Opinion

1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 MARCOS DANIEL SANCHEZ, Case No. 26-cv-03167-BAS-VET 14 Plaintiff, ORDER GRANTING IN PART 15 v. DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S CLAIMS 16 SYNCHRONY BANK N.A., WITH PREJUDICE (ECF No. 3) 17 Defendant. 18 19 Presently before the Court is Defendant Synchrony Bank N.A.’s motion to dismiss 20 Plaintiff’s claims with prejudice (“Motion”). (ECF No. 3.) For the reasons below, the 21 Court GRANTS IN PART Defendant’s Motion. The Court dismisses all causes of action, 22 but declines to dismiss them all with prejudice. 23 I. BACKGROUND 24 Plaintiff Marcos Daniel Sanchez is self-represented. According to his Complaint, 25 he maintained foreign-currency accounts with Defendant. (ECF No. 1-2 ¶ 7.) The 26 Complaint alleges various violations of federal law involving allegedly false adverse 27 entries to credit bureaus (i.e., Equifax, Experian, and TransUnion). (Id. ¶ 10(a).) 28 Defendant’s reporting produced three concrete harms: Plaintiff’s accounts were frozen, he 1 was denied credit-line increases, and negative marks appeared and persisted on his credit 2 reports. (Id. ¶ 10(b).) Plaintiff also references an “Original Agreement” that allegedly 3 disclosed the “securitization” of his “CAP name” (his capitalized name, “MARCOS 4 DANIEL SANCHEZ”) to an unnamed person. (Id. ¶ 15(a).) 5 Plaintiff initially sued Defendant Synchrony Bank N.A. in the Superior Court of 6 California, County of San Diego. (Id.) Plaintiff’s complaint brings the following causes 7 of action (Id. ¶¶ 20–47): 8 1. Count 1: Breach of Fiduciary Duty (12 U.S.C. §§ 1841, 1843(f), 1847; 12 C.F.R. 9 § 5.34); 10 2. Count 2: “Intentional Enrichment” / Foreign-Commerce Violations (12 U.S.C. 11 §§ 503, 615, 461b; 15 U.S.C. § 78c; 15 C.F.R. Part 734); 12 3. Count 3: U.C.C. Conversion / “WITHOUT RECOURSE” (Cal. U.C.C. §§ 3103, 13 3301); 14 4. Count 4: Sherman Act §§ 1 & 2; 15 5. Count 5: Deprivation of Rights Under Color of Law (“15 U.S.C. § 242”); 16 6. Count 6: Government Obligation (12 C.F.R. § 351.12); 17 7. Count 7: Coercion, Duress, and Racketeering (12 U.S.C. § 411); 18 8. Count 8: Fraudulent Securitization Disclosure; 19 9. Count 9: Fraud under U.C.C. § 3-305(a)(1)(iii); 20 10. Count 10: 31 C.F.R. § 328.5 (“Special Endorsement Rights”); 21 11. Count 11: 15 U.S.C. § 1605 (Finance Charges / Collusion); and 22 12. Count 12: U.C.C. § 2-311 (Good-Faith Cooperation). 23 On May 20, 2026, Defendant removed the case from the Superior Court of the State 24 of California to this Court. (ECF No. 1.) Defendant filed a motion to dismiss Plaintiff’s 25 claims. (ECF No. 3.) Plaintiff opposed Defendant’s motion to dismiss.1 (ECF No. 8.) 26 II. LEGAL STANDARD 27 1 Since the Court has denied Plaintiff’s separate motion to remand (ECF No. 13), the Court does 28 1 Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss based on 2 the legal sufficiency of the claims asserted in the complaint. Navarro v. Block, 250 F.3d 3 729, 732 (9th Cir. 2001). The court must accept all factual allegations pleaded in the 4 complaint as true and draw all reasonable inferences from them in favor of the nonmoving 5 party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). To avoid a 6 Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations; rather, 7 it must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. 