Defendant Wise US Inc. (“Wise”), by and through undersigned counsel, and pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., as well as Rule 12(b)(6) of the Federal Rules of Civil Procedure, submits this Memorandum of Law in Support of Motion to Compel Arbitration and Stay Proceedings or, in the alternative, Motion to Dismiss stating as follows:
I. Introduction
The U.S. Supreme Court has routinely held that “courts must `rigorously enforce’ arbitration agreements according to their terms.” Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013) (emphasis added) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221 (1985)). Under the Federal Arbitration Act (“FAA”), an arbitration agreement must be enforced where: (1) the parties entered a written agreement to arbitrate claims, (2) the transaction has a nexus to interstate commerce, and (3) the arbitration clause encompasses the claims. 9 U.S.C. § 2. This inquiry must be undertaken against the background of a “liberal federal policy favoring arbitration agreements[.]” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (alterations added). Given the strong federal policy favoring arbitration, “the party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91 (2000). Thus, Wise’s motion to compel arbitration (the “Motion”) “must be addressed with a healthy regard for the federal policy favoring arbitration.'” Moses H. Cone Mem’l Hosp., 460 U.S. at 24. Plaintiff Youras Ziankovich (“Plaintiff”) asserts claims against Wise relating to funds transfers he attempted to make from his Wise account (the “Account”) and restrictions placed by Wise on those transfers. Plaintiff alleges a violation of 42 U.S.C § 1981, a claim for declaratory and injunctive relief under 28 U.S.C. §§ 2201-2202, as well as common law claims of breach of contract, defamation and false light. The documents that created the Account contain a binding arbitration provision which requires arbitration of any disputes “arising out of or related to” the relationship between Plaintiff and Wise. Accordingly, Plaintiff’s claims against Wise fall squarely within the scope of the arbitration provision, and, therefore, they must be compelled to arbitration.
II. Factual Background
On August 29, 2025, Plaintiff registered for the Account with Wise through Wise’s online platform, and Wise approved Plaintiff for the Account that same day. (Decl. of ANDREA MACCHIAVELLO, attached hereto as Ex. A, at ¶¶ 7-8.) In connection with registering for the Account, Plaintiff was required to click a button indicating that he agreed to be bound by Wise’s Terms of use and accompanying Customer Agreement (Personal) (the “Agreement”). (Ex. A at ¶¶ 8-21; Ex. A, Ex. 2.) Plaintiff clicked a button to confirm the registration of his Account, meaning he agreed to be bound by terms set forth in the Agreement, which contains a binding arbitration provision. (Ex. A at ¶¶ 8-21; Ex. A, Ex. 2.)
The arbitration provision included within the Agreement states:
Governing law and Agreement to Arbitrate. You agree that, except to the extent inconsistent with or preempted by federal law and except as otherwise stated in this Customer Agreement, the laws of the State of New York, without regard to principles of conflict of laws, will govern this Customer Agreement and any claim or dispute that has arisen or may arise between you and Wise, and regardless of your location. Except for disputes that qualify for small claims court, all disputes arising out of or related to this Agreement or any aspect of the relationship between you and Wise, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory, will be resolved through final and binding arbitration before a neutral arbitrator instead of in a court by a judge or jury and you agree that Wise and you are each waiving the right to trial by a jury. You agree that any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted and you are agreeing to give up the ability to participate in a class action. The arbitration will be administered by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules, as amended by this Agreement.
Ex. A, Ex. 2 at 30.) Now, rather than submitting his claims to arbitration, Plaintiff has filed his claims against Wise in this Court (“Complaint”) (Doc. 1.) In the Complaint, Plaintiff asserts claims against Wise under both state and federal law arising out of Wise allegedly placing improper restrictions on Plaintiffs’ attempted transfers from his Wise Account. (Doc. 1, PageID 10-25.) Specifically, Plaintiff claims such conduct amounts to a violation of 42 U.S.C § 1981 for discrimination in the making and enforcement of contracts, a breach of contract, defamation and false light, and entitles him to declaratory and injunctive relief. (Doc. 1, PageID 10-25.) For reasons set forth in greater detail below, these claims are subject to the arbitration provision.
