkel, 445 U.S. 507, 514-17, 100 S.Ct. 1287, 1292-94, 63 L.Ed.2d 574 (1980); Elrod v. Burns, 427 U.S. 347, 358-60, 96 S.Ct. 2673, 2682-83, 49 L.Ed.2d 547 (1976). “[A] public agency that fires an employee because of his political beliefs or political affiliations infringes his freedom of speech ... ” — unless, of course, it can be said that the employee is either a “policymaker” or a “confidential employee”. Soderbeck v. Burnett County, 752 F.2d 285, 288 (7th Cir.1985). “Policymaker” or “confidential employees” can be fired for political reasons with impunity.

The distinction drawn between policymakers and nonpolicymakers is admittedly fuzzy. The plurality opinion in Elrod, supra, stated: “An employee with responsibilities that are not well defined or are of broad scope more likely functions in a policymaking position ... Consideration should also be given to whether the employee acts as an advisor or formulates plans for the implementation of broad goals.” Elrod, 427 U.S. at 368, 96 S.Ct. at 2687. The Seventh Circuit, while acknowledging that the “determination of status as a policymaker in many cases presents a difficult factual question,” has prescribed the following test:

“... whether the position held by the individual authorizes, either directly or indirectly, meaningful input into government decision making on issues where there is room for principled disagreements on goals or their implementation.”

Nekolny v. Painter, 653 F.2d 1164, 1169, 1170 (7th Cir.1981), cert. denied, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 139 (1982).

The definition of a “confidential employee” is no more concrete. The Seventh Circuit has acknowledged that “ ‘considerations of personal loyalty ... may justify the employment of political associates in certain positions,’ but these factors would not apply to ‘positions such as janitors, elevator operators or school teachers.’ ” Tomczak v. The City of Chicago, 765 F.2d 633, 640 (7th Cir.1985), quoting Illinois State Employees Union Local 34 v. Lewis, 473 F.2d 561, 564 (7th Cir.1972), cert. denied, 410 U.S. 928, 93 S.Ct. 1364, 35 L.Ed.2d 590 (1973). All that can be said with certainty with regard to “confidential employees” is that “[i]f Rosalynn Carter had been President Carter’s secretary, President Reagan would not have had to keep her on as his Secretary.” Soderbeck, supra, 752 F.2d at 288.

As an alternative to labeling positions as policymaking or confidential, the Branti court posed the question as follows: “whether the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the office involved.” 455 U.S. at 519, 100 S.Ct. at 1295. Yet, the Seventh Circuit has still persisted in utilizing the jargon of “policymaking” and “confidential” in determining whether political affiliation can be considered for certain positions. Nekolny, supra; Soderbeck, supra; Tomczak, supra.

A non-policymaking/non-confidential employee claiming to be the victim of a political firing has the burden of showing that his protected conduct was a “substantial factor” or “motivating factor” in the decision to terminate his employment. Mt. Healthy City School Dist. v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977); Nekolny v. Painter, 653 F.2d 1164, 1167 (1981). As the Seventh Circuit has stated, “[t]hat burden is not significant. A disgruntled employee fired for legitimate reasons would not be able to satisfy his burden merely by showing that he carried the political card of the opposition party or that he favored the defendants’ opponent in the election.” Nekolny, supra, at 1168. Indeed, “[t]his standard is not satisfied if the plaintiff shows only that elimination of the protected activity may have been welcomed by the defendant or even that such activity played some minor role in the discharge decision.” McClure v. Cywinski, 686 F.2d 541, 546 (7th Cir.1982). Once the plaintiff has met that burden, the defendant has the burden of showing that he would have reached the same decision as to the firing even in the absence of the protected conduct. Mt. Healthy City, supra.

The Court need not address all of the points raised by plaintiffs in support of their motion for summary judgment, for it is clear that at the very least, material issues of fact exist concerning (1) the nature of the investigator positions; and (2) whether plaintiffs’ political beliefs or affiliations were a “substantial” or motivating factor in the decision to terminate their employment.

While plaintiffs characterize the Finance Committee investigators as nothing more than glorified claims adjusters, Alderman Burke maintains that they have significant input into the development of legislative proposals and work on confidential and sensitive investigations. Alderman Burke has denied in his Answer that plaintiffs’ terminations resulted solely from political affiliations, and has contended in his deposition testimony that plaintiffs would have been fired regardless of their affiliation with Alderman Frost because of their performance and attendance records.

The Court cannot accept plaintiffs’ argument that Burke waived his right to assert that plaintiffs would have been fired regardless of political affiliation by failing to plead it as an affirmative defense. The denial in Burke’s Answer and his deposition testimony clearly put this matter at issue. Plaintiffs can hardly claim surprise concerning this defense. However, in the interest of fairness, Burke will be given 14 days to amend his answer to raise this defense as an affirmative defense because “justice so requires.” Rule 15(a), F.R. Civ.P. Plaintiffs will be given leave to conduct whatever further discovery they feel is required with regard to that defense, and that defense alone.

Accordingly, plaintiffs’ motion for summary judgment is denied.

III.

ALDERMAN BURKE’S MOTION FOR SUMMARY JUDGMENT IS DENIED IN PART AND GRANTED IN PART

A. Material Factual Issues Preclude Summary Judgment in Favor of Alderman Burke on the Appropriateness of Considering Political Affiliation in Firing Plaintiffs.

For the reasons previously discussed in section II, supra, the Court finds that an issue exists as to the facts regarding the nature of the investigator position for the Finance Committee under the chairmanship of Alderman Burke. These facts are material and preclude summary judgment on the appropriateness of considering political affiliation in firing plaintiffs.

B. Material Factual Issues Concerning the Applicability of the Doctrine of Legislative Immunity Preclude Summary Judgment on this Defense.

If the doctrine of legislative immunity is applicable, it absolutely bars plaintiffs’ action. Mother Goose Nursery Schools, Inc. v. Sendak, 770 F.2d 668, 671 (7th Cir., 1985).

