Kraft v. Wells Fargo & Company

Background

Rune Kraft brought a civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act, a federal racketeering statute, against Wells Fargo & Company and several of its current and former executives. Kraft alleged that Wells Fargo allowed unauthorized people to open bank accounts in the names of corporations he owned and that those people ultimately withdrew $1.3 million from the corporations’ assets.

Kraft said he was pursuing the claims as an assignee of Pacific Equipment Management Company. The opinion states that Pacific was the successor by merger to the three corporations that allegedly suffered the injuries.

Issue

The defendants filed a motion to dismiss. The court focused on Kraft’s proceeding without a lawyer and on whether he could litigate claims belonging to a corporation. The court stated that a corporation may appear in federal court only through licensed counsel and that a purported assignment does not allow an unrepresented individual to litigate the corporation’s claims.

Ruling

Judge Araceli Martinez-Olguin granted the defendants’ motion to dismiss. The court dismissed the action for lack of jurisdiction because Kraft could not appear without a licensed attorney on behalf of Pacific’s assigned corporate claims. The court did not decide whether the alleged conduct violated the federal racketeering statute. The order did not specify that the dismissal was with or without prejudice.

Effect

The ruling ended this action against Wells Fargo & Company and the other defendants on the stated jurisdictional ground. The supplied opinion text also refers to Kraft’s earlier related proceedings, in which courts had repeatedly addressed his attempts to litigate claims assigned by corporations.