# COWAN

> District Court, D. New Jersey · April 23, 2026

URL: https://www.frixlaw.com/law-library/cases/11359501

## Case

- **Full name:** Scott P. Cowan, et al. v. William Scharfenberg, et al.
- **Court:** District Court, D. New Jersey
- **Decided:** April 23, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SCOTT P. COWAN, et al.,

Plaintiffs,
Civil Action No. 23-09446 (GC) (TJB)
v.
MEMORANDUM OPINION
WILLIAM SCHARFENBERG, et al.,

Defendants.

CASTNER, District Judge
THIS MATTER comes before the Court upon a Motion to Dismiss the Amended
Complaint pursuant to Federal Rule of Civil Procedure (Rule) 12(b)(6). Defendants William
Scharfenberg, Bradley Billhimer, Joseph Coronato, Mark Malinowski, and the Ocean County
Prosecutor’s Office (collectively, Defendants)1 filed a joint Motion to Dismiss on October 31,
2025. (ECF No. 68.) Plaintiffs opposed, and Defendants replied. (ECF Nos. 70, 71.) The Court
has carefully reviewed the parties’ submissions and decides the matter without oral argument
pursuant to Rule 78(b) and Local Civil Rule 78.1(b). For the reasons set forth below, and other
good cause shown, Defendants’ Motion (ECF No. 68) is GRANTED.

1 Beacon Homes of New Jersey, LLC is a defendant in this case but separately answered the
Amended Complaint. (ECF No. 62.) Any reference to “Defendants” in this Memorandum
Opinion, except for in Section III.B, excludes Beacon Homes.
I. BACKGROUND2
A. Factual Background
Plaintiffs Scott Cowan and Jonathan Price sued various entities and individuals, including
William Scharfenberg, Assistant Ocean County Prosecutor and owner of Beacon Homes of New
Jersey, LLC; Joseph Coronato and Bradley Billhimer, Ocean County Prosecutors; Mark
Malinowski, a detective in the Ocean County Prosecutor’s Office (the OCPO), and the OCPO.

Plaintiffs allege that Scharfenberg, in concert with the other Defendants, illegally targeted them
over a business rivalry. (See generally ECF No. 55.) Plaintiffs bring claims under 42 U.S.C.
§ 1983 and pursuant to state law. (Id. at 28-38.) 3 The Court assumes familiarity with the relevant
facts, which are set forth in greater detail in this Court’s prior Opinion. (ECF No. 51.) As such,
the Court only includes the facts and procedural background relevant to resolving the instant
Motion.
Plaintiffs are the owners and operators of Price Home Group, LLC (PHG), an Ocean
County, New Jersey construction business founded in 2013. (ECF No. 55 ¶ 19.) In the aftermath
of Hurricane Sandy, New Jersey established the Reconstruction, Rehabilitation, Elevation, and

Mitigation (RREM) program to administer grants to eligible homeowners for repairs. (Id. ¶¶ 3,
43.) Grant recipients were required to contract with construction businesses admitted to the RREM
program’s qualified pool of builders. (Id. ¶¶ 21, 44-45.) PHG became one such company, having
been certified by the New Jersey Department of Community Affairs (NJDCA) on June 1, 2013 and
subsequently growing into a successful business over the next two years. (Id. ¶¶ 20-21, 44-45.)

2 On a motion to dismiss under Rule 12(b)(6), the Court must accept all facts as true, but
courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation and quotations omitted).
3 The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331.
Initially, PHG built homes in the southern portion of Ocean County, largely centered in and
around Stafford Township, including areas such as Manahawkin, Ship Bottom, and Little Egg
Harbor. (Id. ¶ 23.) As the company grew, PHG expanded its operations northward into Brick,
Toms River, and Seaside Heights. (Id. ¶ 24.) There, PHG competed with another RREM-qualified

