JPMorgan Chase Loses Court Bid to End Consumers’ Home-Equity Line Lawsuits
JPMorgan Chase & Co. (JPM) lost a bid for dismissal of a lawsuit in which consumers accused the second- biggest U.S. bank of wrongly cutting home-equity lines of credit.
U.S. District Judge Rebecca Pallmeyer in Chicago today ruled the homeowners could go forward on some of their claims against the lender while dismissing allegations that JPMorgan had engaged in fraudulent practices.
“Plaintiffs’ allegations that defendant reduced or suspended their HELOCs without adequate justification are sufficient to state claims for breach of contract under Minnesota, California, Texas and Delaware law,” Pallmeyer said in a 42-page decision.
The ruling comes in a consolidated class action, or group lawsuit, alleging that the lender had retracted or crimped those lines of credit without any justification for doing so. The bank had sought to dismiss the action in its entirety.
Thomas A. Kelly, a Chicago-based spokesman for the New York-based bank, declined to comment on the ruling.
“We feel this is a really important victory for consumers throughout the country,” plaintiffs’ lawyer Jay Edelson of Chicago said in a telephone interview. “Banks had believed they could act with impunity. We’re seeing that’s not the case.”
Edelson said the next step was to seek class-wide certification. There are thousands of similarly situated potential class members, he said.
The case is In re: JPMorgan Chase Bank Home Equity Line of Credit Litigation, 10cv3647, U.S. District Court, Northern District of Illinois (Chicago).
To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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