Ndzaka Mouanda Raises Primarily State Claims in Federal Court Challenging Navy Federal Credit Union

The Court vacated its December 30, 2024 Memorandum and Recommendation (ECF 28). ECF 32. Having considered the parties’ submissions and the law, the Court recommends Defendant’s Motion to Dismiss (ECF 24) be denied as to subject matter jurisdiction but all Plaintiff’s claims be dismissed with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6).

The District Judge referred this case to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(A) and (B), the Cost and Delay Reduction Plan under the Civil Justice Reform Act, and Federal Rule of Civil Procedure 72. ECF 4.

The Court has the inherent authority to dismiss claims for failure to state a claim as long as the procedure used to do so is fair.

McCullough v. Lynaugh, 835 F.2d 1126, 1127 (5th Cir. 1988) (citing Link v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962));

See Gaffney v. State Farm Fire and Cas. Co., 294 Fed. App’x 975, 977 (5th Cir. 2008)

(recognizing inherent authority to dismiss sua sponte for failure to state a claim if the procedure employed is fair).

Generally, the sua sponte dismissal procedure is fair if the plaintiff had notice of the court’s intention to dismiss and an opportunity to respond.

Davoodi v. Austin Indep. Sch. Dist., 755 F.3d 307, 310 (5th Cir. 2014)

(“fairness in this context requires both notice of the court’s intention and an opportunity to respond” (citation omitted));

Anokwuru v. City of Houston, 990 F.3d 956, 967 (5th Cir. 2021).

The procedure for sua sponte dismissal in this case is fair because this Memorandum and Recommendation puts Plaintiff on notice of the Court’s intention and Plaintiff has 14 days to file an objection and explain why his case should be allowed to proceed.

See Anokwuru, 990 F.3d at 967

(plaintiff that filed objections to magistrate judge’s recommendation undoubtedly had notice and opportunity to respond before dismissal).

I. Background

On November 24, 2023, Plaintiff executed a loan in the amount of $64,923.06 to purchase a 2023 Dodge Challenger.

Plaintiff, proceeding pro se, filed a Complaint on January 3, 2024, alleging that Defendant violated the Truth in Lending Act, 15 U.S.C. § 1605 et seq., in connection with his November 24, 2023 auto loan in the amount of $64,923.05.

ECF 1.

Plaintiff filed an Amended Complaint on March 14, 2024, adding claims for violation of the Fair Credit Billing Act, 15 U.S. § 1666, and the Uniform Commercial Code §§ 9-203, 308.

ECF 9.

Defendant filed its first Motion to Dismiss on April 5, 2024 pursuant to Federal Rules of Civil Procedure 8(a) and 12(b)(6). ECF 13. Defendant did not contest federal subject matter jurisdiction at that time.

Id.

Plaintiff filed a substantially identical Complaint on the same day that was docketed as Mouanda v. Navy Federal Credit Union, Civil Action No. 24-cv-0019. He voluntarily dismissed the second filed action on March 21, 2024, before Defendant made an appearance.

The Court conducted an Initial Pretrial Scheduling Conference on May 21, 2024, followed by a Status Conference on June 3, 2024.

ECF 16.

The Court ordered Plaintiff to file an Amended Complaint by June 17, 2024, and ordered Defendant to notify the Court by June 10, 2024 if it intended to withdraw the pending Motion to Dismiss.

ECF 17.

On June 10, 2024, Plaintiff filed a Second Amended Complaint and Defendant filed a Notice of Withdrawal of its first Motion to Dismiss.

ECF 18; ECF 20.

Plaintiff’s Second Amended Complaint abandons all previous federal  claims and asserts claims for violation of SEC Regulations and state law causes of action under the Texas Business and Commerce Code.

ECF 18.

Defendant filed the pending Motion to Dismiss on June 28, 2024 arguing that this case should be dismissed for lack of subject matter jurisdiction because

(1) Plaintiff does not have standing to assert claims for violation of SEC rules;

(2), the remaining state law claims asserted in the Second Amended Complaint for violations of various provisions of the Texas Business and Commerce Code cannot provide a basis for federal subject matter jurisdiction;

and

(3) Plaintiff fails to allege facts to support diversity jurisdiction.

ECF 24 at 3.

II. Standard of Review

A. Rule 12(b)(1)

When subject matter jurisdiction is challenged, the court “is free to weigh the evidence and resolve factual disputes in order to satisfy itself that it has power to hear the case.”

