Response in Opposition re 37 Motion for Leave to File a Second Amended Class — Marshall v. Prestamos CDFI, LLC (Dkt. 39, E.D. Pa. No. 5:21-cv-04337)

Record facts

U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 39 · 2022-05-16 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF PENNSYLVANIA 
 
 
ALICIA MARSHALL, DANIEL 
PRONSKY, PARIS TOWNSEND, 
NANCILEE HOLLAND, LEONA 
OWSLEY, KOLAWOLE AHMADOU, 
KIANA DERVIN, KRISTINA 
HENDERSON, DUSTIN INNIS, KELLY 
STALNAKER and JAMIE JONES, 
individually and on behalf of all others 
similarly situated, 
 
 
 
Plaintiffs, 
 
 
 
v. 
 
PRESTAMOS CDFI, LLC, 
 
 
 
 
Defendant. 
 
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Case No. 5:21-cv-04337-JMG 
 
 
 
 
 
 
 
 
PRESTAMOS CDFI, LLC’S OPPOSITION TO 
PLAINTIFFS’ MOTION FOR LEAVE TO FILE  
SECOND AMENDED CLASS ACTION COMPLAINT 
 
 
 
 
BALLARD SPAHR LLP 
HERRERA ARELLANO LLP 
 
Marcel S. Pratt (Pa. ID 307483) 
Roy Herrera* 
Michael R. McDonald (Pa. ID 326873) 
Daniel A. Arellano* 
Alexa L. Levy (Pa. ID 327973) 
Jillian Andrews* 
1735 Market Street, 51st Floor 
530 East McDowell Road, Suite 107-150 
Philadelphia, PA 19103 
Phoenix, AZ 85004 
T: 215-665-8500 
T: 602-567-4820 
F: 215-864-8999 
Roy@ha-firm.com 
PrattM@ballardspahr.com 
Daniel@ha-firm.com 
McDonaldM@ballardspahr.com 
Jillian@ha-firm.com 
LevyA@ballardspahr.com 
 
 
*pro hac vice admission to be sought 
 
Attorneys for Defendant 
 
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TABLE OF CONTENTS 
PRELIMINARY STATEMENT .................................................................................................... 2 
FACTUAL BACKGROUND ......................................................................................................... 2 
ARGUMENT .................................................................................................................................. 3 
I. 
Amendment is futile because the SAC does not cure the deficiencies of the 
Operative Complaint. .............................................................................................. 3 
II. 
Amendment is futile because the SAC does not plausibly allege alter ego 
liability. ................................................................................................................... 5 
A. 
The legal standard. ...................................................................................... 5 
B. 
The SAC does not allege facts that would plausibly state a claim 
for alter ego liability.................................................................................... 6 
C. 
The SAC fails to state a claim for unjust enrichment. .............................. 13 
CONCLUSION ............................................................................................................................. 14 
 
 
 
 
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PRELIMINARY STATEMENT 
 
Plaintiffs’ Motion for Leave File a Second Amended Class Action Complaint should be 
denied because it is futile. First, the Motion for Leave to Amend would be rendered moot by the 
granting of Prestamos CDFI, LLC’s motion to dismiss the operative Amended Class Action 
Complaint, ECF Nos. 18, 24, as the Proposed Second Amended Class Action Complaint (“SAC”) 
contains no new substantive allegations that would provide separate grounds for recovery against 
any defendant. Second, the SAC is bereft of well-pled factual allegations that plausibly could state 
a claim for alter ego liability against Defendant’s owner, Chicanos Por La Causa, Inc. (“CPLC”). 
Indeed, CPLC is not a lender, did not contract with any Plaintiff, and does not control the everyday 
affairs of Prestamos. Because the SAC would fail to state a claim as a matter of law, it is futile and 
leave to amend must be denied. 
FACTUAL BACKGROUND 
 
