Memorandum — Marshall v. Prestamos CDFI, LLC (Dkt. 46-1, E.D. Pa. No. 5:21-cv-04337)

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U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 46-1 · 2022-06-03 · 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 and 
CHICANOS POR LA CAUSA, INC., 
 
 
 
 
Defendants. 
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Case No. 5:21-cv-04337-JMG 
 
 
 
 
 
 
 
 
MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ 
MOTION TO DISMISS PLAINTIFFS’ SECOND AMENDED 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 Defendants 
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TABLE OF CONTENTS 
 
TABLE OF CONTENTS ................................................................................................................ 1 
PRELIMINARY STATEMENT .................................................................................................... 3 
FACTUAL SUMMARY ................................................................................................................ 5 
ARGUMENT ................................................................................................................................ 11 
I. 
Plaintiffs do not have standing to bring their claims. ........................................... 13 
A. 
Plaintiffs lack a legally protected interest in receiving loan funds 
from Prestamos. ........................................................................................ 13 
B. 
At minimum, Plaintiffs lack standing to assert claims under the 
laws of states in which they do not reside or were not injured. ................ 16 
II. 
Plaintiffs have no private right of action under the CARES Act and cannot 
circumvent that Congressional choice by suing under state law. ......................... 17 
III. 
Plaintiffs have not alleged an alter ego relationship that could subject 
CPLC to personal jurisdiction or liability. ............................................................ 20 
A. 
The legal standard. .................................................................................... 20 
B. 
Plaintiffs do not allege facts that would plausibly state a claim for 
alter ego liability. ...................................................................................... 23 
IV. 
The Amended Complaint fails to state a claim for breach of contract. ................ 31 
V. 
Plaintiffs agreed to release all claims against Prestamos. ..................................... 33 
VI. 
Plaintiffs fail to state a claim for violation of the CA UCL. ................................. 35 
A. 
Plaintiffs fail to allege that Defendants’ conduct was “unlawful.” ........... 36 
B. 
Plaintiffs fail to allege that Defendants’ conduct was “unfair.” ............... 37 
C. 
Plaintiffs fail to allege that they are entitled to equitable relief. ............... 38 
VII. 
Plaintiffs fail to state a claim under the ICFA. ..................................................... 39 
A. 
The ICFA claim duplicates Plaintiffs’ contract claim. ............................. 40 
B. 
The ICFA claim is subject to, but does not meet, a heightened 
pleading standard under Rule 9(b). ........................................................... 40 
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C. 
Plaintiffs’ vague allegations do not make out an actionable ICFA 
claim. ......................................................................................................... 41 
VIII. 
Plaintiffs fail to state a claim under the Ohio Deceptive Trade Practices 
Act. ........................................................................................................................ 42 
A. 
The ODTPA does not protect Plaintiffs because they are 
consumers under the statute. ..................................................................... 42 
B. 
The allegations do not make out an ODTPA claim in any event. ............. 43 
IX. 
Plaintiffs fail to state a claim for unjust enrichment. ............................................ 44 
CONCLUSION ............................................................................................................................. 45 
 
 
 
 
 
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PRELIMINARY STATEMENT 
 
As the Coronavirus (“COVID-19”) pandemic devastated the United States, small 
businesses nationwide suffered severe financial hardships as economic activity decreased. 
Congress, through the CARES Act, authorized the U.S. Small Business Administration (“SBA”) 
to administer the Paycheck Protection Program (“PPP”). The program enabled SBA to guarantee 
forgivable loans issued by private lenders to small businesses, subject to certain conditions. 
  
The SBA’s primary goal was clear: encouraging SBA-approved lenders to issue PPP loans 
to as many eligible borrowers as possible, with a particular focus on reaching the smallest 
businesses and those owned by people of color, women, and veterans. To increase PPP access, 
SBA encouraged community development financial institutions, like Defendant Prestamos CDFI 
LLC (“Prestamos”), to support its goal. Through a partnership with start-up technology company 
Blue Acorn PPP, LLC (“Blueacorn”), Prestamos issued 494,415 PPP loans—the most of any 
lender according to a 2021 SBA report. Prestamos was successful because some larger lenders 
focused on making larger loans to more established businesses, rather than issuing relatively 
smaller loans to underserved businesses as Prestamos did.  
  
The Second Amended Complaint (“SAC”) asserts breach of contract claims against 
Prestamos on behalf of a putative nationwide class and statutory consumer fraud claims under the 
laws of three states on behalf of subclasses from each of those states—all based on the inadequately 
pled experiences of the named Plaintiffs whose bank accounts did not receive deposits of PPP 
loans from Prestamos. Plaintiffs also sue Defendant Chicanos Por La Causa, Inc. (“CPLC”), a non-
lender, out-of-state community organization and Prestamos’s parent company, claiming breach of 
contract, violation of California law, and unjust enrichment, based on a wholly conclusory theory 
of alter ego liability. This Court should dismiss the SAC in its entirety. 
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First, Plaintiffs lack standing to bring this lawsuit because they do not allege an injury-in-
fact that is fairly traceable to Defendants. Other courts have concluded that a PPP applicant is not 
entitled to a loan from any particular lender and does not, therefore, suffer a cognizable injury by 
being denied it. Plaintiffs do not explain how the injuries to their businesses wrought by the 
pandemic are traceable to any alleged delay on the part of Defendants. In fact, allegations 
demonstrate that the delay in funding borrowers’ PPP loans could have been attributable to causes 
other than Defendants’ conduct, such as borrowers’ banks flagging and rejecting attempts by 
Prestamos to deposit their loans. And, even if the named Plaintiffs had standing to bring their 
individual claims, they cannot assert state-law claims on behalf of borrowers residing in states in 
which the Plaintiffs themselves do not reside or in which they were never injured—as this Court 
itself recently held. See Talbert v. Am. Water Works Co., No. 2:19-cv-05010, 2021 U.S. Dist. 
LEXIS 88346 (E.D. Pa. May 7, 2021) (Gallagher, J.). Plaintiffs are residents of nine states, and 
they cannot bring contractual or unjust enrichment claims under the laws of 41 other states and the 
District of Columbia.  
 
Second, Congress did not provide a private right of action—whether express or implied—
under the CARES Act or any of the SBA’s implementing regulations. Because Plaintiffs are barred 
from suing under the CARES Act, they attempt to enforce its terms anyway under the guise of 
state-law claims. The alleged breaches of their SBA-form Promissory Notes are not grounded in 
contract, but rather the quality of Prestamos’s performance under the PPP regulatory scheme. 
Courts regularly reject this type of end-run around Congress’s decision to exclude private rights 
of action from federal statutes, including the CARES Act.  
 
Third, the Court should reject Plaintiffs’ belated attempt to embroil CPLC in this litigation, 
which is premised solely on a theory that Prestamos was CPLC’s alter ego. The SAC does not 
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contain the allegations necessary for the extraordinary action of disregarding the corporate form 
and, accordingly, does not show how this Court has personal jurisdiction over CPLC or how CPLC 
may be liable to Plaintiffs.  
 
Fourth, even if the SAC survives the above grounds for dismissal, Plaintiffs fail to make 
out any plausible claims for relief. To state their contract claim, Plaintiffs must identify an express 
commitment to Plaintiffs that Defendants breached. The SAC, however, cites no contractual 
provision in any loan document obligating Prestamos to guarantee the funding of Plaintiffs’ loans, 
let alone by a specific date; it is black-letter law that a lender owes no duty of care to a borrower 
to go above and beyond their contractual terms. Moreover, Plaintiffs cannot enforce the terms of 
an agreement between Prestamos and the SBA to which they are not a party. And the Notes bar 
Plaintiffs’ claims in any event, as each contains an unambiguous release provision. 
 
Fifth, the SAC fails to state a claim under any of the state consumer fraud statutes because 
the allegations fail to show how the parties are covered by these laws or that Plaintiffs are entitled 
to the relief each statute authorizes. 
 
Lastly, Plaintiffs fail to make a plausible unjust enrichment claim against CPLC, which 
received no money from Plaintiffs and cannot be compelled to pay fees it validly received from a 
subsidiary in the ordinary course.  
 
