IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

FORT WORTH DIVISION 

SHELONDRIA GAY, 

Plaintiff, 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

v. CIVIL ACTION NO. 4:22-CV-979-P 

EMERALD FINANCIAL 

SERVICES, LLC, 

Defendant. 

FINDINGS, CONCLUSION AND RECOMMENDATIONS ON DEFENDANT 

EMERALD FINANCIAL SERVICES, LLC'S MOTION TO DISMISS FOR LACK OF 

SUBJECT MATTER JURISDICTION 

Pending before the Court is a Motion to Dismiss for Lack of Subject-Matter Jurisdiction 

[doc. 19], filed January 18, 2023, by Defendant Emerald Financial Services, LLC ("EFS"). 1 

Having carefully considered both paiiies' pleadings and all relevant, applicable law, the Court 

finds EFS' motion should be GRANTED and that all claims against it be DISMISSED. 

I. RELEVANT BACKGROUND 

Plaintiff pro se Shelondria Gay ("Gay") first filed this lawsuit against H&R Block on 

October 31, 2022 [doc. 1]. Gay filed her Amended Complaint [doc. 11] on November 15, 2022, 

seeking relief against H&R Block for her inability to withdraw a $1,400.85 check from her closed 

1 In its motion, EFS states as follows: 

Plaintiff names H&R Block as a defendant in this action. H&R Block is a trade name and 

not a legal entity with the capacity to be sued. Based on the allegations in Plaintiff's Amended 

Complaint, the legal entity associated with the allegations appears to be Emerald Financial Services, 

LLC. Accordingly, this motion to dismiss is made on behalfofEmerald Financial Services, LLC. 

(Defendant Emerald Financial Services, LLC's Motion to Dismiss for Lack of Subject-Matter Jurisdiction ("Def. 's 

Mot.") at I (internal citations omitted).) 

The Comt previously found the properly-named Defendant in Gay's suit is EFS and issued an Order [doc. 

37] directing the Court to change the docket to reflect EFS as the sole Defendant in this lawsuit. 

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H&R Block account. 2 (Pl. 's Am. Com pl. at 3 .) Gay was authorized to proceed in forma pauperis 

[ doc. 13] on November 21, 2022, and the Court ordered service of H&R Block on December 7, 

2022 [doc. 14]. As stated, EFS filed the instant motion to dismiss on January 18, 2023. In its 

motion, EFS argues Gay's lawsuit should be dismissed because the Court lacks subject-matter 

jurisdiction to adjudicate her claims. 

II. MOTION TO DISMISS STANDARD 

Federal Rule of Civil Procedure 12(b )(I) "allow[ s] a pmiy to challenge the subject matter 

jurisdiction of the district comi to hear a case." Ramming v. United Stales, 281 F.3d 158, 161 (5th 

Cir. 2001 ). Federal comis are courts of limited jurisdiction and possess only that power authorized 

by the Constitution and federal statutes. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 

377 (1994). Parties "may neither consent to nor waive federal subject matter jurisdiction." Simon 

v. Wal-Mart Stores, Inc., 193 F.3d 848,850 (5th Cir. 1999). "The burden of establishing subject 

matter jurisdiction [and resisting dismissal under Rule 12(b)(l)] rests upon the pmiy asse1iing 

jurisdiction." Volvo Trucks N. Am., Inc. v. Crescent Ford Truck Sales, Inc., 666 F.3d 932, 935 

(5th Cir. 2012); see also Settlement Funding, L.L.C. v. Rapid Settlements, Ltd., 851 F.3d 530,537 

2 ln her Amended Complaint, Gay brings seven claims against H&R Block: (I) Misappropriation of Funds 

under on 18 U.S.C. § 644, (2) Tort of Fraudulent Conversion pursuant to 18 U.S.C. §§ 643-44, 648-653 and various 

Texas Penal Code statutes, (3) Embezzlement pursuant to 18 U.S.C. §§ 31, 649 and the Texas Civil Practices and 

Remedies Code, (4) Reckless Breach of Fiduciary Duty under the Texas Civil Practices and Remedies Code, (5) 

Negligence pursuant to the Texas Civil Practices and Remedies Code, (6) Unjust Enrichment, in which Gay curiously 

cites a Colorado case dealing with home builder liability, and (7) Wire and ACH Fraud under 18 U.S.C. § 1343 and 

the Texas Penal Code. 