The privilege of legislators to be free from civil liability for what they do or say in legislative proceedings was a long recognized principal of English law. The Founding Fathers deemed the privilege “so essential that it was written into the Articles of Confederation and later into the Constitution.” Tenney v. Brandhove, 341 U.S. 367, 372, 71 S.Ct. 783, 786, 95 L.Ed. 1019 (1951). Article I, § 6 of the Constitution provides:

... for any Speech or Debate in either House, [the Senators and Representatives] shall not be questioned in any other place.

Of course, the Constitution’s Speech or Debate Clause confers no immunity upon state or local legislators. The Supreme Court has, however, extended a federal common law immunity from suit under 42 U.S.C. § 1983 to state legislators acting “in the sphere of legitimate legislative activity.” Supreme Court of Virginia v. Consumers Union, 446 U.S. 719, 731-32, 100 S.Ct. 1967, 1974, 64 L.Ed.2d 641 (1980). Municipal legislators also enjoy such immunity. Reed v. Village of Shorewood, 704 F.2d 943, 952 (7th Cir.1983). The purpose of the immunity

... is based on the need for an independent legislative branch, free from the coercion of restraint imposed by inquiry from other governmental authority, as well as from the time consuming problem of legislators having to defend their official acts in court.

Agromayor v. Colberg, 738 F.2d 55, 58 (1st Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 515, 83 L.Ed.2d 405 (1985).

The immunity does not encompass everything that a legislator might do while in office, however. Administrative functions are not protected. Only a legislator’s conduct while “acting in the sphere of legitimate legislative activity” is immunized. Tenney v. Brandhove, 341 U.S. at 376, 71 S.Ct. at 788. Although the Constitution speaks only of “speech or debate”, the Supreme Court has broadly construed the Constitutional protection to cover a wide range of legislative activity including “[c]ommittee reports, resolutions, and the act of voting ... ’ [i]n short, ... things generally done in a session of the House by one of its members in relation to the business before it.’ ” Gravel v. United States, 408 U.S. 606, 617, 92 S.Ct. 2614, 2623, 33 L.Ed.2d 583 (1972), quoting Kilbourn v. Thompson, 103 U.S. (13 Otto) 168, 204, 26 L.Ed. 377 (1881). “Investigations, whether by standing or special committees” have been recognized to be within the sphere of legitimate legislative activity, absent a showing that there was a usurpation of functions exclusively vested in the Executive or Judiciary. Tenney, supra, 341 U.S. at 377, 71 S.Ct. at 788. The immunity has also been extended to legislative aids or assistants because:

it is literally impossible in view of the complexities of the modern legislative process, with Congress almost constantly in session and matters of legislative concern constantly proliferating, for Members of Congress to perform their legislative tasks without the help of aids and assistants; that the day-to-day work of such aids is so critical to the Members’ performance that they must be treated as the latter’s alter-egos ...

Gravel, supra, 408 U.S. at 617-18, 92 S.Ct. at 2623.

In the instant case, Alderman Burke asserts that his decision to terminate plaintiffs’ employment as Finance Committee investigators was within “the sphere of legitimate legislative activity” and thus immunized. Plaintiffs contend that the firing of Finance Committee investigators is an administrative, not legislative, act and thus argue that no protection is afforded to Alderman Burke by legislative immunity.

This Court has no clear guidance from the Supreme Court or from the Seventh Circuit concerning this issue. Most courts when called upon to differentiate between “legislative” and “administrative” acts have candidly recognized that “[n]o bright line delineates ... administrative actions from ... legislative functions ... Hence, whether defendants’ [firing of] plaintiff[s] was an administrative or legislative function does not admit to facile resolution.” Detz v. Hoover, 539 F.Supp. 532, 534 (E.D. Pa.1982).

Employment decisions concerning employees having no connection whatsoever with the legislative process have generally been held to be administrative acts not subject to legislative immunity, even if such decisions were voted on by legislators. See e.g., Detz v. Hoover, supra, (police chief); Visser v. Magnarelli, 542 F.Supp. 1331 (N.D.N.Y.1982) (city clerk); Walker v. Jones, 733 F.2d 923 (D.C.Cir.1984) (restaurant manager). Such decisions do not answer the question presented here, however, because Alderman Burke contends that the investigators do have some connection with the legislative process. The Courts of Appeals of two circuits confronted with similar cases have arrived at opposite conclusions.

In Davis v. Passman, 544 F.2d 865 (5th Cir.1977), reversed en banc on other grounds on rehearing, 571 F.2d 793 (5th Cir.1978), reversed on other grounds, 442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979), Congressman Passman fired his Deputy Administrative Assistant because she was a woman. The Fifth Circuit held that the Congressman was not immune to the assistant’s Fifth Amendment claim. The court held, with Judge Jones dissenting, that the firing of Congressional employees was not within the legitimate scope of legislative activity:

Such dismissal decisions certainly are not “an integral part of the deliberative and communicative process by which Members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House.” Gravel v. United States, supra, 408 U.S. at 625, 92 S.Ct. at 2627. Peripheral or tangential activities of a representative must not be confused with the legislative core. A representative’s transgressions are not given absolute absolution. The Constitution establishes an immunity for aberrations in a representative’s legislative activities, but members of Congress become mere mortals when they operate in more mundane fields. When members of Congress dismiss employees they are neither legislating nor formulating legislation. The fear of judicial inquiry into dismissal decisions cannot possibly affect a legislator’s decisions on matters pending before Congress. 544 F.2d at 880.

The First Circuit in Agromayor v. Colberg, 738 F.2d 55 (1st Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 515, 83 L.Ed.2d 405 (1985), reached the opposite conclusion. In Agromayor, a journalist brought a civil rights action against the Speaker of the House of Representatives of the Commonwealth of Puerto Rico for alleged violations of his Constitutional rights in being denied employment as a legislative press officer because of political affiliation and national origin. The legislator moved to dismiss, in part, because the plaintiff’s suit was barred by legislative immunity. The motion was denied and the legislator appealed.

