Order, Alicia Marshall v. Prestamos CDFI, LLC

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An Order dated March 30, 2023 by Judge John M. Gallagher in Alicia Marshall, et al. v. Prestamos CDFI, LLC, Civil No. 5:21-cv-04337-JMG, in the U.S. District Court for the Eastern District of Pennsylvania (Document 57). The Court denies the plaintiffs' Motion for Leave to File Supplemental Authority (ECF No. 53) and declines to take judicial notice of the contents of a House Select Subcommittee staff report. It grants in part and denies in part the defendants' Motion to Dismiss (ECF No. 46): Count Two is dismissed as to both defendants, Counts Three and Four are dismissed as to Prestamos, Count One for breach of contract is denied as to Prestamos, and claims against Chicanos Por La Causa, Inc. are denied without prejudice pending limited jurisdictional discovery.

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Case 5:21-cv-04337-JMG

Document 57

Filed 03/30/23

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
ALICIA MARSHALL, et al.,
Plaintiffs,
v.
PRESTAMOS CDFI, LLC,
Defendant.
__________________________________________

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Civil No. 5:21-cv-04337-JMG

ORDER
AND NOW, this 30th day of March, 2023, upon consideration of Defendants Prestamos
CDFI, LLC (“Prestamos”) and Chicanos Por La Causa, Inc.’s (“CPLC”) Motion to Dismiss (ECF
No. 46) Plaintiffs Second Amended Complaint (“SAC”), the responses and replies thereto, as well
as Plaintiffs’ Motion for Leave to File Supplemental Authority (ECF No. 53), Defendants’
Response in Opposition thereto (ECF No. 54), its exhibits and attachments, IT IS HEREBY
ORDERED as follows:
1. Plaintiffs’ Motion for Leave to File Supplemental Authority (ECF No. 53) is
DENIED.1

Plaintiffs seek leave to supplement their Response to Defendants’ Motion to Dismiss with
a Staff Report from the United States House of Representatives Select Subcommittee on the
Coronavirus Crisis titled “We are not the Fraud Police: How Fintechs Facilitated Fraud in the
Paycheck Protection Program” (“Report”). See ECF No. 53 at pg. 1. The Report’s Executive
Summary provides “This staff report presents findings…into the role of financial technology
companies (fintechs) in facilitating a disproportionately high rate of fraudulent and otherwise
ineligible loans through the Paycheck Protection Program (“PPP”).” See ECF No. 53-1 at pg. 4.
Plaintiffs ask this Court to take judicial notice of the contents of this Report, in particular the
Report’s findings that Defendant Prestamos “approved the highest number of PPP loans of any
PPP lender in 2021,” that “Prestamos’ President acknowledged that [Prestamos] was ‘not prepared
for all the applications that we received’ during the PPP and said that the nonprofit knowingly took
on a role larger than it had been prepared to handle” and that “Blueacorn” who “was involved in
the processing of nearly all of the loans facilitated by…Prestamos” prioritized large loans over
other loans, some of which Blueacron deliberately “delet[ed]” or chose not to fund. See ECF No.
53 at pgs. 2-3.
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2. Defendants’ Motion to Dismiss (ECF No. 46) is GRANTED IN PART and
DENIED IN PART as follows:
a. Defendants’ Motion to Dismiss Plaintiffs’ SAC for lack of standing pursuant to
Federal Rule of Civil Procedure 12(b)(1) is DENIED IN PART and GRANTED IN PART.
Named Plaintiffs2 have standing, except to the extent Named Plaintiffs purport to bring state law
claims under the laws of states in which they do not reside in or in which they were never injured.
b. Defendants’ Motion to Dismiss Plaintiffs’ SAC as to Defendant CPLC for lack
of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(6) is DENIED
WITHOUT PREJUDICE subject to the following limited jurisdictional discovery;
c. To the extent Plaintiffs seek limited discovery on the issues of Defendant
CPLC’s relationship with Defendant Prestamos for purposes of establishing personal jurisdiction,
as set forth in the accompanying Memorandum Opinion, Plaintiffs shall file a proposed plan
within twenty-one (21) days of entry of this Order, specifically identifying (1) what discovery