Montez v. Dep’t of the Navy, 392 F.3d 147, 149 (5th Cir. 2004);

Krim v. Pcorder.com, 402 F.3d 489, 494 (5th Cir. 2005).

The court may consider any of the following in resolving a Rule 12(b)(1) motion:

“(1) the complaint alone; (2) the complaint supplemented by the undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts.”

Lane v. Halliburton, 529 F.3d 548, 557 (5th Cir. 2008);

see also Schaeffler v. United States, 889 F.3d 238, 242 (5th Cir. 2018).

The plaintiff bears the burden  of establishing subject matter jurisdiction.

Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380, 388 (5th Cir. 2014).

If the plaintiff fails to meet his burden, the case must be dismissed.

Id.

B. Rule 12(b)(6)

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the conduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);

Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009).

In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), this Court “accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.”

Alexander v. AmeriPro Funding, Inc., 848 F.3d 698, 701 (5th Cir. 2017)

(citing Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).

However, the court does not apply the same presumption to conclusory statements or legal conclusions.

Iqbal, 556 U.S. at 678-79.

III. Analysis

A. Federal subject matter jurisdiction exists in this case.

Defendant has filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) challenging this Court’s subject matter jurisdiction.

Plaintiff’s  original Complaint asserted federal claims which supported federal question subject matter jurisdiction under 28 U.S.C. § 1331.

Plaintiff’s Second Amended Complaint dropped the original federal claims and added federal claims for violation of SEC Regulations 17 C.F.R. § 230.424(b)(5) and 17 C.F.R. § 240.10b-5.

Even though the Court agrees with Defendant’s argument that § 230.424(b)(5) does not create a private cause of action, the SEC Regulations claims invoke this Court’s subject matter jurisdiction.

Furthermore, Defendant’s request for dismissal of Plaintiff’s claim for violations of § 240.10b-5 is more aptly considered under Rule 12(b)(6) because Defendant argues that Plaintiff cannot satisfy the elements of the § 240.10b-5 cause of action, specifically the requirement that his loan meet the definition of a “security.”

Regardless of whether subject matter jurisdiction otherwise exists, Defendant’s motion to dismiss the § 230.424(b)(5) claim arguably should have been filed under Rule 12(b)(6) instead of 12(b)(1).

See Graves v. Health Exp., Inc., No. CIV. A. 09-0277, 2009 WL 2835778, at *2 n.3 (W.D. La. Aug. 31, 2009).

Although the Fifth Circuit held in Acara v. Banks, 470 F.3d 569, 572 (5th Cir. 2006) that subject matter jurisdiction does not exist when a statute fails to create a private cause of action, it previously held in Montez v. Department of Navy, 392 F.3d 147,150 (5th Cir.2004) that when a defendant’s challenge to jurisdiction is “also a challenge to the existence of a federal cause of action, the proper course of action for the district court … is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff’s case’ under either Rule 12(b)(6) or Rule 56.”

(citations omitted).

Despite the recommendation for dismissal of Plaintiff’s federal claims as set forth below, the Court retains supplemental jurisdiction over Plaintiff’s state law claims pursuant to 28 U.S.C. § 3167(c).

For these reasons, the Court recommends denial of Defendant’s Motion to Dismiss pursuant to Rule 12(b)(1).

B. Plaintiff cannot state a claim for violation of SEC Rules.

Although Defendant moved for dismissal of Plaintiff’s SEC Rules violation claims under Rule 12(b)(1), which the Court recommends denying, Defendant’s arguments support dismissal for failure to state a claim under Rule 12(b)(6).

Plaintiff’s Second Amended Complaint alleges that a search of Bloomberg and sec.gov reveals that Defendant has made “misrepresentations on multiple levels” in violation of SEC Rules 424(b)(5) and 10-b(5).

ECF 18 at 2;

ECF 19.

Defendant argues that 17 C.F.R. § 230.424(b)(5) does not create a private right of action and that 17 C.F.R. § 240.10b-5 applies only to the sale of securities.

ECF 24 at 6.

