NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MAO-MSO RECOVERY II, LLC, a 

Delaware entity; MSP RECOVERY 

CLAIMS SERIES LLC, a Delaware entity; 

MSPA CLAIMS 1, LLC, a Florida entity, 

 Plaintiffs-Appellants, 

 v. 

MERCURY GENERAL, a California 

company, its subsidiaries and affiliates, 

 Defendant-Appellee.

No. 21-56395 

D.C. No. 

2:17-cv-02525-AB-AFM 

MEMORANDUM*

MAO-MSO RECOVERY II, LLC, a 

Delaware entity; MSP RECOVERY 

CLAIMS SERIES LLC, a Delaware entity; 

MSPA CLAIMS 1, LLC, a Florida entity, 

 Plaintiffs-Appellants, 

 v. 

MERCURY GENERAL, a California 

company, its subsidiaries and affiliates, 

 Defendant-Appellee.

No. 21-56396 

D.C. No. 

2:17-cv-02557-AB-AFM 

 * This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

FEB 7 2023

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2 

Appeal from the United States District Court

for the Central District of California

Andre Birotte, Jr., District Judge, Presiding

Argued and Submitted December 9, 2022

Pasadena, California

Before: BERZON, R. NELSON, and BADE, Circuit Judges.

Partial Dissent by Judge BERZON.

In these consolidated appeals, Appellants MAO-MSO Recovery II, LLC; 

MSP Recovery Claims Series LLC; and MSPA Claims 1, LLC (collectively 

“Appellants”) appeal the district court’s dismissal of their claims against Appellee 

Mercury General (“Mercury”) for lack of standing and its denial of Appellants’ 

request for leave to amend the operative complaints.1

 We have jurisdiction under 

28 U.S.C. § 1291, and we affirm.

Because “standing is an essential and unchanging part of the case-orcontroversy requirement of Article III,” federal courts cannot exercise jurisdiction 

over parties that lack standing. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 

(1992). “The party invoking federal jurisdiction bears the burden of establishing” 

standing at each stage in legal proceedings. Id. at 561. This requires a plaintiff to 

show, among other things, that it “suffered an injury in fact—an invasion of a 

legally protected interest which is (a) concrete and particularized and (b) actual or 

1 We previously consolidated these appeals for argument, and now we 

consolidate them for disposition.
3 

imminent, not conjectural or hypothetical.” Id. at 560 (citations and internal 

quotation marks omitted).

1. Appellants first contend the district court erred procedurally by not 

requiring Mercury to move for summary judgment on the issue of standing 

consistent with Federal Rule of Civil Procedure 56. But this court has long held 

that a summary judgment motion is an inappropriate vehicle for challenging a 

plaintiff’s standing “because ‘[t]he plaintiff’s obligation to establish standing 

should not be passed to the defendant by the simple device of waiting for a 

summary judgment motion.’” Am. Postal Workers Union v. U.S. Postal Serv., 861 

F.2d 211, 213 (9th Cir. 1988); see also 10A CHARLES ALAN WRIGHT & ARTHUR R.

MILLER, FEDERAL PRACTICE AND PROCEDURE § 2713 (4th ed. 2022) (explaining 

that the “general rule” in the federal system “is that it is improper for a district 

court to enter judgment under Rule 56 for defendant because of a lack of 

jurisdiction”). Appellants’ procedural arguments are thus foreclosed by precedent 

and practice.

2. Appellants also contend the district court erred on the merits by 

declining to find standing for Appellants to bring claims related to (1) an individual 

named J.R., (2) an individual named D.M., and (3) unpled “data matching 

exemplar” plaintiffs, whose relevant allegations were not part of either of the 

operative complaints.
4 

(a) Appellants first contend the district court erred in concluding 

Appellants lacked standing to bring the claim related to J.R. because neither the 

ultimate holder of J.R.’s recovery rights nor the holder’s “parent” LLC were 

named plaintiffs. Appellants admit these parties are not identified as plaintiffs in 

either of the operative complaints, but they contend that naming the wrong plaintiff 

was a “ministerial or technical defect” they should be permitted to correct by 

amending the complaint. But even if we accepted Appellants’ characterization of 

their pleading errors, the fact remains that after years of litigation and multiple 

amendments, Appellants’ operative complaints continued to assert allegations for 

an entity that is not a party to the litigation and that is not alleged to have suffered 

any harm. Given the procedural posture and age of this case, the district court did 

not err in exercising its considerable discretion to deny Appellants’ request for 

leave, see Chodos v. West Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 2022), and in 

dismissing the J.R. claim for lack of standing.

