By Tom Halls
Jan 24 (Reuters) – U.S. President Donald Trump on Thursday filed a $5 billion lawsuit against JPMorgan Chase and its CEO Jamie Dimon for allegedly closing its accounts for political reasons.
Here’s a look at Trump’s claim and how the case might play out:
Why is Trump complaining?
America’s largest bank closed the accounts of several Trump businesses in April 2021 after they had been customers for decades, according to Trump’s lawsuit. JPMorgan notified Trump of the shutdown on January 6, 2021, about a month after his supporters stormed the US Capitol building.
Trump said the bank’s motivations were political and that JPMorgan violated Florida law to prevent unfair business practices and acted in bad faith.
Trump also accused Dimon of ordering a malicious “blacklist” to warn other banks from doing business with the Trump Organization, Trump family members and Trump himself. Trump said publication of the blacklist constituted trade defamation under Florida law and resulted in significant financial and reputational damage to his business.
The lawsuit comes after Dimon criticized Trump’s immigration policy and his proposal to cap the interest rates banks charge on credit cards.
JPMorgan has denied wrongdoing, saying the lawsuit has no merit and that it closes accounts that create legal or regulatory risk for the company.
What will Trump have to show to win?
The case will likely boil down to whether Trump’s legal team can prove the bank canceled the accounts because of his political views. The terms of the banking agreement strongly favor banks, who are not required to provide a reason for account closure and customers often do not know why their account was closed.
In this case, Trump said JPMorgan gave 60-day notice to close the account but did not give a reason.
Banks have to monitor their customers for various types of potential risks, and a customer whose account has been closed due to prohibited activities such as money laundering has no basis to challenge it.
However, some grounds for account termination may be considered unfair business practices or bad faith, including account termination due to the customer’s religion or race.
Legal experts say canceling an account because of an account holder’s political views, which JPMorgan does not do, would likely be unacceptable.
However, it may be legal if an account holder’s views were so extreme that they undermined trust in the bank. After losing the November 2020 election, Trump can argue that his political views are mainstream because he recently garnered more than 70 million votes.
What about trade libel claims?
Trump’s trade defamation claim stems from blacklisting allegations. Trump claimed that the JPMorgan blacklist is reserved for clients who have committed malpractice or other actions that deserve to have their accounts closed. Trump said his business account was in good standing before being added to the list.
In February 2024, nearly three years after the accounts were closed, a New York state judge found Trump and his businesses liable for civil fraud in a lawsuit brought by the state attorney general. A state appeals court later threw out a half-billion-dollar fine against Trump after not fully overturning the fraud finding. Both parties have appealed.
Legal experts said that trade libel claims typically allege that the defendant’s product is disparaged to gain a competitive edge — an aspect that is missing from Trump’s accusations. The claim would hinge on the existence of a blacklist and that JP Morgan made defamatory statements to other banks about Trump and his businesses that were false.
How is the case likely to proceed?
The lawsuit was filed in Florida State Court in Miami-Dade County. JPMorgan may try to move the case to federal court, which is often the preferred venue for corporate defendants. Unlike Florida trial court judges, who are usually elected, federal judges are appointed for life. Capital One is defending a similar lawsuit by Trump Businesses, which it moved to federal court.
JP Morgan will likely try to quickly dismiss the case, arguing that the allegations are too speculative to sustain the case. If Trump can pass this step, it clears the way for discovery and subpoenas and access to witnesses inside the bank.
How can the issue be resolved?
If JPMorgan, which is highly regulated by the federal government, cannot dismiss the case, it will be forced to settle before a trial.
Trump is seeking $5 billion, but damages will depend on the disruption to Trump’s business as it shifts to another financial institution. The president said the account closure forced him to “go to small banks all over the place.”
Trump has sued several media businesses in his personal capacity since returning to the White House, and two of those cases have been settled quickly, while others are pending.
(Reporting by Tom Halls in Wilmington, Delaware; Additional reporting by Jonathan Stempel in New York; Editing by Nolen Walder and Bill Burkrot)
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