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. 	3:26-cv-127
EMERALD GROUP HOLDINGS LLC, 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 May 4,
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. 10.
On May 15, 2026, the plaintiff filed his objections to the memorandum and
recommendation. 	Dkt. 	13. 	The 	plaintiff 	simultaneously 	filed 	a 	motion 	for
appointment of counsel and a motion to stay, requesting the same relief requested in
his objections. Dkts. 14, 15. 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
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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 court’s opinion.
The plaintiff first objects that Judge Edison misapplied certain authorities
cited in his memorandum and recommendation, and that he treated as controlling
authority the opinion issued in M2 Technology, Inc. v. M2 Software, Inc., 589 F.
App’x 671 (5th Cir. 2014). Dkt. 13 at 2–3. 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.
Binding Fifth Circuit authority is not required for this court to follow the
uniform rule adopted by every federal court to confront the issue: 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). The plaintiff claims to bring his case as “the owner
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and sole member of Mitchell Adjusting International LLC.” Dkt. 1 at 2. To the extent
that the plaintiff has a personal claim against the defendants, the plaintiff will be given
leave to amend to make clear the claims that he possesses in his individual capacity.
But the only way that the plaintiff can advance claims belonging to his LLC is through
licensed counsel; an assignment cannot be made to defeat this rule.
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).
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 plaintiff’s federal restitution obligation provide a basis for the plaintiff, a
non-lawyer, to prosecute his LLC’s claims.
The 	plaintiff 	also 	objects 	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 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)
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(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 the plaintiff’s third objection, he argues that he “has direct individual-
capacity injuries as the natural-person federal restitution debtor whose designated
funding source these receivables constitute.” Dkt. 13 at 4 (cleaned up). This objection
is overruled. The plaintiff argues that 18 U.S.C. § 3664(m)(1)(A) “contemplates
assignment of corporate receivables to the natural-person defendant as a means of
satisfying [a restitution] obligation.” Dkt. 13 at 4. That statutory provision says no
such thing; rather, it states that an “order of restitution may be enforced . . . by all
other 	available 	and 	reasonable 	means.” 	18 	U.S.C. 	§ 3664(m)(1)(A). 	Because
assignments may not defeat the requirement that business entities appear through
licensed counsel, the plaintiff’s appearance on behalf of his LLC is not an available
and reasonable means to prosecute his LLC’s claims. As for the plaintiff’s other
arguments as to why he has claims in his individual capacity against the defendants,
the plaintiff will be given leave clarify those claims. But the plaintiff may not prosecute
claims belonging to his LLC, even as its assignee, except through counsel.
In his final 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
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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 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 the plaintiff in his individual capacity.
It is therefore ordered that:
(1) 	Judge 	Edison’s 	memorandum 	and 	recommendation, 	Dkt. 	10, 	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
his LLC’s sole member or as an assignee of the LLC’s claims;
(3) 	The plaintiff’s motion for appointment of counsel, Dkt. 14, 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
pursue his LLC’s claims 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. 15, 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
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