(b) Appellants next argue the district court erred in dismissing the claims 

related to D.M. because the evidence demonstrated they had received the rights of 

recovery to this claim from a contract with Trinity Physicians, LLC. But the 

record demonstrates that, prior to entering into this agreement with Appellants, 

Trinity had already assigned those rights to another entity, Freedom Health Care. 

Appellants’ contentions that this result is “mind-boggling,” are based on extrinsic 
5 

evidence and thus are irrelevant because the contract’s unambiguous text controls. 

See, e.g., Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564, 568 (9th Cir. 

1988) (“Under traditional contract principles, extrinsic evidence is inadmissible to 

interpret, vary or add to the terms of an unambiguous integrated written 

instrument.”).

Their argument that the assignment of rights pertains to the merits rather 

than standing is similarly unpersuasive: whether Appellants had the legal right to 

seek reimbursement for payments allegedly made for the J.R. and D.M. claims 

relates directly to whether Appellants have a sufficient “legally protected interest” 

in bringing suit, a quintessential standing question. See Lujan, 504 U.S. at 560–61; 

see also Flast v. Cohen, 392 U.S. 83, 99–100 (1968) (explaining that “when 

standing is placed in issue in a case, the question is whether the person whose 

standing is challenged is a proper party to request an adjudication of a particular 

issue”). And Appellants’ contention that Trinity did not contractually assign to 

Freedom its statutory rights of recovery is contradicted by the unambiguous text of 

the agreement between Trinity and Freedom. Moreover, their argument is 

logically unsound: if Trinity were unable to assign statutory remedies to Freedom 

by contract (as Appellants claim), it is unclear how Trinity would nevertheless be 
6 

able to assign those same statutory remedies to Appellants by contract.2 

(c) Finally, Appellants contend the district court erred by dismissing the 

complaints for lack of standing when there were numerous unpled “data matching 

exemplars” that purportedly established Appellants’ standing. Appellants’ 

contention that they can rely on unpled injuries to establish standing over a case 

involving entirely unrelated injuries is foreclosed by well-established case law. 

Standing “is not dispensed in gross”; instead, “a plaintiff must demonstrate 

standing for each claim he seeks to press and for each form of relief that is sought.” 

Davis v. Fed. Election Comm’n, 554 U.S. 724, 734 (2008) (internal quotation 

marks and citations omitted). And dismissal of a complaint on the merits is proper 

when the plaintiff alleges only “[t]hreadbare recitals of the elements of a cause of 

action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 

678 (2009). As Appellants concede that none of the operative facts related to the 

“data matching exemplars” are pled in the operative complaints, they plainly fail to 

establish these claims can support federal jurisdiction.

2 Appellants further contend they have standing to pursue the D.M. claims 

because those claims were assigned to an unnamed “subsidiary series” LLC and 

parent LLCs have standing to bring suit on behalf of their subsidiary series LLCs. 

We have yet to determine whether a parent LLC has standing to bring suit on 

behalf of a subsidiary series LLC, and we need not do so here as Appellants failed 

to provide evidence demonstrating the series LLCs granted such authority to their 

parent in the relevant operating agreement. Cf. MSP Recovery Claims, Series LLC 

v. ACE Am. Ins. Co., 974 F.3d 1305, 1319–20 (11th Cir. 2020).
7 

Accordingly, the district court did not err in its consideration of the merits of 

Appellants’ standing, and it properly dismissed the complaints for lack of 

jurisdiction.

3. Finally, Appellants contend the district court abused its discretion in 

denying their request for leave to file third amended complaints. District courts 

have broad discretion in denying subsequent requests for leave to amend where, as 

here, previous requests were granted. See Chodos, 292 F.3d at 1003. Appellants’ 

contentions that leave to amend should be freely given to cure standing defects 

relies on an overly solicitous reading of Northstar Financial Advisors Inc. v. 

Schwab Investments, 779 F.3d 1036 (9th Cir. 2015), and characterizing their 

substantive amendments—including adding and removing allegations and even 

parties—as merely implicating standing concerns. Their assertion that they did not 

unduly delay in seeking amendment given prior instructions from the district court 

misreads the record and fails to explain why Appellants waited more than a month 

after the dismissal order before seeking leave to amend their complaints. And the 

argument that the proposed amendment is not prejudicial to Mercury because it is 

the dismissal, not leave to amend, that would “essentially [require Mercury] to 

restart the entire litigation and defend itself based on a new set of operative facts,” 

ignores that these inefficiencies are the result of Appellants’ own scattershot 

litigation strategy—a strategy, it should be noted, that has resulted in dismissals for 
8 

lack of standing in district courts across the country. See, e.g., MAO-MSO 

Recovery II, LLC v. State Farm Mut. Auto. Ins. Co., 994 F.3d 869, 872 (7th Cir. 