(Plaintiffs Amended Complaint ("Pl. 's Am. Comp!.") at 10-16); see also See Pulte Home Corp., Inc. v. Coun/lJ'Side 

Cinty. Ass'n, No. 14SC77, 2014 WL 4403205 (Colo. 2014). 

Gay seeks the following relief: 

(S]tatutory and civil liability, exemplary, punitive, and equitable leaving the Defendant with a lesson 

once all restitution is exhausted that is afforded to Plaintiff in this case. 

(Id. at 19.) 

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(5th Cir. 2017). "If the record does not contain sufficient evidence to show that subject matter 

jurisdiction exists, 'a federal court does not have jurisdiction over the case."' Settlement Funding, 

851 F.3d at 537 (quoting Howe,y v. Allstate Ins. Co., 243 F.3d 912,916 (5th Cir. 2001)). 

III. ANALYSIS OF PLAINTIFF'S CLAIMS 

As stated, the primaiy issue presented by EFS is whether this Comi has subject matter 

jurisdiction to hear Gay's claims. In order for Gay's suit to survive EFS' attack under Federal 

Rule of Civil Procedure l 2(b )(1 ), the Court must find it has original jurisdiction by way of diversity 

or federal questionjurisdiction.3 Under 28 U.S.C. § 1331, a federal court has original jurisdiction 

over cases "arising under the Constitution, laws, or treaties of the United States." To determine 

whether a claim arises under federal law, the comi examines the "well pleaded" allegations of the 

complaint and "ignore[s] potential defenses." Beneficial Nat'/ Bank v. Anderson, 539 U.S. 1, 6 

(2003). The aiiful-pleading doctrine serves as a corollary to the well-pleaded complaint rule. See 

Roland v. Green, 675 F.3d 503, 520 (5th Cir. 2012). In her Amended Complaint, Gay claims 

federal question jurisdiction via 15 U.S.C.A. § 77v and 28 U.S.C. § 1331. The Court will address 

the statutes' applicability below. 

A. 15 U.S.C.A. § 77v 

15 U.S.C.A. § 77v is the jurisdictional section of the Securities Act of 1933 ("1933 Act"). 

Federal comis have jurisdiction over actions protecting the securities market. See 15 U.S.C.A. § 

77v(a). To state a claim under the 1933 Act, a plaintiff must allege the defendant made a false or 

misleading statement of fact on a registration statement and that the statement was material. 

Securities Act 1933 § 11, 12. Federal Rule of Civil Procedure 9(b) furthers, requiring a 

pmiicularity requirement for "all averments of fraud or mistake." Fed. R. Civ. P. 9(b). 

Accordingly, when a plaintiff claims fraud in a 1933 Act claim, she must plead according to Rule 

3 Gay asserts only federal question jurisdiction. Accordingly, the Court will not address diversity jurisdiction. 

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9(b)'s particularity requirement. In re. STAC Elecs. Sec. Litig., 89 F.3d 1399, 1404-05 (9th Cir. 

1996); Melder v. Morris, 27 F.3d 1097, 1100 n.6 (5th Cir. 1994) (holding Rule 9(b) applies to 

Securities Act 1933 claims based in fraud rather than negligence), 

Gay relies, in part, on the 1933 Act for jurisdiction in all her seven claims against EFS. 

Gay wholly fails, however, to allege that EFS made a false or misleading statement of fact on a 

registration statement. For her claims asserting fraud-"Tort of Fraudulent Conversion" and 

"Wire and Ach Fraud"-Gay, again, wholly fails to plead with any particularity that EFS 

committed fraud under the 1933 Act. (Pl.'s Am. Comp!. at II, 15.) Accordingly, Gay's mere 

assertion of jurisdiction under the 1933 Act is insufficient for jurisdictional purposes and the Court 

FINDS it does not have subject matter jurisdiction to hear Gay's claims against EFS under 15 

U.S.C.A. § 77v. EFS' motion should be GRANTED as to this jurisdictional basis. 

