Memorandum in Support re 154 Motion for Reconsideration — Marshall v. Prestamos CDFI, LLC (Dkt. 155, 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. 155 · 2025-05-07 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF PENNSYLVANIA 
 
 
ALICIA MARSHALL, et al.,  
 
 
 
 
Plaintiffs, 
 
 
 
v. 
 
PRESTAMOS CDFI, LLC, 
 
 
 
 
Defendant. 
 
 
 
Civil Action No. 5:21-cv-04337-JMG 
 
 
 
 
 
 
 
 
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ MOTION FOR PARTIAL 
RECONSIDERATION OF THE COURT’S APRIL 30, 2025 RULING 
 
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Plaintiffs’1 respectfully submit this memorandum in support of their motion for partial 
reconsideration of the Court’s ruling filed April 30, 2025 that denied Plaintiffs’ motion for class 
certification, and granted in part and denied in part defendant Prestamos’ motion to exclude 
Plaintiffs’ expert reports and testimony (the “Ruling”). 
Plaintiffs seek reconsideration of the Court’s Ruling limited to only Plaintiffs’ request that 
the Court certify their Declaratory Judgment Class under Fed. R. Civ. P. 23(b)(2). Plaintiffs do so 
because a) the Court’s Ruling did not address Plaintiffs’ requests for Rule 23(b)(2) class 
certification or declaratory judgment relief; b) the Court’s reasoning in its Ruling denying class 
certification under Rules 23(a) and (b)(3) supports certification under Rule 23(b)(2) of Plaintiffs’ 
claim for a classwide declaration that defendant Prestamos be barred from seeking repayment of 
the PPP loans at issue; and c) the undisputed evidence already in the record in this case reflects 
that Prestamos has attempted to seek repayment plus interest of certain Plaintiffs’ loans.  
Summary of Factual and Procedural History 
Plaintiffs filed their operative Third Amended Class Action Complaint on May 2, 2024. 
ECF No. 108. Plaintiffs’ TAC alleges both a Damages Class under Fed. R. Civ. P. 23(a) and 
(b)(3), and a Declaratory Judgment Class under Fed. R. Civ. P. 23(a) and (b)(2). Id. ¶¶ 376 – 377.  
Plaintiffs’ TAC alleges also specifically alleges that the Court should certify the 
Declaratory Judgment Class under Rules 23(a) and (b)(2) “because Prestamos has acted and 
refused to act on grounds that apply classwide such that injunctive or corresponding declaratory 
judgment relief is appropriate respecting the Declaratory Judgment Class as a whole[.]” Id. ¶ 
416. Plaintiffs allege “that the Court should declare specifically … 
d. 
that Prestamos is also precluded as a matter of law from seeking or 
 
1  
Capitalized terms used but not otherwise defined herein have the same meaning set forth 
in Plaintiffs’ Brief in Support of Plaintiffs’ Motion for Class Certification. ECF No. 139. 
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obtaining any money or other relief, whether payment or repayment of 
principal, interest or attorneys’ fees or other costs, from Plaintiffs and 
class members in connection with their PPP loans with Prestamos, 
including any action that negatively impacts their credit rating.”  
 
