Court Opinion

ID: 49835
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:37:58+00
Date Added: 2024-06-11T17:18:43.542449
License: Public Domain

[DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS
                                                               FILED
                    FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                      ________________________ ELEVENTH CIRCUIT
                                                           JUL 12, 2006
                            No. 06-11349                 THOMAS K. KAHN
                        Non-Argument Calendar                CLERK
                      ________________________

                  D. C. Docket No. 05-60414-CV-JEM

M. ELAINE SCHULZE,
RICHARD SCHULZE,
PLAYCARE AT VICTORIA PARK INC.,
a Florida corporation,

                                                        Plaintiffs-Appellants,

                                 versus

BROWARD COUNTY BOARD OF COUNTY COMMISSIONERS,
Child Care Licensing and Enforcement Section,
SHAWN LAMARCHE,

                                                       Defendants-Appellees.

                      ________________________

               Appeal from the United States District Court
                   for the Southern District of Florida
                     _________________________

                             (July 12, 2006)

Before BARKETT, MARCUS and WILSON, Circuit Judges.

PER CURIAM:
       Pursuant to 42 U.S.C. § 1983, M. Eliane Schulze and Richard Schulze

brought suit against Broward County, alleging that inspection and regulation of

their daycare facility injured their “business reputational property interests,

including goodwill, without due process of law.” The Schulzes also raised claims

of defamation and fraud under Florida state law, and they requested an injunction

under the Declaratory Relief Act, 28 U.S.C. § 2201-02. The suit arose from

Broward County’s monitoring, enforcement, and public reporting actions against

the Schulzes’ daycare center, and the County’s threat to issue a citation if the

center fails to comply with an ordinance requiring water fountains at such

facilities.

      The district court ruled that the Schulzes failed to state a claim under § 1983

pursuant to Paul v. Davis, 424 U.S. 693 (1976) and Cypress Ins. Co. V. Clark, 144

F.3d 1435 (11th Cir. 1995), which held that allegations of injury to reputation

cannot in themselves support a § 1983 due process challenge, and therefore must be

accompanied by some other constitutionally recognized injury. Cypress, 133 F.3d

at 1174. The district court dismissed all of plaintiffs’ complaint, explaining that in

the absence of a legitimate cause of action under § 1983, it lacked jurisdiction over

the Schulzes’ state law claims and their request for injunctive relief.

      The central issue in this appeal, then, is whether the district court correctly

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construed our holding in Cypress to bar the Schulzes’ § 1983 claim that Defendants

“injured [their] business reputational property interests, including goodwill, without

due process of law.” The Schulzes argue that their claim is valid under Marrero v.

City of Hialeah, 625 F.2d 499 (5th Cir. 1980), where we recognized that

       Paul simply holds that no liberty or property interest is infringed when
       the only loss suffered at the hands of the government is damages to
       personal reputation if personal reputation is not recognized by the
       relevant state law as a liberty or property interest. . . . The Supreme
       Court acknowledged in Paul that had state law extended to Davis ‘any
       legal guarantee of present enjoyment of reputation, the defamation
       alone, without deprivation of any other interest, would be actionable
       under § 1983. Athough Florida law may not recognize personal
       reputation as a liberty or property interest, it does recognize business
       reputation, at least to the extent it approximates goodwill, as a
       property interest. . . . Since that interest is a protected property
       interest under Florida law, Florida may not deprive appellants of that
       interest without due process of law.

       Id. at 514-15 (emphasis added).

      Noting that “[t]he Marrero decision has resulted in some confusion regarding

the extent of § 1983 in this Circuit,” we acknowledged in Cypress that “Florida law

recognizes a property interest in business reputation, and that this state-created

property right is protected by the Due Process Clause.” Cypress, 144 F.3d at 1437.

But we emphasized that, in Marrero itself, “the state not only defamed the plaintiff's

business, but also deprived the plaintiff of more tangible property interests: the

Hialeah Police Department illegally seized most of the plaintiff's inventory in

                                           3
violation of the Fourth Amendment.” Id. (emphasis added). Thus we clarified that

“although injury to business [goodwill] may be relevant to damages in a § 1983

action, these damages would only be available in a case involving the deprivation of

a more tangible liberty or property right.” Id. (emphasis added).

       As the district court recognized, the Schulzes ultimately take issue with this

Circuit’s decision in Cypress.1 But it is Cypress, unqualified and untarnished by

any subsequent caselaw, which most directly controls this case. Therefore the

district court properly dismissed the Schulzes’ § 1983 action for failure to state a

claim. And because the Schulzes’ other claims depended upon the viability of their

§ 1983 suit, dismissal of the rest of the complaint is similarly

AFFIRMED.

        1
          Plaintiffs admitted as much in a memorandum, filed in the district court, arguing that "Cypress
just does not interpret Siegert or Marrero correctly."

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