Plaintiffs’ Motion for Leave to Amend reflects their latest attempt, amid a recent series of 
unrelenting efforts, to saddle Prestamos and CPLC with costly discovery and to burden this Court 
with redundant motion practice. (Indeed, despite Prestamos having not yet answered because of 
its pending 12(b) motion, this case has already generated nearly 40 docket entries before this Court 
alone.) In brief, disputes over Plaintiffs’ various requests for irrelevant, unduly burdensome 
discovery of Prestamos are pending before the Court. ECF Nos. 22, 27, 30, 31, 34, 35. Preferring 
not to wait for this Court’s resolution of those disputes, Plaintiffs opted instead to issue document 
and deposition subpoenas requesting the same information to Prestamos’s corporate parent, 
CPLC. The parties filed competing motions to quash and to compel those subpoenas in the District 
of Arizona, where compliance was to take place, disputing whether Plaintiffs must first pursue 
discovery against Prestamos—and await adjudication of Prestamos’s good-faith discovery 
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objections and request for a stay before this Court—before burdening a non-party with requests 
for the same information. Marshall v. Prestamos CDFI, LLC, No. 2:22-mc-00007-DJH (D. Ariz.), 
ECF Nos. 1, 7. The U.S. District Court for the District of Arizona has since transferred those 
motions to this Court for resolution. Id. ECF No. 14.  
 
Before the transfer, Plaintiffs filed a motion for “accounting,” again seeking to compel 
production of the same information—and again opting for superfluous filings over waiting for 
court resolution of pending issues. ECF No. 36. Plaintiffs are now back again, this time by asking 
for leave to amend their complaint to add CPLC as a defendant, ECF No. 38, presumably to obviate 
any subpoena objections CPLC might have by virtue of being a nonparty.  
 
Critically, though, Plaintiffs’ central theory of liability remains the same: that Prestamos 
did not fund loans to which Plaintiffs allege they were entitled, and that this constituted either a 
breach of contract by Prestamos or a violation (again, by Prestamos) of certain states’ consumer 
protection statutes. In other words, Plaintiffs do not allege any new conduct that would give rise 
to liability (either as to Prestamos or CPLC) separate from what is already alleged in the operative 
complaint. Instead, they merely seek to hold CPLC vicariously liable for Prestamos’s alleged 
violations through an alter ego theory of liability.  
ARGUMENT 
I. 
Amendment is futile because the SAC does not cure the deficiencies of the Operative 
Complaint. 
 
Rule 15(a)(2)’s “policy favoring liberal amendments is not unbounded.” Synthes, Inc. v. 
Marotta, 281 F.R.D. 217, 224 (E.D. Pa. 2012).1 Rather, “[u]nder Rule 15(a), futility of amendment 
                                                 
1 Unless expressly included, all citations and internal quotation and alteration marks have been 
omitted. 
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is a sufficient basis to deny leave to amend.” Great W. Mining & Min. Co. v. Fox Rothschild LLP, 
615 F.3d 159, 175 (3d Cir. 2010). “‘Futility’ means that the complaint, as amended, would fail to 
state a claim upon which relief could be granted.” In re Burlington Coat Factory Sec. Litig., 114 
F.3d 1410, 1434 (3d Cir. 1997). “In assessing ‘futility,’ the District Court applies the same standard 
of legal sufficiency as applies under Rule 12(b)(6).” Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 
2000). 
 
The currently operative Amended Class Action Complaint is the subject of a fully briefed, 
case-dispositive motion to dismiss. ECF Nos. 18, 24, 29, 32. That motion maintains that Plaintiffs 
lack Article III standing and that their allegations fail to state a claim as a matter of law, as Plaintiffs 
were not entitled receive to a PPP loan, cannot circumvent Congress’s enforcement scheme, were 
never promised the distribution of loan proceeds, released Prestamos of all liability, and are 
ineligible to recover under the consumer protection statutes they cite. The SAC, which proposes 
to add CPLC as a defendant on an alter ego theory of liability, does not allege any new conduct 
that could give rise to liability separate from that alleged in the Amended Class Action Complaint. 
Plaintiffs expressly acknowledge as much, stating that their “allegations against Prestamos have 
not changed.” ECF No. 37-1 at 6. As Plaintiffs further acknowledge, “[t]he briefing addressed to 
Prestamos’s Motion to Dismiss Plaintiffs’ pending first amended complaint (ECF 24) can just as 
readily apply to the proposed SAC.” Id. (emphasis added). If the Court were to grant the motion 
to dismiss Plaintiffs’ Amended Class Action Complaint, it follows that the SAC would likewise 
fail to provide a basis for subject mater jurisdiction or to state a claim as a matter of law. Because 
the SAC fails to cure the deficiencies identified in the pending motion to dismiss, it necessarily 
will be rendered futile by the grant of that motion. See Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 
2000) (“[I]f a claim is vulnerable to dismissal under Rule 12(b)(6), but the plaintiff moves to 
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amend, leave to amend generally must be granted unless the amendment would not cure the 
deficiency.”). 
II. 
Amendment is futile because the SAC does not plausibly allege alter ego liability. 
A. 
The legal standard. 
 