For the reasons set forth below, the Court should dismiss the Second Amended Complaint 
with prejudice to renewal. 
FACTUAL SUMMARY 
CPLC is a nonprofit organization that formed in 1969 to fight discrimination against the 
Mexican-American community. Inspired by Dolores Huerta and Cesar Chavez, CPLC was devoted 
initially to advocating for equity in education, politics, and labor conditions. Today, CPLC 
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provides services to people of all backgrounds while honoring its Mexican-American roots. 
CPLC’s programs give individuals and families a seat at the table. CPLC facilitates growth through 
five “Areas of Impact:” (1) Health & Human Services; (2) Housing; (3) Education; (4) Economic 
Development; and (5) Advocacy. CPLC is not a lender. 
In 2000, CPLC created Prestamos. Prestamos is a Community Development Financial 
Institution (“CDFI”) certified by the United States Department of the Treasury as a Loan Fund. 
CDFIs are mission-driven organizations that have a primary goal of promoting community 
development through improving the social and/or economic conditions of underserved persons, 
including low-income persons, persons who lack adequate access to capital or financial services, 
as well as residents of economically distressed communities. See 12 U.S.C. § 4702(5)(A). 
Prestamos has administered a variety of lending programs aimed at creating jobs, revitalizing 
communities, and facilitating community wealth-building. See, e.g., SAC, ECF No. 39, ¶ 60. 
History of the CARES Act. On March 13, 2020, the federal government declared the 
COVID-19 pandemic of sufficient severity and magnitude to warrant an emergency declaration 
for the entire country. See 86 Fed. Reg. 3692. On March 27, 2020, Congress passed the 
Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide emergency 
assistance for individuals, families, and businesses affected by the pandemic. Id.; see also SAC 
¶ 39. The CARES Act created and funded the PPP, a new loan program to be administered by the 
SBA, through which the federal government would guarantee business loans from private lenders 
that would be eligible for forgiveness of up to the full principal amount. See 15 U.S.C. 
§ 636(a)(36); 86 Fed. Reg. 3692. See also SAC ¶ 42. 
Applying for PPP Loans. As detailed in the SAC, Congress conditioned a business’s 
eligibility for a PPP loan on numerous criteria. See 86 Fed. Reg. 3692, 3695–3703 (setting forth 
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extensive guidelines for program eligibility and limitations). SBA promulgated rules governing 
the processes for applying for, approving, and disbursing PPP loans. See SAC ¶¶ 50–53. 
Prospective borrowers applied for PPP loans by submitting a standard form created by the SBA: 
the PPP Borrower Application Form, also known as SBA Form 2483. See SAC ¶ 49.1 The form 
for second-draw loans—SBA Form 2483-SD—contains similar language. Id.2 This form is to be 
completed by the applicant and submitted to an SBA participating lender. 
Without citing any source of this purported contractual obligation, Plaintiffs charge that 
PPP lenders were required to disburse approved loans “within ten days of SBA approval and 
assignment of the loan number.” Id. ¶ 51. Neither SBA Form 2483 nor SBA Form 2483-SD—nor 
any loan documents Plaintiffs reference—guarantee a time by which borrowers’ applications will 
be reviewed, approved or rejected, or their funds disbursed. 
The PPP requires lenders to implement certain underwriting procedures. See 86 Fed. Reg. 
3692, 3708. Lenders must also follow any applicable Bank Secrecy Act and anti-money laundering 
requirements. Id. (permitting non-bank lenders to rely on the anti-money laundering and customer 
identification programs of a federally insured bank or credit union). Congress granted all lenders 
approved to make other loans under SBA programs delegated authority to make and approve PPP 
loans without requiring the SBA to conduct its own underwriting analysis of every issued loan. 15 
U.S.C. § 636(a)(36)(F)(ii)(I). Lenders must submit SBA Form 2484 (an application with various 
                                                 
1 SBA revised the form several times; all versions are located at https://www.sba.gov/document/ 
sba-form-2483-ppp-first-draw-borrower-application-form (last accessed June 3, 2022). 
2 This form is located at https://www.sba.gov/document/sba-form-2483-sd-ppp-second-draw-
borrower-application-form (last accessed June 3, 2022). 
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information about the borrower and certifications) to issue a PPP loan and receive a loan number 
for each originated PPP loan. 86 Fed. Reg. 3692, 3709. 
The PPP loan is 100 percent guaranteed by SBA. 15 U.S.C. § 636(a)(2)(F). To receive 
forgiveness of a PPP loan, the borrower must submit an application for forgiveness to the lender 
along with certain certifications regarding how PPP funds were spent. 15 U.S.C. § 9005(e). 
Prestamos’s PPP Lending Program. The SBA strongly encouraged CDFIs, like 
Prestamos, and minority-, women-, veteran-, and military-owned lenders to apply to become PPP 
lenders in order to reach diverse, small businesses. 86 Fed. Reg. 3692, 3707. Citing an SBA report, 
the SAC states that Prestamos processed 494,415 PPP loans. See SAC ¶¶ 8, 80–81; see also id. 
¶¶ 86–94 (describing lending process). 
Under SBA rules, a lender such as Prestamos may contract with a lender service provider 
to assist with one or more lender functions. See 13 C.F.R. § 103.1(d). Prestamos partnered with 
Blueacorn, a lender service provider, to facilitate and administer the loan application, paperwork 
collection, and approval process. See SAC ¶¶ 73–75, 78. Blueacorn was created in 2020 to help 
small businesses find PPP lenders, as, according to an article cited in the SAC discussing Blueacorn 
and another PPP technology company, some lenders would not make smaller loans to small 
businesses, but gravitated toward providing larger loans to more established businesses because it 
was more lucrative. See SAC ¶¶ 78, 81. Blueacorn’s technology streamlined the PPP application 
process, which made it easier for a lender to make smaller loans to smaller businesses. As shown 
by the loan documents, borrowers asked Prestamos to disburse their PPP loans to the bank accounts 
the borrowers identified. Id. ¶ 101. 
Although Plaintiffs intimate throughout the complaint that Prestamos was enriched by 
receiving credit from SBA for loan proceeds it never disbursed, see, e.g., id. ¶ 266, at no point do 
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Plaintiffs allege that Prestamos spent or misappropriated any money it received from SBA or did 
not otherwise distribute those funds to other PPP applicants.  
The premise underlying Plaintiffs’ allegations that Prestamos failed to “disburse the 
proceeds” of Plaintiffs’ individual loans, as if Prestamos received funds reserved for each Plaintiff, 
is demonstrably false. Prestamos issued loans with money it borrowed from the federal 
government. See SAC ¶ 96. The Federal Reserve Bank, through the Paycheck Protection Program 
Liquidity Facility (“PPPLF”), extended credit at 35 basis points to institutions like Prestamos, 
which pledged the PPP loans as collateral at face value. See SAC ¶¶ 86–87 (citing Federal Reserve 
documents); 85 Fed. Reg. 38282, 38283. 
Plaintiffs’ causes of action against Prestamos. Despite a lengthy pleading winding 
through Prestamos’s participation in the PPP, much of what is contained in the SAC is irrelevant 
to Plaintiffs’ causes of action. Plaintiffs are alleged sole proprietors who reside in California, 
Pennsylvania, Missouri, Illinois, Washington, Michigan, Nevada, and Arizona, who manage small 
businesses. SAC ¶¶ 15–25. Plaintiffs each applied for a PPP loan with Prestamos through 
Blueacorn, submitted required documentation, received notice of approval from SBA, received 
and executed a Promissory Note and accompanying documents, and did not receive the loan. See 
id. ¶¶ 97–224. In each case, Plaintiffs allegedly inquired with SBA about the status of their loans 
and made attempts to obtain the loan proceeds, although they provide no or sparse details about 
those attempts. See id. Even where Plaintiffs purport to provide details through their amendments, 
interestingly, none of the eleven Plaintiffs allege what communications they had with their 
individual banks regarding their PPP loans and if so, what, if anything, they learned, such as 
whether and why their individual bank rejected Prestamos’s attempt to fund the loan. 
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Plaintiffs assert four causes of action again Prestamos: First, Plaintiffs allege breach of 
contract, claiming that Prestamos “entered into a binding agreement with each of the Plaintiffs . . 
. to fund their respective PPP loans” but “breached its obligations to fund Plaintiffs’ . . . PPP loans 
by failing to fund the loans within 10 days of the SBA’s approval of the loans.” See SAC ¶¶ 248, 
254. 
Next, Plaintiffs allege that Prestamos violated California’s Unfair Competition Law, Cal. 
Bus. & Prof. Code § 17200, et seq. (“CA UCL”), because its failure to fund PPP loans 
“constitute[d] unlawful and unfair business acts or practices” within the meaning of the CA UCL. 
See id. ¶¶ 260–76. Because of these violations, Plaintiffs allege they “are entitled to equitable 
relief” such as restitution and injunctive relief directing Prestamos to pay Plaintiffs the loan 
proceeds. Id. ¶ 276. Plaintiffs also claim that Prestamos engaged in “deceptive” and “unfair” 
conduct under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. 
Stat. 505/1, et seq. (“IFCA”), see SAC ¶¶ 277–92, and the Ohio Deceptive Trade Practices Act, 
Ohio Rev. Code Ann. § 4165.01–.04 (“ODTPA”), SAC ¶¶ 293–303. 
Plaintiffs’ causes of action against CPLC. Plaintiffs allege no independent conduct on the 
part of CPLC that they contend is actionable. Rather, Plaintiffs bring their breach-of-contract and 
CA UCL claims against CPLC on the same grounds as Prestamos, asserting that CPLC is liable as 
Prestamos’s corporate alter ego. See SAC ¶¶ 258, 267. Plaintiffs also bring an unjust enrichment 
claim against CPLC, “only in the alternative, to the extent Plaintiffs’ breach of contract and 
California state law claims fail to adequately compensate Plaintiffs . . . for the violations as alleged 
herein.” SAC ¶ 305. 
The Promissory Note. The Promissory Note, which is an SBA form, confers absolutely no 
obligations on the part of Prestamos to fund the loan. It expresses Plaintiffs’ promise to repay the 
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loan evidenced by the Note and the terms by which they will do so, see Note3 §§ 1, 3, outlines 
conditions constituting a loan default and Prestamos’s subsequent remedies, id. §§ 4, 5, and 
enumerates Prestamos’s “General Powers,” which include the prerogative to “[t]ake any action 
necessary to protect the Collateral or collect amounts owing on this Note,” id. § 6(E). Notably, the 
Note does not state a timeframe or date by which Prestamos must fund the loan. 
Each Promissory Note also includes an express release of claims against Prestamos. By 
signing the Note, Plaintiffs agreed to release Prestamos for  
any and all claims . . . whether statutory . . . , in contract or in tort, . . . arising out 
of or in any way connected to (i) any extension of credit by the Lender to Borrower 
on or prior to the date hereof, or (ii) any matter or thing done, omitted or suffered 
to be done by the Lender . . . on or prior to the date hereof.  
 