8 Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the 9 plaintiff pleads factual content that allows the court to draw the reasonable inference that 10 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 11 (2009) (citing Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are ‘merely 12 consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and 13 plausibility of entitlement to relief.’ ” Id. (quoting Twombly, 550 U.S. at 557). 14 III. ANALYSIS 15 A. Count 1: Breach of Fiduciary Duty (12 U.S.C. §§ 1841, 1843(f), 1847; 12 16 C.F.R. § 5.34) 17 Plaintiff alleges Defendant breached its fiduciary “duties of care and disclosure” by 18 failing to make material disclosures required under federal law. More specifically, Plaintiff 19 cites federal laws 12 U.S.C. §§ 1841, 1843(f), 1847; 12 C.F.R. § 5.34—none of which, as 20 Defendant points out (ECF No. 3 at 15:6–22) impose fiduciary duties upon banks or permit 21 a private cause of action. This alone is sufficient grounds to dismiss Plaintiff’s claims 22 under Count 1. 23 Under California law, “[t]he elements of a cause of action for breach of fiduciary 24 duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage 25 proximately caused by the breach.” Stanley v. Richmond, 35 Cal.App.4th 1070, 1086 26 (1995). Typically, “[t]he relationship between a bank and its depositor is not fiduciary in 27 character but, rather, founded on contract . . . which is ordinarily memorialized by a 28 1 signature card that the depositor signs upon opening the account.” Chazen v. Centennial 2 Bank, 61 Cal.App.4th 532, 537 (1998) (internal citations omitted). 3 Next, though banks may owe depositors a duty of care (separate from a fiduciary 4 duty) in certain circumstances under California law, Plaintiff has not alleged any of those 5 circumstances here. See, e.g., The L. Firm of Fox & Fox v. Chase Bank, N.A., 95 Cal. App. 6 5th 182, 200–01 (2023) (“Banks owe a long-recognized duty of care to their depositors . . 7 . including to ensure a person making a withdrawal has authority to do so”); Bullis v. 8 Security Pac. Nat. Bank, 21 Cal.3d 801, 808 (1978) (a bank has “a duty to act with 9 reasonable care in its transactions with its depositors”); Basch v. Bank of America, 22 10 Cal.2d 316, 321 (1943) (“[A] bank pays a forged check at its peril”); Pacific Finance Corp. 11 v. Bank of Yolo, 215 Cal. 357, 361 (1932) (banks have a duty to ensure funds are not 12 “improperly disbursed”). 13 Thus, the Court GRANTS Defendant’s motion to dismiss. (ECF No. 3.) Since 14 Plaintiff may amend his claim to plead a breach of duty of care under California law, the 15 Court DISMISSES WITHOUT PREJUDICE Plaintiff’s claim for breach of fiduciary 16 duty (Count 1). 17 B. Count 2: “Intentional Enrichment” / Foreign-Commerce Violations (12 18 U.S.C. §§ 503, 615, 461b; 15 U.S.C. § 78c; 15 C.F.R. Part 734) 19 Plaintiff alleges Defendant engaged in “intentional enrichment” by “knowingly 20 retained currency gains and fees” in violation of an array of banking and export provisions. 21 (ECF No. 1-2 ¶¶ 23–25.) 22 “The elements for a claim of unjust enrichment are ‘receipt of a benefit and unjust 23 retention of the benefit at the expense of another.’ ” Prakashpalan v. Engstrom, 24 Lipscomb & Lack, 223 Cal.App.4th 1105, 1132 (2014). 25 “The theory of unjust enrichment requires one who acquires a benefit which may not justly 26 be retained, to return either the thing or its equivalent to the aggrieved party so as not to be 27 unjustly enriched.” Id. Though Plaintiff claims Defendant “knowingly retained currency 28 gains and fees” (ECF No. 1-2 ¶ 24), Plaintiff does not provide justification for why such 1 retention is “unjust” or “at the expense of another.” Prakashpalan, 223 Cal.App.4th at 2 1132. 