Both CPLC and Prestamos are incorporated in Arizona. SAC ¶¶ 26–27. As a result, the 
Court must apply Arizona law in determining whether CPLC may be held vicariously liable for 
Prestamos’s conduct. See McElroy v. FirstEnergy Corp., No. 18-cv-1612, 2019 WL 5965329, at 
*3 (W.D. Pa. Nov. 13, 2019) (“[I]t is well established that, under Pennsylvania law, the veil-
piercing analysis is governed by the law of the state of incorporation.”). “Although the tests 
employed to determine when circumstances justifying ‘veil-piercing’ exist are variously referred 
to as the ‘alter ego,’ ‘instrumentality,’ or ‘identity’ doctrines, the formulations are generally similar, 
and courts rarely distinguish them.” Pearson v. Component Tech. Corp., 247 F.3d 471, 485 (3d Cir. 
2001). 
“Arizona law is clear that the corporate status will not be lightly disregarded.” JTF Aviation 
Holdings Inc v. CliftonLarsonAllen LLP, 472 P.3d 526, 530 (Ariz. 2020). In Arizona, as in most 
jurisdictions, a plaintiff seeking to hold a corporate parent liable for the acts of its subsidiary on 
an alter ego theory “must prove both (1) unity of control and (2) that observance of the corporate 
form would sanction a fraud or promote injustice.” Gatecliff v. Great Republic Life Ins. Co., 821 
P.2d 725, 728 (Ariz. 1991). “Unity of control is shown where the parent corporation exercised 
substantially total control over the management and activities of the subsidiary.” Taeger v. Cath. 
Fam. & Cmty. Servs., 995 P.2d 721, 733 (Ariz. App. 1999). According to the Arizona Supreme 
Court:  
Substantially total control may be proved by showing, among other things: stock 
ownership by the parent; common officers or directors; financing of subsidiary by 
the parent; payment of salaries and other expenses of subsidiary by the parent; 
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failure of subsidiary to maintain formalities of separate corporate existence; 
similarity of logo; and plaintiff's lack of knowledge of subsidiary’s separate 
corporate existence. 
 
Gatecliff, 821 P.2d at 728. 
 
Also, while not controlling here, “[t]he Third Circuit alter ego test is fairly typical of the 
genre,” Pearson, 247 F.3d at 484, and is therefore helpful. The Third Circuit test 
requires that the court look to the following factors: gross undercapitalization, 
failure to observe corporate formalities, nonpayment of dividends, insolvency of 
debtor corporation, siphoning of funds from the debtor corporation by the dominant 
stockholder, nonfunctioning of officers and directors, absence of corporate records, 
and whether the corporation is merely a facade for the operations of the dominant 
stockholder. 
 
Id. at 484–85. 
A parent entity’s control of a subsidiary’s policy decisions does “not necessitate [the] 
control over day-to-day operations” that is necessary to impose vicarious liability under Arizona 
law. Taeger, 995 P.2d at 734; see also Bellomo v. Pa. Life Co., 488 F. Supp. 744, 745 (S.D.N.Y. 
1980) (“Only day to day control by the parent so complete that the subsidiary is, in fact, merely a 
department of the parent will constitute the requisite control.”). Moreover, “[t]o be held responsible 
for actions of its subsidiary, the parent must actually exercise this control so that the subsidiary 
becomes a mere instrumentality.” Taeger, 995 P.2d at 734–35; see also Oldenburger v. Del E. Webb 
Dev. Co., 765 P.2d 531, 536 (Ariz. App. 1988) (refusing to disregard corporate form where 
evidence showed that parent corporation had authority to overrule subsidiary’s decisions but took 
no such action). 
B. 
The SAC does not allege facts that would plausibly state a claim for alter ego 
liability. 
It is not enough for Plaintiffs to allege, in conclusory fashion, that CPLC “controlled and 
dominated” Prestamos and should therefore be held vicariously liable for its conduct. SAC ¶ 7. 
Rather, they must include well-pled factual allegations that plausibly could support recovery on a 
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theory of alter ego liability. See Accurso v. Infra-Red Servs., Inc., 23 F. Supp. 3d 494, 510 (E.D. 
Pa. 2014) (“Averments reciting elements of the veil-piercing test, without any supporting facts, 
constitute legal conclusions. Even under a notice pleading standard, as interpreted in Twombly, 
such averments cannot support a veil-piercing claim.”). Here, Plaintiffs rely on allegations that (1) 
a consolidated financial statement sometimes refers to CPLC and Prestamos collectively, (2) 
CPLC’s and Prestamos’s websites and marketing materials sometimes refer to Prestamos as 
“CPLC Prestamos,” (3) CPLC and Prestamos employ overlapping executives and directors, (4) 
Prestamos “upstreamed” PPP loan fees it received to CPLC, (5) CPLC and Prestamos have offices 
in close proximity to each other, and (6) CPLC and Prestamos are represented by the same counsel 
in this litigation. Even taken as true, none of these allegations, whether individually or collectively, 
plausibly could sustain an alter ego theory of liability. 
 