builder, Beacon Homes, for the same prospective customer base: those whose homes were
damaged by Hurricane Sandy. (Id. ¶ 34.)
Beacon Homes was owned and operated by Scharfenberg while he was simultaneously
serving as an Assistant Ocean County Prosecutor. (Id. ¶¶ 32-35.) Plaintiffs contend that
Scharfenberg “used Beacon Homes as a weapon and instrumentality in his effort to defame, harass,
intimidate and destroy PHG as a competitor.” (Id. ¶ 40.) According to Plaintiffs, Scharfenberg
operated Beacon Homes from OCPO premises using OCPO resources, including equipment and
staff. (Id. ¶ 41.) Plaintiffs allege that this conduct created a conflict of interest and violated New
Jersey ethics laws. (See id. ¶¶ 5, 32-42.) Plaintiffs state that Ocean County Prosecutors Coronato
and Billhimer were aware of Scharfenberg’s ownership and operation of Beacon Homes but

nevertheless permitted his “unlawful operation of Beacon Homes at and through the OCPO using
the OCPO’s personnel and other resources.” (Id. ¶ 42.)

Plaintiffs allege that, in 2015, Scharfenberg initiated an improper criminal investigation
based on information Scharfenberg learned regarding a civil payment dispute between PHG and
its client. (See id. ¶¶ 47-51.) According to Plaintiffs, PHG’s customer failed to pay the required
“draw-down” needed to complete the construction on her home and therefore, “consistent with its
contract and the law of New Jersey,” Plaintiffs refused to release her house. (Id. ¶¶ 48-49.) The
customer’s son was an ex-Ocean County Sheriff’s Office employee who knew Scharfenberg and
complained to Scharfenberg about his mother’s dealings with PHG. (Id. ¶ 47.) Based on those
complaints, Scharfenberg initiated a criminal investigation into Plaintiffs. (Id. ¶¶ 50-51.)
Plaintiffs contend that in conducting the criminal investigation, Scharfenberg “misused and
abused” the power of his office by misrepresenting and falsifying material information during the

investigation, concealing his conflict of interest from others involved in the investigation, and
personally performing various actions normally left to investigators. (Id. ¶ 53.) Specifically, on
April 30, 2015—with Billhimer’s and Coronato’s knowledge—Scharfenberg personally served a
subpoena at PHG’s accountant’s office for Plaintiffs’ tax returns and bank statements as well as
those of Price and Cowan’s wives, and arranged for an IRS agent to be present during the service.
(Id. ¶¶ 53-56.) Ten days later, on May 10, 2015, Scharfenberg personally interviewed PHG’s
accountant in the presence of the IRS agent. (Id. ¶ 60.) According to Plaintiffs, the IRS thoroughly
reviewed all subpoenaed information, including business and personal tax returns, and found no
irregularities or unlawful conduct. (Id. ¶ 62.)
Nonetheless, Plaintiffs allege that, using information obtained from the subpoenas,

Scharfenberg and investigators under his direction, including Detective Malinowski, contacted
PHG’s customers and informed them that the OCPO was investigating PHG for possible criminal
violations. (Id. ¶¶ 63-64.) Moreover, Plaintiffs allege that Scharfenberg falsely told PHG
customers, manufacturers, and suppliers that Plaintiffs had stolen $1 million and wired it to
accounts outside of the country. (Id. ¶ 57.)
Plaintiffs assert that Scharfenberg—with Billhimer’s and Coronato’s knowledge and
permission—also directly interfered with Plaintiffs’ business operations and “effectively dr[ove
them] out of business.” (Id. ¶¶ 67-68.) Scharfenberg allegedly instructed PHG customers to stop
making additional payments to PHG despite their contractual obligations. (Id. ¶ 64.) And, based
on advice it received from Scharfenberg, Ritz Craft, PHG’s exclusive modular home manufacturer,
stopped accepting PHG orders. (Id. ¶¶ 58, 66.) These and other actions culminated in bankruptcy
and state civil proceedings that resulted in the destruction of Plaintiffs’ business.
a. The Bankruptcy Proceedings