B. 28 U.S.C. § 1331 

The Cami now turns to 28 U.S.C. § 1331. Relevant here, federal question jurisdiction 

under this statute requires that a plausible federal claim appears on the face of the complaint. See 

Young v. Hosemann, 598 F.3d 184, 188 (5th Cir. 2010). Stated differently, a Cami lacks 

jurisdiction when the alleged federal claim is "frivolous or insubstantial ... , i.e., [when] a claim 

[] has no plausible foundation." See Id. (internal quotations omitted); e.g., Willis v. McCoy, 1 F.3d 

1237, 1993 WL 310295 at *1 (5th Cir. 1993) (per curiam) (affirming sua sponte dismissal of 

plaintiff's libel action for lack of federal question jurisdiction). Gay relies on various federal 

statutes to support her claims and the Cami will separately address them below. 

1. Title 18 Claims 

Four of Gay's claims-Misappropriation of Funds, Fraudulent Conversion, 

Embezzlement, and Wire and ACH Fraud-rely on sections of Title 18 of the United States Code 

to supp01i federal question jurisdiction. Simply put, Title 18 of the United States Code defines 

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crimes and offenses against the United States. Gay has alleged only claims for civil relief against 

EFS in her Amended Complaint. Accordingly, the Court FINDS that Title 18 is unavailable to 

Gay. See Stacker v. Tex. Dept of Safety, No. 3:20-CV-2951-X-BN, 2020 WL 5996434, at *2 (N.D. 

Tex. Sept. 25, 2020) (quoting Hanna v. Home Ins. Co., 281 F.2d 298, 303 (5th Cir. 1960) ("The 

sections of Title 18 may be disregarded in this suit. They are criminal in nature and provide no 

civil remedies."). Therefore, any claim under this Title should be DISMISSED. 

2. Uniform Commercial Code ("UCC") Claims 

Gay also cites two sections under UCC Article 4 in her Amended Complaint as basis for 

federal question jurisdiction to support her Misappropriation of Funds and Wire and Ach Fraud 

claims.4 (Pl.'s Am. Comp!. at 11, 16.) Generally, UCC Article 4 governs bank deposits and 

collections. Specifically, §4A-208 governs the rights and liabilities of parties when the payment 

order designates an intermediary or beneficiary's bank by a number which is not correct. The 

section also governs when the designation is by name and number and where each identify a 

different bank. Next, §4A-108 provides that the article does not apply to a funds transfer that is 

governed by the Electronic Fund Transfer Act of 1978 ("EFTA"). In her Amended Complaint, 

Gay fails to plead that a payment order designated an incorrect intermediary or beneficiary's bank 

number or that there was a discrepancy in name, number, and bank. Rather, she states that an 

H&R Block manager informed her "that someone by the name of Sean Mullen or Sean Logan had 

withdr[awn] money from [her] account after [she] closed it." (Pl.'s Am. Comp!. at 11 (internal 

quotations omitted).) Additionally, Gay wholly fails to plead any facts surrounding the EFTA or 

its applicability. After review, the Comi FINDS the Gay has failed to plead a cause of action or 

4 Gay cites, respectively, "U.C.C. §4A-208 Misdescription of Intermediary Bank or Beneficiary's Bank" and 

"U.C.C. Art. 4A. Funds Transfer §4A-108. Relationship to Electronic Fund Transfer Act." (Pl.'s Campi. at 11, 16 

(emphasis omitted).) 

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claim relevant under the above listed UCC Article 4 provisions. Therefore, as Gay has failed to 

prove federal question under UCC Atticle 4, the claims emanating from it should be DISMISED. 

3. 29 U.S.C. § 1109 Claims 

For her claims of Breach of Fiduciary Duty and Negligence, Gay relies, in part, on 29 

U.S.C. § 1109. This statute provides liability for breach of fiduciaty duty as relates to the 

Employee Retirement Income Security Program ("ERIS"). In her Amended Complaint, Gay 

wholly fails to plead any facts that support she is a member of the ERIS program or that EFS owed 

her a duty pursuant to an ERIS plan. Accordingly, the Court FINDS Gay has not properly pled 

federal question jurisdiction under 29 U.S.C. § 1109 and her Breach of Fiduciary Duty and 

Negligence claims should be DISMISSED. 5 

For the foregoing reasons, the Comt FINDS that Gay has failed to meet her burden to plead 

claims of federal question under 28 U.S.C. § 1331. Accordingly, the Comt FINDS that it lacks 

original jurisdiction to adjudicate this lawsuit and that EFS' motion should be GRANTED. As 

such, the Comt RECOMMENDS that EFS' motion be GRANTED and that all claims against it 

be DISMISSED for lack of subject matter jurisdiction. 