1. 
The Consolidated Financial Statement. 
 
To begin, Plaintiffs fundamentally misrepresent the records on which they rely for their 
allegations that CPLC controlled Prestamos and its lending activities. Those documents govern 
over Plaintiffs’ characterizations of them. Chong v. 7-Eleven, Inc., No. 18-cv-1542, 2019 WL 
1003135, at *4 (E.D. Pa. Feb. 28, 2019) (“When allegations contained in a complaint are 
contradicted by the document it cites, the document controls.”).  
Plaintiffs rely most heavily on CPLC’s consolidated financial statement for the year ending 
June 30, 2021 (the “Financial Statement”) for the allegation that CPLC participated directly in PPP 
lending and received PPP lending fees directly from the SBA.2 SAC ¶¶ 12, 68, 82. To get there, 
Plaintiffs reason that, when the Financial Statement refers to the conduct of “the Organization,” it 
                                                 
2 The Financial Statement is available publicly at:  
https://projects.propublica.org/nonprofits/display_audit/11175820211.  
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is referring to CPLC as distinct from Prestamos. E.g., SAC ¶ 68. So, Plaintiffs surmise, when the 
Financial Statement says that “the Organization” began participating in the PPP program in May 
2020 (Financial Statement at 18), and that “the Organization” received PPP loan fees from the 
SBA (id. at 20), it must mean that CPLC itself actively participated in lending decisions and 
received loan fees directly. Critically, however, the Financial Statement explicitly states at the 
outset that the term “the Organization” refers collectively to the activities of CPLC and its 
subsidiaries and affiliates. Financial Statement at 15 (noting that “CPLC and its subsidiaries and 
affiliates” are “collectively referred to as CPLC or Organization” and that the financial statements 
include the financial statements of CPLC and its subsidiaries, among them Prestamos). As a result, 
when the Financial Statement says that “the Organization” participated in PPP lending and 
received loan fees, it is not referencing CPLC to the exclusion of Prestamos. 
The fact that CPLC’s and Prestamos’s finances are accounted for in a consolidated 
financial statement that references the two entities collectively does not support an inference of 
control necessary for alter ego liability. As Arizona courts have expressly recognized, “the control 
standard for filing a combined financial statement [is] not the equivalent of the control standard 
for determining whether one corporation is an alter-ego of another.” Taeger, 995 P.2d at 734; see 
also Cheatham v. ADT Corp., 161 F. Supp. 3d 815, 824 (D. Ariz. 2016) (“Courts have recognized 
that companies may omit distinctions between related corporate entities in their [public] filings, 
and still insist on these distinctions when haled into court.”). Other courts likewise reject the use 
of consolidated financial statements between a parent and a subsidiary as a factor supporting alter 
ego liability. See Calvert v. Huckins, 875 F. Supp. 674, 678–79 (E.D. Cal. 1995) (“[C]onsolidating 
the activities of a subsidiary into the parent’s annual reports is a common business practice. It is 
allowed by both the Internal Revenue Service and the Securities and Exchange Commission, and 
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it is recommended by generally accepted accounting principles.”); Bellomo, 488 F. Supp. at 745 
(rejecting alter ego theory where parent’s “annual reports describe the business of the parent, 
subsidiaries and sub-subsidiaries as if they were all part of a common enterprise, and that the 
annual report consolidates the earnings statements of all the affiliates”). 
 