Rule 424(b)(5), which addresses the filing of prospectuses, provides:

(b) Ten copies of each form of prospectus purporting to comply with section 10 of the Act, except for documents constituting a prospectus pursuant to Rule 428(a) (§ 230.428(a)) or free writing prospectuses pursuant to Rule 164 and Rule 433 (§ 230.164 and § 230.433), shall be filed with the Commission in the form in which it is used after the effectiveness of the registration statement and identified as required by paragraph (e) of this section; provided, however, that only a form of prospectus that contains substantive changes from or additions to a previously filed prospectus is required to be filed; Provided, further, that this paragraph (b) shall not apply in respect of a form of prospectus contained in a registration statement and relating solely to securities offered at competitive bidding, which prospectus is intended for use prior to the opening of bids. Ten copies of the form of prospectus shall be filed or transmitted for filing as follows:

* * *

(5) A form of prospectus that discloses information, facts or events covered in both paragraphs (b)(2) and (3) shall be filed with the Commission no later than the second business day following the earlier of the date of the determination of the offering price or the date it is first used after effectiveness in connection with a public offering or sales, or transmitted by a means reasonably calculated to result in filing with the Commission by that date.

17 C.F.R. § 230.424(b)(5) (emphasis in original).

The Second Amended Complaint fails to allege any facts demonstrating how this Rule applies to Plaintiff’s car loan.

See ECF 18; ECF 19.

Further, Rule 424(b)(5) does not create a private right of action for persons allegedly aggrieved by its violation.

“Like substantive federal law itself, private rights of action to enforce federal law must be created by Congress.”

Alexander v. Sandoval, 532 U.S. 275, 286 (2001) (citations omitted).

A law or regulation creates a private right of action only if its language “displays an intent to create not just a private right but also a private remedy.”

Id. (citations omitted).

Rule 424(b)(5) displays no intent to create a private right or remedy. Therefore, Plaintiff cannot state a claim for violation of Rule 424(b)(5).

SEC Rule 10b-5 prohibits manipulative and deceptive practices “in connection with the purchase or sale of any security.”

17 C.F.R. § 240.10b-5.

The elements of a private cause of action under Rule 10b-5 are:

“(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.”

Masel v. Villarreal, 924 F.3d 734, 743 (5th Cir. 2019), as revised (June  6, 2019).

Thus, a crucial element of any claim for violation of Rule 10b-5 is the existence of a security.

Id.

The definition of “security” in the Securities and Exchange Act is broad.

Id.; Landreth Timber Co. v. Landreth, 471 U.S. 681, 686, (1985).

Nonetheless, the definition is not so broad as to include a consumer loan transaction.

The Fifth Circuit has developed a three-factor test plaintiffs must satisfy to meet the definition of security:

“(1) an investment of money; (2) in a common enterprise; and (3) on an expectation of profits to be derived solely from the efforts of individuals other than the investor.”

Masel, 924 F.3d at 743.

Clearly, Plaintiff’s car purchase fails to satisfy the second and third factors.

Thus, Plaintiff cannot state a claim under 17 C.F.R. § 240.10b-5.

C. The Court should exercise supplemental jurisdiction over Plaintiff’s state law claims.

Defendant moved to dismiss Plaintiff’s state law claims for lack of subject matter jurisdiction and did not address supplemental jurisdiction under 28 U.S.C. § 1367(c)(3).

When a federal court has original jurisdiction under 28 U.S.C. § 1331, it also has supplemental jurisdiction over “all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.”

28 U.S.C. § 1367.

Therefore, this Court may exercise supplemental jurisdiction over Plaintiff’s Texas state law claims.

A federal court may decline to exercise supplemental jurisdiction if it has dismissed all claims over which it has original jurisdiction.

28 U.S.C. § 1367(c)(3).

District courts have discretion to decide whether to exercise supplemental jurisdiction.

Brookshire Bros. Holding v. Dayco Prod., Inc., 554 F.3d 595, 602 (5th Cir. 2009)

(holding district court abused its discretion by declining to exercise jurisdiction “after investing a significant amount of judicial resources in the litigation.”).

In making its decision, the Court considers factors such as judicial economy, convenience, fairness, and comity.

Id.; Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988).

According to Fifth Circuit precedent:

[t]he general rule is that a court should decline to exercise jurisdiction over remaining state-law claims when all federal-law claims are eliminated before trial, but this rule is neither mandatory nor absolute; no single factor is dispositive, ….

Brookshire Bros., 554 F.3d at 602 (citing Batiste v. Island Records Inc., 179 F.3d 217, 227 (5th Cir.1999)).

