Poirier v. Hodges

• Decision Date: 02 February 1978
• Docket Number: No. 76-12-Civ-Oc.,76-12-Civ-Oc.
• Citation: 445 F. Supp. 838
• Parties: George H. POIRIER, III, Plaintiff, v. Joseph E. HODGES, Ralph D. Gray, and Doe 1, Defendants.
• Court: U.S. District Court — Middle District of Florida

445 F. Supp. 838

George H. POIRIER, III, Plaintiff, v. Joseph E. HODGES, Ralph D. Gray, and Doe 1, Defendants.

No. 76-12-Civ-Oc.

United States District Court, M. D. Florida, Ocala Division.

February 2, 1978.

COPYRIGHT MATERIAL OMITTED

John L. Riley, St. Petersburg, Fla., Jack F. White, Jr., Clearwater, Fla., for plaintiff.

Charles P. Pillans, III, Bedell, Bedell, Dittmar & Zehmer, Jacksonville, Fla., for defendants.

OPINION

CHARLES R. SCOTT, Senior District Judge.

Plaintiff brings his claims under 42 U.S.C. §§ 1983, 1985, 1986, and purports to invoke the Court's jurisdiction under 28 U.S.C. § 1343. He states that in early 1975, he had an agreement with the First Marion Bank of Ocala, Florida, in accordance with which purchase contracts were assigned by plaintiff to the bank. Plaintiff was the seller in the purchase contracts; the bank was the assignee; and the purchase contracts were for hearing aids. Under the purchase contracts, the buyers were to pay for the hearing aids by installment payments.

Plaintiff alleges that defendants are employees of the State of Florida and acted under color of state law. However, he does not indicate the official capacity by which defendants would have engaged in the conduct alleged. Plaintiff charges defendants with engaging in a conspiracy to destroy his business and violate his rights to due process and equal protection under the Fourteenth Amendment. Specifically, he alleges that defendants' conspiracy had as its object (1) to interfere with the contractual obligations of the installment purchase contracts; (2) to defame and destroy plaintiff's business and economic reputation; and (3) to suspend plaintiff's license to engage in business in the State of Florida. Plaintiff alleges that, as acts in furtherance of their conspiracy, defendants (1) contacted two other buyers of hearing aids under the installment purchase contracts, and instructed them not to pay the purchase obligations under the contracts; and (2) contacted the assignee of the contracts, the First Marion Bank of Ocala, telling bank officials that (i) the purchase contracts had been fraudulently obtained and (ii) plaintiff was under investigation and might lose his license to do business in the state. Plaintiff then declares that, as a direct result of defendants conspiracy, and their overt acts in furtherance of it, the First Marion Bank of Ocala reassigned some of the purchase contracts to plaintiff and cancelled further assignment transactions with him. He further states that he has lost customers and suffered injury to his business reputation, because defendants' impaired contractual obligations between himself and the various buyers under the purchase contracts, and between himself and the assignee of those contracts, the First Marion Bank of Ocala.

Defendants have filed a motion to dismiss the complaint for lack of jurisdiction over the subject matter and failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(1), (6). A motion to dismiss for failure to state a remediable claim is warranted only if no matter what set of facts a plaintiff might present, as a matter of law, he could not prove his claim. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84 (1957); Cook & Nichol, Inc. v. Plimsoll Club, 451 F.2d 505, 506 and n. 1 (5th Cir. 1971); Barton v. Eustis, Fla., 415 F.Supp. 1355, 1357 (M.D.Fla.1976). On a motion to dismiss for lack of jurisdiction, however, the burden remains with the plaintiff to show, assuming the allegations of the complaint to be true, that the limited federal jurisdiction of the Court has properly been invoked. McNutt v. GMAC, 298 U.S. 178, 182, 56 S.Ct. 780, 782, 80 L.Ed. 1135, 1137 (1935). The question presented by this motion is whether plaintiff states any claim under 42 U.S.C. §§ 1983, 1985, or 1986, which, if proven true, could be entitled to a remedy from the Court.

I. The Section 1983 Claim:

A. U.S. Constitution, Article I, Section 10, and the Impairment of Contractual Obligations.

There are two necessary elements for a claim under 42 U.S.C. § 1983¹: (1) conduct by a defendant under the authority and color of state law, and (2) deprivation by that conduct of a plaintiff's constitutional rights. Gearhart v. Federal Reserve Bank, 516 F.2d 353, 354 (6th Cir. 1975); Stene v. Berrisford School Dist., 425 F.Supp. 1389, 1390 (D.S.D.1977); Baron v. Carson, 410 F.Supp. 299, 301 (N.D.Ill.1976); Chase v. McMasters, 405 F.Supp. 1297, 1299 (D.N.D.1975). Historically, § 1983 was intended by Congress to enforce the provisions of the Fourteenth Amendment. Monroe v. Pape, 365 U.S. 167, 171, 81 S.Ct. 473, 475-476, 5 L.Ed.2d 492, 496 (1961). The legislative history of the statute indicates that it was enacted pursuant to, and to implement, the Fourteenth Amendment. Id. Hence, the Fourteenth Amendment is the "centerpiece" of the statute, Mitchum v. Foster, 407 U.S. 225, 238-39, 92 S.Ct. 2151, 2160, 32 L.Ed.2d 705, 715 (1972); and the scope of § 1983 is identical with those rights guaranteed by the Fourteenth Amendment. Monroe v. Pape, 365 U.S. at 171, 81 S.Ct. at 475-476, 5 L.E.d.2d at 496; Golden v. Biscayne Bay Yacht Club, 530 F.2d 16, 18 (5th Cir. 1976) (en banc) rev'g 521 F.2d 344 (5th Cir. 1975) and 370 F.Supp. 1038 (S.D.Fla. 1973); Local 1954, Hanover Township Feder. of Teachers v. Hanover Community School Corp., 457 F.2d 456, 461 (Stevens, J.).