2. 
“CPLC Prestamos.” 
Next, Plaintiffs point to CPLC’s annual report and website and their use of the term “CPLC 
Prestamos” as somehow blurring the line between CPLC and Prestamos. See SAC ¶¶ 7, 35, 67, 
83.3 But simply noting the affiliation between the two entities does not imply that CPLC and 
Prestamos are the same entity. See Action Mfg. Co. v. Simon Wrecking Co., 375 F. Supp. 2d 411, 
423 (E.D. Pa. 2005) (“[R]eferences in the parent’s annual report to subsidiaries or chains of 
subsidiaries as divisions of the parent company do not establish the existence of an alter ego 
relationship.”); In re Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538, 570 (M.D. Pa. 
2009) (declining to rely on evidence that a corporate family had “cultivated a unified global image” 
across websites, annual reports, and corporate policy statements because such evidence “fails to 
demonstrate the corporate parents’ actual control over the daily affairs of their subsidiaries”); 
Gruca v. Alpha Therpaeutic Corp., 19 F. Supp. 2d 862, 867–68 (N.D. Ill. 1998) (use of “we” and 
“our” in annual report were “consistent with [subsidiary’s] existence as a separate entity”). 
Besides, Prestamos’s website, which the SAC quotes and incorporates (SAC ¶ 67), makes 
clear that CPLC and Prestamos are distinct entities: it states explicitly that Prestamos is “a division 
of Chicanos Por La Causa,” that CPLC is Prestamos’s “parent corporation,” and that CPLC 
“created Prestamos” in 2000. See https://www.prestamosloans.org/about-prestamos/. Likewise, 
                                                 
3 These are available at: https://cplc.org/assets/files/publications/CPLC%20FY19-20%20Annual-
Report.pdf and https://www.prestamosloans.org/about-prestamos/.  
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the quote attributed to CPLC’s CEO, David Aadame, in The New York Times (“What we did 
together is absolutely incredible”) does not conflate CPLC and Prestamos; to the contrary, the 
quote is followed immediately by the notation that CPLC is “the parent organization of 
Prestamos.”4 
The SAC conspicuously does not allege that any Plaintiff was confused as to which entity 
they were dealing with. Additionally, the loan documents attached to the SAC make clear that the 
counterparty was Prestamos, making no reference whatsoever to CPLC. SAC Exh. A. Nor did 
Plaintiffs allege any confusion with respect to CPLC in their initial or first amended complaints—
let alone assert any claim against CPLC—despite, for much of that period, having access to the 
same information they now rely on in bringing their new allegations. The fact that Plaintiffs were 
not—and, indeed, could not have been—confused about which entity they were dealing with 
defeats their alter ego liability theory. See Taeger, 995 P.2d at 735 (finding no fraud or injustice to 
satisfy second element of alter ego test where plaintiffs “admittedly were not confused about the 
relationship between” the two entities and that “[t]hey understood that they were working with” 
the subsidiary). 
 
 
3. 
Overlapping Directors and Executives. 
 
Prestamos’s three board members are CPLC executives, as is Prestamos’s President. SAC 
¶¶ 65–66. But satisfying even this factor is insufficient to disregard the corporate form, as “[t]he 
mere fact that corporations have the same officers does not make one liable for the acts of the 
other.” Deutsche Credit Corp. v. Case Power & Equip. Co., 876 P.2d 1190, 1195 (Ariz. App. 1994); 
see also Jabczenski v. S. Pac. Mem’l Hosps., 579 P.2d 53, 59 (Ariz. App. 1978) (“Mere interlocking 
                                                 
4 https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html.  
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directorates or like evidence of close association will not justify disregarding corporate 
identities.”); Am. Protein Corp. v. AB Volvo, 844 F.2d 56, 60 (2d Cir. 1988) (noting, of interlocking 
directorates: “This commonplace circumstance of modern business does not furnish such proof of 
control as will permit a court to pierce the corporate veil.”). 
 