Judicial economy favors the exercise of supplemental jurisdiction because the Court has already expended significant resources to manage this case, including conducting an initial conference and issuing a scheduling order on May 21, 2024; conducting a status conference on June 3, 2024; ruling on two of Plaintiff’s motions; writing an initial Memorandum and Recommendation on Defendant’s Motion to Dismiss that was docketed on December 30, 2024; reviewing Defendant’s objections to that Memorandum and Recommendation; vacating the prior Memorandum and  Recommendation (ECF 32) on January 15, 2025; and issuing this Memorandum and Recommendation.

Further, judicial economy favors the exercise of supplemental jurisdiction because the state law claims are without merit and should be dismissed at this stage of the proceedings.

The convenience and fairness factors are neutral because this Court and the state court in which Plaintiff would refile his claims should he choose to do so are both located in Houston, Texas, as are Defendant’s counsel of record.

While Defendant would benefit from dismissal of this case, as least initially, Plaintiff chose this federal forum, paid the filing fee, has appeared in person before the Court when required, and has been granted electronic filing privileges in this Court.

ECF 27.

Significantly, Defendant has not shown any prejudice that will result by continuing in this federal forum.

As to the final factor to consider when weighing the exercise of supplemental jurisdiction, there are no comity issues implicated by the exercise of supplemental jurisdiction.

This case does not present novel and complex legal issues that the state has a particular interest in deciding to the exclusion of federal courts.

Under the specific circumstances of this case, the relevant factors- particularly judicial economy-weigh in favor of retaining jurisdiction.

Furthermore, while Plaintiff did not adequately plead diversity jurisdiction, it is plausible that diversity jurisdiction exists and the pleading deficiencies could be  cured by amendment.

Because supplemental jurisdiction exists, the Court does not make a definitive ruling on diversity jurisdiction.

Plaintiff’s operative Second Amended Complaint does not specify the source of federal jurisdiction.

See ECF 18.

Although Plaintiff failed to plead Defendant’s citizenship, Defendant does not claim to be a citizen of Texas.

See ECF 11 (demonstrating that Defendant was served at 820 Follis Lane SE, Vienna, VA, 23180);

ECF 24 (not asserting Texas citizenship);

ECF 29 (objections to ECF 28 arguing that the amount in controversy is not met).

As to the minimum amount in controversy, Defendant argues that it is limited to the value of the car, established by the $64,923.05 loan amount.

ECF 24 at 11-12.

In a declaratory judgment action, the amount in controversy is determined by “the value of the right to be protected or the extent of the injury to be prevented.”

St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (emphasis added).

The ePromissory Note, Security Agreement, and Disclosure for the car loan demonstrate that Plaintiff will incur $25,096.79 in finance charges, for a total due under the ePromissory Note of $90,019.84.

ECF 1-1 at 1; ECF 9 at 13; ECF 18-1 at 3.

Under Plaintiff’s theory of the case, he intends to obtain title to the car and relief from continuing obligations under the Note.

The foreclosure cases Defendant cites, Govea v. JPMorgan Chase Bank, N.A., No. CIV.A. H-10-3482, 2010 WL 5140064, at *4 (S.D. Tex. Dec. 10, 2010) and Farkas v. GMAC Mortg., L.L.C., 737 F.3d 338, 341 (5th Cir. 2013), are distinct from this case on that point, because a successful plaintiff seeking to stop foreclosure obtains continued possession of the house but generally is not relieved of all obligations on the debt.

D. Plaintiff cannot state a plausible claim for relief under the Texas Business and Commerce Code.

Defendant argues that Plaintiff’s claim for an injunction against repossession of the vehicle is not ripe for adjudication.

ECF 24 at 12-13.

The Court disagrees, but nonetheless recommends Plaintiff’s state law claims be dismissed with prejudice for failure to state a plausible claim for relief.

1. Ripeness

A case that is “abstract or hypothetical” should be dismissed as not ripe for adjudication.

Roark & Hardee LP v. City of Austin, 522 F.3d 533, 545 (5th Cir. 2008)

(citing Monk v. Huston, 340 F.3d 279, 282 (5th Cir.2003)

(quoting New  Orleans Pub. Serv., Inc. v. Council of New Orleans, 833 F.2d 583, 586 (5th Cir.1987))).

Generally, a case is ripe if it presents legal questions that do not require factual development.

Id.

Yet, even if only legal questions remain, “the plaintiff must show some hardship in order to establish ripeness.”