On March 1, 2016, “[a]s a direct and proximate result of Scharfenberg’s interference with
PHG,” Price and Cowan each filed for Chapter 11 bankruptcy. (Id. ¶ 69.) During the proceedings,
Plaintiffs allege that Scharfenberg met with the United States Bankruptcy Trustees on or around
December 6, 2016. (Id. ¶ 70.) In that meeting, Scharfenberg relayed “false and inaccurate
information” about Plaintiffs while also concealing the fact that he “owned and operated Beacon
Homes and was a competitor of PHG.” (Id. ¶¶ 70-71.) Scharfenberg also asked the Trustees to
depose Cowan using questions provided by the Defendants. (Id. ¶ 70.) Plaintiffs allege that
Scharfenberg’s actions resulted in the conversion of their bankruptcy from a Chapter 11 to a
Chapter 7 bankruptcy and seizure of all their assets. (Id. ¶ 72.)4 Furthermore, Scharfenberg’s
interference led the Trustees to successfully “oppose[ ] the discharge of the bankruptcies.” (Id.)

The bankruptcy court closed Price’s case on December 6, 2017 and Cowan’s on February 26, 2021,
and Plaintiffs did not appeal their unfavorable outcomes. (See ECF No. 68-8 at 24, 35.)5

4 Chapter 11 and Chapter 7 bankruptcies have different legal consequences. In a Chapter 11
bankruptcy, debtors and creditors negotiate a plan to allow a debtor to repay creditors while
continuing to operate their business. Czyzewski v. Jevic Holding Corp., 580 U.S. 451, 455 (2017).
In a Chapter 7 bankruptcy, a debtor’s assets are liquidated and distributed to creditors. Id.
5 Page numbers for record cites (i.e., “ECF Nos.”) refer to the page numbers stamped by the
Court’s e-filing system and not the internal pagination of the parties. Courts may take judicial
notice of public records, including court proceedings. McPherson v. United States, 392 F. App’x
938, 940 & n.1 (3d Cir. 2010)
b. NJDCA Lawsuit
In June 2016, the NJDCA filed a civil suit under the Consumer Fraud Act against Plaintiffs
in state court. (See ECF No. 68-7 at 3-25.) In May 2018, Plaintiffs entered into Consent Judgments
with the State: PHG was removed from the RREM program, Plaintiffs’ business licenses were

permanently revoked, and Plaintiffs were each required to pay close to $500,000 in penalties and
restitution. (See id. at 60-79, 104-122; ECF No. 55 ¶ 67.) The case was dismissed that same year.
(See ECF No. 68-7 at 129-131.)

After the investigation and resulting bankruptcy and state court proceedings, the OCPO
presented its criminal case against Plaintiffs to the grand jury on January 6, 2021, which Plaintiffs
allege was done under Scharfenberg’s direction. (ECF No. 55 ¶ 78.) On January 16, 2021, the
grand jury returned a 31-count indictment charging PHG, Price, and Cowan with conspiracy and
fraud. (Id. ¶ 79.) Plaintiffs allege that, during the grand jury proceedings, Defendants failed to
present multiple sources of exculpatory evidence. (Id. ¶¶ 81-161.)6 These criminal proceedings
culminated in a plea deal with the State under which Plaintiffs participated in the State’s Pretrial

Intervention Program. (See ECF No. 51 at 26.)

As a result of Defendants’ alleged conduct, Plaintiffs assert they incurred substantial
damages including legal fees of approximately $300,000 for Cowan and $214,000 for Price. (ECF
No. 55 ¶¶ 174, 181.) Plaintiffs also contend that Defendants’ actions resulted in a deprivation of
a “right to earn a livelihood” because they were each forced into (1) bankruptcy and (2) a $500,000

6 Because the allegations surrounding the criminal case are not relevant to the current
dispute, the Court will not recount them in detail. A more thorough overview of these allegations
can be found in this Court’s previous Opinion. (See ECF No. 51 at 6-8.)
settlement with the NJDCA that also resulted in the permanent loss of their contractor and builder
licenses. (Id. ¶¶ 174, 181.) Plaintiffs also allege they were damaged by the harm done to their
reputations. (Id. ¶¶ 174, 181.)
B. Procedural Background