3 Next, as Defendant argues (ECF No. 3 at 17:3–17:16), Plaintiff alleges that the 4 relationship between Plaintiff and Defendant is governed by the “original agreement”—an 5 express contract—and repeatedly evokes “his contractual rights.” Durell v. Sharp 6 Healthcare, 183 Cal. App. 4th 1350, 1370 (2010); see also Huffman v. JP Morgan Chase 7 Bank, N.A., No. 24 5653, 2026 WL 396536, at *1 (9th Cir. Feb. 12, 2026) (unjust 8 enrichment fails where Deposit Account Agreement governed relationship under similar 9 state law). 10 Lastly, as Defendant points out (ECF No. 3 at 17:17–18:13), Plaintiff’s “Foreign- 11 Commerce Violations” are brought under federal laws that do not provide private rights of 12 action (12 U.S.C. §§ 503, 615, 461b; 15 U.S.C. § 78c; 15 C.F.R. Part 734). 13 Thus, the Court GRANTS Defendant’s motion to dismiss. (ECF No. 3.) and 14 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim for unjust enrichment (Count 15 2). 16 C. Count 3: U.C.C. Conversion / “WITHOUT RECOURSE” (Cal. U.C.C. 17 §§ 3103, 3301) 18 As an initial matter, Plaintiff’s cited provisions of the California Uniform 19 Commercial Code (Cal. Com. Code §§ 3103, 3301) do not provide a private cause of action 20 for conversion. This alone is sufficient grounds to dismiss Plaintiff’s claims under Count 21 3. 22 Next, from what the Court can discern, Plaintiff brings a claim for conversion against 23 Defendant for declining to pay out or credit Plaintiff’s self-endorsed instruments under the 24 California Uniform Commercial Code. (ECF No. 1-2 ¶¶ 16, 26–27 (Defendant allegedly 25 “improperly credited or converted” Plaintiff’s negotiable instruments bearing his “without 26 recourse” endorsement).) As Defendant argues (ECF No. 3 at 18:14–19:5), Plaintiff fails 27 to go beyond conclusory allegations (i.e., improperly credited or converted) to describe the 28 facts underlying Plaintiff’s conversion cause of action. Twombly, 550 U.S. at 556 (Rule 8 1 “requires a complaint with enough factual matter (taken as true) to suggest” that a violation 2 has occurred). 3 Moreover, the Court cannot ascertain what provision of the California Uniform 4 Commercial Code Plaintiff is alleging Defendant violated in his conversion cause of action. 5 Although there are some U.C.C. provisions dealing with conversion, none of them are 6 applicable to the facts alleged in Plaintiff’s Complaint. 7 For example, under Cal. Com. Code § 3420(a), a plaintiff can bring an action against 8 a bank where “[a]n instrument is . . . converted . . . [because] it is taken by transfer, other 9 than a negotiation, from a person not entitled to enforce the instrument or a bank makes or 10 obtains payment with respect to the instrument for a person not entitled to enforce the 11 instrument or receive payment.” Id. But, “[a]n action for conversion of an instrument may 12 not be brought by . . . a payee or indorsee who did not receive delivery of the instrument.” 13 Id. (emphasis added). Given that Plaintiff is the alleged endorser of the alleged instrument 14 (ECF No. 1-2 ¶ 16(a) (“For value received, pay to the order of [payee] without recourse — 15 [signed] Marcos D. Sanchez, Attorney in Fact for Marcos Daniel Sanchez”)), Plaintiff 16 cannot bring a claim under Cal. Com. Code § 3420 for conversion. 17 As another example, under Cal. Com. Code § 3419, a plaintiff can bring a cause of 18 action for conversion of an instrument against a bank “when . . . [the instrument] is paid 19 on a forged endorsement” and where the plaintiff is the payee of the instrument. Id. 20 However, here Plaintiff does not allege the instrument was paid or the endorsement (by 21 Plaintiff himself) was forged. 