On appeal, the First Circuit reversed. Senior Judge Bailey Aldrich, speaking for the court, acknowledged that “the scope of ‘legitimate legislative activity’ subject to immunity ... is ill-defined,” but stated:

To the extent that an employee’s function is “essential” to the legislative process, his qualifications, and hence his proper selection, should be correspondingly essential. The question we must answer is, to what-extent should a legislator be immune from judicial inquiry in determining those essential questions?

738 F.2d at 59. Reviewing the decision in Davis, supra, Judge Aldrich observed that in the opinion of three dissenting justices of the Supreme Court, Congressman Pass-man should have been immune because:

A Member of Congress has a right to expect that every person on his or her staff will give total loyalty to the political positions of the Member, total confidentiality, and total support. This may, on occasion, lead a Member to employ a particular person on a racial, ethnic, religious, or gender basis thought to be acceptable to the constituency represented, even though in other branches of Government — or in the private sector— such selection factors might be prohibited____
At this level of Government — staff assistants of Members — long-accepted concepts of separation of powers dictate, for me, that until Congress legislates otherwise as to employment standards for its own staff, judicial power in this area is circumscribed. Davis v. Passman, ante, 442 U.S. at 249-50, 99 S.Ct. at 2279 (Burger, C.J., dissenting).

Judge Aldrich explained further that the dissenting justices’ views “expressed a proper common law concern beyond strict speech and debate or comparable immunity that courts should exhibit towards legislators, state or federal.” Id., at 60.

The Agromayor court recognized, however, that “not all employment raises a legislative interest.” Id. The Court concurred with the result in Walker v. Jones, supra, which held that the position of House restaurant manager has no meaningful input with regard to the legislative functioning. “However, any employee dealing with ‘the deliberative and communicative process’ ... must be of direct legislative importance.” Id. The First Circuit concluded that if there is “enough opportunity for ‘meaningful input’ into the legislative process” the employment decision should be immunized. Id.

This Court believes that the Agromayor approach is correct and more consistent with the policy considerations which underlie the legislative immunity. The Davis Court’s analysis totally ignores the realities of the modern legislative process previously recognized by the Supreme Court that “it is literally impossible ... for [legislators] to perform their legislative tasks without the help of aids and assistants ...” Gravel, supra, 408 U.S. at 617, 92 S.Ct. at 2623. To the extent that such aids or assistants have some opportunity for meaningful input into the legislative process, this Court believes that the decision to hire or fire such aids or assistants is within the sphere of legitimate legislative activity.

The question thus becomes do investigators for the Finance Committee have the opportunity for meaningful input into the legislative process? The facts presented by the parties leave that question in dispute. Alderman Burke has submitted evidence suggesting that the Committee investigators have participated in investigations which have formed the basis of proposed or enacted legislation. See supra, pp. 1503-1505. Plaintiffs have countered that the investigators still process workmen’s compensation claims.

Of course, the fact that investigators perform some administrative and some legislative tasks is not determinative. As the Agromayor court explained:

... in applying the immunity we decline to inquire deeply into the functions performed by a particular personal legislative aide, inasmuch as such an inquiry itself threatens to undermine the principles that absolute immunity was intended to protect. Personal aides may perform a variety of tasks, only some of which are vital to the legislative process.

Agromayor, supra at 60. Nor does the fact that the investigators are employees of the Finance Committee, rather than personal aides to Alderman Burke, mean that Alderman Burke’s decision to fire plaintiffs and hire other investigators is not within the sphere of legitimate legislative activity. It is undisputed that the function of hiring and firing of Finance Committee staff has been delegated by the Committee to the Chairman. How the Finance Committee chooses to manage its hiring/firing decisions “is a legislative matter, not our concern.” Id., at 60 n. 4.

However, after reviewing the deposition transcripts submitted, the Court is unable to determine with any certainty whether the investigators meet the Agromayor test or not.

Alderman Burke’s motion for summary judgment based upon legislative immunity must therefore be denied because material factual issues remain to be resolved.

C. Alderman Burke’s Qualified Immunity Does Bar Plaintiffs’ Claims For Damages.

Although this Court is unable to resolve summarily the issue of legislative immunity on the record presented, the question of qualified immunity is different. The standard for qualified immunity was set down in Harlow v. Fitzgerald, 457 U.S. 800, 818, 819, 102 S.Ct. 2727, 2738, 2739, 73 L.Ed.2d 396 (1982):

[Gjovernment officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have know.

The standard is an objective one, and does not depend upon the subjective state of mind of the official. Gannon v. Daley, 561 F.Supp. 1377, 1388 (N.D.Ill.1983). The qualified immunity, however, only bars an action for monetary relief; it is inapplicable to requests for injunctive relief. Wood v. Strickland, 420 U.S. 308, 314 n. 6, 95 S.Ct. 992, 997 n. 6, 43 L.Ed.2d 214 (1975).

Alderman Burke claims that he should be afforded qualified immunity because he relied in good faith upon a June 1983 Shakman Consent Decree which listed plaintiffs’ position as exempt from the prohibition of political firings. Plaintiffs counter that such an argument is precluded by Judge Marshall’s decision in Gannon v. Daley, 561 F.Supp. 1377 (N.D.Ill.1983) which rejected a similar argument. Plaintiffs further argue that since they are clearly neither policymakers nor confidential employees, Alderman Burke had to know that he was violating their constitutional rights by firing them for political reasons.