On August 24, 2023, Plaintiffs filed a six-count Complaint against Scharfenberg, Beacon

Homes, Billhimer, Coronato, the OCPO, unidentified OCPO Prosecutor John Does 1-20,
Malinowski, and unidentified Investigator Richard Roes 1-20. (See ECF No. 1 at 1.) Plaintiffs
brought federal claims under 42 U.S.C. § 1983 and the Declaratory Judgment Act against all
Defendants (Counts I and II). (See id. at 22-25.) They also brought state law claims for tortious
interference with contractual relations, tortious interference with prospective economic advantage,
and defamation against Scharfenberg and Beacon Homes (Counts III, IV and V). (See id. at 25-
28.) Finally, they brought a state law civil conspiracy claim against all Defendants (Count VI).
(See id. at 28-29.)
Defendants Scharfenberg, Billhimer, Coronato, Malinowski, and the OCPO filed a joint

Motion to Dismiss on February 18, 2025, (ECF No. 45), and the Court granted in part and denied
in part that Motion on August 4, 2025, (ECF No. 51.) The Court first held that “sovereign
immunity bars any claims for damages against the OCPO, Billhimer, Coronato, Scharfenberg and
Malinowski in their official capacities” and found the doctrine of Ex Parte Young, 209 U.S. 123
(1908), did not apply because Plaintiffs did not seek prospective injunctive relief. (Id. at 14-15.)
The Court therefore dismissed all claims against those Defendants in their official capacities
without prejudice. (See ECF No. 52.)
Turning to claims against Defendants in their individual capacities, the Court began with
Plaintiffs’ § 1983 claims. (See ECF No. 51 at 16-28.) The Court construed Plaintiffs’ allegations
as asserting a malicious prosecution claim under the Fourth Amendment and a claim for
deprivation of liberty and property interests in Plaintiffs’ business without due process of law under
the Fourteenth Amendment. (Id. at 16.)
As for malicious prosecution, the Court found that “[a]ny actions Scharfenberg took in

connection with the grand jury proceedings against Plaintiffs [were] afforded absolute immunity”
as were Scharfenberg’s “withholding of evidence from Plaintiffs during discovery” and his
“decision to prosecute Plaintiffs, despite his alleged conflict of interest.” (Id. at 21-22.) However,
the Court held that absolute immunity did not “bar claims based on allegations that Scharfenberg
engaged in misconduct during the criminal investigation or provided false information to the
United States Bankruptcy Trustees” nor did it apply “to the allegedly false statements made to
PHG’s vendors.” (Id. at 23.) Nonetheless, the Court dismissed the malicious prosecution claim
against Scharfenberg—and all other named Defendants under that Count—with prejudice. The
Court reasoned that Plaintiffs did not, and could not, allege the criminal proceeding ended in their
favor, which is a required element of a malicious prosecution claim, given that Plaintiffs entered

into a “negotiated plea deal with the State with admission into the State’s Pretrial Intervention
Program . . . conditioned upon payment of restitution and compliance with probation and other
restrictive conditions.” (Id. at 25-28.)
As for the deprivation of liberty and property interests in Plaintiffs’ business claim, the
Court allowed it to move forward given that Defendants only challenged the malicious prosecution
claim, but the Court only allowed it to proceed “to the extent it is premised on allegations unrelated
to Scharfenberg’s initiation and pursuit of the criminal proceedings.” (Id. at 16-17 & n.12.) The
Court warned that should Plaintiffs seek to amend their Complaint, “the Court instructs [Plaintiffs]
to plead each § 1983 claim as a separate count, . . . specify which constitutional right is being
violated and set forth specific factual allegations supporting each element of the claim.” (Id. at 17
n.12).
The Court then addressed the remaining claims. It dismissed the Declaratory Judgment
Act claims against all Defendants without prejudice because Plaintiffs’ allegations were based

solely on prior—rather than ongoing—conduct and were duplicative of the § 1983 claims. (Id. at
28-29.) And the Court dismissed the state law tort claims without prejudice because Plaintiffs
failed to allege that Defendants were provided with the requisite notice under the New Jersey Tort
Claims Act. (Id. at 29-30.)7