III. Argument
A. This Court Should Enforce the Arbitration Agreement Because Arbitration Agreements Are Presumed Valid.
The FAA establishes that an arbitration agreement “shall be valid, irrevocable, and enforceable[.]” 9 U.S.C. § 2 (alterations added). Congress passed the FAA “to ensure judicial enforcement of privately made agreements to arbitrate,” and “to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-20 (1985). Through passage of the FAA, Congress placed arbitration agreements “upon the same footing as other contracts.” Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 225-26 (1987) (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974)). Indeed, the purpose behind the FAA is to promote the enforceability of arbitration agreements. See Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 476 (1989) (The federal policy underlying the FAA “is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.”). And the Supreme Court has held that judicial “suspicion of arbitration” has been repudiated as “out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes.” Rodriguez de Ouijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 481 (1989)).
Thus, Congress, through its passage of the FAA, and the Supreme Court, through its interpretation of the Act, have together created a strong federal policy favoring the enforcement of arbitration agreements. See e.g. Grigson v. Creative Artist Agency, LLC, 210 F.3d 524, 526 (5th Cir. 2000) (“Arbitration is favored in the law.”). These policies are so strong that, “as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp., 460 U.S. at 24-25. It is against the backdrop of this strong federal policy encouraging arbitration that this Court must evaluate the merits of Wise’s Motion. Upon doing so, this Court should find good grounds to grant it.
B. Questions of Arbitrability Should Be Left to the Arbitrator.
The arbitration provision in the Agreement incorporates the rules of the American Arbitration Association (the “AAA”), which require the arbitrator to decide the issue of arbitrability of claims. (Ex. A, Ex. 2 at 30.) Accordingly, any question as to whether Plaintiff’s claims are arbitrable must be resolved by the arbitrator. Agreements such as this authorize the arbitrator, not a court, to decide issues of arbitrability based upon the governing arbitration rules and have routinely been upheld by state and federal courts under the doctrine announced in First Options, Inc. v. Kaplan, 514 U.S. 938 (1995). There, the U.S. Supreme Court explained that “[j]ust as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, see, e.g., Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57, 115 S. Ct. 1212, 1216, 131 L. Ed. 2d 76 (1995); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct. 3346, 3353, 87 L. Ed. 2d 444 (1985), so the question `who has the primary power to decide arbitrability’ turns upon what the parties agreed about that matter.” First Options, Inc., 514 U.S. at 943. “[W]hen the parties have explicitly agreed that the question of arbitrability is to be decided by an arbitrator rather than the court, that agreement must be interpreted by an arbitrator.” Greater Canton Ford Mercury, Inc. v. Ables, 948 So. 2d 417, 422 (Miss. 2007).
Additionally, when parties explicitly incorporate rules of arbitration that empower an arbitrator to decide issues of arbitrability, such as the arbitral forum’s rules, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator. See Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 675 (5th Cir. 2012); Terminix Int’l Co. v. Palmer Ranch Ltd., 432 F.3d 1327, 1332 (11th Cir. 2005); Contec Corp. v. Remote Solution, Co., 398 F.3d 205, 208 (2d Cir. 2005) (finding that “when . . . parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator”).1
In Petrofac, the Fifth Circuit Court of Appeals held that an arbitration agreement “clearly and unmistakably” provided for an arbitration panel to decide the arbitrability of claims by expressly incorporating the AAA Rules into the agreement. See Petrofac, Inc., 687 F.3d at 675. After receiving an unfavorable ruling in arbitration, which was confirmed by the district court, the defendant argued on appeal that the arbitration panel had exceeded its authority by ruling on a claim that was outside the scope of the arbitration agreement. Id. at 674. Noting that the AAA rules grant the arbitrator “the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement,” the Fifth Circuit stated, “We agree with most of our sister circuits that the express adoption of these rules presents clear and unmistakable evidence that the parties agreed to arbitrate arbitrability.” Id. at 675. Accordingly, the court affirmed the district court’s confirmation of the arbitration panel’s arbitration award. Id.
In this case, the arbitration provision in the Agreement explicitly provides for the application of Consumer Arbitration Rules of the AAA. (Ex. A, Ex. 2 at 30.) These rules provide that “[t]he arbitrator shall have the power to rule on their own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.” See Am. Arbitration Assn. Consumer Arbitration Rules, www.adr.org, Rule R-7(a), attached hereto as Exhibit B. By stating that any arbitration must be conducted in accordance with the applicable rules of the AAA, the Arbitration Agreement leaves no doubt whatsoever that the arbitrator alone should have the power to rule on the arbitrability of the claims in this case. See Terminix, 432 F.3d at 1330-31; Petrofac, Inc., 687 F.3d at 675; AAA Rule R-7(a). Plaintiff cannot evade the consequences that flow from the incorporation of these rules into the Agreement, which were clearly disclosed in the arbitration provision. Thus, any challenge to the arbitrability of this dispute must be heard by the arbitrator.