C. State Law Claims 

Lastly, in all her claims against EFS, with the exception of Misappropriation of Funds and 

Unjust Enrichment, Gay relies on various _Texas statutes. A federal court may exercise 

supplemental jurisdiction over state law claims that arise from the same case or controversy 

presented in the federal lawsuit. 28 U.S.C. § 1367. A court may decline to exercise supplemental 

jurisdiction for the following reasons: 

(1) the claim raises a novel or complex issue of State law, 

5 Notably, "Texas does not recognize a fiduciaiy duty owed by a lender to a borrower." Williams v. 

CounliJ>wide, 504 F.Supp.2d 176, 192 (S.D. Tex. 2007); Esty v. Beal Bank, S.S.B., 298 S. W.3d 280, 304 (Tex. App.-

Dall. I 009, no pet.). 

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(2) the claim substantially predominates over the claim or claims over 

which the district court has original jurisdiction, 

(3) the district court has dismissed all claims over which it has original 

jurisdiction, or 

(4) in exceptional circumstances, there are other compelling reasons for 

declining jurisdiction. 

28 U.S.C. § 1367(c). 

As to Gay's remaining state law claims, the Court RECOMMENDS DECLINATION to 

exercise supplemental jurisdiction over such claims, based on the factors set forth in 28 U.S.C. § 

1367(c), as well as the common-law factors of judicial economy, convenience, fairness, and 

comity. 

IV. RECOMMENDATION 

For the reasons set above, the Court RECOMMENDS that Motion to Dismiss for Lack of 

Subject-Matter Jurisdiction [doc. 19] be GRANTED, as Gay's suit lacks subject matter 

jurisdiction under Federal Rule of Civil Procedure 12(b)(l). 

The Comi fmiher RECOMMENDS the District Judge DECLINE to exercise 

supplemental jurisdiction over Gay's state law claims. 

NOTICE OF RIGHT TO OBJECT TO PROPOSED 

FINDINGS, CONCLUSIONS AND RECOMMENDATION 

AND CONSEQUENCES OF FAILURE TO OBJECT 

Under 28 U.S.C. § 636(b)(l), each party to this action has the right to serve and file specific 

written objections in the United States District Court to the United States Magistrate Judge's 

proposed findings, conclusions and recommendation within fourteen (14) days after the party has 

been served with a copy of this document. The United States District Judge need only make a de 

nova determination of those po1iions of the United States Magistrate Judge's proposed findings, 

conclusions and recommendation to which specific objection is timely made. See 28 U.S.C. § 

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636(b)(l). Failure to file, by the date stated above, a specific written objection to a -~roposed 

factual finding or legal conclusion will bar a party, except upon grounds of plain error or manifest 

injustice, from attacking on appeal any such proposed factual findings and legal cotr-iclusions 

accepted by the United States District Judge. See Douglass v. United Servs. Auto Ass 'n , 7 9 F.3d 

1415, 1428~29 (5th Cir. 1996), modified by statute on other grounds, 28 U.S.C. § e;3 6 (b)(l) 

(extending time to file objections to 14 days). 

ORDER 

Under 28 U.S.C. § 636, it is hereby ORDERED that each party is granted until July 13, 

2023, to serve and file written objections to the United States Magistrate Judge's Proposed 

findings, conclusions and recommendations. It is further ORDERED that if objections are filed 

and the opposing party chooses to file a response, the response shall be filed within seven (7) days 

of the filing date of the objections. 

It is further ORDERED that the above-styled and numbered action, previously referred to 

the United States Magistrate Judge for findings, conclusion and recommendations, be and hereby 

is returned to the docket of the United States District Jud 

SIGNED June 29, 2023. 

- URETON 

TATES MAGISTRATE JUDGE 

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