Mitchell v. PMC Funding 2021 LLC

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
ANDREW J MITCHELL, 	§
§
§
§
§
§
§
§
§
Plaintiff,
V. 	3:26-cv-99
PMC FUNDING 2021 LLC et al.,
Defendants.
ORDER ADOPTING MAGISTRATE JUDGE’S
MEMORANDUM AND RECOMMENDATION
On March 25, 2026, all pretrial matters in this case were referred to United
States Magistrate Judge Andrew M. Edison under 28 U.S.C. § 636(b)(1). Dkt. 10.
Judge Edison filed a memorandum and recommendation sua sponte on April 30,
2026, recommending that that the court order the conditional dismissal of this
lawsuit without prejudice unless the plaintiff appears through licensed counsel within
30 days from the date the memorandum and recommendation is adopted. Dkt. 22.
On May 15, 2026, the plaintiff filed his objections to the memorandum and
recommendation. 	Dkt. 	26. 	The 	plaintiff 	simultaneously 	filed 	a 	motion 	for
appointment of counsel and a motion to stay, requesting the same relief requested in
his objections. Dkts. 27, 28. Because these motions request the same relief requested
in the plaintiff’s objections, the court will address these two motions alongside the
plaintiff’s objections. In accordance with 28 U.S.C. § 636(b)(1)(C), this court is
required to “make a de novo determination of those portions of the [magistrate
United States District Court
Southern District of Texas
ENTERED
May 28, 2026
Nathan Ochsner, Clerk
Case 3:26-cv-00099 Document 31 Filed 05/27/26 in TXSD Page 1 of 5

2
judge’s] report or specified proposed findings or recommendations to which objection
[has been] made.” After conducting this de novo review, the court may “accept, reject,
or modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” Id.; see also Fed. R. Civ. P. 72(b)(3).
The court has carefully considered the objections; the memorandum and
recommendation; the pleadings; and the record. The court accepts Judge Edison’s
memorandum and recommendation and adopts it as the opinion of the court.
The plaintiff first objects that Judge Edison misapplied certain authorities
cited in his memorandum and recommendation. This objection is overruled. “It
has been the law for the better part of two centuries . . . that a corporation may
appear in the federal courts only through licensed counsel.” Rowland v. Cal. Men’s
Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 201–02 (1993). It is this
centuries-old, binding precedent that underpins Judge Edison’s memorandum
and recommendation. Every other court to have confronted the question of
whether an assignment can defeat this rule has held that where “the lay individual
chose to accept the advantages of incorporation,” he “must now bear the burdens
of that incorporation; thus, he must have an attorney present the corporations legal
claims.” Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 23 (2d Cir. 1983)
(quotation omitted). It is irrelevant why the plaintiff wishes to represent his
corporate entity—every individual who attempts to represent his business in
litigation surely believes he has a compelling reason for doing so. The fact remains
Case 3:26-cv-00099 Document 31 Filed 05/27/26 in TXSD Page 2 of 5

3
that limited liability entities may appear in federal court only through licensed
counsel, and assignments may not be used to defeat that rule.
The plaintiff also objects that he has standing as the real party in interest
under Sprint Communications Co. v. APCC Services, Inc., 554 U.S. 269 (2008),
and the Mandatory Victims Restitution Act. Sprint did not address whether a non-
lawyer may proceed pro se on behalf of a limited liability entity and has no bearing
here. Nor does the Mandatory Victims Restitution Act have any bearing on whether
the plaintiff may represent his limited liability entity. The plaintiff, an incarcerated
felon, refers to himself as a “federal restitution beneficiary.” Dkt. 26 at 4. The court
is unfamiliar with this term, which does not appear in any case law or the
Mandatory Victims Restitution Act. The plaintiff argues that because he is
personally obligated to pursue restitution recoveries, that he is the real party in
interest. The plaintiff cites no law to support such an argument. What happened in
the plaintiff’s criminal case is not the determiner of who the real party in interest
is in this litigation, and nothing about plaintiff’s restitution obligation affects the
long-standing rule requiring business entities—or those standing in their shoes—
to appear in court through counsel.
The plaintiff also objects that he has individual-capacity claims as a contracting
party. If the plaintiff believes that he has claims to assert solely as an individual and
not as the assignee or sole member of his LLC, the court will permit the plaintiff to
amend his complaint to assert such claims. But the plaintiff may not bring any claims
belonging to his LLC, or as the assignee of such claims, except through counsel.
Case 3:26-cv-00099 Document 31 Filed 05/27/26 in TXSD Page 3 of 5

4
Finally, the plaintiff objects that Judge Edison should have considered
appointing counsel under 28 U.S.C. § 1915(e)(1) and Naranjo v. Thompson, 809
F.3d 793 (5th Cir. 2015). This objection is overruled. The United States Supreme
Court held more than 30 years ago that § 1915 extends only to natural persons. See
Rowland, 506 U.S. at 208. Thus, the court has no power to appoint counsel to a
corporate plaintiff under § 1915. While the Fifth Circuit recognized a district court’s
“inherent power to appoint counsel for an insolvent corporate criminal defendant,”
this court is unaware of any authority that would support appointing counsel for a
corporate plaintiff in civil litigation. Naranjo, 809 F.3d at 802. Assuming the court
has such inherent power, the court declines to use it. If the value of this litigation
is as great as the plaintiff believes, he should have no difficulty securing counsel on
a contingency basis. For this reason, the court also declines to appoint counsel to
this plaintiff in his individual capacity.
It is therefore ordered that:
(1) 	Judge 	Edison’s 	memorandum 	and 	recommendation, 	Dkt. 	22, 	is
approved and adopted in its entirety as the holding of the court;
(2) 	The plaintiff has 30 days from the date of this order to file an amended
complaint asserting claims solely in his individual capacity and not as
an assignee or the sole member of his LLC;
(3) 	The plaintiff’s motion for appointment of counsel, Dkt. 27, is denied;
(4) 	This case is conditionally dismissed unless, within 30 days from the
entry of this order, the plaintiff appears through licensed counsel to
prosecute claims belonging to his LLC or files an amended complaint
asserting claims solely in his individual capacity and not as an
assignee of his LLC’s claims or its sole member; and
Case 3:26-cv-00099 Document 31 Filed 05/27/26 in TXSD Page 4 of 5

5
(5) 	The plaintiff’s motion to stay, Dkt. 28, is granted, in that all other
deadlines in this case are stayed for the next 30 days.
SIGNED on Galveston Island this 27th day of May 2026.
______________________________
JEFFREY VINCENT BROWN
UNITED STATES DISTRICT JUDGE
Case 3:26-cv-00099 Document 31 Filed 05/27/26 in TXSD Page 5 of 5