The Supreme Court’s recent case of Mitchell v. Forsyth, — U.S. -, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) highlights the appropriate line of inquiry. Mitchell involved a suit for damages against a former Attorney General of the United States who had authorized a warrantless wiretap on the respondent. The District Court held that the Attorney General was not absolutely or qualifiedly immune from suit. The Court of Appeals affirmed the lower court’s ruling with regard to absolute immunity, but held that the ruling on qualified immunity was not ripe for appeal. The Supreme Court granted certiorari and affirmed the ruling on absolute immunity, but found that the ruling on qualified immunity was appealable and erroneous. The Court explained:

The legality of the warrantless domestic security wiretap Mitchell authorized in November 1970, was, at that time, an open question, and Harlow teaches that officials performing discretionary functions are not subject to suit when such questions are resolved against them only after they have acted. The District Court’s conclusion that Mitchell is not immune because he gambled and lost on the resolution of this open question departs from the principles of Harlow. Such hindsight-based reasoning on immunity issues is precisely what Harlow rejected. The decisive fact is not that Mitchell’s position turned out to be incorrect, but that the question was open at the time he acted. Hence, in the absence of contrary directions from Congress, Mitchell is immune from suit for his authorization of the Davidson wiretap notwithstanding that his actions violated the Fourth Amendment.

In words that are apropo for the instant case, the Court observed:

We do not intend to suggest that an official is always immune from liability or suit for a warrantless search merely because the warrant requirement has never explicitly been held to apply to a search conducted in identical circumstances. But in cases where there is a legitimate question whether an exception to the warrant requirement exists, it cannot be said that a warrantless search violates clearly established law.

— U.S. at-; -n. 12, 105 S.Ct. at 2819-20; 2820 n. 12.

When Alderman Burke made his decision to fire plaintiffs, Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980) was the controlling statement on the permissibility of political firings. But Branti did not absolutely forbid dismissals for political reasons. Branti in fact permits political firings if the “hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the office involved.” 445 U.S. at 519, 100 S.Ct. at 1295. This is in essence the reasoning that has lead courts to categorize such positions as “policymaking” or “confidential”. E.g., Soderbeck v. Burnett County, 752 F.2d 285, 288 (7th Cir.1985).

As the Seventh Circuit has acknowledged, the “determination of status as a policymaker in many cases presents a difficult factual question.” Nekolny v. Painter, 653 F.2d 1164, 1169 (7th Cir.1981), cert. denied, 455 U.S. 1021, 102 S.Ct. 1719, 72 L.Ed.2d 139 (1982). But that is not always the case. “[Pjositions such as janitors, elevator operators or school teachers” are clearly ones for which political affiliation could never be considered an appropriate job criterion. Tomczak v. The City of Chicago, 765 F.2d 633, 640 (7th Cir.1985), quoting Illinois State Employees Union Local 34 v. Lewis, 473 F.2d 561, 564 (7th Cir. 1972), cert. denied, 410 U.S. 928, 93 S.Ct. 1364, 35 L.Ed.2d 590 (1973). Similarly, political affiliation would clearly not be appropriate for positions such as bus drivers or secretary-dispatchers (Nekolny v. Painter, supra) or clerks (Gannon, supra).

To determine whether Alderman Burke can successfully assert a qualified immunity from suit, the Court assumes plaintiffs were fired for political reasons. The Court must then determine if “there is a legitimate question ” whether political affiliation was an appropriate requirement for plaintiffs’ positions. It seems clear to this Court that there was a legitimate question on this issue. Classification of the positions in question presents “a difficult factual question” (Nekolny, supra) not susceptible to facile resolution. Under the reasoning of Mitchell, supra, subjecting Alderman Burke to monetary liability “because he gambled and lost on the resolution of this open question departs from the principles of Harlow.” Mitchell, supra. The “decisive fact” is not whether Aider-man Burke’s legal position ultimately turns out to be correct or incorrect, “but that the question was open at the time he acted.” Id. Thus, while the Court does not “suggest that an official is always immune” simply because the positions in question have never been litigated, (id.) the Court holds that qualified immunity is applicable here because “a legitimate question” existed (and continues to exist) as to whether political affiliation was an appropriate consideration in firing plaintiffs. Plaintiffs claim for damages will be dismissed, but their claims for injunctive relief based upon the record presently before the Court will be allowed to proceed.

CONCLUSION

For the reasons set forth, the motion of defendant City of Chicago for summary judgment is GRANTED, plaintiffs’ motion for summary judgment is DENIED and defendant Burke’s motion is GRANTED in part and DENIED in part. Defendant Burke is granted leave to file within 14 days an amended Answer setting forth additional affirmative defense matters. The parties are given 21 days thereafter to complete additional discovery, if any is desired, on the new matters, and only the new matters, raised in the amended Answer.

Case set for a report on status at 9:15 a.m., November 6, 1985.

      . When the action was originally filed, Clarence Bell and W. Ronald Lambert were also named plaintiffs, but they were subsequently dismissed. Gwen Flowers was added as a plaintiff on June 14, 1984, in a supplemental pleading.

      . The statement of undisputed facts is taken from the pleadings, depositions, and statements of Material Facts As To Which There Is No Genuine Dispute filed by defendants in support of their motions pursuant to the Local Rules. Plaintiffs filed no response to the statements filed by defendants, and did not submit their own statement in support of their motion for summary judgment as required by this Court’s rule. While this is bad practice, the Court will not, as suggested by defendants, grant or deny the pending motions on that ground. The Court will treat those statements of fact (when supported by the record) made in plaintiffs’ briefs as their recitation of facts.

      . The Fifth Circuit en banc reversed the panel's decision, not resolving the issue of legislative immunity. (571 F.2d 793 (5th Cir.1978)) The Supreme Court reversed the en banc decision. Although the Court did not reach the issue of legislative immunity, three dissenting justices suggested that the issue of legislative immunity should have barred plaintiffs action. (442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979).) See discussion infra.


source: Caselaw Access Project

author: COHN, District Judge.

license: Public Domain

text:
    Frank C. PASTERNAK; Antoine J. LaBadie; Harold J. Barbret; James H. Wickham; Otto J. Blattler; Ona M. Greve; David G. Brednel; Robert Semeniuk; Gerald W. Tremblay; John Hirschmann; Richard M. Szymanski, Venturers of Sioux Shares Co. v. SAGITTARIUS RECORDING CO.; Frank J. Van Arsdale; Shelley Whalen; Booth, Lipton & Lipton; Philip Pierce; Frederick M. Mintz; A.V.I. Records, Inc.; A.V.I. Records Distributing Corp.; Raymond Harris, and BOOTH, LIPTON & LIPTON, Third-Party Plaintiff, v. ROSE, FELDMAN, RADIN, PAVONE & SKEHAN, Third-Party Defendant.
    No. 82-CV-70500-DT.
    United States District Court, E.D. Michigan, S.D.
    Sept. 24, 1985.