22 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 23 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim for conversion under the 24 California Uniform Commercial Code (Count 3). 25 D. Count 4: Sherman Act §§ 1 & 2 (15 U.S.C. §§ 1 & 2) 26 To plead antitrust injury under the Sherman Act, the plaintiff must allege “(1) 27 unlawful conduct, (2) causing an injury to [the plaintiff], (3) that flows from that which 28 makes the conduct unlawful, and (4) that is of the type the antitrust laws were intended to 1 prevent.” See Realtek Semiconductor Corp. v. MediaTek, Inc., 769 F. Supp. 3d 1067, 1092 2 (N.D. Cal. 2025) (citing PLS.Com, LLC v. Nat’l Ass’n of Realtors, 32 F.4th 824, 832 (9th 3 Cir. 2022)). 4 Here, Plaintiff claims Defendant violated Sherman Act, 15 U.S.C. §§ 1, 2 by 5 submitting false adverse entries to credit bureaus (i.e., Equifax, Experian, and TransUnion). 6 (See ECF No. 1-2 ¶¶ 28–29.) More specifically, Plaintiff alleges Defendant’s reporting to 7 credit bureaus “unreasonably restrains trade in the market for banking and credit-reporting 8 services.” Plaintiff also alleges coordinated false reporting among Defendant and credit 9 bureaus is “an exclusionary practice designed to monopolize the credit-reporting market.” 10 (ECF No. 1-2 ¶¶ 11(b), 29.) However, as Defendant asserts (ECF No. 3 at 19:21–20:11), 11 Plaintiff fails to allege how Defendant’s conduct—furnishing data to credit bureaus—is an 12 unlawful conspiracy prohibited by antitrust law. Twombly, 550 U.S. at 557 (A “bare 13 assertion of conspiracy will not suffice”); see also 15 U.S.C.A. § 1681(a) (The “banking 14 system is dependent upon fair and accurate credit reporting” around which an “elaborate 15 mechanism has been developed for investigating and evaluating [] credit worthiness.”). 16 Additionally, as Defendant points out (ECF No. 3 at 20:12–21:5), Plaintiff also fails 17 to allege how the harm suffered by Plaintiff (i.e., frozen accounts, denied credit-line 18 increases, and negative marks persisting on his credit reports) (ECF No. 1-2 ¶ 10(b)) is “the 19 type the antitrust laws were intended to prevent.” PLS.Com, LLC, 32 F.4th at 832; Pool 20 Water Prods. v. Olin Corp., 258 F.3d 1024, 1034 (9th Cir. 2001) (quoting Rebel Oil Co. v. 21 ARCO, 51 F.3d 1421, 1433 (9th Cir. 1995)) (To “show antitrust injury, a plaintiff must 22 prove that his loss flows from an anticompetitive aspect or effect of the defendant’s 23 behavior.”). 24 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 25 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim under the Sherman Act (Count 26 4). 27 E. Count 5: Deprivation of Rights Under Color of Law (“15 U.S.C. § 242”) 28 1 As an initial matter, Plaintiff cites federal law 15 U.S.C. § 242—which neither 2 provides a cause of action for deprivation of rights under color of law nor permits a private 3 cause of action. (ECF No. 1-2 ¶¶ 30–31.) This alone is sufficient grounds to dismiss 4 Plaintiff’s claims under Count 5. 