Id. ¶ 416(d). Accord Id. Prayer for Relief D (requesting “a judgment under 28 U.S.C. § 2201 and 
Fed. R. Civ. P. 57 determining the parties’ respective rights and obligations as alleged”). 
Both before and following the filing of the TAC, the parties engaged in fact and expert 
discovery bifurcated between class certification (Phase I) and merits (Phase II) discovery 
pursuant to the Order of the Court. ECF No. 102.  
On September 6, 2024, Plaintiffs filed their motion for class certification and 
accompanying brief and appendix of exhibits in support. ECF Nos. 138-139. Plaintiffs’ motion 
for class certification also sought to separately certify the Declaratory Judgment Class pursuant 
to Fed. R. Civ. P. 23(a) and (b)(2). ECF No. 138 at 1-2; ECF No. 139 at 11-12. Plaintiffs 
specifically argued in their brief that “Plaintiffs’ claims for a judgment that they need not repay 
arises from the same conduct and applies to all class members, or none of them. The 
[Declaratory Judgment] class is also cohesive, clearly defined and ascertained; and the claim 
seeks exclusively non-damage relief.” Id. at 11.  
The appendix accompanying Plaintiffs’ motion for class certification contains undisputed 
evidence indicating that Prestamos has already attempted to seek repayment of PPP loans from at 
least three of the Plaintiffs. See ECF No. 139-20 at 3 (testimony on Prestamos’ cross-
examination of plaintiff Lloyd that Lloyd filed and is maintaining this lawsuit “[t]o make sure 
that it is settled to the way that it should be so that I am not reported as defaulted with the SBA, 
to stop Prestamos coming after me to collect money on funds that I never received. Which is 
what you guys are doing.”); ECF No. 139-20 at 6 (accord; testimony of plaintiff Johnson that “I 
want to say I believe they did send something stating that they wanted to be repaid for the loan 
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with interest”); ECF No. 139-20 at 7 (accord; testimony of plaintiff Townsend that “Oh, because 
basically [Prestamos] sent me an E-mail asking me to repay money that I’ve never gotten 
back.”). See also ECF No. 108 ¶¶ 296-298 (quoting directly from Prestamos’ invoices to plaintiff 
Lloyd seeking repayment of $20,832.00 in principal plus 1% interest); Exhibit A filed herewith 
(containing Prestamos’ invoices and correspondence to plaintiff Lloyd). 
On October 4, 2024, Prestamos filed its brief and accompanying appendix in opposition 
to Plaintiffs’ motion for class certification. ECF No. 142. Also on October 4, 2024, Prestamos 
filed a motion to strike the expert reports that Plaintiffs filed with their motion for class 
certification and to exclude Plaintiffs’ expert testimony. ECF Nos. 143-144. On October 18, 
2024, Plaintiffs filed their opposition to Prestamos’ motion to strike Plaintiffs’ expert reports and 
testimony. ECF No. 146. Prestamos’ brief in opposition to class certification specifically 
addressed and opposed Plaintiffs’ separate request for Rule 23(b)(2) class certification. See ECF 
No. 143 at 13. 
In addition to seeking repayment of PPP loans from plaintiffs Lloyd, Johnson and 
Townsend as noted above, additional evidence Prestamos itself filed with its opposition to class 
certification also reflects that Prestamos via its PPP loan service provider Blueacorn sought 
repayment on other unfunded class member PPP loans. See ECF No. 142-25. 
Standards for Motions for Reconsideration 
 