      Frederick A. Patmon, Hallison H. Young of Patmon & Young, Detroit, Mich., for plaintiffs.
    John J. Ronayne, Chester E. Kasiborski, Jr., of Van Til, Kasiborski & Ronayne, Detroit, Mich., for third-party defendant Rose, Feldman, Radin, Pavone & Skehan.
    Michael Sullivan, Clayton Farrell of Collins, Einhorn & Farrell, Southfield, Mich., for Booth, Lipton & Lipton.
   ORDER DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANT BOOTH, LIPTON & LIPTON’S MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM

COHN, District Judge.

For the reasons stated in the accompanying memorandum, it is ORDERED that Plaintiffs’ Motion for Summary Judgment is DENIED, and that Defendant Booth, Lipton & Lipton’s Motion for Summary Judgment is GRANTED, and that Booth, Lipton & Lipton and Third-Party Defendant Rose, Feldman, Radin, Pavone & Skehan are DISMISSED as defendants.

MEMORANDUM

I. Plaintiffs’ Motion for Summary Judgment

A.

Plaintiffs’ claims arise out of their participation as venturers in Sioux Shares Company, a Michigan joint venture. Each of the individual plaintiffs contributed varying sums of cash and promissory notes sometime between early April and early August of 1981, for the purpose of forming Sioux Shares as an investment vehicle. On August 10, 1981, Sioux Shares entered into three Master Recording Lease Agreements with defendant Sagittarius Recording Company (Sagittarius). Under the agreements, Sagittarius was to have bought title to certain master recordings from defendants American Variety International Records, Inc. and American Variety International Records Distributing Corp. (AVI). Sagittarius would then lease those recordings to Sioux Shares, which would have them produced and distributed for a substantial profit. As an additional benefit to plaintiffs, Sagittarius was to have passed the Investment Tax Credit (ITC) for the master recordings through to Sioux Shares, to be claimed by plaintiffs on their 1981 federal income tax returns. As the basis for their belief that they would be entitled to the ITC, plaintiffs claim to have relied on the opinion of defendant Booth, Lipton & Lipton (Booth), a New York law firm. Booth prepared tax opinion letters on October 6, 1980 and June 25,1981 advising Sagittarius of the tax consequences in respect to Sagittarius’s acquiring and subsequent leasing of the master recordings. The lengthy 1981 opinion contained in Sagittarius’s offering brochure is the foundation of plaintiffs’ claims against Booth. Sagittarius failed to deliver the master recordings to plaintiffs’ chosen manufacturer/distributor, Rosanova Productions, Inc. (Rosanova), thus preventing plaintiffs from reaping their expected profits and taking the ITC on their 1981 tax returns.

Plaintiffs request summary judgment as to Counts III, V, VII, and VIII of the Amended Complaint. Count III is against AVI for tortious interference with Sioux Shares’s lease contract with Sagittarius. Count V is against Booth for common law fraudulent misrepresentation, both intentional and innocent. Count VII is against AVI for violation of the Securities and Exchange Commission’s Rule 10(b)-5, 17 C.F.R. § 240.10b-5, for material misrepresentations in the sale of a security. Count VIII is for injunctive relief to prevent AVI from destroying or concealing relevant documents and things. Alternatively, plaintiffs ask for partial summary judgment against Booth as to the common law claims for fraudulent and innocent misrepresentation, and against AVI for tortious interference with prospective advantages.

Defendant Booth and third-party defendant Rose, Feldman, Radin, Pavone & Skehan (“Rose”) — an accounting firm upon whose statements Booth relied for some of its tax opinions in this matter — have responded. AVI has not responded and is currently unrepresented by counsel.

Plaintiffs’ motion papers offer no support other than all “the records and files of this action.” Attached to the motion is a 208 paragraph document entitled “Plaintiffs’ Statement of Material Facts Not in Dispute;” it is merely a copy of plaintiffs’ abbreviated “Proposed Findings of Facts.” Many, if not most, of the “facts not in dispute” are unsupported by any reference to the record. The document is repetitive and reads more like a complaint. Further, plaintiffs offer no legal support or argument to show that they are entitled to judgment as a matter of law.

B.

Booth and Rose have filed complementary motions and briefs in opposition to the motion of plaintiffs. Booth points out that plaintiffs have failed to identify what material facts are not in dispute, and that they are really asking me to support their motion for them by sifting through the entire record. Rose concurs and additionally points out that, even if plaintiffs did show there is no dispute as to material facts, they have failed to show they are entitled to judgment as a matter of law.

C.

Plaintiffs have a heavy burden. They must clearly show the true facts and exclude any real doubt as to the existence of any genuine issue of material fact. Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 728-29, 88 L.Ed. 967 reh’g denied, 322 U.S. 767, 64 S.Ct. 941, 88 L.Ed. 1593 (1944); 6 Moore’s Federal Practice ¶ 56.15[3], at 56-466 to -467. They must also show that they are entitled to judgment as a matter of law. Ghandi v. Police Dep’t of the City of Detroit, 747 F.2d 338, 344 (6th Cir.1984). Furthermore, plaintiffs’ supporting papers are closely scrutinized, while the papers of the opposing parties are indulgently treated. Watkins v. Northwestern Ohio Tractor Pullers Ass’n, Inc., 630 F.2d 1155 (6th Cir. 1980). The evidence must be viewed and all inferences must be drawn therefrom in the light most favorable to the opposing parties. Smith v. Hudson, 600 F.2d 60 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979).