5 Even when construing Plaintiff’s claim as an 18 U.S.C. § 1983 claim for deprivation 6 of rights under color of law, the defendant must engage in a state action. As Defendant 7 argues (ECF No. 3 at 21:6–22:11), Plaintiff has not alleged any circumstances in which 8 Defendant—a private bank—could have engaged in a state action. See, e.g., Rawson v. 9 Recovery Innovations, Inc., 975 F.3d 742, 747 (9th Cir. 2020) (setting out test for state 10 action); Kirtley v. Rainey, 326 F.3d 1088, 1093 (9th Cir. 2003) (credit reporting has never 11 been “both traditionally and exclusively governmental” and therefore does not satisfy the 12 public-function test); Bailey v. Harleysville Nat’l Bank & Trust, No. 05–4352, 2006 WL 13 2009329, at *2 (3d Cir. July 18, 2006) (“[B]anks have been found not to be state actors, 14 despite extensive regulation, even when their complained-of actions have been explicitly 15 authorized by the state . . . The bank is not a state actor.”). 16 Since Plaintiff cannot bring constitutional claims against Defendant—as a private 17 bank—the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and DISMISSES 18 WITH PREJUDICE Plaintiff’s claim for deprivation of rights under color of law (Count 19 5). See Potts v. Crosby Indep. Sch. Dist., No. 05–20615, 2006 WL 2985939 (5th Cir. Oct. 20 18, 2006) (dismissing with prejudice pro se plaintiff’s § 1983 claim against bank dismissed 21 as conclusory because, even liberally construed, the bank was not a state actor and did not 22 act under color of state law). 23 F. Count 6: Government Obligation (12 C.F.R. § 351.12) 24 Plaintiff alleges Defendant’s conduct breaches “the statutory obligation of the 25 United States Government to ensure covered financial activities serve the public interest” 26 under 12 C.F.R. § 351.12. (ECF No. 1-2 ¶¶ 33–37.) 27 Again, Defendant is a private bank, and cannot be counted as an actor of the federal 28 government. (See ECF No. 3 at 22:12–23.) In addition, 12 C.F.R. § 351 does not create a 1 private right of action. Put differently, even if Defendant were an actor of the federal 2 government, Plaintiff cannot enforce a private action against Defendant. 3 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 4 DISMISSES WITH PREJUDICE Plaintiff’s claim for imposing the federal 5 government’s statutory duty under 12 C.F.R. § 351.12 upon Defendant (Count 6). 6 G. Count 7: Coercion, Duress, and Racketeering 7 Plaintiff alleges Defendant used “coercive threats, duress, and racketeering-type 8 behavior” to force the “Original Obligor” into an unfavorable position in violation of 12 9 U.S.C. § 411. (ECF No. 1-2 ¶¶ 34–35.) 10 As an initial matter, 12 U.S.C. § 411 states only that Federal Reserve notes are U.S. 11 obligations and legal tender. It does not provide for a cause of action, or discuss coercion, 12 duress, or racketeering. This alone is sufficient grounds to dismiss Plaintiff’s claims under 13 Count 7. 14 Next, as Defendant argues (ECF No. 3 at 22:24–23:19), most of Plaintiff’s other 15 cited statutes against Defendant—18 U.S.C. §§ 1005 (prohibiting false credit entries), 1951 16 (prohibiting extortion), 15 U.S.C. § 78c—do not provide private rights of action. See 17 Keyter v. McCain, 207 F. App’x 801, 802 (9th Cir. 2006) (A plaintiff cannot bring civil 18 claims “based on federal criminal statutes because statutes that provide for punishment by 19 fine or imprisonment do not create privately enforceable rights or give rise to civil 20 liability.”). 21 Further, though 12 U.S.C. § 1972 can involve a private right of action under 12 22 U.S.C. § 1975, Plaintiff fails to allege an “anti-competitive tying arrangement” and how 23 such arrangement could benefit Defendant (see ECF No. 3 at 2:15–26). S & N Equip. Co. 24 v. Casa Grande Cotton Fin. Co., 97 F.3d 337, 345 (9th Cir. 1996) (quotations omitted) 25 (“To establish a violation of § 1972, a plaintiff must show that (1) the banking practice in 26 question was unusual in the banking industry, (2) an anti-competitive tying arrangement 27 existed, and (3) the practice benefits the bank.”). 