Because Plaintiffs ask the Court to take judicial notice of the truth of information and
conclusions contained within the Report, and Plaintiffs’ Second Amended Complaint is not “based
on” nor does it explicitly rely upon the Report, the Court declines to take judicial notice of the
Reports contents. See Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014). “Should Plaintiffs wish
to incorporate any of this information, they must do so through the proper evidentiary channels.”
Greathouse v. Capital Plus Financial, LLC, No. 22-cv-686 at ECF No. 54 (N.D. Tex., Dec. 22,
2022). See also Sturgeon v. PharMerica Corp., 438 F. Supp. 3d 246, 259 (E.D. Pa. 2020)
(declining, at motion to dismiss stage, to take judicial notice of the truth of the contents of FDA
reports); Hall v. Johnson & Johnson, No. 18-1833, 2019 U.S. Dist. LEXIS 221513 at *34 (D. N.J.
Dec. 27, 2019) (declining to take judicial notice of NIH reports at motion to dismiss stage where
reports “address[] the merits of Plaintiff’s claims, is not relied upon or integral to the complaint,
and would require the Court to delve into the scientific evidence that forms the crux of the parties’
dispute.”); St Luke’s Health Network, Inc. v. Lancaster Gen. Hosp., No. 18-2157, 2021 U.S. Dist.
LEXIS 195881 at *9 (E.D. Pa. Oct. 12, 2021) (“Under the public records exception, a court make
take judicial notice of documents such as an administrative or legislative report, but such notice
serves only to ‘indicate what was in the public realm at the time, not whether the contents of those
documents are true.’”) (quoting U.S. ex rel Spay v. CVS Caremark Corp., 913 F. Supp. 2d 125,
139-40 (E.D. Pa. 2012)).
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“Named Plaintiffs” are Plaintiffs Alicia Marshall, Daniel Pronsky, Paris Townsend,
Nancilee Holland, Leona Owsley, Kolawole Ahmadou, Kiana Dervin, Kristina Henderson,
Dustin Innis, Kelly Stalnaker and Jamie Jones
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Plaintiff requires and (2) using what proposed discovery tools. Defendants shall respond to the
proposal within fourteen (14) days of receipt of the proposal.
d. Defendants’ Motion to Dismiss Count One of the SAC for Breach of Contract
as to Defendant Prestamos is DENIED.
e. Defendants’ Motion to Dismiss Count One of the SAC for Breach of Contract
as to Defendant CPLC is DENIED WITHOUT PREJUDICE pending the limited jurisdictional
discovery as forth in subsection (c) above and the accompanying Memorandum Opinion.
f. Defendants’ Motion to Dismiss Count Two of the SAC for Violation of
California’s Unfair Competition Law as to both Defendants Prestamos and CPLC is GRANTED.
Count Two of Plaintiffs’ SAC is hereby DISMISSED.
g. Defendants’ Motion to Dismiss Count Three of Plaintiffs’ SAC for Violation
of the Illinois Consumer Fraud and Deceptive Business Practices Act as to Defendant
Prestamos is GRANTED. Count Three of Plaintiffs’ SAC is hereby DISMISSED.
h. Defendants’ Motion to Dismiss Count Four of Plaintiffs’ SAC for Violation
of the Ohio Deceptive Trade Practices Act as to Defendant Prestamos is GRANTED. Count
Four of Plaintiffs’ SAC is hereby DIMISSED.
i. Defendants’ Motion to Dismiss Count Five of Plaintiffs’ SAC for Unjust
Enrichment against Defendant CPLC is DENIED WITHOUT PREJUDICE pending the
limited jurisdictional discovery as forth in subsection (c) above and the accompanying
Memorandum Opinion.
BY THE COURT:

/s/ John M. Gallagher
JOHN M. GALLAGHER
United States District Court Judge
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