Plaintiffs have certainly failed to establish that they are entitled to judgment as a matter of law. Plaintiffs have never submitted any legal argument regarding their claims. Plaintiffs have never argued the elements of their claims, nor shown how they satisfy those elements. In fact, in plaintiffs’ “Anticipated Contested Legal Issues” (the only place where plaintiffs cite any legal authority), plaintiffs admit the contestability of the elements for: tortious interference (Count III), fraudulent or innocent misrepresentation (Count V), the securities claim (Count VII), and injunctive relief (Count VIII).

Plaintiffs’ failure to show they are entitled to judgment as a matter of law is sufficient to deny their motion in all respects without prejudice.

II. Booth’s Motion for Summary Judgment

A.

As to plaintiffs’ claim (Count V) based on fraudulent misrepresentation, Booth argues that plaintiffs cannot show Booth’s misrepresentations proximately caused plaintiffs’ harm — a required element — because it was AVI and Sagittarius’s failure to deliver the masters to plaintiffs’ chosen manufacturer/distributor, Rosanova, that proximately harmed plaintiffs. Even if Booth’s representations had been true, plaintiffs still would have been harmed by the failure to deliver. Rose concurs in this defense. Booth adds further that plaintiffs cannot show they were harmed by any act or omission of Booth, especially since Sagittarius returned to plaintiffs all monies paid by them as part of a consent judgment between these parties. As to plaintiffs’ claim based on innocent misrepresentation, Booth argues that plaintiffs have not pleaded the required elements; alternatively, even if they did, plaintiffs cannot establish privity between themselves and Booth or show that their losses inured to the benefit of Booth — required elements. For purposes of this motion only, Booth accepts as true the allegations of the misrepresentations and plaintiffs’ reliance thereon.

B.

Plaintiffs’ first response to Booth’s motion simply says that Booth has not shown the absence of any triable issue of material fact. At a hearing on September 6, 1985, the Court asked plaintiffs to identify more specifically the documents that would support an inference that Booth knew AVI or Sagittarius did not intend to ever deliver the masters to plaintiffs’ chosen manufacturer/distributor. In a 29 paragraph “Supplemental Response,” plaintiffs identify documents that they say would support an inference of Booth’s knowledge of such intentions by AVI and Sagittarius. The Supplemental Response fails to show a dispute as to the sole material issue raised by Booth’s motion, i.e., whether Booth knew prior to June 25, 1981, the date of its 1981 tax opinion, of any intention not to deliver the masters. The Supplemental Response largely addresses issues such as whether Booth knew facts that would negate the tax benefits of the master leasing program or make the master leasing program a “security” under the securities laws. As discussed infra, the failure of Sagittarius to deliver the masters makes these other issues causally irrelevant as to Booth’s liability.

C.

1. Intentional Misrepresentation Claim

a.

Booth lays out the six elements for a common law claim for fraudulent misrepresentation in Michigan: (1) That the defendant made a material misrepresentation; (2) that it was false; (3) that the defendant knew the statement was false when made, or made the statement recklessly, without any knowledge of its truth and as a positive assertion; (4) that the defendant made it with the intention that it should be acted upon by the plaintiff; (5) that the plaintiff acted in reliance upon it; and (6) that the plaintiff thereby suffered injury. See Hi-Way Motor Co. v. International Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813 (1976). For purposes of this motion, Booth concedes that plaintiffs satisfy the first five elements. This leaves the requirement that Booth’s misrepresentations be the proximate cause of harm to plaintiffs. Rosenblatt v. Ivory Storage Co., 262 Mich. 513, 517, 247 N.W. 733 (1933), cited with approval by W. Keeton & W. Prosser, Handbook on the Law of Torts § 110, at 767 (5th ed. 1984).

In Rosenblatt, the plaintiff had entered into a warehouse storage agreement with the defendant based upon the latter’s false representation that the warehouse was fireproof. It was not, and plaintiff’s goods were destroyed by fire. The defendant attempted to escape liability by arguing that plaintiff’s loss was “caused” not by the misrepresentation, but rather by a fire for which the defendant was not responsible. The argument was rejected by the court: “[T]he loss grew out of the very subject-matter of the fraud, the misrepresentation that the building was fireproof.” Id. at 515-16, 247 N.W. 733.

Plaintiffs’ alleged harm in this case stems first and foremost from the failure of Sagittarius to deliver the masters to Rosanova by December 31, 1981. This caused plaintiffs to lose the benefits of the lease contract with Sagittarius, including the ability to take the ITC on their 1981 tax returns. While plaintiffs might not have entered into the contract “but for” the representations of Booth, Booth argues that any harm suffered by plaintiffs is due to the failure to deliver to Rosanova. Even if Booth’s representations had been true, the failure of Sagittarius to deliver would still have caused plaintiffs to lose the ITC and the benefit of the contract. Thus, Booth argues that its acts or omissions were not the proximate cause of plaintiffs’ harm. Rose concurs in this defense.

While many of the circumstances of the lease are disputed by the parties, it is clear that the triggering event in this lawsuit was the failure of AVI or Sagittarius to deliver the masters to Rosanova. Where there is no dispute about causal connection, causation becomes a question of law for the court. Davis v. Thornton, 384 Mich. 138, 145, 180 N.W.2d 11 (1970). Proximate cause is “essentially a problem of law.” Moning v. Alfono, 400 Mich. 425, 440, 254 N.W.2d 759 (1977); Prosser, supra, § 42, at 273. The analysis that follows convinces me that Booth’s representations clearly were not the proximate cause of plaintiffs’ harm. Booth has shown that there is no genuine issue of material fact as to the claim for fraudulent misrepresentation and that Booth is entitled to judgment on this cause of action as a matter of law.

b.