28 1 Lastly, to plead a civil claim under Section 1964(c) of the Racketeer Influenced and 2 Corrupt Organizations (“RICO”) Act, 18 U.S.C. §§ 1961–1968, Plaintiff must allege the 3 following elements: “(1) conduct (2) of an enterprise (3) through a pattern (4) of 4 racketeering activity (5) causing injury to plaintiff’s business or property.” United Bhd. of 5 Carpenters & Joiners of Am. v. Bldg. & Const. Trades Dep’t, AFL-CIO, 770 F.3d 834, 837 6 (9th Cir. 2014). Plaintiff’s vague and conclusory allegation that Defendant engaged in 7 “racketeering-type behavior” (ECF No. 1-2 ¶ 35) falls short of identifying predicate acts 8 qualifying as “racketeering” as defined by 18 U.S.C. § 1961 (see ECF No. 3 at 24:27– 9 25:9). 10 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 11 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim for coercion, duress, and 12 racketeering (Count 7). 13 H. Count 8: Fraudulent Securitization Disclosure 14 Plaintiff alleges Defendant engaged in “fraudulent securitization disclosure” 15 because the “securitization of the ‘CAP name’ ” was “fully disclosed in the Original 16 Agreement,” and any omission or misrepresentation of that securitization is fraud. (ECF 17 No. 1-2 ¶¶ 15, 36–37.) 18 There is no cause of action by the name “fraudulent securitization disclosure” in 19 either California or federal law. From the named cause of action, the Court construes 20 Plaintiff’s claim as one “sounding in fraud.” Kearns v. Ford Motor Co., 567 F.3d 1120, 21 1125 (9th Cir. 2009). In federal court, claims sounding in fraud must satisfy Rule 9(b), in 22 that they must specify “the times, dates, places, benefits received, and other details of the 23 alleged fraudulent activity” such that the defendant has “notice of the particular misconduct 24 which is alleged to constitute the fraud.” Glazer Cap. Mgmt., L.P. v. Forescout Techs., 25 Inc., 63 F.4th 747, 765 (9th Cir. 2023) (citation and internal quotation marks omitted). 26 Here, beyond failing to cite any state or federal law that prohibits Defendant’s 27 alleged “fraudulent securitization disclosure” as fraudulent misconduct, Plaintiff also does 28 1 not provide any times, dates, places, or benefits derived from such disclosure. Glazer Cap. 2 Mgmt., L.P., 63 F.4th at 765. 3 Thus, the Court agrees with Defendant that Plaintiff has failed to meet the standards 4 of pleading fraud set forth by Rule 9(b) (ECF No. 3 at 25:10–21), and GRANTS 5 Defendant’s motion to dismiss (ECF No. 3) and DISMISSES WITHOUT PREJUDICE 6 Plaintiff’s claim for “fraudulent securitization disclosure” (Count 8). 7 I. Count 9: Fraud under U.C.C. § 3-305(a)(1)(iii) 8 Plaintiff alleges Defendant engaged in fraud under the Uniform Commercial Code 9 § 3-305(a)(1)(iii) by misrepresenting the instruments’ terms, failure to disclose material 10 facts, and improper handling of the “without recourse” endorsements. (See ECF No. 1-2 11 ¶¶ 38–39.) 12 However, as Defendant points out (ECF No. 3 at 25:22–26:4), U.C.C. § 3- 13 305(a)(1)(iii) is a state provision providing a defense against a breach of contract claim— 14 whereby an obligor can assert fraud when someone enforces an instrument against her. 15 Thus, Plaintiff cannot cite U.C.C. § 3-305(a)(1)(iii) to affirmatively bring a claim. 