Mitchell v. Whyte, Esq. et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
ANDREW J MITCHELL, 	§
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Plaintiff,
v. 	CIVIL ACTION NO. 3:26-cv-00123
MARC WHYTE, ESQ., et al.,
Defendants.
ORDER ADOPTING MAGISTRATE JUDGE’S
MEMORANDUM AND RECOMMENDATION
On April 23, 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. 7.
Judge Edison filed a memorandum and recommendation sua sponte on April 30,
2026, recommending 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. 9.
On May 11, 2026, the plaintiff filed his objections to the memorandum and
recommendation. 	Dkt. 	11. 	The 	plaintiff 	simultaneously 	filed 	a 	motion 	for
appointment of counsel and a motion to stay, requesting the same relief requested
in his objections. Dkts. 12, 13. 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
United States District Court
Southern District of Texas
ENTERED
May 19, 2026
Nathan Ochsner, Clerk
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[magistrate 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 “the ‘corporation cannot proceed pro se’
framework” is reversible error. Dkt. 11 at 6. 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. There does not need to be binding Fifth Circuit authority for this
court to follow the uniform rule adopted by ever federal court to confront the issue
and hold 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 corporation’s 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 non-
lawyer who seeks to represent a business entity in litigation believes he has a
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compelling reason for doing so. The fact remains 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 next objects that “MAI was the billing conduit; Plaintiff was the
licensed individual whose personal labor generated the compensation Defendants
withheld.” Dkt. 11 at 6. The court understands this reasoning, but again: the
plaintiff “chose to accept the advantages of incorporation” and therefore “must
now bear the burdens of that incorporation; thus, he must have an attorney present
the corporations legal claims.” Jones, 722 F.2d at 23 (quotation omitted).
The plaintiff next objects that he has standing as the real party in interest
under Sprint Communications Co. v. APCC Services, Inc., 554 U.S. 269 (2008),
the Mandatory Victims Restitution Act, and his direct individual injury as the
licensed professional. This objection is overruled. 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 “the federally-directed restitution-recovery
vehicle.” Dkt. 19 at 6. 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 allegedly “holds legal title to [his LLC’s] receivable under a federally-
disclosed transfer that pre-existed 	this litigation 	and 	was 	made for federal
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restitution-coordination purposes,” he has standing. Id. The plaintiff “points to no
authority for his proposition that when [a federal district court in an unrelated
criminal action] determines an LLC is an individual [criminal defendant’s asset]
for [restitution] purposes, the LLC should be disregarded for all purposes,
including when determining whether an LLC’s sole member has standing to assert
a RICO claim alleging harm to the LLC or when applying federal law requiring
business entities to appear in court only through licensed counsel.” Lunnon v.
United States, No. 21-2140, 2022 WL 17729999, at *6 (10th Cir. Dec. 16, 2022).
As for the plaintiff’s contention that he has claims against the defendants in
his individual capacity—namely, as “the licensed public adjuster whose personal
labor generated the compensation”—that contention is undercut by the plaintiff’s
own pleadings. Id. at 6. The only contracts that the plaintiff attaches to his
complaint show that Mitchell Adjusting International, LLC was the contracting
party, not the plaintiff individually. See Dkt. 1-1. All correspondence with the
insurance companies on behalf of the insureds came from Mitchell Adjusting
International, LLC, not the plaintiff individually. See Dkt. 1-2 at 2–3. Nevertheless,
if the plaintiff believes that he has claims to assert solely as an individual and not
as the sole member of his LLC or as an assignee of its claims, the court will permit
him to amend his complaint to assert such claims.
In his fourth objection, the plaintiff argues that “[f]ederal RICO standing is
a creature of federal law and is not subject to state-law assignment doctrine or
contract-form analysis” because “RICO standing turns on the causal chain between
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the predicate acts and the injury, not on the form of the underlying contractual
relationship.” Dkt. 11 at 7. In support, the plaintiff cites the Supreme Court’s
decision in Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (2008). Bridge,
like Sprint, is inapplicable here because it says nothing about whether a non-
attorney can represent an LLC’s interests, or whether the sole member of an LLC
has RICO standing based on injuries derived from harm to his LLC. The relevant
authority is National Enterprises, Inc. v. Mellon Financial Services Corp. No. 7,
847 F.2d 251 (5th Cir. 1988), in which the Fifth Circuit rejected the notion of
derivative RICO standing. Here, as in National Enterprises, “the only sound
perspective is to view [the plaintiff]’s injury of non-payment as flowing from the
legitimate contractual relationship [his LLC] had [with the defendants].” Id. at
254; see also Grow Mich., LLC v. LT Lender, LLC, 50 F.4th 587, 596 (6th Cir.
2022) 	(observing 	that 	“derivative 	losses 	are 	not 	direct 	injuries 	for 	RICO
purposes”); 	Lunnon, 	2022 	WL 	17729999, 	at 	*7 	(upholding 	“district 	court’s
determination that [the plaintiff’s LLC] was the proper plaintiff on the RICO claim
. . . and that [the plaintiff], who is not a licensed attorney, could not represent [his
LLC] on the RICO claim”).
In his fifth objection, the plaintiff argues that Judge Edison wrongly
recommended dismissal without first affording the plaintiff an opportunity to cure
under Rule 17(a) and Wieburg v. GTE Southwest Inc., 272 F.3d 302 (5th Cir.
2001). This objection is overruled. Unlike here, the court in Wieburg dismissed the
action outright. Judge Edison recommended conditional dismissal if the plaintiff
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does not appear through licensed counsel within 30 days. If the plaintiff appears
through licensed counsel, the action will not be dismissed. If the plaintiff does not
appear through licensed counsel, the action will be dismissed, but only once the 30
days have passed. Conditional dismissals are a standard means for dealing with
the substitution of the real party in interest. See, e.g., Wright v. Sears Roebuck &
Co., No. CIV.A. 09-1498, 2010 WL 6032803, at *5 (W.D. La. Oct. 19, 2010)
(holding that the remedy under Rule 17 is conditional dismissal unless the real
party in interest joins the litigation), report and recommendation adopted, No.
CIV.A. 09-1498, 2011 WL 867252 (W.D. La. Mar. 10, 2011).
In his sixth objection, the plaintiff argues 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—or to a non-lawyer attempting to assert a
corporate plaintiff’s claims—under § 1915.
While the Fifth Circuit has 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
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as the plaintiff believes, he should have no difficulty securing counsel on a
contingency basis.
It is therefore ordered that:
(1) 	Judge 	Edison’s 	memorandum 	and 	recommendation 	(Dkt. 	9) 	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
the sole member of his LLC or as an assignee of its claims;
(3) 	The plaintiff’s motion for appointment of counsel (Dkt. 12) is denied;
(4) 	This case is conditionally dismissed unless, within 30 days from the
entry of this order, the plaintiff appears through licensed counsel or
files an amended complaint asserting only individual claims against
the defendants and not as his LLC’s sole member or as an assignee of
his LLC’s claims; and
(5) 	The plaintiff’s motion to stay (Dkt. 13) is granted, in that all other
deadlines in this case are stayed for the next 30 days.
SIGNED on Galveston Island this 19th day of May 2026.
______________________________
JEFFREY VINCENT BROWN
UNITED STATES DISTRICT JUDGE
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