Plaintiffs are mindful of the Court’s Policy and Procedure § II. B. 7., which states that 
motions for reconsideration “should be filed sparingly.” Plaintiffs respectfully submit that the 
Court should grant partial reconsideration of the Court’s Ruling in the circumstances here as the 
Court has done in other cases to prevent manifest injustice -- which in this case would result if 
the Court denies class certification without considering Plaintiffs’ separate claim for a 
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declaratory judgment barring Prestamos from seeking repayment and class certification under 
Fed. R. Civ. P. 23(a) and (b)(2). See, e.g., Harrison v. City of Lancaster, 2021 WL 2454500, at 
*2 (E.D. Pa. June 16, 2021) (Gallagher, J.) (granting motion for reconsideration; “A district court 
may reconsider and amend a judgment based on … ‘(3) the need to correct clear error of law or 
prevent manifest injustice.’”) (citation omitted); Martz v. Norfolk Southern Railway Co., 2023 
WL 2632213, at *3 (E.D. Pa. Mar. 24, 2023) (Gallagher, J.) (accord; granting motion for 
reconsideration of order imposing sanctions; holding that whether to grant a motion for 
reconsideration “is discretionary”).   
             The case for reconsideration is even stronger here because Rule 23 expressly allows 
district courts to “alter[] or amend[]” an “order that grants or denies class certification” at any 
time “before final judgment.” Fed. R. Civ. P. 23(c)(1)(C). Indeed, courts including the Third 
Circuit have held that this rule permits plaintiffs “multiple bites” at the class certification 
“apple.” Hargrove v. Sleepy’s LLC, 974 F.3d 467, 476 (3d Cir. 2020). Accord Mallory v. Eyrich, 
922 F.2d 1273, 1282 (6th Cir. 1991); Cody v. City of St. Louis ex rel. Medium Sec. Inst., 103 F.4th 
523, 529 (8th Cir. 2024). See also Connelly v. Amazon.com Services, LLC, 2025 WL 693258, at 
*7 (E.D. Pa. March 4, 2025) (Gallagher, J.) (granting class certification where “the Court can 
modify the proposed classes so that the individualized liability issues created by the app are 
eliminated” and holding that “[t]he Court will use this more limited definition to reconstruct both 
of Plaintiff’s primary classes”). 
Argument 
The Court should grant partial reconsideration of its Ruling for several reasons. First, the 
Court’s only reference in the Ruling to Plaintiffs’ Declaratory Judgment Class was to repeat the 
definition of that Class. ECF No. 152 at 6. The Court did not otherwise address Plaintiffs’ request 
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for certification of that Class under Rule 23(b)(2), or Plaintiffs’ corresponding request for a 
declaration barring Prestamos from seeking repayment of Plaintiffs’ and class members’ PPP 
loans. The Court should grant partial reconsideration for this reason alone.2 
Second, Plaintiffs are aware both that, by its express terms, a Rule 23(b)(2) class also has 
to also satisfy the requirements of Rule 23(a), and that the Court’s Rule 23(a) analysis in its 
Ruling “focus[ed] on the two that doom Plaintiffs’ class certification efforts—commonality and 
typicality.” ECF No. 152 at 13. But the Court’s analysis of those two Rule 23(a) requirements 
supports granting class certification to the Declaratory Judgment Class.  
In particular, in holding that Plaintiffs fail to meet typicality under Rule 23(a)(3), the 
Court explicitly acknowledged that “Plaintiffs raise the same claims and allegedly suffered the 
same injuries ….” ECF No. 152 at 16. The Court held that Plaintiffs failed to satisfy typicality 
not because Plaintiffs’ claims were materially different, but instead because “they are subject to 
unique defenses. As explained before, Plaintiffs’ banks returned their PPP loans for many 
different reasons” which “’thus implicate different defenses.’” Id. (emphasis added; citation 
omitted). 
Plaintiffs’ request for a declaratory judgment barring Prestamos from seeking repayment 
of the PPP loans also indisputably raises the same claims. But critically, moreover, that claim is 
not subject to any individualized defenses that Prestamos has even argued -- much less supported 
by any evidence in the record -- regarding why any of Plaintiffs’ banks returned the loans, or any 
other reasons why Plaintiffs’ and Declaratory Judgment Class members’ PPP loans were 
 