1 See also, e.g., Apollo Computer, Inc. v. Berg, 886 F.2d 469, 473 (1st Cir. 1989); CitiFinancial, Inc. v. Newton, 359 F. Supp. 2d 545, 549-52 (S.D. Miss. 2005); Bayer CropScience, Inc. v. Limagrain Genetics Corp. Inc., No. 1:04-cv-5829, 2004 WL 2931284, at *4 (N.D. Ill. Dec. 9, 2004); Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, P.A. v. MedPartners, Inc., 203 F.R.D. 677, 685 (S.D. Fla. 2001), aff’d on other grounds, 312 F.3d 1349 (11th Cir. 2002).
C. The FAA’s Requirements for Enforcing an Arbitration Agreement Are Met.
In addition to being presumed valid, arbitration agreements are enforceable under the FAA if three requirements are met: (1) there is a written agreement to arbitrate, (2) the underlying transaction involves interstate commerce, and (3) the claims are covered by the arbitration agreement. 9 U.S.C. § 2; see Webb v. Investacorp, Inc., 89 F.3d 252, 258 (5th Cir. 1996). Here, each of these requirements is met.
1. The arbitration agreement is in writing.
There is no dispute that the Agreement to Arbitrate is in writing. (Ex. A, Ex. 2.) Thus, this requirement is met. See 9 U.S.C. § 2.
2. The transaction involved interstate and/or foreign commerce.
The FAA applies where the parties’ transaction involved “commerce.” 9 U.S.C. § 2. The term “involving commerce” has been interpreted as the functional equivalent of the more familiar term “affecting commerce” and “encompasses a wider range of transactions than those actually `in commerce’–that is, `within the flow of interstate commerce.'” Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003) (citing Allied-Bruce Terminix, 513 U.S. at 273). As such, “Congress’ Commerce Clause power `may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent `a general practice . . . subject to federal control.'” Id. at 56-57 (citing Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219, 236 (1948)). Put differently, the FAA extends to the Commerce Clause’s full reach. See Allied-Bruce Terminix, 513 U.S. at 270. It is beyond dispute that the delivery, transfer, or movement of goods, services, or other articles of commerce “across state lines has long been recognized as a form of `commerce.'” Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 573 (1997); Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 36 (1980); Gibbons v. Ogden, 22 U.S. 1, 194 (1824). Furthermore, commerce is defined in the FAA to mean “commerce among the several Sates or with foreign nations[.]” 9 U.S.C. § 1 (alterations and emphasis added). Here, Plaintiff is a Texas resident and Wise is headquartered in New York. (Doc. 1 at ¶ 2; Ex. A at ¶ 2.) Plaintiff also admits to utilizing his Wise Account for its primary purpose – to send money overseas. (Doc. 1 at ¶¶ 20-22; Ex. A at ¶ 2.) Thus, Plaintiff’s Account was used to send money to foreign nations, which is interstate commerce as defined by the FAA. Accordingly, since this transaction undoubtedly involved interstate commerce, the FAA is applicable here.
3. The arbitration agreement covers Plaintiff’s claims.
Once a binding arbitration agreement has been established, an “order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986). When deciding an arbitration agreement’s scope, courts look at the parties’ intent to submit the dispute to arbitration, starting with the arbitration agreement’s language. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). Importantly, “due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration.” Volt, 489 U.S. at 476; see also Bhatia v. Johnson, 818 F.2d 418, 421 (5th Cir. 1987) (explaining that any decision on arbitrability must be made with a “healthy regard for the federal policy favoring arbitration.”) (quotation marks omitted); see also Elkjer v. Scheef & Stone, LLP, 8 F. Supp. 3d 845, 849 (N.D. Tex. 2014) (“[T]he court must observe the strong federal policy favoring arbitration and resolve all ambiguities in favor of arbitration.”) (citation omitted). The presumption of arbitrability can be overcome only if “it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.” AT&T Techs. v. Commc’ns. Workers of Am., 475 U.S. 643, 650 (1986) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)); see also Lora v. Providian Bancorp Servs., No. EP-05-CA-045-DB, 2005 WL 1743878, at *2 (W.D. Tex. Jul. 22, 2005) (Because of the “strong presumption in favor of arbitration. . .a party seeking to invalidate an arbitration agreements bears the burden of establishing its invalidity.”).