Note § 10. 
ARGUMENT 
The SAC is not viable for multiple reasons. Foremost, this Court does not have subject 
matter jurisdiction over the dispute because the pleadings do not show that Plaintiffs have standing 
to bring their claims. Nor do Plaintiffs have a right to bring their state law claims, which are veiled 
attempts to use state law to enforce a federal statute that contains no right of action. And the 
allegations—which are vague, if not irrelevant—do not make out plausible claims in any event. 
As one consequence of these deficiencies, it is plain the Court lacks personal jurisdiction over 
CPLC, an Arizona corporation with no contacts to Pennsylvania and, indeed, with no alleged 
interactions with Plaintiffs. For any or all of these reasons, the SAC should be dismissed. 
                                                 
3 A copy of the Promissory Note, identical versions of which each Plaintiff signed, is attached to 
the SAC as Exhibit A. 
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Under Federal Rule of Civil Procedure 12(b)(1), “a party may move to dismiss the 
complaint by alleging that the court lacks subject-matter jurisdiction over the plaintiff’s claims.” 
The court must “assume that the allegations of the complaint are true” and decide whether “the 
pleadings fail to present an action within the court’s jurisdiction.” Wheeler v. Corr. Emergency 
Response Team, No. 18-cv-3813, 2019 U.S. Dist. LEXIS 108459, at *5 (E.D. Pa. June 27, 2019) 
(citation omitted). If the plaintiff is unable to establish the existence of subject matter jurisdiction 
over their claims, the Court is without power to hear those claims and must dismiss the case. See 
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977). 
A complaint also should be dismissed where it fails “to state a claim upon which relief can 
be granted.” Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss, a complaint must contain- 
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” 
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks and citations omitted). The 
allegations must “raise a right to relief above the speculative level.” Victaulic Co. v. Tieman, 499 
F.3d 227, 234 (3d Cir. 2007) (quotation omitted). When deciding the motion, the Court “need not 
credit a complaint’s bald assertions or legal conclusions.” Morse v. Lower Merion Sch. Dist., 132 
F.3d 902, 906 (3d Cir. 1997). 
Dismissal also is required as to a party over whom the Court lacks personal jurisdiction. 
See Fed. R. Civ. P. 12(b)(2). Upon a challenge to personal jurisdiction under Rule 12(b)(2), it is 
the plaintiff’s burden to show that jurisdiction exists by alleging “specific facts rather than vague 
or conclusory assertions.” Vizant Techs., LLC v. Whitchurch, 97 F. Supp. 3d 618, 627 (E.D. Pa. 
2015) (citations omitted). 
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I. 
Plaintiffs do not have standing to bring their claims. 
A. Plaintiffs lack a legally protected interest in receiving loan funds from 
Prestamos. 
In order to invoke federal court jurisdiction, Plaintiffs must “clearly . . . allege facts 
demonstrating” that they have standing to sue. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 
(2016). Two elements of standing are relevant here. First, Plaintiffs must show that they “suffered 
an injury in fact,” which “requires ‘an invasion of a legally protected interest which is (a) concrete 
and particularized, and (b) actual or imminent, not conjectural or hypothetical.’” Constitution 
Party v. Aichele, 757 F.3d 347, 361 (3d Cir. 2014) (quoting Lujan v. Defenders of Wildlife, 504 
U.S. 555, 560–61 (1992)). Second, the alleged injury must be “fairly traceable to the challenged 
conduct of the defendants,” and not, for example, result “from the independent action of some 
third party not before the court.” Id. at 366 (quotation omitted). Failure to establish either of these 
prongs—and the SAC fails both—requires dismissing Plaintiffs’ claims. Davis v. Wells Fargo, 824 
F.3d 333, 346 (3d Cir. 2016). 
The allegations do not make out an injury in fact because, as other courts have recognized, 
an applicant for a PPP loan is not necessarily entitled to receive it. In Pinehurst Neuropsychology, 
PLLC v. First-Citizens Bank & Tr. Co., the court dismissed, for lack of standing, a complaint by a 
PPP applicant alleging that the lender took too long to fund the applicant’s loan. No. 20-cv-636, 
2021 U.S. Dist. LEXIS 186525 (M.D.N.C. Sept. 29, 2021). The court held that the plaintiff 
“fail[ed] to establish that it ha[d] a legally protected interest in receiving any loan from [defendant], 
irrespective of a delay,” because the plaintiff, as a PPP borrower, was merely “a loan applicant 
whose application could have been approved or denied for a variety of reasons at [the lender’s] 
discretion.” Id. at *9–11 (citing Profiles, Inc. v. Bank of Am. Corp., 453 F. Supp. 3d 742, 748 (D. 
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Md. 2020)). It was not a cognizable injury to be deprived of something the plaintiff was not entitled 
to receive. 
The Pinehurst plaintiff’s alleged injury—economic harm caused by the lender’s purported 
delay in processing plaintiff’s loan—mirrors Plaintiffs’ allegations exactly, and the Court’s 
conclusion should follow. Prestamos is delegated authority by SBA to disburse federally-
guaranteed loans at its discretion using underwriting processes to verify that a borrower satisfies 
each of the program’s expansive eligibility criteria. SBA approval of a loan application—as 
allegedly occurred for Plaintiffs here—is necessary, but not sufficient, for a borrower’s receipt of 
loan funds in their individual bank accounts, which may be subject to additional verification 
processes. See, e.g., 86 Fed. Reg. 3692, 3708 (PPP rule describing requirements for anti-money 
laundering compliance program, which may include reliance upon customer identification 
program of federally insured depository institution or federally insured credit union). Moreover, 
SBA approval did not result in the transfer of funds to Prestamos specific to any individual 
Plaintiff’s application; rather, it merely identified the loan amount the agency would forgive for 
the borrower and guarantee for the lender. Indeed, Prestamos used its own funds that it borrowed—
at 35 basis points—from the Federal Reserve through PPPLF to make PPP loans and transfer funds 
to bank accounts identified by borrowers. See SAC ¶¶ 86–87 (citing Federal Reserve documents); 
85 Fed. Reg. 38282, 38283. As the Pinehurst court and others have concluded, and as the case 
with Plaintiffs here, an applicant does not have standing to sue to enforce a particular lender to 
disburse a PPP loan. 2021 U.S. Dist. LEXIS 186525, at *9–11; Elizabeth M. Byrnes, Inc. v. 
Fountainhead Com. Cap., LLC, No. 20-cv-4149, 2021 U.S. Dist. LEXIS 227046, at *10 (C.D. Cal. 
Nov. 24, 2021) (dismissing claim because “Plaintiff, of course, was not guaranteed to have her 
loan application approved, or otherwise entitled to any ‘use of money’” and caused her own harm 
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by “refraining from applying elsewhere”); Scherer v. Wells Fargo Bank, N.A., No. 20-cv-1295, 
ECF No. 20, at 3 (S.D. Tex. Apr. 29, 2020) (denying injunction) (“Plaintiffs fail to show how 
Plaintiffs would suffer irreparable injury if not given access to a loan specifically from Wells Fargo 
[and] why Plaintiffs could not obtain loans under the PPP through another lender.”); Profiles, 453 
F. Supp. 3d at 755 (“Since the evidence on the current record shows that there are thousands of 
institutions participating in PPP, and several that accept loans from new customers, BofA, by 
definition, has not denied Plaintiffs access to the PPP.”).4 
The SAC does not state an injury in fact for another reason—it provides no detail 
whatsoever as to the nature or extent of the harm Plaintiffs purportedly suffered. By not receiving 
a PPP loan, Plaintiff Marshall was “deprived . . . of funds that would have directly assisted in the 
operation of her . . . business and resulted in lost opportunities and other consequential damages.” 
SAC ¶ 120. The other Plaintiffs suffered identically vague injury. See id. ¶¶ 132, 141, 155, 164, 
173, 182, 191, 203, 212, and 224. Conclusory assertions such as these do not suffice to trigger 
federal jurisdiction.5 See In re Johnson & Johnson Talcum Powder Prods. Mktg., Sales Practices 
& Liab. Litig., 903 F.3d 278, 288 (3d Cir. 2018) (“While the evidentiary burdens placed on a 
plaintiff at the pleading stage are minimal, our precedent requires the plaintiff to do more than 
simply pair a conclusory assertion of money lost with a request that a defendant pay up.”). 
                                                 
4 As these opinions demonstrate, Plaintiffs’ charge that they were unable to apply for a PPP loan 
elsewhere do not reflect the settled view of the law. 
5 Plaintiffs also allege that they were harmed because they are “potentially obligated . . . to repay 
funds they never received” and must swear that they used loan funds they never received if they 
seek loan forgiveness. SAC ¶¶ 121, 122. These are too speculative to establish standing to sue. See 
TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2212 (2021) (speculative injury insufficient to 
support Article III standing).  
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As for traceability, each Plaintiff fails to allege whether and why any of the harm they 
supposedly suffered was attributable to Defendants. The pleadings make clear it was the pandemic 
that hurt Plaintiffs’ businesses. See SAC ¶¶ 98, 102, 125, 143, 157, 166, 175, 184, 193, 205, and 
214. And Plaintiffs provide no explanation for how Prestamos’s disbursement of loan proceeds 
would resolve the impact of Covid-19 on their businesses.6 Further, it is unclear Plaintiffs’ receipt 
of the loan was up to Defendants at all. The SAC itself offers other reasons why borrowers did not 
receive their loans, including that some borrowers’ banks rejected attempts by Prestamos to fund 
a PPP loan. See, e.g., SAC ¶ 227.f. This does not adequately trace any harm to Defendants, and the 
SAC must be dismissed. See Pinehurst, 2021 U.S. Dist. LEXIS 186525, at *8–9 (dismissing claim 
in part because it lacked detail about whether or why the delay was attributable to the defendant 
lender).  
B. At minimum, Plaintiffs lack standing to assert claims under the laws of states in 
which they do not reside or were not injured. 
Plaintiffs seek to bring breach of contract and unjust enrichment claims on behalf of 
themselves and a proposed national class. SAC ¶¶ 138–45. At the outset, Plaintiffs’ failure to “link 
their claim to the law of any particular state” dooms their claim as a matter of law. In re Wellbutrin 
XL Antitrust Litig., 260 F.R.D. 143, 167 (E.D. Pa. 2009). “[C]obbling together the elements of a 
[common law claim] from the laws of the fifty states”—no matter how substantively similar those 
laws may be—“is no different from applying federal common law,” which is impermissible. See 
                                                 