2  
Respectfully, the Ruling also mistakenly states in the sentence preceding the definitions 
of the Damages Class and Declaratory Judgment Class that “Plaintiffs seek certification of two 
classes under Federal Rule of Civil Procedure 23(a) and (b)(3)[.]” ECF No. 152 at 5 (emphasis 
added). As noted above, Plaintiffs seek certification of the Declaratory Judgment Class only 
under Rules 23(a) and (b)(2). 
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ultimately not funded. Instead, the claim necessarily is predicated on the indisputable fact that 
the loans were not ultimately funded. The claim thus turns exclusively on the corresponding 
question whether Prestamos should be barred from seeking any repayment on those loans.  
Furthermore, that question is indisputably typical to all Plaintiffs and Declaratory 
Judgment Class members -- none of whom want to face repaying loans they didn’t obtain. The 
claim is thus cohesive fully classwide. In sum, why the loans weren’t funded is legally and 
factually irrelevant to this claim. At a very minimum, the Court should reconsider its Ruling to 
factor into the Rule 23 analysis Plaintiffs’ separate claim for declaratory judgment relief.    
The Court’s commonality analysis similarly turned “on the many possible reasons why 
each Plaintiff’s loans were returned.” Id. at 14-15. The Court stated that “[t]he central question, 
according to Plaintiffs, is whether their PPP loans should ever have been canceled.” Id. at 14. 
The Court also made the merits determination as a matter of law that, because “Plaintiffs do not 
identify any other regulation that creates a duty to cancel unfunded loans … Prestamos had no 
duty under any regulatory or contractual provision to cancel Plaintiffs’ unfunded loans. Without 
such a duty, the central question cannot be answered in ‘one fell swoop.’” Id. at 16 (citation 
omitted; emphasis added). 
Once again, that same reasoning also supports granting partial reconsideration of the 
Court’s Ruling. Whether Plaintiffs are entitled to a classwide declaration on their separate claim 
that Prestamos be barred as a matter of law from seeking repayment on these unfunded loans is 
indisputably answerable “in one fell swoop.”  
Since the loans at issue weren’t ultimately funded as the Ruling acknowledges and the 
parties agree, no Plaintiff or class member should have to repay the loans or have their credit 
adversely affected. All Plaintiffs and class members share this claim.  In the language of Rule 
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23(b)(2), the claim thus raises the simple question of whether “corresponding declaratory 
judgment relief is appropriate respecting the class as a whole” -- in the form of a declaration 
barring Prestamos from seeking repayment or harming any Plaintiffs’ or class members’ credit 
concerning loans they didn’t obtain.  As the Ruling also already also holds (apparently as a 
matter of law) that “Prestamos had no duty … to cancel Plaintiffs’ unfunded loans” as noted 
above (id.), the equities favor the Court also adjudicating the merits of Plaintiffs’ claim that 
Prestamos be barred classwide from seeking repayment. Once again at a bare minimum, the 
Court should grant limited reconsideration of the Ruling to include Plaintiffs’ Rule 23(b)(2) 
declaratory judgment claim in the class certification analysis. 
Finally, the need for a uniform, classwide determination of whether Plaintiffs and the 
other members of the Declaratory Judgment Class are entitled a declaration barring Prestamos 
from seeking repayment or interfering with their credit is not theoretical but real world with 
direct consequences. The evidence in the record shows that Prestamos has already sought 
repayment from plaintiffs Lloyd, Johnson and Townsend as also noted above. This evidence is 
also undisputed. And as also noted above, Prestamos’ own opposition to class certification 
contains additional evidence of Prestamos or its lender service provider Blueacorn seeking 
repayment (on Prestamos’ behalf) from other class members, although Prestamos also included 
purported Blueacorn “Correction Emails” regarding some alleged repayments. See ECF Nos. 
142-25, 142-26.  
Again at a bare minimum, any uncertainties regarding whether Prestamos is or is not 
entitled to repayment, including based on Prestamos’ own evidence, renders classwide 
adjudication of that issue even more important. It simply cannot reasonably or fairly be that some 
unfunded Plaintiffs and class members get hit with repayment and/or impairment to their credit 
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rating, while others do not.  At issue now, however, isn’t Plaintiffs’ alleged entitlement to that 
declaratory judgment relief. Rather, it is whether the Court should grant partial, limited 
reconsideration of its Ruling to include and address that issue in its class certification analysis, 
and grant limited class certification because the claim is shared classwide and otherwise meets 
all requirements of Rules 23(a) and (b)(2). 
Conclusion 
For the foregoing reasons, Plaintiffs respectfully request that the Court grant partial 
reconsideration of its ruling denying class certification, and grant class certification to Plaintiffs’ 
declaratory judgment claim pursuant to Fed. R. Civ. P. 23(a) and (b)(2). 
Dated: May 7, 2025   
 
 
Respectfully submitted, 
 
Bailey & Glasser LLP 
 
By: /s/ Lawrence J. Lederer  
 
Lawrence J. Lederer (Pa. ID 50445) 
Bart D. Cohen (Pa. ID 57606) 
1622 Locust Street 
Philadelphia, PA 19103 
T.: 202.463-2101 
F.: 202.463-2103 
llederer@baileyglasser.com 
bcohen@baileyglasser.com  
Bailey & Glasser LLP 
Michael L. Murphy (admitted pro hac vice)  
1055 Thomas Jefferson Street NW, Suite 540 
Washington, DC 20007 
T.: 202.463-2101 
F.: 202.463-2103 
mmurphy@baileyglasser.com  
Whiteman Osterman & Hanna LLP 
Justin A. Heller (pro hac vice) 
Matthew M. Zapala (pro hac vice) 
80 State Street, 11th Floor 
Albany, NY 12207 
T:  (518) 487-7600 
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F:  (518) 432-3123 
jheller@woh.com  
mzapala@woh.com  
 
Attorneys for Plaintiffs and the Proposed Classes 
 
 
 
 
 
 
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CERTIFICATE OF SERVICE 
I hereby certify that on the 7th day of May, 2025, the foregoing was electronically filed 
and served through the Court’s CM/ECF system to counsel of record. 
/s/ Lawrence J. Lederer                      
 
Lawrence J. Lederer 
 
 
 
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