The parties’ Agreement clearly encompasses the claims and allegations in this action. In pertinent part, the Agreement provides that:
Governing law and Agreement to Arbitrate. You agree that, except to the extent inconsistent with or preempted by federal law and except as otherwise stated in this Customer Agreement, the laws of the State of New York, without regard to principles of conflict of laws, will govern this Customer Agreement and any claim or dispute that has arisen or may arise between you and Wise, and regardless of your location. Except for disputes that qualify for small claims court, all disputes arising out of or related to this Agreement or any aspect of the relationship between you and Wise, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory, will be resolved through final and binding arbitration before a neutral arbitrator instead of in a court by a judge or jury and you agree that Wise and you are each waiving the right to trial by a jury. You agree that any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted and you are agreeing to give up the ability to participate in a class action. The arbitration will be administered by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules, as amended by this Agreement.
(Ex. A, Ex. 2 at 30) (emphasis added). Here, Plaintiff alleges claims for breach of contract, discrimination in the making and enforcement of contracts, declaratory and injunctive relief, and defamation and false light, all of which relate to Plaintiff’s Account, the Agreement with Wise, and Wise’s conduct with respect to the Account and Agreement. (Doc. 1, PageID 10-25.) These claims fall squarely within the broad scope of the arbitration provision because it explicitly states that disputes arising from “contract, tort, statute, fraud, misrepresentation, or any other legal theory. . .” are claims which must be arbitrated. (Ex. A, Ex. 2 at 30.)
Accordingly, Plaintiff’s claims clearly fall under the umbrella of the arbitration provision’s broad language. Therefore, Plaintiff cannot show “with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T Techs., 475 U.S. at 650. As a result, Plaintiff’s claims against Wise must be arbitrated because all requirements under the FAA are satisfied.
“`html id=”f3w9ke”D. The Claims Against Wise Should Be Stayed Pending the Outcome of Arbitration.
This Court should not only compel arbitration of Plaintiff’s claims against Wise, but it should also stay this action pending arbitration. Section 3 of the FAA addresses the procedure for handling cases that are referable to arbitration, stating:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
9 U.S.C. § 3 (emphasis added). Thus, under the FAA, a court must stay an action where the claims have been compelled to arbitration. See Smith v. Spizzirri, 601 U.S. 472, 478-79 (2024) (“When a district court finds that a lawsuit involves an arbitrable dispute, and a party requests a stay pending arbitration, § 3 of the FAA compels the court to stay the proceeding.”). Accordingly, in conjunction with compelling Plaintiff’s claims to arbitration, Wise respectfully moves the Court to stay the case pending the outcome in arbitration.
IV. Alternatively, Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim
A. Introduction
Alternatively, and only if the Court does not grant Wise’s Motion to Compel Arbitration, Wise respectfully moves this Court under Fed. R. Civ. P. 12(b)(6) to Dismiss Plaintiff’s Complaint for failure to state a claim upon which relief can be granted.
Plaintiff asserts claims against Wise relating to activity in Plaintiff’s Account that led to restrictions being placed on Plaintiff’s funds transfers. Based directly on this purported conduct, Plaintiff alleges a violation of 42 U.S.C § 1981 for discrimination in the making and enforcement of contracts, a claim for declaratory and injunctive relief under 28 U.S.C. §§ 2201-2202, as well as common law claims of breach of contract, defamation and false light. (Doc. 1.) However, Plaintiff’s Complaint fails to state a claim for relief against Wise for the reasons set forth below.
B. Standard of Review
To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain well-pleaded factual allegations that state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“Labels and conclusions,” “formulaic recitations of the elements of a cause of action,” and “naked assertions devoid of further factual enhancement” do not suffice to state a plausible claim for relief. Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
To satisfy the “plausibility” standard, the well-pleaded factual allegations, if presumed true, must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft, 556 U.S. at 678. They must permit the Court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
“[W]here a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (quoting Twombly, 550 U.S. at 557).
Determining whether a complaint states a plausible claim for relief is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Ashcroft, 556 U.S. at 679.