6 For this reason, too, Plaintiffs fail to meet the third element of standing—redressability. See 
Spokeo, 136 S. Ct. at 1547; Profiles, 453 F. Supp. 3d at 756 (denying relief because “[t]o grant 
relief, the Court must assume . . . that the [PPP] loan amount would serve as a panacea for the lost 
revenue in their respective businesses.”).  
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id. Even if Plaintiffs’ failure to receive PPP loan funds were a cognizable injury (it is not), they 
would still lack standing to raise state-law claims under the laws of states in which they do not 
reside or in which they were never injured. See id. at 157 (declining to defer resolution of plaintiffs’ 
standing until class certification and concluding that their allegations did not “connect injuries 
specific to the plaintiffs . . . to any cause arising in states where no named plaintiff” was located 
or injured). 
Resolving the issue of Plaintiffs’ claim-specific standing at this juncture avoids the need 
“to embark on lengthy class discovery with respect to injuries in potentially every state in the 
Union” and would prevent Plaintiffs from “proposing to represent the claims of parties whose 
injuries and modes of redress they would not share.” Id. at 155. This Court and others in the Third 
Circuit are in accord. See Talbert, 2021 U.S. Dist. LEXIS 88346, at *13 (“Plaintiffs have suffered 
alleged injuries under Pennsylvania and New Jersey law, so they do not have standing to assert 
state law claims under the laws of any other states.”); see also Lauren v. PNC Bank, N.A., 296 
F.R.D. 389, 391 (W.D. Pa. 2014); In re Ductile Iron Pipe Fittings Indirect Purchaser Antitrust 
Litig., No. 12-cv-169, 2013 U.S. Dist. LEXIS 142466, at *35 (D.N.J. Oct. 2, 2013). Plaintiffs’ 
claims must be dismissed at least insofar as they arise in states where no named plaintiff resides. 
II. 
Plaintiffs have no private right of action under the CARES Act and cannot 
circumvent that Congressional choice by suing under state law. 
Plaintiffs’ claims are an impermissible attempt to enforce the provisions of a statute under 
which Congress did not grant them the right to do so. Plaintiffs did not sue under the CARES Act 
because they cannot; nor, therefore, should they be able to recast such claims under state law. 
Recent decisions have rejected other plaintiffs’ attempts to enforce the CARES Act through state-
law causes of action, and this Court should do the same. 
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“[P]rivate rights of action to enforce federal law must be created by Congress.” Alexander 
v. Sandoval, 532 U.S. 275, 286 (2001). It is well settled that, when enacting the CARES Act (which 
created the PPP), Congress did not include a private right of action—express or implied. See 15 
U.S.C. §§ 9001–9141 (CARES Act); id. § 636(a)(36) (PPP amendments).7 Perhaps this was 
because the CARES Act and related rules already provide a robust enforcement scheme, which 
“tend[s] to contradict a congressional intent to create privately enforceable rights.” Sanchez v. Bank 
of S. Tex., 494 F. Supp. 3d 421, 434 (S.D. Tex. 2020) (discussing SBA’s “supervisory and 
enforcement authority to enforce” the CARES Act). In short, “nothing in its text evidences 
Congress’s intent to enable PPP loan applicants to bring civil suits against PPP lenders.” Profiles, 
453 F. Supp. 3d at 748–52. 
In such circumstances a plaintiff cannot, in the guise of state-law claims, bring what is “in 
essence a suit to enforce” a federal statute that does not contain a private right of action. Astra 
USA, Inc. v. Santa Clara Cty., Cal., 563 U.S. 110, 118 (2011). The Supreme Court’s unanimous 
opinion in Astra USA is illustrative. There, the plaintiff alleged that the defendant pharmaceutical 
company charged prices in excess of the ceilings under the Public Health Services Act, which does 
not include a private right of action. 563 U.S. at 116. The plaintiff sought to circumvent this by 
pleading a state-law breach of contract claim, alleging that the defendant violated an agreement to 
abide by the price-ceiling requirements. Id. at 115. Because the lawsuit was “in essence a suit to 
                                                 
7 Accord Profiles, Inc., 453 F. Supp. 3d at 748 (no express right of action in CARES Act); Crandal 
v. Ball, Ball & Brosamer, Inc., 99 F.3d 907, 909 (9th Cir. 1996) (same, in the Small Business Act, 
the CARES Act’s parent statute); Autumn Court Operating Co. LLC v. Healthcare Ventures of 
Ohio, No. 20-cv-4901, 2021 U.S. Dist. LEXIS 18295, at *13–16 (S.D. Ohio 2021) (no implied 
right of action). 
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enforce the statute itself,” the Supreme Court held that it must be dismissed. Id. at 118. (“The 
absence of a private right to enforce the statutory ceiling-price obligations would be rendered 
meaningless if [plaintiffs] could overcome that obstacle by suing to enforce the contract’s ceiling-
price obligations instead.”). See also, e.g., Gibbs v. SLM Corp., 336 F. Supp. 2d 1, 37–38 (D. Mass. 
2004) (dismissing contract claims seeking to enforce the Higher Education Act); Umland v. 
PLANCO Fin Servs., 542 F.3d 59, 66 (3d Cir. 2008) (plaintiff could not sue for breach of contract 
reflecting an obligation under a statute without a private right of action); Mankodi v. Trump Marina 
Assocs. LLC, 525 F. App’x 161, 166 (3d Cir. 2013) (same). 
The same rationale has borne out in similar cases involving attempts to enforce the PPP. 
See, e.g., Johnson v. JPMorgan Chase Bank, 488 F. Supp. 3d 144, 159 & n.19 (S.D.N.Y. 2020) 
(dismissing PPP claim because court could not “enforce agreements that merely incorporate 
obligations under a statute that does not itself permit the []party to enforce it”); Profiles, 453 F. 
Supp. 3d at 750–51; Radix Law PLC v. JPMorgan Chase Bank NA, 508 F. Supp. 3d 515, 520 (D. 
Ariz. 2020) (plaintiff’s state common law and statutory claims “are not viable because they are in 
essence attempts to enforce the CARES Act”). Such are the circumstances here. No matter the 
named cause of action, the only obligations Plaintiffs allege Defendants breached are those 
Prestamos purportedly had under the PPP to disburse their loans within ten days of SBA approval 
and cancel the loans after disbursement did not occur. E.g., SAC ¶¶ 51, 52, 116, 117, 252. If it 
were to award the relief Plaintiffs seek, the Court would bypass the comprehensive enforcement 
scheme authorized by Congress and promulgated by SBA and compel Defendants to give money 
to individuals who may not be entitled to receive it and where Prestamos would not be protected 
by the federal guarantees that ensured private lender participation in this federal relief program. 
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Plaintiffs’ claims are nothing more than attempts to compel Defendants to comply with the 
terms of the PPP, which—because Congress did not decide to give individuals the right to do so in 
the governing statutes—they cannot do via state law claims. See Astra USA, 563 U.S. at 118. 
Accordingly, Plaintiffs’ claims must be dismissed.  
III. 
Plaintiffs have not alleged an alter ego relationship that could subject CPLC to 
personal jurisdiction or liability. 
A. The legal standard. 
Plaintiffs do not allege that they ever contracted or dealt with CPLC, nor even that they 
thought they might be dealing with CPLC when dealing with Prestamos. Indeed, Plaintiffs 
nowhere allege that CPLC held itself out as a lender or that it ever engaged in or directed any 
activity in or to Pennsylvania. CPLC is therefore subject neither to specific nor general personal 
jurisdiction in the state. See BP Chems. Ltd. v. Formosa Chem. & Fibre Corp., 229 F.3d 254, 259 
(3d Cir. 2000) (“Specific personal jurisdiction exists when the defendant has purposefully directed 
his activities at residents of the forum and the litigation results from alleged injuries that arise out 
of or related to those activities. General personal jurisdiction exists when the defendant’s contacts 
with the forum, whether or not related to the litigation, are continuous and systematic.”). 
 
Acknowledging as much, Plaintiffs try to assert personal jurisdiction over CPLC, as well 
as vicarious liability for breach of contract and violation of California’s Unfair Competition Law, 
through an alter ego theory. SAC ¶¶ 11, 35, 258, 267. But Plaintiffs can establish neither personal 
jurisdiction nor vicarious liability as to CPLC because no well-pled factual allegations support the 
factors necessary to plead that a parent entity is the alter ego of its subsidiary. Failing to do so, 
CPLC must be dismissed from the case. 
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1. The alter ego test for personal jurisdiction. 
 