Id. (quoting Cent. & Sw. Servs. v. E.P.A., 220 F.3d 683, 690 (5th Cir.2000)).

In determining whether an actual controversy exists in the context of an action for declaratory or injunctive relief, courts focus on whether the threatened injury is sufficiently likely to happen to justify judicial intervention.

Orix Credit All., Inc. v. Wolfe, 212 F.3d 891, 897 (5th Cir. 2000);

see also

Shields v. Norton, 289 F.3d 832, 835 (5th Cir. 2002)

(stating courts “look to the practical likelihood that a controversy will become real”).

Plaintiff’s case does not require further factual development to become ripe-it is based on events that have already occurred and seeks a declaration of rights based on existing loan documents.

See ECF 18.

Plaintiff claims entitlement to clear title for the car and Defendant disputes his claim.

Disregarding the merits, Plaintiff’s claims do not consist of an abstract or hypothetical controversy about events that have not happened.

The claims are ripe and justiciable.

2. The Texas Business and Commerce Code

Plaintiff makes the unsubstantiated assertion that he is Defendant’s creditor under the loan agreement at issue.

ECF 18 ¶ 1.

This basic mischaracterization underlies his claims pursuant to the following sections of the Texas Business and  Commerce Code, all of which are part of the Texas Uniform Commercial Code:

§§ 9.102, 9.210, 9.601, 9.609, 9.625, 8.105, 8.503, 3.305, 3.306.

Plaintiff also asserts a claim for violation of § 27.01.

All Plaintiff’s claims should be dismissed under Rule 12(b)(6) because the allegations in the Second Amended Complaint consist only of conclusory assertions and fail to include sufficient factual content to state a plausible claim for relief.

Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 678-79.

The Court addresses additional bases for dismissal below.

a. Tex. Bus. & Com. Code Chapter 9

“Chapter 9 of the Texas Business and Commerce Code applies to any transaction that creates a security interest in personal property by contract.”

Smith v. Cmty. Nat. Bank, 344 S.W.3d 561, 565-66 (Tex. App.-Eastland 2011, pet. denied).

A “security interest” is “an interest in personal property or fixtures which secures payment or performance of an obligation,” and includes a promissory note in a transaction that is subject to Chapter 9.

TEX. BUS. & COM. CODE § 1.201(35).

Plaintiff’s Second Amended Complaint and attached documents make clear that the parties entered a security agreement under which Defendant is the secured party holding a security interest in the 2023 Dodge Charger.

ECF18 ¶2; ECF 18-1 at 2.

Section 9.210(a) of the Texas U.C.C. authorizes a debtor to request an accounting, a list of collateral, or a statement of account regarding the transaction that is the subject of the request. Section 9.210(b) requires the secured party to  respond within 14 days.

Plaintiff does not allege that he made a proper request under § 9.210 or that Defendant failed to timely respond.

See ECF 18.

Plaintiff also asserts rights under §§ 9.601, 9.609, and 9.625 of the Texas U.C.C., which set forth a secured parties’ rights after default by the debtor.

Plaintiff makes the fallacious argument that he is the secured party under the security agreement who is entitled to possession of the security instrument and the car due to Defendant’s default.

ECF 18 ¶¶ 4, 6, 7.

These allegations do not state a plausible claim for relief and in any event are contradicted by the very documents Plaintiff attached as exhibits to his Second Amended Complaint.

See ECF 18-1.

For these reasons, Plaintiff’s claims under Chapter 9 of the Texas Business and Commerce Code governing secured transactions should be dismissed.

b. Tex. Bus. & Com. Code Chapter 8

In the Second Amended Complaint Plaintiff alleges an adverse claim to the security instrument under §§ 8.105 and 8.503 of the Texas U.C.C. ECF 18 ¶ 8.

Again, these are not plausible allegations and they are belied by the documents attached to the Second Amended Complaint.

Plaintiff is the obligor under the ePromissory Note.

He has no claim to ownership of the Note.

Section 8.105 merely defines what constitutes an adverse claim, and this case falls outside any definition in that section.

Section 8.503 relates to the “Property Interest of Entitlement Holder in Financial Asset Held by Securities Intermediary.”

No allegations in the Second Amended Complaint indicate who is the “entitlement holder,” who is the “securities intermediary,” nor do any allegations demonstrate that this provision is applicable in any way to this case.

