Kraft v. Wells Fargo & Company

Background

Rune Kraft moved under 28 U.S.C. § 455(a) and (b)(1) to disqualify Judge Araceli Martinez-Olguin and to vacate prior proceedings. Section 455(a) requires disqualification when a judge’s impartiality might reasonably be questioned. Section 455(b)(1) requires disqualification when the judge has personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts. The court explained that the standard is objective: whether a reasonable person who knew all the facts would question the judge’s impartiality.

Arguments and analysis

Kraft argued that the court’s order allowing the defendants to file motions before answering the complaint was a “fraud on the court” because it deprived him of a normal adjudication process. The court understood this argument to be based on Kraft’s belief that he was entitled to amend his complaint after the defendants’ initial motion under Rule 12(b) of the Federal Rules of Civil Procedure. The court stated that its scheduling orders did not conflict with the Federal Rules and that judicial rulings and conduct during the case generally do not establish bias or partiality.

Kraft also argued that the court violated the Civil Local Rules, but he did not identify the rule allegedly violated or the conduct that violated it. The court concluded that this unsupported contention did not demonstrate bias or prejudice. Kraft further argued that Wells Fargo’s attorneys could not properly represent the bank because they were supporting a criminal enterprise. The court noted that, before the case was reassigned, Judge James Donato had considered and rejected the same argument. It also concluded that the argument did not establish bias or an appearance of impropriety concerning the defendants’ choice of counsel.

Ruling

The court held that Kraft failed to meet his burden to show that Judge Martinez-Olguin was biased or prejudiced, or that her impartiality might reasonably be questioned. The court therefore denied Kraft’s motion for retroactive disqualification and vacatur. The opinion does not otherwise resolve the underlying claims against Wells Fargo & Company or the other defendants.