The alter ego test for personal jurisdiction is functionally identical to that for vicarious 
liability. Where a subsidiary is merely the agent of, and is controlled by, its parent corporation, the 
subsidiary’s contacts in the state may be imputed to the parent for purposes of personal jurisdiction. 
Lutz v. Rakuten, Inc., 376 F. Supp. 3d 455, 470 (E.D. Pa. 2019). “The question of whether an alter 
ego relationship exists should be examined in terms of the legal interrelationship of the entities, 
the authority to control and the actual exercise of control, the administrative chains of command 
and organizational structure, the performance of functions, and the public’s perception.” Neopart 
Transit, LLC v. CBM N.A. Inc., 314 F. Supp. 3d 628, 644–45 (E.D. Pa. 2018). “Ultimately, a 
plaintiff must show that a parent company is operating the day-to-day operations of the subsidiary 
such that the subsidiary can be said to be a mere department of the parent.” Britax Child Safety, 
Inc. v. Nuna Int’l B.V., 321 F. Supp. 3d 546, 555 (E.D. Pa. 2018). Courts in this District consider 
the following factors when deciding whether one entity is the alter ego of another for purposes of 
personal jurisdiction: 
(1) ownership of all or most of the stock of the subsidiary, (2) common officers and 
directors, (3) a common marketing image, (4) common use of a trademark or logo, 
(5) common use of employees, (6) an integrated sales system, (7) interchange of 
managerial and supervisory personnel, (8) subsidiary performing business 
functions which the principal corporation would normally conduct through its own 
agents or departments, (9) subsidiary acting as marketing arm of the principal 
corporation, or as an exclusive distributor, and (10) receipt by officers of the related 
corporation of instruction from the principal corporation. 
Id. 
2. The alter ego test for vicarious liability. 
Because CPLC and Prestamos are both incorporated in Arizona, SAC ¶¶ 26–27, Arizona 
law determines whether CPLC may be held vicariously liable for Prestamos’s conduct. See 
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McElroy v. FirstEnergy Corp., No. 18-cv-1612, 2019 U.S. Dist. LEXIS 196468, at *7 (W.D. Pa. 
Nov. 13, 2019).  Arizona law, as that of virtually all jurisdictions, “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). 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). Such control may be shown 
by, 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; 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. 
Merely controlling a subsidiary’s policy decisions does “not necessitate [the] control over 
day-to-day operations” that is necessary to impose vicarious liability. 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.”). Additionally, “[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 (emphasis added); accord Oldenburger v. Del E. 
Webb Dev. Co., 765 P.2d 531, 536 (Ariz. App. 1988). 
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These principles are hardly unique to Arizona. Pennsylvania courts likewise “recognize[] 
a strong presumption against piercing the corporate veil,” In re Blatstein, 192 F.3d 88, 100 (3d Cir. 
1999), and “will not pierce the veil unless exceptional circumstances warrant such an exceptional 
remedy.” Accurso v. Infra-Red Servs., Inc., 23 F. Supp. 3d 494, 509 (E.D. Pa. 2014). The Third 
Circuity’s test for alter ego liability is “fairly typical of the genre” and requires courts to consider 
a similar basket of factors as described above:  
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. 
Pearson v. Component Tech. Corp., 247 F.3d 471, 484–85 (3d Cir. 2001).  
The tests for veil-piercing, alter ego, instrumentality, and the identity doctrines are thus 
“generally similar, and courts rarely distinguish them.” Id. at 485. Regardless of which precise 
formulation of factors is applied, “the standard a party must meet to persuade a court to pierce the 
corporate veil is a stringent one,” Accurso, 23 F. Supp. 3d at 509, and “[s]uch a burden is 
notoriously difficult for plaintiffs to meet.” Pearson, 247 F.3d at 485. Indeed, “courts have refused 
to pierce the veil even when subsidiary corporations use the trade name of the parent, accept 
administrative support from the parent, and have a significant economic relationship with the 
parent.” Id.  
B. 
Plaintiffs do 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 Prestamos’s conduct or 
have Prestamos’s jurisdictional contacts imputed to it. SAC ¶ 7. Rather, Plaintiffs must include 
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well-pled factual allegations that plausibly could support an alter ego theory; mere averments to 
the elements are not enough to satisfy Rule 8. See Accurso, 23 F. Supp. 3d at 510. 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 U.S. Dist. 
LEXIS 31962, at *10 (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.8 SAC ¶¶ 12, 68, 82. To get there, 
Plaintiffs reason that, when the Financial Statement refers to “the Organization” and its 
participation in the PPP program or receipt of loan fees, it is referring to CPLC as distinct from 
                                                 
8 The Financial Statement is available publicly at:  
https://projects.propublica.org/nonprofits/display_audit/11175820211 (last accessed June 3, 
2022). 
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Prestamos. E.g., SAC ¶ 68. But the Financial Statement states explicitly 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,” among them 
Prestamos, are “collectively referred to as CPLC or Organization”). As a result, when the Financial 
Statement says that “the Organization” participated in PPP lending and received loan fees, it is not 
referring uniquely to CPLC. 
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 
requisite control. “[T]he 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 or jurisdiction. See Deardorff v. Cellular 
Sales of Knoxville, Inc., No. 19-cv-2642, 2022 U.S. Dist. LEXIS 18444, at *24 (E.D. Pa. Feb. 1, 
2022) (consolidated financial statements did not establish that parent “exercised daily control 
over” subsidiary necessary to establish personal jurisdiction on alter ego theory); Reynolds v. 
Turning Point Holding Co., LLC, No. 19-cv-01935, 2020 U.S. Dist. LEXIS 33163, at *8 (E.D. Pa. 
Feb. 26, 2020) (same, with respect to consolidated tax returns among parent and subsidiaries); 
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 it is recommended 
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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 dissolving the corporate line between CPLC and Prestamos. See SAC 
¶¶ 7, 35, 67, 83.9 But simply noting their affiliation 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”); Reynolds, 2020 U.S. 
Dist. LEXIS 33163, at *10 (“[T]he fact that a company is portrayed as a single brand to the public 
does not demonstrate the necessary control by defendant parent over the 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”). 
                                                 
9 These are available at: https://cplc.org/assets/files/publications/CPLC%20FY19-20%20Annual-
Report.pdf and https://www.prestamosloans.org/about-prestamos/ (each last accessed June 3, 
2022).  
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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, 
the quote Plaintiffs attribute (SAC ¶ 85) 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.”10 
Plaintiffs do not allege that they were confused as to which entity they were dealing with. 
Indeed, the loan documents make clear that the counterparty was Prestamos and nowhere reference 
CPLC. SAC Ex. A. That Plaintiffs were not—and, indeed, could not have been—confused about 
which entity they were dealing with alone 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); Savin Corp. v. Heritage Copy Prod., Inc., 
661 F. Supp. 463, 469 (M.D. Pa. 1987) (listing “the confusion of distinction between the parent 
and its subsidiary” as factor to consider in alter ego analysis for personal jurisdiction). 
3. Overlapping directors and executives. 
 
Prestamos’s three board members are CPLC executives, as is Prestamos’s President. SAC 
¶¶ 65–66. But this lone factor does not substantiate Plaintiffs’ theory, as “[t]he mere fact that 
                                                 
10 https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html (last 
accessed June 3, 2022). 
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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 
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.”). 
 
Indeed, it is a “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. To overcome this presumption, a plaintiff 
must plausibly allege that the dual officers and directors were acting “for the wrong company” 
when making decisions and supervising activities. Lieberman v. Corporacion Experienca Unica, 
S.A., 226 F. Supp. 3d 451, 470 (E.D. Pa. 2016). Here, Plaintiffs merely allege common directorates; 
they allege no facts that Prestamos’s directors or its executive were acting for “the wrong 
company,” id., when overseeing Prestamos’s affairs. 
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4. “Upstreaming” of fees to CPLC. 
 
Plaintiffs also rely on Prestamos having “upstreamed” PPP loan fees to CPLC. SAC ¶ 82. 
But there is nothing untoward about a subsidiary simply paying dividends to its parent.11 See Wady 
v. Provident Life & Accident Ins. Co. of Am., 216 F. Supp. 2d 1060, 1069 (C.D. Cal. 2002) 
(“[R]eceiv[ing] money from subsidiaries in the form of dividends and interest on loans . . . 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 usually supports 
disregarding the corporate form. See Trustees of Nat. Elevator Indus. Pension v. Lutyk, 140 F. 
Supp. 2d 447, 459 (E.D. Pa. 2001); 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 
                                                 
11 Nor, for that matter, is there anything untoward about 501(c) organization maintaining for-profit 
subsidiaries that fund the parent organization’s mission. See, e.g., Girl Scouts of Manitou Council, 
Inc. v. Girl Scouts of U.S., Inc., 646 F.3d 983, 987–88 (7th Cir. 2011). 
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litigation, courts have likewise rejected consideration of this factor in assessing alter ego claims. 
Calvert, 875 F. Supp. at 679. 
 
