Tom Hals
Jan 24 (Reuters) – U.S. President Donald Trump filed a $5 billion lawsuit on Thursday against JPMorgan Chase & Co. and its chief executive, Jamie Dimon, saying it closed its accounts for political reasons.
Here’s a look at Trump’s claims and how the case is progressing:
Why did Trump file the lawsuit?
The largest U.S. banks closed the accounts of several Trump businesses in April 2021 because they had been customers for decades, according to Trump’s lawsuit. JPMorgan Chase informed Trump of the closure about a month after his supporters stormed the U.S. Capitol on January 6, 2021.
Trump said the bank’s motives were political and that JPMorgan violated Florida laws prohibiting unfair trade practices and acted dishonestly.
Trump also accused Dimon of ordering the malicious release of a “blacklist” to warn other banks not to do business with the Trump Organization, Trump family members and Trump himself. Trump said publishing the blacklist amounted to trade libel under Florida law and said his business had suffered considerable financial and reputational damage as a result.
The lawsuit comes after Dimon criticized Trump’s immigration policies and proposals to cap interest rates on bank credit cards.
JPMorgan Chase has denied wrongdoing, saying the lawsuit has no legal basis and has closed accounts that pose legal or regulatory risks to the company.
What does Trump have to show to win?
The case will likely come down to whether Trump’s legal team can prove that the bank canceled the accounts because of his political views. Bank agreement terms tend to be very favorable to banks, banks are not required to provide reasons for closing accounts, and customers often have no idea why their accounts were terminated.
In this case, Trump said JPMorgan gave 60 days’ notice of closing the account but did not provide a reason.
Banks are required to monitor customers for a variety of potential risks, and customers whose accounts are closed for prohibited activities such as money laundering have no reason to challenge.
However, certain reasons for account termination may be considered unfair trade practices or bad faith, including closing accounts because of a customer’s religion or race.
Legal experts say canceling an account because of the account holder’s political views — something JPMorgan Chase says it won’t do — may not be allowed.
However, this may be legal if the account holder’s views are so extreme that they undermine trust in the bank. Trump may argue that his political views are mainstream because he just lost the November 2020 election, winning more than 70 million votes.
What about a trade libel claim?
Trump’s trade libel claims stem from blacklisting allegations. Trump claimed that the J.P. Morgan blacklist was reserved for clients who had engaged in malfeasance or other behavior worthy of account closure. Trump said his business accounts were in good standing before being added to the list.
In February 2024, nearly three years after the account was closed, a New York state judge found Trump and his businesses liable for civil fraud in a case brought by the New York State Attorney General. A state appeals court later rejected the $500 million fine against Trump but did not completely overturn the fraud finding. Both parties appealed.
Legal experts say trade libel claims typically involve defendants accused of disparaging the plaintiff’s products to gain a competitive advantage, something Trump’s allegations lack. The charge will hinge on whether there is a blacklist and whether JPMorgan made false and defamatory statements about Trump and his business to other banks.
How might the case unfold?
The case was filed in Florida state court in Miami-Dade County. JPMorgan may try to move the case to federal court, often the preferred venue for corporate defendants. Unlike Florida trial court judges, who are generally elected, federal judges are appointed for life. Capital One is defending a similar case brought by Trump businesses that has been moved to federal court.
JPMorgan may try to quickly dismiss the lawsuit, arguing that the allegations are too speculative to sustain the case. If Trump can get past that stage, it could clear the way to obtain evidence, request documents and gain access to witnesses within the bank.
How was the case resolved?
If JPMorgan, which is heavily regulated by the federal government, cannot dismiss the case, it will face pressure to settle before trial.
Trump is seeking $5 billion in damages, but the damages would depend on the disruption caused by moving Trump’s business to another financial institution. The president said the account closures forced him to go to “little banks all over the place.”
Since returning to the White House, Trump has sued several media companies in his personal capacity, with two cases quickly settled and others continuing to be litigated.
(Reporting by Tom Hals in Wilmington, Del.; Additional reporting by Jonathan Stempel in New York; Editing by Noelyn Walder and Bill Burkrot)