“Regardless of whether the plaintiff is pro se or represented by counsel, the complaint must sufficiently plead facts to state a claim for relief in order to survive a motion to dismiss.” Nyabwa v. City of Corpus Christi, No. 2:18-CV-103, 2018 WL 4870937, at *1 (S.D. Tex. Oct. 9, 2018) (citing Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th Cir. 2002)).
C. Argument
1. Plaintiff failed to plausibly plead a violation of 42 U.S.C. § 1981.
Section 1981 assures the rights of making and enforcing contracts, suing, being a party, giving evidence, and having the full and equal benefit of all laws and proceedings for the security of persons. Jones v. Texas A&M Univ., No. CV H-18-1434, 2020 WL 4013143, at *10 (S.D. Tex. Feb. 26, 2020), report and recommendation adopted, No. CV H-18-1434, 2020 WL 1698907 (S.D. Tex. Apr. 8, 2020) (citing 42 U.S.C. § 1981(a)).
In order to sufficiently state a claim under § 1981, a plaintiff must allege:
(1) the plaintiff is a member of a racial minority;
(2) an intent to discriminate on the basis of race by the defendant; and
(3) the discrimination concerns one or more of the activities enumerated in § 1981.
Alejandro Garza v. United States Marshals Serv., No. CV B-07-052, 2008 WL 11480490, at *4 (S.D. Tex. Dec. 12, 2008).
Importantly, a plaintiff fails to sufficiently state a claim under Section 1981 if they fail to allege any specific discrimination or hostility based on race. See e.g. Hickman v. Powell Industries, Inc., No. 4:25-CV-2696, 2025 WL 4592286, at *4-5 (S.D. Tex. Dec. 8, 2025), report and recommendation adopted, 2026 WL 184207 (S.D. Tex. Jan. 22, 2026).
The same is true here regarding Plaintiff’s Complaint. Specifically, Plaintiff merely alleges that Wise “perceived and classified both Plaintiff and the recipients of Plaintiff’s lawful transaction based on ethic and national origin”; however, he fails to allege any details regarding his race and further fails to identify any specific acts of discrimination or hostility that Wise took in order to sufficiently plead a cause of action. (Doc. 1 at ¶ 39.)
Indeed, this Court has dismissed similarly pleaded Section 1981 claims when the allegations in the complaint are solely based on the defendant’s “perception” and not a specific, plausible act of racial discrimination. See e.g. Hickman, 2025 WL 4592286, at *4-5 (dismissing plaintiff’s Section 1981 claim because “Plaintiff relies on subjective perceptions and conclusory assertions of unfair treatment.”).
The Court should follow suit in the present case and dismiss Plaintiff’s Section 1981 claim because he fails to plausibly plead a claim for relief.
2 Plaintiff’s “discrimination” claim solely relates to his identity as a Belarussian, which does not qualify as a racial minority for the purposes of a Section 1981 claim. For avoidance of doubt, these allegations are denied.
2. Plaintiff’s breach of contract claim fails as a matter of law.
“Under Texas law, a plaintiff alleging a breach of contract must show ‘(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages to the plaintiff resulting from that breach.'” Hunter v. JP Morgan Chase Bank N.A., No. CV H-24-491, 2024 WL 1887060, at *3 (S.D. Tex. Apr. 30, 2024).
“Generally, a plaintiff needs to be able to specify the provision of a contract that was breached.” Id.
Plaintiff fails to identify or point to a specific contractual provision that Wise purportedly breached, which is fatal to his breach of contract claim. See Hunter, 2024 WL 1887060, at *3.
While Plaintiff alleges various acts of Wise that purportedly gave rise to a breach of contract, he fails to adequately assert how those acts breached a contract. (Doc. 1 at ¶¶ 49-59.)
Because of this, Plaintiff failed to adequately plead his breach of contract claim. Consequently, it is due to be dismissed.
3. Plaintiff fails to state a claim for defamation and false light.
It is well-established that Texas does not recognize a false light cause of action. See e.g. SMC Corp. of Am. v. King Indus. of the Valley, Inc., No. CV M-04-53, 2005 WL 8169084, at *3 (S.D. Tex. Mar. 31, 2005) (“Texas does not recognize ‘false light’ as a cause of action.”) (citing Cain v. Hearst Corp., 878 S.W.2d 577, 580 (Tex. 1994)); see also Matta v. May, 888 F. Supp. 808, 814 (S.D. Tex. 1995) (granting the defendant’s motion to dismiss because “a false light claim is not a recognized claim in Texas.”).
