Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-01264/USCOURTS-cand-3_16-cv-01264-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 09:0010 Petition to Vacate Arbitration Award

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

GLOBAL EBUSINESS SERVICES, INC., 

et al.,

Plaintiffs,

v.

INTERACTIVE BROKER LLC,

Defendant.

Case No. 16-cv-01264-JD 

ORDER DISMISSING CASE

This case was filed on behalf of plaintiffs Syed Nazim Ali and Global Ebusiness Services, 

Inc. Ali, who is not a lawyer, purported to represent both himself and the incorporated entity on a 

pro se basis. Dkt. No. 1. The relief requested was for the Court to vacate, pursuant to the Federal 

Arbitration Act, 9 U.S.C. § 10, an arbitration award that was handed down by a FINRA dispute 

resolution panel against Global Ebusiness Services, Inc. and in favor of Interactive Brokers, LLC. 

Id.

Ali was advised by the Court in a written order that under Civil Local Rule 3-9(b), a 

corporation may appear only through a member of the bar of this Court. Dkt. No. 7. Global 

Ebusiness Services, Inc. was advised to retain counsel, and warned that it would be dismissed and 

the case would proceed only as to Ali if it failed to do so. Id.

No counsel appeared on Global’s behalf in response to the order, and to date, Global 

remains without counsel. Instead, Ali filed a document titled, “Global Ebusiness Services, Inc. 

Assignment of Sole Interest to Syed Nazim Ali, As Individual.” Dkt. No. 18. Included in the 

filing was a “Corporation Interest Assignment Agreement,” dated March 23, 2016, in which 

Global purported to assign to Ali “all rights, title, interest and obligation.” Id. at ECF p. 18. Ali 

signed for both sides of the transaction. Id.

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United States District Court

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At a subsequent hearing, the Court noted that it appeared that “only Global Ebusiness 

Services, Inc. has a claim in this case, but Global Ebusiness is not represented by counsel.” Dkt. 

No. 26. The Court questioned whether the “assignment of sole interest” filed by Ali was proper 

for purposes of prosecuting the case without a lawyer, and requested briefing from the parties on 

that issue. Id. Both sides filed briefs, Dkt. Nos. 28, 29, which the Court has reviewed.

As a preliminary matter, the Court notes that defendant Interactive Brokers does not 

challenge the assignment agreement on its face. See Dkt. No. 29 at 1 (acknowledging that 

“California generally permits the assignment of claims pursuant to Cal. Civ. Code § 954”). This is 

a generous position because the assignment could be questioned as vague, among other possible 

problems, but in any event this does not decide the question.

The United States Supreme Court has stated that “[i]t has been the law for the better part of 

two centuries . . . that a corporation may appear in the federal courts only through licensed 

counsel.” Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 194, 200-01 

(1993). As Ali was advised, this rule is codified in our Civil Local Rules at Rule 3-9(b). See Dkt. 

No. 7. The rule provides that “[a] corporation, unincorporated association, partnership or other 

such entity may appear only through a member of the bar of this Court.” Civil L.R. 3-9(b).

The Court joins a number of other courts to hold that an individual plaintiff affiliated with 

a corporation may not circumvent this rule through a purported assignment of interest from the 

corporation to the individual, whether such an assignment is valid or not. See, e.g., Bischoff v. 

Waldorf, 660 F. Supp. 2d 815, 821 (E.D. Mich. 2009) (assuming validity of assignment,

corporation’s claims were still required to be litigated by a licensed attorney); Mercu-Ray Indus., 

Inc. v. Bristol-Myers Co., 392 F. Supp. 16, 18-19 (S.D.N.Y. 1974) (where validity of assignment 

was not challenged and law was settled that claims of the same type could be assigned, rejecting 

effort by pro se sole stockholder-assignee to represent corporation); Jones v. Niagara Frontier 

Transp. Auth., 722 F.2d 20, 23 (2d Cir. 1983) (rejecting attempt to circumvent general rule barring 

corporations from proceeding pro se “by the procedural device of an assignment of the 

corporation’s claims to the lay individual”); Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385-86 

(11th Cir. 1985) (noting that general rule prohibiting corporation from representing itself “applies 

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even where the person seeking to represent the corporation is its president and major stockholder,” 

and concluding that there was “no reason to permit any evasion of the general rule by the simple 

expedient of the assignment of corporate claims to the pro se plaintiff.”); see also U.S. v. High 

Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (holding that “[t]o allow a sole 

shareholder with interests identical to the corporation’s to intervene under such circumstances, 

rather than hire corporate counsel, would eviscerate [28 U.S.C.] section 1654,” and “declin[ing] to 

read Rule 24 as condoning such a result”). Ali is barred from using the expedient of an 

assignment to make an end run around the centuries-old rule recognized by the Supreme Court and 

codified in Civil Local Rule 3-9(b). 

More than eight months have passed since Global was first advised that its dismissal would 

result from a failure to comply with Rule 3-9(b). To date, it has not complied. For his part, Ali

has not objected to the Court’s view that he has no claim to assert in this case as he was not 

personally a party to the underlying arbitration proceeding.

The Court consequently dismisses the entire case and orders the file closed. The dismissal 

is without prejudice to Global’s ability to re-file the action if and when it has retained counsel. 

IT IS SO ORDERED.

Dated: January 9, 2017

JAMES DONATO

United States District Judge

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