2021); MSP Recovery Claims, Series LLC v. AIG Prop. Cas., Inc., No. 20-CV2102, 2021 WL 1164091, at *15–16 (S.D.N.Y. Mar. 26, 2021); MSP Recovery 

Claims, Series LLC v. Tech. Ins. Co., Inc., No. 18 CIV 8036, 2020 WL 91540, at 

*5 (S.D.N.Y. Jan. 8, 2020); MSP Recovery Claims, Series LLC v. USAA Gen. 

Indem. Co., No. 18-21626, 2018 WL 5112998, at *13 (S.D. Fla. Oct. 19, 2018). 

For these reasons, we conclude the district court did not abuse its discretion in 

denying Appellants’ leave to amend the operative complaints.

AFFIRMED.
1

MAO-MSO Recovery v. Mercury General

Nos. 21-56395, 56396

BERZON, Circuit Judge, dissenting in part:

I agree that Appellants lack standing on the basis of the current complaints. 

But I would hold that denying leave to amend was an abuse of discretion.

First, I would hold that Appellants did not unduly delay in seeking leave to 

amend. There was no deadline in the scheduling order for the filing of amended 

complaints. The district court stated that it did not want to consider the possibility 

of any motions for leave to amend the complaints at least until the class 

certification hearing, which was held in May 2021. In their supplemental briefs on 

standing filed June 2021, Appellants concluded by stating that, if their arguments 

were rejected, any standing defects should be cured through a supplemental or 

amended pleading under Fed. R. Civ. P. 15(d).

This Court does not require formal motions for leave to amend. United 

States v. $11,500.00 in U.S. Currency, 710 F.3d 1006, 1013 (9th Cir. 2013); 

Edwards v. Occidental Chem. Corp., 892 F.2d 1442, 1445 n.2 (9th Cir. 1990). 

Appellants provided sufficient notice of their desire for leave to amend to the 

district court and to Mercury at least as early as June 2021, when the standing brief 

was filed.

Second, permitting the proposed amendments would not be significantly 

prejudicial to Mercury, in light of the district court’s dismissal of the complaints 

FILED

FEB 7 2023

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
2

without prejudice. In dismissing without prejudice, the district court has permitted 

Appellants to restart litigation against Mercury through the filing of new 

complaints that could include the proposed amendments. Allowing Appellants 

instead to amend the current complaints would improve judicial efficiency and 

minimize the burden on all parties by permitting the parties to build upon the

discovery and motions practice that have already occurred in these cases. The 

majority asserts that any “inefficiencies” resulting from new litigation “are the 

result of Appellants’ own scattershot litigation strategy.” Mem. Disp. at 7–8. While 

Appellants have certainly struggled to sufficiently plead facts to establish standing, 

those failings are not relevant to assessing the prejudice to Mercury caused by a 

third amended complaint, as compared to an entirely new suit. 

Moreover, the nature of the amendments Appellants seek to make are not 

seriously “substantive,” as the majority suggests. Mem. Disp. at 7. At the hearing 

on standing held July 2021, Appellants read into the record contractual language 

indicating that the parent corporation had authority to sue on behalf of the series 

LLCs, thus showing that the complaints could readily be amended to cure that 

problem. Nor do the facts pertaining to additional beneficiaries constitute new 

“claims,” as the claims alleged were on behalf of the Medicare Advantage 

Organizations, not individual beneficiaries. So, adding new “exemplars” would not 

be adding new claims. Finally, although technically new parties, the proper 
3

corporate entities that would be added are closely related to the named parties, not 

some entirely new third parties.

Appellants were certainly sloppy. And their mode of filing complaints 

before ascertaining the possibly meritorious claims assigned is not to be 

encouraged, and in some instances will appropriately lead to dismissal for lack of 

standing. Here, however, enough of the errors appear to be easily curable that 

amendment should have been allowed in lieu of dismissing the cases without 

prejudice. Halting litigation on account of misnamed entities or failure to quote 

from governing documents that actually exist is inefficient and pointless, in my 

view. 

For the foregoing reasons, I would hold that the district court abused its 

discretion in denying Appellants leave to amend the operative complaints.