Simply put, Plaintiffs have plausibly alleged at most that CPLC owns Prestamos and that 
the two entities have common officers and directors. Such evidence fails to establish alter ego 
jurisdiction or liability “because it fails to demonstrate the corporate parents’ actual control over 
the daily affairs of the daily affairs of their subsidiaries.” Chocolate Confectionary Antitrust Litig., 
602 F. Supp. 2d at 571; see also In re Enter. Rent-A-Car Wage & Hour Emp. Pracs. Litig., 735 F. 
Supp. 2d 277, 324 (W.D. Pa. 2010) (no alter ego jurisdiction despite parent owning all of 
subsidiary’s stock, having overlapping directors, and using common marketing imaging, logos, 
and an integrated sales system, because none of these showed that the parent “exercised any control 
over the internal workings or day-to-day operations of its subsidiaries”); Reynolds, 2020 U.S. Dist. 
LEXIS 33163, at *11 (finding that entities “operate as a single brand with common corporate 
control,” but that such evidence “is not enough to overcome the presumption that wholly-owned 
subsidiaries are separate and distinct from their parent companies”). 
Nor do Plaintiffs include well-pled factual allegations that would establish any of the 
myriad other factors courts deem necessary 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. Plaintiffs’ failure to establish any of these 
factors, let alone daily control of Prestamos by CPLC, doom its alter ego theory both for personal 
jurisdiction and vicarious liability. These allegations do not justify hauling CPLC into a foreign 
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court and do not plausibly show how CPLC might be liable for any of Prestamos’s conduct. CPLC 
should be dismissed from the case. 
IV. 
The Amended Complaint fails to state a claim for breach of contract. 
Plaintiffs’ allegations fail even to make out a simple claim for breach of contract. The 
existence of a contract is a threshold element of a claim for breach. See CoreStates Bank, N.A. v. 
Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999). Here, there was no contract between Plaintiffs 
and Prestamos in which Prestamos committed to funding Plaintiffs’ loans, let alone doing so on 
any particular timeline. 
Plaintiffs allege that Prestamos entered into an agreement with them to fund their PPP loans 
through (1) “its agreement to make PPP loans via the Loan Documents,” (2) “its acceptance and 
approval of Plaintiffs’ PPP loan applications,” and (3) “as the counterparty to the Loan 
Documents.” SAC ¶ 248. None of these actually constituted a contract obligating Prestamos to 
fund Plaintiffs’ loans, let alone a guarantee that the funds would be deposited in the bank accounts 
that they identified. 
First, any agreement between Prestamos and the SBA for Prestamos to make PPP loans in 
compliance with the agency’s rules and regulations is not one to which Plaintiffs are a party and 
is therefore not one they can enforce. See Medevac MidAtlantic, LLC v. Keystone Mercy Health 
Plan, 817 F. Supp. 2d 515, 531–32 (E.D. Pa. 2011) And even if Plaintiffs were entitled to receive 
PPP funds under the program, “the breach of contract claims would be foreclosed by controlling 
precedent that forbids third-party suits to enforce agreements that merely incorporate obligations 
under a statute that does not itself permit the third-party to enforce it.” Johnson, 488 F. Supp. 3d 
at 158; see also Regions Bank v. Gator Equip. Rentals, LLC, No. 15-cv-5084, 2016 U.S. Dist. 
LEXIS 112938, at *16 (E.D. La. July 1, 2016) (“[I]t is well established that SBA guarantees are 
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agreements between the private lender and the SBA, which are independent of and create no rights 
in the borrowers.” (quotations omitted)). 
Second, Plaintiffs do not plausibly allege any facts to support their conclusion that 
Prestamos’s “acceptance and approval” of their PPP loan applications created a contract to fund 
the loans. To do so, Plaintiffs must point to an agreement that demonstrates an express commitment 
to provide the funds. See, e.g., Krebs v. FDIC, 851 F. Supp. 430, 433 (M.D. Fla. 1994) (“Plaintiffs 
are unable to point to any specific documentation, or written agreement or promise by [lender] that 
demonstrates a commitment to fund the end loans.”). There is no allegation that Prestamos’s 
“acceptance and approval” contained such an express promise or a guarantee that their personal 
banks would not reject a PPP loan transaction. 
Third and finally, nothing in the “Loan Documents” contained an express promise by 
Prestamos to fund the loans, either. The Note and its accompanying documents merely state the 
terms on which the borrower promises to pay “in return for the Loan” and outlines Prestamos’s 
remedies in the event of default. See generally Note. A note that recites the borrower’s obligations 
to repay a loan without an express commitment by the lender to actually fund the loan is not a 
binding contract to lend money. Mark Andrew of Palm Beaches, Ltd. v. GMAC Com. Mortg. Corp., 
265 F. Supp. 2d 366, 380–81 (S.D.N.Y. 2003); In re Vickers, 275 B.R. 401, 405–06 (Bankr. M.D. 
Fla. 2001); Jericho All-Weather Opportunity Fund, LP v. Pier Seventeen Marina & Yacht Club, 
LLC, 207 So. 3d 938, 941 (Fla. Dist. Ct. App. 2016). That some documents reference a loan does 
not equate to an explicit promise to fund a loan. 
Neither any agreement between Prestamos and the SBA, Prestamos’s approval of 
Plaintiffs’ loan applications, nor the Loan Documents created a contract whereby Prestamos 
promised to fund Plaintiffs’ loans. As Plaintiffs cannot establish this threshold element, their 
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breach of contract claim fails. See Ryan v. Temple Univ., No. 20-cv-02164, 2021 U.S. Dist. LEXIS 
77157, at *22 (E.D. Pa. Apr. 22, 2021) (Gallagher, J.) (“Plaintiffs have not identified a contractual 
duty that Defendant breached. Therefore, the Complaint fails to adequately plead an essential 
element necessary to support Plaintiffs’ claims for breach of contract, subjecting those claims to 
dismissal.”). For these reasons, too, and because Plaintiffs only sue CPLC under an alter ego theory 
of liability, the breach of contract claim against CPLC must be dismissed. 
V. 
Plaintiffs agreed to release all claims against Prestamos. 
By signing the Note, Plaintiffs expressly agreed to release all claims that might accrue 
against Prestamos relating to or arising out of the Note or the PPP Loan. Their claims here squarely 
are encompassed by the Note’s release provision. Accordingly, these claims must be dismissed. 
Each Note contains an unambiguous and broad release of claims against Prestamos. The 
Note states that the borrower: 
RELEASES, ACQUITS AND FOREVER DISCHARGES the Lender . . . from any 
and all claims . . . of whatsoever nature or character, whether statutory (including 
. . . deceptive trade practices claims), in contract or in tort [which] have accrued or 
may accrue . . . on account of any injures, damages or losses or otherwise arising 
out of or in any way connected to (i) any extension of credit by the Lender to 
Borrower on or prior to the date hereof, or (ii) any matter or thing done, omitted or 
suffered to be done by the Lender- . . . on or prior to the date hereof. 
 
Note § 10. 
  
Under Pennsylvania law, “it is firmly settled that the intent of the parties to a written 
contract is contained in the writing itself.” Duquesne Light Co. v. Westinghouse Elec. Corp., 66 
F.3d 604, 613 (3d Cir. 1995) (quoting Samuel Rappaport Family P’ship v. Meridian Bank, 657 
A.2d 17, 21 (Pa. Super. Ct. 1995)). A court must enforce a contract—including a release 
agreement—according to the plain meaning of its terms. Id. (citation omitted); Seasor v. 
Covington, 670 A.2d 157, 159 (Pa. Super. Ct. 1996). “If the language of the release is clear, the 
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court looks no further, even if the language is broad or general and no matter how ‘improvident’ 
the agreement may later prove to be for one of the parties.” Conestoga Ceramic Tile Distribs. v. 
Travelers Cas. & Sur. Co. of Am., No. 2085 C.D. 2012, 2013 Pa. Commw. Unpub. LEXIS 647, at 
*9–11 (Pa. Commw. Ct. Aug. 22, 2013) (quoting Republic Ins. Co. v. Paul Davis Sys. of Pittsburgh 
S., Inc., 670 A.2d 614, 615 (Pa. 1995)).  
The release in the Note is precisely the kind that courts have applied to bar claims related 
to the agreement containing the release. The borrowers in Front Street Development Associates, 
L.P. v. Conestoga Bank sued the lender bank for breach of loan documents and related claims for 
breach of the duty of good faith and fair dealing and other torts. See 161 A.3d 302, 305–06 (Pa. 
Super. Ct. 2017). On appeal, the court affirmed dismissal of the claims because the governing 
document contained a provision broadly releasing the lender from “any and all . . . claims . . . , 
known or unknown . . . whether statutory, in contract or in tort,” relating to or arising out of the 
loan documents and actions taken in connection with them. Id. at 308. Even though borrower’s 
claims arose several years after the loan document was executed, the court held that the contract 
language clearly indicated that the release applied even to future claims that traced back to the 
parties’ agreement, and, therefore, barred the suit. See id. at 311–12; see also, e.g., Three Rivers 
Motors Co. v. Ford Motor Co., 522 F.2d 885, 895–97 (3d Cir. 1975) (parties can release future 
claims that are contemplated at the time the release is signed).  
Applying these well-worn principles here, Plaintiffs’ claims are barred by Section 10 of 
the Note. Plaintiffs agreed to release Prestamos “for any and all claims . . . on account of any 
injuries . . . arising out of or in any way connected to” Prestamos’s extension of credit to Plaintiffs 
or any of its conduct. Note § 10 (emphasis added). The provision even specifies that the release 
encompasses contract, tort, and statutory claims, including “deceptive trade practices claims.” Id. 
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The “obvious meaning” of these terms is that Plaintiffs waived their right to bring breach-of-
contract, breach-of-good-faith, and statutory claims for Prestamos’s failure to adhere to purported 
obligations “in any way connected to” Prestamos’s agreement to loan Plaintiffs money.12 See 
Bowman v. Sunoco, Inc., 65 A.3d 901, 909 (Pa. 2013) (release of future unaccrued claims will 
cover any matter contemplated by the parties at the time the release was signed). Accordingly, 
Plaintiffs’ claims must be dismissed.  
VI. 
Plaintiffs fail to state a claim for violation of the CA UCL. 
The California Unfair Competition Law prohibits a business act or practice that is 
“unlawful, unfair, or fraudulent.” Cal. Bus. & Prof. Code § 17200. Plaintiffs allege that 
Defendants’ conduct was unlawful and unfair, but not fraudulent. See SAC ¶¶ 269–70. The 
pleadings fail to make out a plausible claim to relief: first, Plaintiffs do not allege that Defendants’ 
conduct was unlawful under the CA UCL, because they fail to allege an underlying wrongful act; 
second, Defendants’ alleged conduct was not unfair as defined by California law; and third, 
Plaintiffs have not alleged that they are entitled to their requested equitable relief. For all of these 
reasons, Plaintiffs’ CA UCL claim must be dismissed. 
                                                 