On September 3, 2025, Plaintiffs filed the operative Amended Complaint alleging largely
the same facts. (See ECF No. 55.)8 But the Counts are modified. First, abandoning their malicious
prosecution claim, Plaintiffs bring a § 1983 claim against Scharfenberg, Malinowski, Billhimer,
and Coronato for “Depriving Plaintiffs’ Liberty and Property Interests Without Due Process of
Law: Destruction of Plaintiffs’ Business Interests” under “the Fifth Amendment as applied to the
states through the Fourteenth Amendment” (Count I). (Id. at ¶¶ 168-174.) Second, Plaintiffs bring

a § 1983 claim against those same four Defendants for “Depriving Plaintiffs’ Liberty and Property
Interests Without Due Process of Law: Defamation, Harassment and Intimidation” also under the
Fifth Amendment as applied to the states through the Fourteenth Amendment (Count II). (Id.
¶¶ 175-181.) Next, Plaintiffs asserts tortious interference with contractual relations, tortious

7 The Court also dismissed all of PHG’s claims with prejudice because it lacked standing
given that it no longer exists as a legal entity. (See ECF No. 51 at 30-31.) PHG is not a named
Plaintiff in the Amended Complaint. (See ECF No. 55.)
8 Indeed, Plaintiffs acknowledge as much: “It is true that, in the Amended Complaint,
[P]laintiffs have re-pled many of the same facts.” (See ECF No. 70 at 5.)
interference with prospective economic advantage, and defamation claims against Scharfenberg
and Beacon Homes, an entity which Plaintiff alleges is Scharfenberg’s alter ego (Counts III-V).
(Id. ¶¶ 182-194.) Finally, Plaintiff brings a claim for civil conspiracy against all Defendants (Count
VI). (Id. ¶¶ 178-180.)9

On October 31, 2025, Defendants Scharfenberg, Malinowski, Billhimer, Coronato, and the
OCPO filed a Motion to Dismiss the Amended Complaint. (ECF No. 68.) That Motion is now
fully briefed and pending before this Court.
II. LEGAL STANDARD
On a motion to dismiss for failure to state a claim, courts “accept the factual allegations in
the complaint as true, draw all reasonable inferences in favor of the plaintiff, and assess whether
the complaint and the exhibits attached to it ‘contain enough facts to state a claim to relief that is
plausible on its face.’” Wilson v. USI Ins. Serv. LLC, 57 F.4th 131, 140 (3d Cir. 2023) (quoting
Watters v. Bd. of Sch. Dir. of City of Scranton, 975 F.3d 406, 412 (3d Cir. 2020)). “A claim is
facially plausible ‘when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.’” Clark v. Coupe, 55

F.4th 167, 178 (3d Cir. 2022) (quoting Mammana v. Fed. Bureau of Prisons, 934 F.3d 368, 372
(3d Cir. 2019)). When assessing the factual allegations in a complaint, courts “disregard legal
conclusions and recitals of the elements of a cause of action that are supported only by mere
conclusory statements.” Wilson, 57 F.4th at 140 (citing Oakwood Lab’ys LLC v. Thanoo, 999 F.3d
892, 903 (3d Cir. 2021)). The defendant bringing a Rule 12(b)(6) motion bears the burden of
“showing that a complaint fails to state a claim.” In re Plavix Mktg., Sales Pracs. & Prod. Liab.

