A federal judge dismissed a lawsuit filed by a non-profit organization against the U.S. Department of Justice over a $13 billion settlement reached between JPMorgan Chase and the DOJ, according to media reports.
Better Markets, a non-profit Wall Street reforms advocate based in Washington, D.C., filed a suit against the DOJ in February 2014 alleging that the settlement Chase agreed to with the DOJ in November 2013 to settle claims that Chase sold toxic mortgage-backed securities in the run-up to the financial crisis, was "unlawful" and that the settlement had granted the megabank civil immunity without sufficient judicial review.
The DOJ filed a motion to have the lawsuit dismissed in May 2014, and Judge Beryl A. Howell of the U.S. District Court for the District of Columbia accepted the motion, claiming the plaintiff did not have sufficient grounds to sue the Justice Department.
Representatives from Chase did not immediately respond to a request for comment.
Better Markets President and CEO Dennis Kelleher issued a statement expressing his disappointment at the judge's ruling to dismiss the lawsuit. In the suit, the organization was reportedly seeking to have a judge review the settlement before it was enforced.
"The court never considered or ruled on the merits of our lawsuit that DOJ did not have the unilateral authority to settle years of JP Morgan Chase’s egregious illegal conduct without independent judicial review," Kelleher said. "The decision sadly stands for the proposition that there are no checks and balances when it comes to Executive Branch action to settle any case on any terms without any meaningful transparency, public accountability or oversight by anyone.
"This procedural ruling makes clear that the lawsuit is not deficient, the law is: no one has standing to challenge DOJ’s actions even when senior political appointees secretly negotiate legal immunity in exchange for a $13 billion payment from the country’s largest, most politically connected too-big-to-fail Wall Street bank for inflating the subprime housing bubble, which lead to the worst financial crash since 1929. Such backroom deals should not be allowed in a democracy worthy of its name. We will be carefully evaluating the court’s opinion before determining our next steps."
The Justice Department issued a statement saying that it was "serious about examining the root causes of the financial crisis, and holding the appropriate people and companies accountable."
The $13 billion settlement between Chase and the DOJ was a record amount between the government and one company until nine months later, when Bank of America settled with the DOJ for $16.65 billion in August 2014 over similar MBS issues.