This factor being insufficient to treat two entities as alter egos is grounded in the “well 
established principle of corporate law that directors and officers holding positions with a parent 
and its subsidiary can and do ‘change hats’ to represent the two corporations separately, despite 
their common ownership.” United States v. Bestfoods, 524 U.S. 51, 69 (1998). “[C]ourts generally 
presume that directors are wearing their ‘subsidiary hats’ and not their ‘parent hats’ when acting 
for the subsidiary.” Id. Thus,  
even where dual officers and directors make policy decisions and supervise 
activities at the other company, liability does not exist unless a party can present 
facts showing that, despite the general presumption to the contrary, the officers and 
directors were acting in their capacities as officers and directors for the wrong 
company when they committed those acts. 
 
Lieberman v. Corporacion Experienca Unica, S.A., 226 F. Supp. 3d 451, 470 (E.D. Pa. 2016). 
Plaintiffs allege no facts that Prestamos’s directors or its executive were acting for “the wrong 
company,” id., when overseeing Prestamos’s affairs. 
 
 
4. 
“Upstreaming” of Fees to CPLC. 
 
Plaintiffs also allege that Prestamos “upstreamed” PPP loan fees to CPLC. SAC ¶ 82. 
Plaintiffs’ sinister intimations notwithstanding, there is nothing untoward about a subsidiary 
“upstreaming” fees to its parent: this is simply the payment of dividends.5 See Wady, 216 F. Supp. 
                                                 
5 Relatedly, and despite Plaintiffs’ insinuations that CPLC is only “purportedly” a nonprofit, SAC 
¶¶ 27, 62, it is entirely appropriate for 501(c) organizations to maintain for-profit subsidiaries that 
fund the organization’s mission. See Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S., 
Inc., 646 F.3d 983, 987–88 (7th Cir. 2011) (“[T]he principal difference between [nonprofit and 
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2d at 1069 (noting that parent entities “receiv[ing] money from subsidiaries in the form of 
dividends and interest on loans, and reinvest[ing] some portion of those funds in the subsidiaries . 
. . are precisely the kinds of transactions which would occur among entities which respect the 
corporate separateness among entities”). Indeed, it is the nonpayment of dividends that is often a 
factor in support of disregarding the corporate form. See Trustees of Nat. Elevator Indus. Pension 
v. Lutyk, 140 F. Supp. 2d 447, 459 (E.D. Pa. 2001) (“[T]he non-payment of dividends is usually a 
factor favoring piercing of the corporate veil.”); In re Opus E., LLC, 528 B.R. 30, 63–64 (Bankr. 
D. Del. 2015) (“[T]he payment of dividends annually is not sufficient evidence to pierce the 
corporate veil. In fact, it is usually the failure to pay dividends (while instead siphoning funds from 
the subsidiary though other means) that evidences a subsidiary is a mere facade of the parent.”). 
Prestamos paying dividends to CPLC in the ordinary course thus supports respecting the corporate 
form, not disregarding it.  
 
 
5. 
Nearby Offices and Shared Counsel. 
 
Bizarrely, Plaintiffs allege that CPLC and Prestamos occupy nearby but separate offices 
as a factor in support of their alter ego theory. SAC ¶ 7. Prestamos is not aware of any authority 
treating two entities as alter egos simply because their unshared offices are near one another. And 
while Plaintiffs point to Prestamos and CPLC being represented by the same counsel in this 
litigation, courts have likewise rejected consideration of this factor in assessing alter ego claims. 
Calvert, 875 F. Supp. at 679. 
                                                 