The test for whether Booth’s misrepresentations were the proximate cause of plaintiffs’ harm is whether their loss of the ITC and benefit of the contract “grew out of the very subject-matter of the fraud____ [and] was within the contemplation of the parties” Rosenblatt, supra, at 515-16, 247 N.W. 733. Here, the subject matter of the alleged fraud went to Booth’s representations that plaintiffs could take an ITC for leasing the masters and that they would obtain legal title to the masters along with substantially all copyright privileges. Even if Booth knowingly misrepresented the nature of the ITC benefits, legal title and copyrights, it was AVI or Sagittarius’s failure to deliver the masters to Rosanova that prevented plaintiffs form getting those benefits. Booth did not represent as part of its tax opinion that Sagittarius would deliver the masters before any certain date. Thus, Booth’s representations could be the proximate cause only if it knew that the masters would not exist before the end of 1981, or that AVI would not deliver the masters to Sagittarius. This would be akin to the warehouseman in Rosenblatt, who did not start the fire but nonetheless assured that a fire could not occur. In other words, it would be necessary that, although Booth was not responsible for the failure to deliver, it had nonetheless assured that plaintiffs would obtain legal title and possession when in fact it knew that such would not be likely to occur. My examination of the record, as explained infra, convinces me that there simply is insufficient evidence in the record that would allow an inference that Booth participated in a fraud as to title and delivery.

Paragraph 5 of plaintiffs’ Supplemental Response says that the masters always remained in the possession, custody, and control of AVI. This fails to help plaintiffs, since it merely restates the obvious, i.e., that Sagittarius failed to deliver the masters to Rosanova. The documents supporting this paragraph (Zeiger Dep., p. 63; Whalen Dep., p. 169) do not show that Booth knew before June 25, 1981 that AVI never intended to deliver to plaintiffs’ chosen manufaeturer/distributor. Indeed, these do not even constitute evidence of AVI’s intent to breach, regardless of what Booth’s knowledge might have been. They merely state the nature of AVI’s operations, i.e., that AVI holds its masters until such time as it bails them to a qualified manufaeturer/distributor. See Lease, Art. 15. Paragraph 24 of the Supplemental Response says that AVI refused to release the masters to Rosanova unless plaintiffs executed a distribution agreement with an AVI affiliate. But any dispute between the parties here as to what constitutes a qualified manufaeturer/distributor is irrelevant unless Booth knew that AVI would not release the masters to any manufacturer/ distributor that plaintiffs possibly could have chosen. There is no such evidence in the record. That Booth knew AVI would keep the masters in the interim is not evidence that it knew of a plan not to deliver.

Paragraph 8 of the Supplemental Response states that Booth met with Sagittarius representatives for more than ten hours before issuing its 1981 tax opinion. From this, plaintiffs would infer that Booth must have known of an intent not to deliver. While such discussions may raise a suspicion that Booth knew of such an intent, suspicion is not enough. “The party opposing the motion must place a material fact in issue by presenting facts of a substantial nature; it is not sufficient to rely on conclusions of law or mere suspicions.” Invictus Records v. American Broadcasting Companies, 98 F.R.D. 419, 426 (E.D.Mich. 1982).

Paragraphs 10 and 14 of the Supplemental Response document Booth’s concern as to Sagittarius’s unreliability and indicate that Booth suspected its tax opinion might be litigated. Similarly, the purpose of paragraph 13 seems to be to suggest that Booth should have been concerned as to whether the 1981 master leasing program could safely be characterized as a “non-security” under the securities laws. Paragraph 21 suggests that Booth should have known the 1981 program would not give plaintiffs an ITC on their tax returns. These “due diligence” concerns would be relevant only if I were here concerned with whether Booth harmed plaintiffs by misleading them as to the ITC, or whether Booth improperly characterized the master leasing program as a “non-security.” But these issues are made causally irrelevant by the failure to deliver the masters in the first place, which is the proximate cause of plaintiffs’ harm. Booth’s concern over future litigation does not allow an inference that Booth knew AVI or Sagittarius intended to breach by failing to deliver the masters to any or all manufacturers plaintiffs might have chosen.

To the contrary, some of the documents offered by plaintiffs suggest Booth expected the masters to be released to some manufaeturer/distributor on behalf of plaintiffs. A January 28, 1981 memo (Exhibit D to the Supplemental Response) by the law firm of Bragar, Spiegel, Schulman, Rubin & Driggin — which wrote an opinion as to the 1980 program — was supposedly seen by Booth. Whether or not the 1981 program would qualify as a “non-security,” the memo suggests at the least that there was an expectation that the masters would be delivered to some manufacturer/distributor for the benefit of the plaintiffs.

Similarly, a Booth memo dated May 8, 1981 (Exhibit G to the Supplemental Response) suggests that Booth expected AVI to deliver the masters to a qualified manufacturer/distributor selected by plaintiffs, including any masters that might not have been in existence at the time the contract was executed. The document, the product of conversations with Sagittarius, does not suggest that Booth was put on notice of any preconceived plan to breach. Indeed, it suggests quite to the contrary. This is reinforced by the deposition testimony of one of Booth’s lawyers who worked on the 1981 opinion letter, Jay Zeiger, who said: “[W]e would not have permitted any of our clients to continue to offer an interest in a transaction without the transaction confirming [sic] to the 1981 Tax Act____” (Zieger Dep., p. 55.)

To the extent Booth displayed concern over potential problems with Sagittarius’s leasing programs in 1981 and before, this does not suggest that Booth was trying to cover up for its client, but rather that it wanted to assure the program would be properly managed so as to reduce its own potential liability. Plaintiffs’ undocumented allegation tht Booth drafted its 1981 opinion letter despite knowledge that AVI or Sagittarius would not deliver the masters — a major event that could have been expected to, and in fact did, trigger the instant litigation — flies in the face of Booth’s documented concern that Sagittarius’s leasing program might be inadequate in more subtle ways, related instead to the tax and security aspects of the program.

Loss from the failure of Sagittarius to deliver was simply not within the contemplation of the parties, as required by Rosenblatt. “Where there are no issues of fact left for the trier of fact to determine, the moving party has a right to judgment even if intent and motive are involved.” Invictus, supra. Plaintiffs have presented only suspicions and no substantial facts as to the material issue here. Thus, there is no proximate cause as to Booth, since the harm flows from Sagittarius’s intervening act in failing to deliver to Rosanova.

c.

