JPMorgan Chase Bank, N.A. v. Johnson
470 B.R. 829
E.D. Ark.2012Background
- This case asks whether a national banking association (JPMorgan Chase Bank, N.A.) may use Arkansas's nonjudicial foreclosure procedure (Statutory Foreclosure Act).
- The question is addressed in five consolidated matters, including three bankruptcy appeals and two civil actions (Rivera and Jones).
- Bankruptcy courts found JPMorgan Chase was not authorized to do business in Arkansas under § 18-50-117, affecting its right to foreclose nonjudicially.
- Rivera class action alleges Arkansas Deceptive Trade Practices Act violations and unjust enrichment related to foreclosures under the Act.
- Jones seeks to enjoin a nonjudicial foreclosure; JPMorgan removed the case to federal court based on diversity of citizenship.
- The central issue is whether a OCC-chartered national bank is “authorized to do business in this state” under § 18-50-117 so it may invoke the Foreclosure Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether JPMorgan is authorized to use 18-50-117 | Rivera/Jones contend JPMorgan is not authorized | JPMorgan asserts federal authorization via NBA to do business in Arkansas | Yes, JPMorgan is authorized to use the Act |
| Whether the NBA preemption/dormant Commerce Clause analysis is needed | Preemption/dormant Commerce Clause prevents state requirement | NBA preempts or negates state registration for foreclosures | Not addressed on the merits (preemption/dormant Commerce Clause left undecided) |
| Whether due process or attorneys’ fees issues affect dismissal/relief | Rivera seeks damages and fees for improper use of Act | JPMorgan argues compliance with federal law suffices | Court did not resolve preemption or due process/fees issues here |
Key Cases Cited
- Watters v. Wachovia Bank, N.A., 550 U.S. 1 (U.S. 2007) (national-banks’ incidental powers and authority across states)
- First Nat'l Bank of E. Ark. v. Taylor, 907 F.2d 775 (8th Cir. 1990) (NBA authority to operate in states and preemption concepts)
- Bank One, Utah v. Guttau, 190 F.3d 844 (8th Cir. 1999) (per curiam; interpretation of national-bank powers)
- In re Falcon Prods., Inc., 497 F.3d 838 (8th Cir. 2007) (bankruptcy appellate standard and de novo review guidance)
- Schaaf v. Residential Funding Corp., 517 F.3d 544 (8th Cir. 2008) (12(b)(6) dismissal standard and pleading requirements)