Plaintiff’s claims under Chapter 8 of the U.C.C. should be dismissed.

c. Tex. Bus. & Com. Code Chapter 3

Chapter 3 of the Texas U.C.C. governs negotiable instruments.

A “negotiable instrument” is:

(a) . . . an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;

(2) is payable on demand or at a definite time;

and

(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, . . .

TEX. BUS. & COM. CODE § 3.104.

A promissory note is a contract, but if it meets certain requirements it may be a negotiable instrument.

Patel v. Chaudhari, No. 01-22-00187-CV, 2023 WL 4937056, at *10 (Tex. App.-Houston [1st Dist.] Aug. 3, 2023, pet denied)

(holding that a promissory note is a contract but if it is negotiable it is governed by UC”);

Campbell v. Texas Tea Reclamation, LLC., No. 3:20-CV-00090, 2021 WL 3008285, at *2 (S.D. Tex. June 15, 2021)

(holding that to be negotiable a promissory note must contain “magic words of negotiability-payable ‘to bearer’ or payable ‘to order.’), report and recommendation adopted No.  3:20-CV-0090, 2021 WL 2982394 (S.D. Tex. July 15, 2021).

Here, even if the ePromissory Note is negotiable, Plaintiff makes no plausible allegations demonstrating he is entitled to void the loan for any of the reasons identified in § 3.305(a)(1), such as infancy, duress, lack of legal capacity, illegality, fraud in the inducement, or bankruptcy.

The Second Amended Complaint also lacks any factual allegations showing that § 3.306 (providing the taker of a negotiable instrument, other than a holder in due course, takes the instrument subject to all claims), applies here. Plaintiff’s claims based on Chapter 3 of the Texas U.C.C. should be dismissed.

d. Texas Business and Commerce Code § 27.01

Section 27.01 prohibits “[f]raud in a transaction involving real estate or stock in a corporation or joint stock company.”

TEX. BUS. & COM. CODE § 27.01(a).

A Dodge Challenger is neither real estate nor stock.

This section is inapplicable and this claim should be dismissed.

E. Plaintiff’s claims should be dismissed with prejudice without leave to amend.

A district court should generally give a plaintiff leave to amend a deficient pleading.

Matter of Life Partners Holdings, Inc., 926 F.3d 103, 125 (5th Cir. 2019).

However, the court may deny leave to amend when amendment would be futile.

See Mason v. Fremont Inv. & Loan, 671 Fed.Appx. 880, 883 (5th Cir. 2016)

(“Although a pro se litigant should generally be afforded an opportunity to amend his complaint before it is dismissed, denial is nonetheless justified when the proposed amendment  would be futile” (internal citations omitted));

Yan v. Taylor, No. 24-10288, 2024 WL 4579606, at *1 (5th Cir. Oct. 25, 2024)

(holding where amendment would be futile, there can be no abuse of discretion). Denial of leave to amend is also appropriate where a plaintiff has previously been given leave to amend.

Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 566 (5th Cir. 2002)

(finding no abuse of discretion in denying leave to amend where plaintiff had already amended twice);

Wiggins v. Louisiana State Univ.-Health Care Servs. Div., 710 Fed.Appx. 625, 627 (5th Cir. 2017)

(holding denial of leave to amend appropriate when plaintiff has pled his best case).

Here, Plaintiff has already amended his complaint twice.

ECF 1; ECF 9; ECF 18.

Therefore, the Court recommends dismissal of Plaintiff’s claims with prejudice, without leave to amend.

On January 13, 2025, without seeking leave to amend, Plaintiff filed a Third Amended Complaint.

ECF 30.

The Court struck the motion.

ECF 33.

Having reviewed the proposed Third Amended Complaint, the Court finds it fails to cure the deficiencies noted in this Memorandum and Recommendation and therefore leave to amend would be futile.

IV. Conclusion and Recommendation

For the reasons set forth above, the Court recommends Defendant’s Motion to Dismiss for lack of subject matter jurisdiction (ECF 24) be DENIED, but all claims be DISMISSED WITH PREJUDICE pursuant to Rule 12(b)(6).

The Clerk of the Court shall send copies of the memorandum and recommendation to the respective parties, who will then have fourteen days to file  written objections, pursuant to 28 U.S.C. § 636(b)(1)(C).

Failure to file written objections within the period provided will bar an aggrieved party from attacking the factual findings and legal conclusions on appeal.

Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc), superseded by statute on other grounds.