12 The release is no less broad because it is for claims related to Prestamos’s conduct “on or prior 
to the date hereof.” See Note § 10. Even strictly construing that language, Plaintiffs’ claims—that 
Prestamos failed to disburse their loans—clearly arise out of the extension of credit Prestamos 
allegedly agreed to when Plaintiffs executed their Notes and its alleged deceit. Besides, it would 
defy all logic to read the release to subject Prestamos to liability for Loan-related misconduct 
occurring at the stroke of midnight the night the Note was signed, but not that occurring before. 
See, e.g., Reed v. Pittsburgh Bd. of Pub. Educ., 862 A.2d 131, 136 (Pa. Commw. Ct. 2004) 
(declining to “impute” a construction of contract language leading to “an absurd result”); 
Binswanger of Pa., Inc. v. TSG Real Estate LLC, 217 A.3d 256, 262 (Pa. 2019) (court should “find 
an interpretation which will effectuate the reasonable result intended [by the contract]”). 
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A. Plaintiffs fail to allege that Defendants’ conduct was “unlawful.” 
In order to allege a violation of the CA UCL’s “unlawful” prong, Plaintiffs must allege a 
violation of some other, underlying law. See Hamilton v. Bank of Blue Valley, 746 F. Supp. 2d 
1160, 1179–80 (E.D. Cal. 2010). “Where a plaintiff cannot state a claim under the ‘borrowed’ law, 
she cannot state a UCL claim either.” Rubio v. Capital One Bank (USA), N.A., 572 F. Supp. 2d 
1157, 1168 (C.D. Cal. 2008) (citation omitted). The underlying violation Plaintiffs allege is 
Prestamos’s breach of “the Loan Documents and accompanying legal duties,” SAC ¶ 265, and 
CPLC’s “control[] and direct[ion]” of Prestamos in that breach, id. ¶ 267. As argued elsewhere 
herein, Plaintiffs do not plausibly claim that Defendants breached any obligation owed to 
Plaintiffs. Therefore, because the complaint alleges no “predicate violation of [another] law,” the 
CA UCL claim must be dismissed. Hamilton, 746 F. Supp. 2d at 1180. 
Additionally, Prestamos’s conduct with respect to administering Plaintiffs’ loan 
applications specifically is permitted by the rules and guidance governing the PPP. California law 
recognizes a “safe harbor rule” which prohibits using “the general unfair competition law” to 
challenge conduct that is statutorily permitted. See Cel-Tech Comm’ns, Inc. v. L.A. Cellular Tel. 
Co., 973 P.2d 527, 541 (Cal. 1999). If a law expressly permits conduct, or prohibits an action based 
on that conduct, then that conduct cannot be the basis of a CA UCL claim. See Klein v. Chevron 
U.S.A., Inc., 202 Cal. App. 4th 1342, 1379 (Cal. Ct. App. 2012). As argued, there is no private right 
of action in either the CARES Act or the PPP. Moreover, under the implementing regulations, PPP 
Lenders (like Prestamos) possess “discretion” to approve or deny loan applications “for a variety 
of reasons.” Pinehurst, 2021 U.S. Dist. LEXIS 186525, at *10; see also Profiles, 453 F. Supp. 3d 
at 748. Federal law simply does not bar anything Plaintiffs allege Prestamos or CPLC to have 
done. Plaintiffs cannot use the CA UCL to circumvent those choices by Congress. See, e.g., 
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Loeffler v. Target Corp., 324 P.3d 50, 76–77 (Cal. 2014) (“The UCL cannot . . . impose on retailers 
a duty with respect to sales tax that is contradicted by the statutory scheme governing the sales 
tax.”); Lopez v. World Sav. & Loan Ass’n, 105 Cal. App. 4th 729, 741–42 (Cal. Ct. App. 2003) 
(“[T]he UCL remains available to remedy a myriad of potential [conduct], so long as the practice 
is outside the scope of federal regulation. (emphasis added)). 
B. Plaintiffs fail to allege that Defendants’ conduct was “unfair.” 
In consumer cases arising under the CA UCL, a business practice is “unfair” when “it 
offends an established public policy or when the practice is immoral, unethical, oppressive, 
unscrupulous or substantially injurious to consumers.” Holt v. Noble House Hotels & Resort, Ltd, 
370 F. Supp. 3d 1158, 1163 (S.D. Cal. 2019) (citation omitted). California courts employ two tests 
to determine whether a business practice is unfair: one, explained in Cel-Tech, 973 P.2d at 544, 
assessing whether the alleged unfairness is “tethered to some legislatively declared policy or proof 
of some actual or threatened impact on competition”; or two, a balancing test weighing “the utility 
of the defendant’s conduct against the gravity of the harm to the alleged victim,” S. Bay Chevrolet 
v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861, 886 (Cal. Ct. App. 1999). See also Lozano 
v. AT&T Wireless Servs., 504 F.3d 718, 735–36 (9th Cir. 2007) (discussing split in California 
appellate courts). 
Under either test, the allegations here are inadequate. Although whether conduct is “unfair” 
often is a fact-intensive question, California courts have not hesitated to dismiss claims similar to 
Plaintiffs’ outright. See, e.g., Kunert v. Mission Fin. Servs. Corp., 110 Cal. App. 4th 242, 265 (Cal. 
Ct. App. 2003) (car dealers’ practice of receiving extra fees related to financing was not illegal and 
it was “scarcely unfair” for dealers to “seek a profit on the credit services they provide”); Chavez 
v. Whirlpool Corp., 93 Cal. App. 4th 363, 374–75 (Cal. Ct. App. 2001) (conduct that was not 
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unreasonable restraint on trade could not, as a matter of law, be “unfair” under the UCL). Courts 
in this circuit also have denied CA UCL unfair-conduct claims, especially where the pleadings fail 
to weigh relevant policy considerations or where they challenge conduct regulated or authorized 
by federal law. See, e.g., SEPTA v. Gilead Scis., Inc., 102 F. Supp. 3d 688, 707 (E.D. Pa. 2015).  
C. Plaintiffs fail to allege that they are entitled to equitable relief. 
The CA UCL provides only two remedies for an injured consumer: restitution and 
injunctive relief. Plaintiffs here seek both. SAC ¶ 276. But both are equitable in nature, and are 
foreclosed by federal law that equitable relief is unavailable where a legal remedy may be 
sufficient. And Plaintiffs specifically cannot get restitution because they do not plausibly allege 
that Defendants took property from Plaintiffs in which they had a vested interest. Accordingly, 
failing to allege that they are entitled to any relief, Plaintiffs’ claim must be denied. 
Even when applying state substantive law, federal courts must follow federal law that 
equitable relief is only available where the plaintiff establishes they lack an adequate remedy at 
law. See Sonner v. Premier Nutrition Corp., 971 F.3d 834, 842–44 (9th Cir. 2020) (collecting cases, 
including Hertz v. Record Publ’g Co., 219 F.2d 397, 398 n.2 (3d Cir. 1955)). The SAC alleges in 
a passing and conclusory manner only that Plaintiffs are entitled to equitable relief “in the 
alternative and to the extent that their breach of contract claim fails to adequately award their 
damages.” SAC ¶ 276. This hardly suffices to state that a legal remedy is inadequate, especially 
because the equitable relief mirrors the damages sought exactly. Id. (seeking injunctive relief 
“directing Prestamos to fund [the] loans” or restitution in the amount of the “wrongfully withheld 
PPP loan proceeds”). Thus, the CA UCL claim should be dismissed. Sonner, 971 F.3d at 844 
(dismissing CA UCL claim because the complaint failed to allege the plaintiff lacked an adequate 
legal remedy and sought “the same sum in equitable restitution” as it “requested in damages”); 
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Elizabeth M. Byrnes, 2021 U.S. Dist. LEXIS 227046, at *15–16 (dismissing CA UCL claim related 
to a PPP loan for the same reasons).  
Additionally, Plaintiffs are not entitled to an order of restitution, which is one “compelling 
a UCL defendant to return money obtained through an unfair business practice to those persons . . 
. who had an ownership interest in the property . . . .” Korea Supply Co. v. Lockheed Martin Corp., 
63 P.3d 937, 944–45 (Cal. 2003). Restitution is only appropriate to restore the “status quo” by 
“returning to the plaintiff funds in which he or she has an ownership interest.” Id. The interest must 
be “vested”; a mere “contingent expectancy of payment” is not recoverable. Ozeran v. Jacobs, 798 
F. App’x 120, 122–23 (9th Cir. 2020). And a plaintiff cannot obtain restitution to disgorge the 
defendant of money it received from a third party. Drew v. Am. Home Prods. (In re Diet Drugs 
Prods. Liab. Litig.), No. 00-cv-21044, 2012 U.S. Dist. LEXIS 49319, at *5 (E.D. Pa. Apr. 9, 2012). 
Here, Plaintiffs acknowledge in the complaint that they never possessed the loan proceeds 
they now allege Defendants were enriched by. See, e.g., SAC ¶ 106. Moreover, they allege that the 
only payments Prestamos received were from SBA, a third party. See, e.g., id. ¶¶ 81–96. Because 
the expectation of receiving a loan under a promissory note—when Plaintiffs have not paid 
anything to the defendants—does not confer on Plaintiffs a vested ownership interest in those loan 
proceeds, they are not entitled to recover that loan through restitution. Cf. Pinehurst, 2021 U.S. 
Dist. LEXIS 186525, at *9–11.  
VII. 
Plaintiffs fail to state a claim under the ICFA. 
The Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”) prohibits 
“unfair or deceptive acts or practices” and affords a remedy to “consumers” who are harmed by 
such practices. 815 Ill. Comp. Stat. 505/1. This claim is untenable for several reasons. 
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A. The ICFA claim duplicates Plaintiffs’ contract claim. 
Illinois law is clear that the breach of a contract cannot give rise to a consumer fraud claim; 
if the alleged consumer fraud and contractual claim “rest on the same factual foundation,” the 
claim must be dismissed. Turner v. Orthopedic & Shoulder Ctr., S.C., 82 N.E.3d 801, 807 (Ill. Ct. 
App. 2017) (quotations omitted). Indeed, the basis for Plaintiffs’ ICFA claim is that Prestamos 
“falsely communicated its promises to” “fulfill the terms of its written agreements with” Plaintiffs, 
hold Plaintiffs to obligations in those agreements, and otherwise act as a “Lender.” SAC ¶ 280. 
“The very language of [the] amended complaint proclaims that the asserted consumer fraud was a 
breach of contract,” and, accordingly, the claim should be dismissed. Turner, 82 N.E.3d at 807–08 
(ICFA claim in complaint specifically referenced contractual obligations); see also Avery v. State 
Farm Mut. Auto Ins. Co., 835 N.E.2d 801, 844 (Ill. 2005) (“[A] ‘deceptive act or practice’ involves 
more than the mere fact that a defendant promised something and then failed to do it.”); Cafferty 
Clobes Meriwether & Sprengel, LLP v. XO Communs. Servs., 190 F. Supp. 3d 765, 772 (N.D. Ill. 
2016) (“Even a widespread or systemic breach of contract does not suffice to state a claim for 
consumer fraud under the statute, notwithstanding a plaintiff’s assertion that the breach implicates 
consumer-protection concerns.” (quotation omitted)). 
B. The ICFA claim is subject to, but does not meet, a heightened pleading standard 
under Rule 9(b). 
Plaintiffs’ ICFA claim alleges fraudulent conduct on the part of Prestamos and is therefore 
subject to a heightened pleading standard which Plaintiffs fail to meet. Duarte v. Convergent 
Outsourcing, Inc., No. 12-cv-06051, 2018 U.S. Dist. LEXIS 117783, at *5 (N.D. Ill. July 16, 2018) 
(citation omitted); Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 737 (7th Cir. 2014) (a 
claim of “unfair” conduct under the ICFA is subject to Rule 9(b) when the alleged conduct still is 
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“premised upon the primary claim” that the defendant engaged in deception). Federal Rule of Civil 
Procedure 9(b) requires a plaintiff to “state with particularity the circumstances constituting fraud.” 
And Plaintiffs’ allegations that “Prestamos” “concealed and suppressed material facts concerning 
funding” Plaintiffs’ loans “[i]n the course of its business,” SAC ¶ 280, are vague and do not come 
close to specifying the “who, what, when, where, and how of” the alleged fraud that is necessary 
to sustain their claim. Camasta, 761 F.3d at 737. Moreover, nowhere in the complaint do Plaintiffs 
allege, even conclusorily, that Prestamos intended to deceive Plaintiffs, a required element of an 
ICFA claim. Cohen v. Am. Sec. Ins. Co., 735 F.3d 601, 608 (7th Cir. 2013).  
C. Plaintiffs’ vague allegations do not make out an actionable ICFA claim. 
Plaintiffs fail to describe conduct on the part of Prestamos that is covered by the statute. 
The ICFA applies to “unfair” as well as deceptive conduct. To determine whether conduct is 
“unfair,” Illinois courts balance three factors: “(1) whether the practice offends public policy; (2) 
whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial 
injury to consumers.” Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951, 960–61 (Ill. 2002) 
(adopting the test set forth in Fed. Trade Comm’n v. Sperry & Hutchinson Co., 405 U.S. 233 
(1972)). Plaintiffs may pepper these terms throughout the SAC (albeit in connection with other 
claims, e.g., SAC ¶¶ 270–72) but the “bare assertion of unfairness without describing in what 
manner the [conduct] either violate[s] public policy or [is] oppressive is insufficient to state a cause 
of action” under the ICFA. Robinson, 775 N.E.2d at 963 (dismissing ICFA claim based on 
allegations that financing company charged excessive penalties, failed to disclose capitalization 
charges, and engaged in unfair early termination practices). Plaintiffs’ gripe with Prestamos is that 
it allegedly breached an SBA-form promissory note, despite the pleadings recognizing the 
existence of other causes (e.g., Plaintiffs’ banks rejecting the loans). Without more, the allegations 
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that Prestamos breached a contract do not rise to the level of violating public policy or “oppressive” 
conduct. Plaintiffs’ ICFA claim should be dismissed. 
VIII. 
Plaintiffs fail to state a claim under the Ohio Deceptive Trade Practices Act.13 
A. The ODTPA does not protect Plaintiffs because they are consumers under the 
statute. 
Plaintiffs have not alleged the kind of commercial injury necessary to state a claim under 
the ODTPA. Ohio courts look to Lanham Act cases to interpret the ODTPA, as the two statutes are 
analogous. Worthington Foods, Inc. v. Kellogg Co., 732 F. Supp. 1417, 1431 (S.D. Ohio 1990). 
Consumer suits are barred under the Lanham Act because “a plaintiff must allege an injury to a 
commercial interest in reputation or sales” to come within the statute’s zone of interests. Lexmark 
Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014). Applying these principles, 
nearly all federal courts to have reached the question hold that the ODTPA bars consumer suits. 
See Borden v. Antonelli Coll., 304 F. Supp. 3d 678, 685 (S.D. Ohio 2018) (collecting cases).14 So 
has every Ohio appellate court to have considered the question. See Torrance v. Rom, 157 N.E.3d 
172, 188 (Ohio Ct. App. 2020); Michelson v. Volkswagen Aktiengesellschaft, 99 N.E.3d 475, 479 
(Ohio Ct. App. 2018); Hamilton v. Ball, 7 N.E.3d 1241, 1253 (Ohio Ct. App. 2014); Dawson v. 
Blockbuster, Inc., No. 86451, 2006 Ohio App. LEXIS 1138 (Ohio Ct. App. Mar. 16, 2006). Absent 
                                                 
