[DO NOT PUBLISH]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
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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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