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.
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