Mitchell v. Emerald Group Holdings LLC 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-00127
EMERALD GROUP HOLDINGS LLC, et
al.,
Defendants.
MEMORANDUM AND RECOMMENDATION
This case has been referred to me for all pretrial purposes. See Dkt. 7. I am
sua sponte issuing this memorandum and recommendation to suggest that the
court order the conditional dismissal of this lawsuit without prejudice unless
Plaintiff Andrew Mitchell appears through licensed counsel within 30 days from
the date this memorandum and recommendation is adopted.
On April 8, 2026, Mitchell, an incarcerated person proceeding pro se,
instituted this lawsuit against Defendants. Mitchell was a licensed public adjuster.
Mitchell 	provided 	his 	public 	adjusting 	services 	through 	Mitchell 	Adjusting
International LLC (“MAI”), a Texas limited liability company. At all times, Mitchell
has been the sole member of MAI. Mitchell claims that Defendants operated a
“predatory merchant cash advance [MCA] scheme” that “induced [MAI] into a
series of successive MCA renewals carrying escalating daily repayment obligations
that [Defendants] knew . . . would collectively exceed MAI’s incoming accounts
receivable, create an irreversible cash deficit, and ultimately destroy MAI’s ability
to fulfill its fiduciary obligations.” Dkt. 1 at 1. Mitchell asserts claims for civil RICO,
civil RICO conspiracy, breach of contract, fraudulent inducement, conversion,
unjust enrichment, and violations of the Texas Finance Code. Mitchell purports to
United States District Court
Southern District of Texas
ENTERED
May 04, 2026
Nathan Ochsner, Clerk
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bring this lawsuit as “owner and operator of Mitchell Adjusting International LLC.”
Id. Mitchell cannot do this.
“In all courts of the United States the parties may plead and conduct their
own cases personally or by counsel as, by the rules of such courts, respectively, are
permitted to manage and conduct causes therein.” 28 U.S.C. § 1654. The right to
conduct one’s own cases personally is limited to one’s own interests. “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). This rule applies to all
“[a]rtificial business entities—such as limited liability companies, corporations,
and partnerships.” Alt. Materials, LLC v. TCH Constr. Grp., Inc., 339 F.R.D. 322,
324 (N.D. Fla. 2021).
The Standard Merchant Cash Advance Agreement that Mitchell attaches to
his complaint shows that the MAI was a party to the agreement, not Mitchell
personally. See Dkt. 1-1 at 2. The merchant cash advances on which this lawsuit is
based were issued to MAI as the account holder, not to Mitchell personally. See
Dkt. 1-3. The account statements attached to the complaint are accounts held in
MAI’s name, not Mitchell’s name. See Dkt. 1-4. The claims here clearly belong to
MAI, the company with whom Defendants contracted. MAI can appear in federal
court only through an attorney. Mitchell is not an attorney. Thus, he cannot
prosecute MAI’s claims himself. See, e.g., Robinson v. Ashland Inc., No. 1:24-cv-
97, 2024 WL 5158429, at *8 (E.D. Tex. Dec. 18, 2024) (collecting cases and holding
that “Plaintiffs, even as sole owners of their LLC, lack standing to assert claims
individually where the cause of action belongs to the company.”).
“A district court may dismiss a claim on its own motion as long as the
procedure employed is fair.” Davoodi v. Austin Indep. Sch. Dist., 755 F.3d 307, 310
(5th Cir. 2014) (cleaned up). Fairness “requires both notice of the court’s intention
and an opportunity to respond.” Id. (quotation omitted). Here, Mitchell has both
the opportunity to object to this memorandum and recommendation and, in the
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event it is adopted, 30 days to appear through counsel before this action is
dismissed without prejudice. That is fair.
CONCLUSION
For the reasons discussed above, I recommend that the court order the
conditional dismissal of this lawsuit without prejudice unless Mitchell appears
through licensed counsel within 30 days from the date this memorandum and
recommendation is adopted.
The 	parties 	have 	14 	days 	from 	service 	of 	this 	Memorandum 	and
Recommendation to file written objections. See 28 U.S.C. § 636(b)(1)(C); Fed. R.
Civ. P. 72(b)(2). Failure to file timely objections will preclude appellate review of
factual findings and legal conclusions, except for plain error.
SIGNED this ___ day of May 2026.
______________________________
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE
4th
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