9 Plaintiffs also bring this claim against Beacon Homes. (See ECF No. 55 ¶¶ 178-180.)
Litig. (No. II), 974 F.3d 228, 231 (3d Cir. 2020) (citing Davis v. Wells Fargo, 824 F.3d 333, 349
(3d Cir. 2016).
III. DISCUSSION
A. Section 1983 Claims
Count I and II of Plaintiffs’ Amended Complaint are brought under 42 U.S.C. § 1983 for
deprivation of liberty and property interests without due process of law. Defendants first argue

that these claims are barred by the two-year statute of limitations. (ECF No. 68-1 at 30-32.)
Second, Defendants contend that even if the claims are not time-barred, Plaintiffs fail to state a
claim under either Count because Defendants did not cause Plaintiffs to be deprived of their
interests and Plaintiffs were afforded due process when they lost those interests. (Id. at 32-40.)
Third, Defendants argue that they are entitled to qualified immunity. (Id. at 40-44.) The Court
will only address the first argument because it agrees Plaintiffs’ § 1983 claims are time-barred.
Defendants argue that Plaintiffs’ § 1983 claims must have accrued after August 2021 to be
actionable, and “the Court has conferred absolute immunity on OCPO Defendants for matters
related to the grand jury and prosecution of Plaintiffs,” so “the only remaining allegations as to the

due process claims involve Defendants’ conduct during the investigation phase.” (ECF No. 68-1
at 32.) But these remaining allegations, Defendants contend, predate August 2021 given that the
indictment was itself issued before then in January 2021. (Id. at 32-33.) Plaintiffs respond that
the statute of limitations did not begin to run until the criminal charges against them were
dismissed, which would make their § 1983 claims timely. (ECF No. 70 at 11.)
“[A] section 1983 claim arising in New Jersey has a two-year statute of limitations.” Dique
v. N.J. State Police, 603 F.3d 181, 185 (3d Cir. 2010). “Federal law . . . governs the issue of what
constitutes accrual.” Id. (citing Wallace v. Kato, 549 U.S. 384, 388 (2007)). In the context of a
Fourteenth Amendment due process claim, courts have previously held that the statute of limitation
period begins when the plaintiff’s deprivation occurs. See, e.g., Wilson v. City of Newark, N.J.,
Civ. No. 06-5219, 2007 WL 1135301, at *2 (D.N.J. Apr. 16, 2007) (“[The p]laintiff first became
aware that his property was lost on June 27, 2005. It follows that the right to institute and maintain
a suit first arose on June 27, 2005[.]”).

However, the Supreme Court has recently clarified the proper inquiry. It stated that “[a]s
a general matter, the statute of limitations begins to run when the plaintiff has a complete and
present cause of action.” Reed v. Goertz, 598 U.S. 230, 235 (2023) (internal quotation marks and
citations omitted). “To determine when a plaintiff has a complete and present cause of action,”
Reed explained, a court must therefore “focus[] . . . on the specific constitutional right alleged to
have been infringed. Id. at 235-36. “A procedural due process claim consists of two elements: (i)
deprivation by state action of a protected interest in life, liberty, or property, and (ii) inadequate
state process.” Id. at 236. The Supreme Court ruled that a procedural due process claim therefore
does not accrue “when the deprivation occurs” and instead the statute of limitations begins to run
“only when the State fails to provide due process.” Id. (internal quotation marks and citations

omitted). In other words, both elements of the claim must have occurred for the accrual period to
begin.
In Reed, a plaintiff seeking post-conviction relief filed a motion for DNA testing, which
was denied by the state court and affirmed on appeal, and he thereafter brought a § 1983 suit in
federal court challenging the DNA testing law on due process grounds. Id. at 233, 236. The
Supreme Court held the § 1983 accrual period began when the appellate court denied plaintiff’s
motion for a rehearing rather than when the trial court denied his initial motion. Id. at 236. The
Supreme Court reasoned that “[i]f the statute of limitations for a § 1983 suit like [the plaintiff’s]
began to run after a state trial court’s denial of a plaintiff’s motion for DNA testing . . . the plaintiff
would likely continue to pursue relief in the state system and simultaneously file a protective
federal § 1983 suit challenging that ongoing state process,” which would be a result “counter to
core principles of federalism, comity, consistency, and judicial economy.” Id. at 236-37 (internal
quotation marks and citations omitted).