for-profit firms] is not that nonprofits eschew typical commercial activities such as the sale of 
services—they do not—but that a nonprofit enterprise is forbidden to distribute any surplus of 
revenues over expenses as dividends or other income to owners of the enterprise, but must apply 
the surplus to the enterprise’s mission.”). 
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Simply put, Plaintiffs have plausibly alleged at most that CPLC owns Prestamos and that 
the two entities have common officers and directors. But Plaintiffs fail to allege facts that would 
show any of the myriad other factors courts also require be present to disregard the corporate form: 
failure to maintain corporate formalities; siphoning of funds; undercapitalization or insolvency of 
the putative judgment debtor; financing of the subsidiary by the parent; payment of the subsidiary’s 
salaries by the parent; identical logo; or plaintiff’s lack of knowledge of the entities’ separate 
existence. Gatecliff, 821 P.2d at 728; Pearson, 247 F.3d at 484. 
C. 
The SAC fails to state a claim for unjust enrichment. 
The SAC fails to state a claim of unjust enrichment against CPLC.6 “The elements 
necessary to prove unjust enrichment are: (1) benefits conferred on defendant by plaintiff; (2) 
appreciation of such benefits by defendant; and (3) acceptance and retention of such benefits under 
such circumstances that it would be inequitable for defendant to retain the benefit without payment 
of value.” Hollenshead v. New Penn Fin., LLC, 447 F. Supp. 3d 283, 292 (E.D. Pa. 2020). Plaintiffs’ 
claim fails to satisfy even the first element, as Plaintiffs have not conferred any benefit on either 
Prestamos or CPLC: any loan fees received, even if improperly, were conferred by the SBA, not 
by Plaintiffs. And even if Plaintiffs had conferred a benefit that CPLC received, it would not be 
inequitable for CPLC to retain the benefit, because Plaintiffs are entitled neither to loan proceeds 
nor the SBA’s loan fees.  
Further, even if Prestamos breached a legal obligation in not funding Plaintiffs’ loans, there 
is nothing wrong or unconscionable in CPLC receiving dividends from its subsidiary in the 
                                                 
6 In addition to failing to state a claim for relief, the Court also would lack personal jurisdiction 
over CPLC, as it is a non-lender without ties to Pennsylvania, and Prestamos‘s contacts in the state 
may not be imputed to it. Prestamos expects that CPLC would contest personal jurisdiction if it is 
formally brought into the litigation. 
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ordinary course. See Halstead v. Motorcycle Safety Found., Inc., 71 F. Supp. 2d 455, 459 (E.D. Pa. 
1999) (explaining that to recover on an unjust enrichment theory, “a claimant must show that the 
party against whom recovery is sought either wrongfully secured or passively received a benefit 
that would be unconscionable for the party to retain without compensating the provider”). Plaintiffs 
are not entitled to recoup dividends CPLC properly received from Prestamos simply because they 
take issue with conduct by Prestamos. To do so would be to allow Plaintiffs to circumvent the 
rigorous standards for veil piercing simply by restyling what is really an alter ego claim as one for 
unjust enrichment. See Commonwealth by Shapiro v. Golden Gate Nat’l Senior Care LLC, 194 
A.3d 1010, 1035 (Pa. 2018) (rejecting unjust enrichment claim that was premised on allegation 
that ill-gotten proceeds had bad been transferred from subsidiaries to parent entities, but where 
misconduct was alleged only as to the subsidiaries); Simons v. Park City RV Resort, LLC, 354 P.3d 
215, 222 (Utah App. 2015) (rejecting unjust enrichment claim that “appears to be more accurately 
viewed as a restatement of [plaintiff’s] alter ego claim”). 
Finally, even if Plaintiffs plausibly alleged that they will not be able to recover a judgment 
against Prestamos (they have not), simply seeking to secure a putative judgment is not grounds to 
pierce the corporate veil. See Sea-Land Servs., Inc. v. Pepper Source, 941 F.2d 519, 524 (7th Cir. 
1991) (veil-piercing test requires that “some ‘wrong’ beyond a creditor’s inability to collect would 
result”). 
CONCLUSION 
 
For the foregoing reasons, the Court should deny Plaintiffs’ Motion for Leave to Amend. 
 
 
 
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Dated: May 16, 2022 
BALLARD SPAHR LLP 
 
 
By: /s/ Marcel S. Pratt 
 
 
 
 
Marcel S. Pratt (Pa. ID 307483) 
 
 
Michael R. McDonald (Pa. ID 326873) 
 
 
Alexa L. Levy (Pa. ID 327973) 
 
 
PrattM@ballardspahr.com 
 
 
McDonaldM@ballardspahr.com 
 
 
 
 
 
LevyA@ballardspahr.com 
 
 
 
HERRERA ARELLANO LLP 
 
 
 
 
Roy Herrera* 
 
 
Daniel A. Arellano* 
 
 
Jillian Andrews* 
 
 
Roy@ha-firm.com 
 
 
Daniel@ha-firm.com 
 
 
Jillian@ha-firm.com 
 
 
*pro hac vice admission to be sought 
 
 
 
Attorneys for Defendant 
Case 5:21-cv-04337-JMG     Document 39     Filed 05/16/22     Page 16 of 16

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