Although the scope of constitutional rights included within the Fourteenth Amendment by incorporation has expanded, the bar against states' enacting laws that impair contractual obligations (U.S.Const., Art. I, Section 10), has never been incorporated into the sphere of Fourteenth Amendment protection. Spears v. Mt. Etna Morris, 313 F.Supp. 52, 55 (W.D.Mo.1969), aff'd sub nom. Spears v. Robinson, 431 F.2d 1089, 1091 (8th Cir. 1970); Pudlik v. Public Services Co., 166 F.Supp. 921 at 925. Article I, Section 10 of the Constitution is an independent obligation upon the states against enacting legislation that would impair legitimate contractual obligations. It is not, therefore, a part of the "centerpiece" of constitutional rights guaranteed and protected by the Fourteenth Amendment. Consequently, the Court holds that the prohibition in Article I, Section 10 of the Constitution, against impairing legitimate contractual obligations, is not a right redressable under 42 U.S.C. § 1983.

Additionally, the express prohibition of Article I, Section 10 of the Constitution is directed to the states, forbidding them from passing laws that impair contractual obligations. Hepburn v. Griswold, 8 Wall. 603, 19 L.Ed. 513 (1870); Dixon v. Pennsylvania Crime Comm'n, 67 F.R.D. 425, 432 (M.D.Pa. 1975); Johnson v. United States, 79 F.Supp. 208, 211, 111 Ct.Cl. 750 (1948). It is not applicable to mere individual conduct by persons acting under color of state law. In the present case there is not so much as an intimation that defendants participated in, or contributed to, the enactment of state legislation impairing plaintiff's contractual rights and obligation. The Court, therefore, holds that plaintiff has failed to state a remediable claim under § 1983 for an alleged violation of the Contracts Clause, Art. I, Section 10 of the Constitution.

B. Stigmatization—Injury to Business Reputation.

Plaintiff alleges that his business reputation has been injured so that he lost buyers for hearing aids and was unable to assign further purchase contracts to the First Marion Bank of Ocala. In Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976), the Supreme Court distinguished between mere injuries to reputation alone, and such an injury in connection with the denial of an interest protected by the Due Process Clause of the Fourteenth Amendment. Id. at 706, 709, 710-12, 96 S.Ct. at 1163, 1164, 1165-1166, 47 L.Ed.2d at 416-17, 418, 419-20. The Court then held that "the interest in reputation . . . is neither `liberty' nor `property' guaranteed against state deprivation without due process of law." Id. at 712, 96 S.Ct. at 1166, 47 L.Ed.2d at 420. In an earlier decision, Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971), the Supreme Court had ruled that the posting of a notice in all retail liquor stores in the city, by the chief of police, forbidding sales or gifts of liquor to the plaintiff for a year, violated the Due Process Clause of the Fourteenth Amendment. The Wisconsin statute which permitted such posting, as a form of written prohibition of liquor to excessive drinkers, was facially invalid for failure to provide fundamental due process. The Supreme Court declared:

Where a person's good name, reputation, honor, or integrity is at stake because of what the government is doing to him, notice and an opportunity to be heard are essential. Id. at 437, 91 S.Ct. at 510, 27 L.Ed.2d at 519.

The Supreme Court interpreted and clarified that statement in Paul v. Davis, supra.

. . . the italicized language in the last sentence quoted, "because of what the government is doing to him," referred to the fact that the governmental action taken in that case Wisconsin v. Constantineau deprived the individual of a right previously held under state law . . . 424 U.S. at 708, 96 S.Ct. at 1164, 47 L.Ed.2d at 418.

It was the denial of an interest protected by procedural due process, coupled with the scandalous and defamatory stigma of the posting, that required the basic elements of due process. Id. at 708-09, 96 S.Ct. at 1164, 47 L.Ed.2d at 418.

Interests protected by procedural due process are (1) property interests created by state law, or (2) liberty interests guaranteed by the Bill of Rights "independently of state law." Paul v. Davis, 424 U.S. at 710-11 and n. 5, 96 S.Ct. at 1165, 47 L.Ed.2d at 419 and n. 5. In Perry v. Sinderman, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972), the Supreme Court had held that even without a property interest protected by the Fourteenth Amendment, a...