13 Although Count Four is captioned “Violation of the Ohio Consumer Sales Practices Act, Ohio 
Rev. Code § 1345.01, et seq,” SAC at 70, Plaintiffs have clarified that they are suing only under 
the ODTPA. Pl.’s Mem. of Law in Opp. to Def.’s Mot. to Dismiss Pl.’s Am. Compl. at 33, n.4, 
ECF No. 29. Accordingly, Defendants address Plaintiffs’ failure to allege an ODTPA claim, while 
reserving their right to seek dismissal of an OCSPA claim should Plaintiffs seek to pursue it. 
14 Only two cases have held otherwise, and neither has been followed by other courts. See 
Schumacher v. State Auto. Mut. Ins. Co., 47 F. Supp. 3d 618, 632 (S.D. Ohio 2014); Bower v. Int’l 
Bus. Machs., Inc., 495 F. Supp. 2d 837, 843 (S.D. Ohio 2007). 
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an indication that the Ohio Supreme Court would decide the matter differently (and the Sixth 
Circuit, in Holbrook v. La.-Pac. Corp., 553 F. App’x 493, 498 (6th Cir. 2013), found none), these 
decisions must be afforded significant weight. City of Philadelphia v. Lead Indus. Ass’n, Inc., 994 
F.2d 112, 123 (3d Cir. 1993). 
This class action is a consumer suit according to Plaintiffs’ amended complaint. While 
Plaintiffs artfully omit use of the word “consumer” in Count Four (ODTPA), they identify 
members of the Illinois subclass as “consumers,” SAC ¶ 284, and there is no basis in the complaint 
for this distinction. Taking Plaintiffs at their word, as consumers, Plaintiffs cannot sue under the 
ODTPA. None of the Plaintiffs are corporate entities and the fact that the loans were for their sole 
proprietorships is beside the point; Plaintiffs still have not alleged an “injury to a commercial 
interest in reputation or sales.” Lexmark, 572 U.S. at 118; see also id. (“Even a business misled by 
a supplier into purchasing an inferior product is, like consumers generally, not under the [Lanham] 
Act’s aegis.”). Their claim should be dismissed. 
B. The allegations do not make out an ODTPA claim in any event. 
Even if Plaintiffs were covered by the statute, they still have not stated an ODTPA claim. 
Prestamos did not falsely promise to “act as a ‘Lender,’” SAC ¶ 299, just because it did not fund 
these Plaintiffs’ loans: a financial institution need not lend money to anyone who asks for it to hold 
itself out as a lender. Nor did Prestamos fail to perform its obligations to Ohio borrowers or fulfill 
the terms of its written agreements with them, because no agreement included an absolute 
guarantee that Plaintiffs would receive a PPP loan, particularly in light of the impediments that 
Plaintiffs’ amended complaint identifies. And, like the ICFA, a breach of contract does not suffice 
to give rise to a claim under the ODTPA. See JP Morgan Chase Bank, N.A. v. Safeco Ins. Co. of 
Am., No. 02-16014, 2012 U.S. Dist. LEXIS 74570, at *12 (N.D. Ohio May 30, 2012) (dismissing 
Case 5:21-cv-04337-JMG     Document 46-1     Filed 06/03/22     Page 44 of 46

 
 
 
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ODTPA claims as failing to allege independently tortious conduct or misrepresentations outside of 
the “contract documents). Lacking sufficient allegations of deception or intent, and based merely 
on the same conduct as their contract claim, Plaintiffs’ ODTPA claim should be dismissed. 
IX. 
Plaintiffs fail to state a claim for unjust enrichment. 
Plaintiffs fail to state a claim of unjust enrichment against CPLC. “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 
ordinary course. See Halstead v. Motorcycle Safety Found., Inc., 71 F. Supp. 2d 455, 459 (E.D. Pa. 
1999) (“[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 CPLC’s properly received 
dividends 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 Simons v. Park City RV Resort, LLC, 354 P.3d 
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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”). Pennsylvania courts have rejected this 
strategy—where misconduct is alleged only as to a subsidiary, an unjust enrichment claim seeking 
allegedly ill-gotten proceeds transferred from the subsidiary to the parent is not viable. Commw. 
by Shapiro v. Golden Gate Nat’l Senior Care LLC, 194 A.3d 1010, 1035 (Pa. 2018). 
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”). Plaintiffs’ alternative claim of unjust enrichment must be dismissed. 
CONCLUSION 
For the foregoing reasons, Defendants respectfully request that the Court dismiss Plaintiffs’ 
Second Amended Complaint, with prejudice. 
Dated: June 3, 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) 
 
 
 
HERRERA ARELLANO LLP 
 
 
 
 
Roy Herrera* 
 
 
Daniel A. Arellano* 
 
 
Jillian Andrews* 
 
 
*pro hac vice admission to be sought 
 
 
 
Attorneys for Defendants
Case 5:21-cv-04337-JMG     Document 46-1     Filed 06/03/22     Page 46 of 46

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