16 To the extent Plaintiff’s claim “sounds in fraud,” Plaintiff again fails to provide 17 details of how Defendant’s activity constitutes fraud to meet the Rule 9(b) pleading 18 standard (e.g., how did Defendant misrepresent the instruments’ terms to Plaintiff and how 19 was Plaintiff wronged by such misrepresentations). See Glazer Cap. Mgmt., L.P., 63 F.4th 20 at 765; Kearns, 567 F.3d at 1125. 21 Since U.C.C. § 3-305(a)(1)(iii) is an affirmative defense and cannot be asserted as 22 an independent cause of action, the Court GRANTS Defendant’s motion to dismiss (ECF 23 No. 3) and DISMISSES WITH PREJUDICE Plaintiff’s claim under U.C.C. § 3- 24 305(a)(1)(iii) (Count 9). 25 J. Count 10: 31 C.F.R. § 328.5 (“Special Endorsement Rights”) 26 Plaintiff claims that 31 C.F.R. § 328.5 authorizes a holder on an instrument to make 27 a “special endorsement” to obtain payment, that he exercised that right, that Defendant 28 1 refused to honor it, and that he suffered lost timely payment, added fees, and credit harm 2 as a result. (See ECF No. 1-2 ¶¶ 40–43.) 3 First, 31 C.F.R. § 328.5 confers no private right of action and does not involve a 4 customer’s asserted right to “specially endorse” instruments for payment. This alone is 5 sufficient to dismiss Count 10. 6 Next, as Defendant argues (ECF No. 3 at 26:19–27:18), 31 C.F.R. Part 328 only 7 governs restrictive endorsements of “U.S. bearer securities.” (See ECF No. 3 at 27:2–3 8 (citing 31 C.F.R. § 328.1).) Since Plaintiff fails to plead that any U.S. bearer securities 9 were presented to Defendant or that Defendant refused, Plaintiff’s claim under 31 C.F.R. 10 § 328.5 should be dismissed. Additionally, 31 C.F.R. § 328.5 provides form language for 11 endorsement to be placed on a bearer security, including terms such as the “Federal Reserve 12 Bank” and “Fiscal Agent of the United States.” However, the language allegedly endorsing 13 Plaintiff’s instruments— “For value received, pay to the order of [payee] without 14 recourse,” followed by his signature as attorney-in-fact (ECF No. 1-2 ¶ 16(a))—does not 15 contain those terms. 16 Because 31 C.F.R. § 328.5 confers no private right of action and Plaintiff cannot 17 bring a claim under that provision and Plaintiff does not cite any other law to support his 18 “special endorsement rights,” the Court GRANTS Defendant’s motion to dismiss (ECF 19 No. 3) and DISMISSES WITH PREJUDICE Plaintiff’s claim under 31 C.F.R. § 328.5 20 (Count 10). 21 K. Count 11: 15 U.S.C. § 1605 (Finance Charges / Collusion) 22 Plaintiff alleges Defendant improperly determined the “finance charge” in a 23 discriminatory manner, and used bureau information as a pretext to impose additional, 24 undisclosed, or inflated charges to penalize him for his credit profile. (See ECF No. 1-2 ¶¶ 25 44–46.) 26 Section 1605 of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., is 27 TILA’s definition of “finance charge,” not a standalone liability provision. Section 1640 28 of TILA is the statute’s civil remedy, but only provides a private cause of action for certain 1 failures to make required disclosures. Plaintiff does not claim Defendant failed to make 2 any disclosures listed under 15 U.S.C. § 1640. 3 Next, as Defendant argues (ECF No. 3 at 28:11–13), a “finance charge” under 4 Section 1605 of TILA must be “incident to the extension of credit.” See 15 U.S.C. 5 § 1605(a). Plaintiff expressly states the relevant charges were “not incident to the 6 extension of credit.” (ECF No. 1-2 ¶ 46.) 7 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 8 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim under 15 U.S.C. § 1605 (Count 9 11). 