Thus, to the extent Plaintiff is attempting to assert a separate claim for “false light” in his Complaint, it is due to be dismissed because Texas does not recognize such a claim. (Doc. 1 at ¶¶ 60-71.)
Turning next to Plaintiff’s defamation claim, it requires the following elements under Texas law:
(1) the defendant published a statement;
(2) that was defamatory concerning the plaintiff; and
(3) while acting with malice, if the plaintiff was a public figure, or negligence, if the plaintiff was a private individual, regarding the truth of the statement.
Udoewa v. Plus4 Credit Union, 754 F. Supp. 2d 850, 866 (S.D. Tex. 2010), aff’d, 457 F. App’x 391 (5th Cir. 2012) (citing WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998)).
Importantly, “the threshold requirement for defamation is the publication of a false statement of fact to a third party.” Gutierrez v. Belcan Servs. Grp. Ltd. P’ship, No. CIVIL ACTION M-24-010, 2025 WL 2646544, at *4 (S.D. Tex. Aug. 29, 2025), report and recommendation adopted, No. 7:24-CV-00010, 2025 WL 2646168 (S.D. Tex. Sept. 15, 2025) (citing Dallas Morning News, Inc. v. Tatum, 554 S.W.3d 614, 623 (Tex. 2018)).
Here, Plaintiff explicitly pleads that Wise published statements “through its written communications to Plaintiff, its customer support responses, and its public-facing explanations regarding account restrictions and closures.” (Doc. 1 at ¶ 61.)
As a result, Plaintiff admits that the defamation claim is premised on communications that Wise sent to him directly.
While Plaintiff purports that Wise issued “public-facing explanations,” he has provided no factual allegations in support of this allegation, which fails under the requisite pleading standard. Ashcroft, 556 U.S. at 678 (“[W]here a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.”).
Accordingly, Plaintiff has failed to plead facts to establish an essential element of his defamation claim.
Consequently, it is due to be dismissed.
4. Plaintiff is not entitled to declaratory or injunctive relief because his underlying claims fail.
It is well-settled that “it is the underlying cause of action that is actually litigated in a declaratory judgment action.” Dearmond v. Select Portfolio Servicing, Inc., No. 4:24-CV-01812, 2025 WL 1665775, at *4 (S.D. Tex. May 21, 2025), report and recommendation adopted, No. 4:24-CV-01812, 2025 WL 1665185 (S.D. Tex. June 11, 2025) (citing Collins v. National Football League, 566 F. Supp. 3d 586, 603 (E.D. Tex. 2021)).
Thus, a request for declaratory relief cannot stand alone without an underlying substantive claim. Smith v. MTGLQ Invs., LP, No. CV H-19-1888, 2019 WL 13193219, at *4 (S.D. Tex. Aug. 23, 2019), aff’d sub nom. Smith v. MTGLQ Invs., L.P., 851 F. App’x 514 (5th Cir. 2021).
For the reasons set forth above, Plaintiff’s entire Complaint fails to state a claim upon which relief can be granted and is due to be dismissed in its entirety.
Accordingly, Plaintiff cannot maintain a claim for declaratory relief because no underlying substantive claims remain.
Consequently, Plaintiff’s claim for declaratory relief fails as a matter of law and must be dismissed.
Smith, 2019 WL 13193219, at *4 (“Absent an underlying substantive claim, the request for declaratory relief fails as a matter of law.”).
V. Conclusion
Not only are arbitration agreements presumed valid, but the agreement here meets the FAA’s three requirements for mandatory enforcement:
- The Agreement to Arbitrate is written;
- The transaction involved interstate commerce; and
- The Agreement to Arbitrate covers Plaintiff’s claims.
Consequently, this Court should compel Plaintiff to arbitrate his claims and stay these proceedings.
Alternatively, Wise respectfully requests that this Court dismiss Plaintiff’s Complaint against it for failure to state a claim upon which relief can be granted.
Respectfully submitted this 23rd day of March, 2026.
/s/ Reid S. Manley
Reid S. Manley
State of Texas Bar No. 24047520
BURR & FORMAN, LLP
420 North 20th Street, Suite 3400
Birmingham, Alabama 35203
Telephone: (205) 251-3000
Facsimile: (205) 458-5100
rmanley@burr.com
Attorney for Defendant Wise US, Inc.