Here, Plaintiffs’ § 1983 claims are based on alleged violations of the Fourteenth
Amendment’s Due Process Clause. (See ECF No. 55 ¶¶ 170, 177; see also ECF No. 51 at 17 n.12
(construing original Complaint “as claiming that Defendants’ conduct deprived Plaintiffs of their
liberty and property interests in their business without due process of law”).) In both Counts I and
II, Plaintiffs allege that because of Defendants’ actions, Plaintiffs were deprived of a “right to earn
a livelihood” when they were forced into bankruptcy, coerced into a $500,000 settlement, and
required to permanently relinquish their business licenses. (Id. ¶¶ 174, 181).10 To be actionable
under Reed, the state process that could have remedied these deprivations must have occurred
within two years prior to Plaintiffs’ filing the Complaint on August 23, 2023. (See ECF No. 1.) 11

10 Beyond alleging deprivations of a “right to earn a livelihood,” as a result of the bankruptcy
and settlement proceedings, Plaintiffs’ Amended Complaint is unclear about whether it intends to
assert other Fourteenth Amendment deprivations, and in many instances Plaintiffs appear to reuse
verbatim the language used in their original Complaint, some of which concerns the criminal
proceedings against Plaintiffs. (Compare ECF No. 1 ¶¶ 153-159, with ECF No. 55 ¶¶ 168-174,
and id. ¶¶ 175-181.) But in its previous Opinion, the Court stated it would allow Plaintiffs’ § 1983
claim to survive only “to the extent it is premised on allegations unrelated to Scharfenberg’s
initiation and pursuit of the criminal proceedings against Plaintiffs.” (ECF No. 51 at 17 n.12.)
While Plaintiffs also allege that they suffered “damage to their reputations” due to Defendants’
actions, (ECF No. 55 ¶¶ 174(d), 181(d)), to the extent this harm occurred within the statute of
limitations period and is unrelated to the criminal proceedings, the claim would still fail because
“harm to reputation alone d[oes] not suffice for a constitutional tort based on procedural due
process.” Boyanowksi v. Cap. Area. Intermediate Unit, 215 F.3d 396, 402 (3d Cir. 2000) (citing
Paul v. Davis, 424 U.S. 693, 711-12 (1976)).
11 Plaintiffs rely solely on Patyrak v. Agpar, 511 F. App’x 193 (3d Cir. 2013) in support of
their argument that the accrual period began when the charges against Plaintiffs were dismissed.
(See ECF No. 70 at 11.) In Patyrak, the plaintiff brought claims for excessive force and malicious
prosecution under § 1983. 511 F. App’x at 194. As the Third Circuit stated in that case, accrual
is based on “when the plaintiff has a complete and present cause of action,” and the dismissal of
Plaintiffs do not allege when those alleged deprivations or state processes ended, but
matters of public record demonstrate that these events all took place outside of the statute of
limitations period. Public court dockets12 reveal that Cowan’s bankruptcy proceedings were
terminated by February 26, 2021, Price’s ended on December 6, 2017, and neither was appealed.

(See ECF No. 68-8 at 24, 35). Public dockets similarly reveal that the settlement between Plaintiffs
and the NJDCA that resulted in payment of $500,000 and forfeiture of Plaintiffs’ business licenses
occurred in May 2018, and the state court case was dismissed without appeal in that same year.
(See ECF No. 68-7 at 60-79, 104-122, 129-131.) Because these records make clear that these