Plaintiffs fail to understand the difference between “transaction causation” and “loss causation.” Plaintiffs must show loss causation. See Cable v. Hechler, 532 F.Supp. 239, 244 (E.D.N.Y.1981). While Booth’s representations may have caused plaintiffs to enter into the lease contract with Sagittarius — transaction causation — it is Sagittarius’s failure to deliver that harmed plaintiffs — loss causation. Numerous cases in Michigan support Booth on this point. U.S. Fibres, Inc. v. Proctor & Schwartz, Inc., 358 F.Supp. 449, 462-63 (E.D.Mich.1972), aff'd, 509 F.2d 1043 (6th Cir.1975); Mosher v. Sawyer-Weber Tool Mfg. Co., 224 Mich. 303, 194 N.W. 979 (1923); Gethchell v. Dusenbury, 145 Mich. 197, 202, 108 N.W. 723 (1906). Decisions from other jurisdictions also support Booth on similar facts. Boatmen’s Nat. Co. v. M.W. Elkins & Co., 63 F.2d 214 (8th Cir. 1933); Altschuler v. Cohen, 471 F.Supp. 1372 (S.D.Tex.1979); Hickman v. Groesbeck, 389 F.Supp. 769 (D.C.Utah 1974).

2. Innocent Misrepresentation Claim

Booth lays out the five elements for a claim of innocent misrepresentation in Michigan: “[W]here an action is brought to recover for false and fraudulent misrepresentations made by one party to another [1] in a transaction between them, [2] any representations which are false in fact [3] and actually deceive the other, and [4] are relied on by him to his damage, are actionable, irrespective of whether the person making them acted in good faith in making them, [5] where the loss of the party deceived inures to the benefit of the other.” See U.S. Fidelity & Guaranty v. Black, 412 Mich. 99, 116, 313 N.W.2d 77 (1981), quoting with approval from 37 Am.Jur.2d, Fraud & Deceit § 195. For purposes of this motion, Booth concedes all the elements except the requirements that the misrepresentations have been made in a transaction between the parties, Rosenberg v. Cyrowski, 227 Mich. 508, 511, 198 N.W. 905 (1924); Aldrich v. Scribner, 154 Mich. 23, 30, 117 N.W. 581 (1908), and that plaintiffs’ loss inured to the benefit of Booth, United States Fidelity & Guaranty v. Black, 412 Mich. 99, 116, 118, 313 N.W.2d 77 (1981); Riddle v. Lacey & Jones, 135 Mich.App. 241, 245-46, 351 N.W.2d 916 (1984). Thus, these are the only material contested issues on this claim.

Booth argues first that plaintiffs have failed completely to even properly plead this cause of action because the Amended Complaint does not allege privity of contract or that plaintiffs’ loss inured to Booth’s benefit. This is true. In fact, the innocent misrepresentation claim did not appear until plaintiffs’ “Anticipated Contested Legal Issues,” filed April 15, 1985. Plaintiffs are trying to amend their complaint a second time without having properly moved to amend to add this cause of action. Thus, this claim could be dismissed under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Rule 12(b)(6) also provides that such a defense may be disposed of as one for summary judgment under Rule 56.

Booth further argues the elements of the claim as if properly pleaded by plaintiffs. First, because plaintiffs’ contract was with Sagittarius, not Booth, Booth argues that plaintiffs cannot show the requisite privity between the parties. Privity must proceed from the will of the parties. Woods v. Ayres, 39 Mich. 345 (1878). Booth was not a party to the lease contract, nor do Plaintiffs show that Booth intended to be in privity with plaintiffs. Thus, Booth shows there is no dispute over this material fact.

Second, Booth argues that it received no benefit from plaintiffs’ loss. Booth cites Rosenberg and Riddle, supra, both cases where attorneys, involved with the opposing party, innocently misled plaintiffs. Both cases held that the plaintiff could not recover against the attorney because the latter did not benefit. This is true even if the attorney received a fee. Riddle, at 246, 351 N.W.2d 916. While Booth here did have a written retainer agreement with Sagittarius that provided a $10,000 bonus if leases entered into by Sagittarius amounted to $1.75 million or more, there is no dispute that this was to have been effective for only the 1982 leasing program. Since this case involves only the 1980 and 1981 opinion letters, the 1982 bonus program is not material. Plaintiffs allege no other benefit that Booth received. Booth has shown that there is no genuine dispute as to all material issues, and is thus entitled to summary judgment.

III. Rose’s Motion for Summary Judgment

Because Booth’s motion for summary judgment is granted, the third-party claim against Rose falls, and it is unnecessary to consider Rose’s motion for summary judgment.

      . Booth further notes that plaintiffs must show injury to win on a fraud claim. Mallick v. Migut, 22 Mich.App. 140, 143-44, 177 N.W.2d 200 (1970). Booth argues that plaintiffs have not sustained any injury from the misrepresentations since the harm has been rectified by the provision of a consent judgment whereby Sagittarius returned to plaintiffs all monies paid on the lease. Thus, there is no reliance damage. Plaintiffs also claim that they lost expected profits. Booth properly points out that no recovery is allowed where loss of profits is speculative and conjectural, Talcott v. Crippen, 52 Mich. 633, 18 N.W. 392 (1884), particularly where the business has not yet begun operation, Serbinoff v. Dukas, 348 Mich. 69, footnote at 76, 81 N.W.2d 236 (1957). Thus, there is no compensable injury to plaintiffs.

      . Judge Jon O. Newman of the Court of Appeals for the Second Circuit has recently commented that the rules regarding summary judgment have usually been applied too rigidly to merit-less cases like this, with the result that such cases clog up dockets and deny fairness to other litigants. See J. Newman, Rethinking Fairness: Perspectives on the Litigation Process, 94 Yale L.J. 1643, 1650-52 (1985).