10 L. Count 12: U.C.C. § 2-311 (Good-Faith Cooperation) 11 Plaintiff claims Defendant violated U.C.C. § 2-311 for failure to cooperate in good 12 faith. Notably, Plaintiff fails to specify what aspect of Defendant’s behavior allegedly 13 constitutes a failure to cooperate in good faith. 14 In addition, U.C.C. § 2-311 governs the sale of goods—and would require Plaintiff 15 to allege Defendant has sold Plaintiff goods, or to explicitly state the agreement between 16 Plaintiff and Defendant was regarding the sale of goods. Under U.C.C. § 2-105(1), 17 “goods” are defined as: 18 All things (including specially manufactured goods) which are movable at the time of identification to the contract for sale, other than the money in which 19 the price is to be paid, investment securities (Article 8), and things in action. 20 21 Plaintiff’s allegations that Defendant is a “national banking association” (ECF No. 22 1-2 ¶ 2) and that Plaintiff “maintained foreign-currency accounts” (id. ¶ 7) with Defendant 23 implies that Defendant provided banking services to Plaintiff, but not that Defendant has 24 provided any sale of “movable” physical goods under U.C.C. § 2-105(1). (See ECF No. 3 25 at 29:13–21.) 26 Thus, the Court GRANTS Defendant’s motion to dismiss (ECF No. 3) and 27 DISMISSES WITHOUT PREJUDICE Plaintiff’s claim under U.C.C. § 2-311 for failure 28 to cooperate in good faith (Count 12). 1 IV. CONCLUSION 2 For the reasons above, the Court GRANTS IN PART Defendant’s Motion. 3 More specifically, the Court DISMISSES WITH PREJUDICE the following causes of 4 action: 5 1. Count 5: Deprivation of Rights Under Color of Law (“15 U.S.C. § 242”); 6 2. Count 6: Government Obligation (12 C.F.R. § 351.12); 7 3. Count 9: Fraud under U.C.C. § 3-305(a)(1)(iii); and 8 4. Count 10: 31 C.F.R. § 328.5 (“Special Endorsement Rights”). 9 The Court DISMISSES WITHOUT PREJUDICE the following causes of action: 10 1. Count 1: Breach of Fiduciary Duty (12 U.S.C. §§ 1841, 1843(f), 1847; 12 C.F.R. 11 § 5.34); 12 2. Count 2: “Intentional Enrichment” / Foreign-Commerce Violations (12 U.S.C. 13 §§ 503, 615, 461b; 15 U.S.C. § 78c; 15 C.F.R. Part 734); 14 3. Count 3: U.C.C. Conversion / “WITHOUT RECOURSE” (Cal. U.C.C. §§ 3103, 15 3301); 16 4. Count 4: Sherman Act §§ 1 & 2; 17 5. Count 7: Coercion, Duress, and Racketeering (12 U.S.C. § 411); 18 6. Count 8: Fraudulent Securitization Disclosure; 19 7. Count 11: 15 U.S.C. § 1605 (Finance Charges / Collusion); and 20 8. Count 12: U.C.C. § 2-311 (Good-Faith Cooperation). 21 Plaintiff is GRANTED fourteen (14) days from the date of this Order to file an 22 Amended Complaint curing deficiencies in the claims dismissed without prejudice. 23 Plaintiff must file an Amended Complaint by July 24, 2026. 24 Plaintiff’s Amended Complaint must be complete by itself without reference to 25 either of his prior complaints. Defendants not named and any claim not re-alleged in the 26 Second Amended Complaint will be considered waived. See S.D. Cal. CivLR 15.1; Hal 27 Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1546 (9th Cir. 1989) 28 (“[A]n amended pleading supersedes the original.”); Lacey v. Maricopa Cnty., 693 F.3d 1 928 (9th Cir. 2012) (noting that claims dismissed with leave to amend which are not 2 re-alleged in an amended pleading may be “considered waived if not repled.”’). 3 IT IS SO ORDERED. 4 ~ 5 || DATED: July 10, 2026 (yatta Baphar □□ 6 H n. Cynthia Bashant, Chief Judge United States District Court 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 45]