the criminal proceedings was relevant to the plaintiff’s causes of action. Id. at 195 (internal
quotation marks and citation omitted). Here, by contrast, the resolution of the criminal proceedings
is not relevant to whether Plaintiffs have a cause of action for a Fourteenth Amendment due process
claim related to deprivations of their livelihood stemming from the bankruptcy and settlement
proceedings. Therefore, Plaintiffs’ lone case is inapposite.
12 “The Court is permitted to consider matters of public record, including court-filed
documents, at the motion to dismiss stage.” Womack v. City of Phila., Civ. No. 24-1167, 2024
WL 4466680, at *2 n.2 (E.D. Pa. Oct. 10, 2024) (citing Buck v. Hampton Twp. Sch. Dist., 452 F.3d
256, 260 (3d Cir. 2006)). The Court may rely on these types of documents to reconstruct the
relevant chronology of events. See., e.g., McPherson, 392 F. App’x. at 940 & n.1 (taking “judicial
notice of the official record of prior court proceedings” in motion to dismiss to establish date of
the plaintiff’s criminal conviction); Hadesty v. Rush Twp. Police Dep’t, Civ. No. 14-2319, 2016
WL 1039063, at *5, *9 (M.D. Pa. Mar. 15, 2016) (considering prior criminal docket to determine
when the plaintiff’s charges were filed and dismissed for purposes of evaluating malicious
prosecution claim on motion to dismiss). And, “[a]lthough the running of the statute of limitations
is an affirmative defense, it can be properly raised on the pleadings when the date on which the
alleged claims accrued is apparent from the face of the pleading, public filings, or other documents
integral to the complaint.” Sanford-El v. Cannon, Civ. No. 19-08776, 2020 WL 4745996, at *4
n.5 (D.N.J. Aug. 17, 2020) (citing McPherson, 392 F. App’x. at 943); see also Aubrey v. City of
Bethlehem, Fire Dep’t, 466 F. App’x 88, 91-92 (3d Cir. 2012) (affirming dismissal when district
court used “limited discovery materials” on motion to dismiss to determine whether the plaintiff
timely filed discrimination complaint and “conclude[d] that amended complaint was untimely”);
Bishop v. Univ. of Scranton, Civ. No. 22-01831, 2025 WL 823253, at *3 (M.D. Pa. Mar. 14, 2025)
(finding claim time-barred based on incorporated-by-reference document and dismissing claim
with prejudice).
alleged deprivations and the state proceedings that could have remedied them occurred before
August 23, 2021, Plaintiffs’ § 1983 claims are time-barred. See Reed, 598 U.S. at 235-37.
Accordingly, the Court dismisses Counts I and II. The Court will give Plaintiffs one final
opportunity to amend their § 1983 due process claims, but the Court instructs Plaintiff to carefully

consider whether any deprivations and corresponding denial of process occurred within the statute
of limitations of period.
B. State Law Claims
Counts III through VI of the Amended Complaint assert state law tort claims against all
Defendants. (See ECF No. 55 at 33-38). When a court dismisses all claims over which it had
original federal question jurisdiction, it has the discretion to decline to exercise supplemental
jurisdiction over the remaining state law claims. See 28 U.S.C. § 1367(c)(3). As Plaintiffs’ federal
claims have been dismissed at this early stage, the Court will exercise its discretion to decline to
exercise supplemental jurisdiction over these claims. See Hedges v. Musco, 204 F.3d 109, 123 (3d
Cir. 2000) (“[W]here the claim over which the district court has original jurisdiction is dismissed
before trial, the district court must decline to decide the pendent state claims unless considerations

of judicial economy, convenience, and fairness to the parties provide an affirmative justification
for doing so.” (internal quotation marks and citation omitted); Lawless v. New Jersey Dep’t of
Corr., Civ. No. 12-14670, 2022 WL 2702961, at *1 (D.N.J. July 12, 2022) (“Where federal claims
are dismissed at an early stage in the litigation, courts generally decline to exercise supplemental
jurisdiction over state law claims.” (citing United Mine Workers of America v. Gibbs, 383 U.S.
715, 726 (1966)).
IV. CONCLUSION
For the foregoing reasons, and other good cause shown, Defendants’ Motion to Dismiss
(ECF No, 68) is GRANTED. An appropriate Order follows.

Dated: April 24.2026 /y i), LL, 4 '
GEORGE AE CASTNER
/UNrrED STATES DISTRICT JUDGE
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11359501. Public record. Not legal advice.