Law Firm Says Chase Can't Duck Suit Over PPP Agent Fees

By J. Edward Moreno
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Law360 (November 17, 2020, 3:44 PM EST) -- An Arizona law firm shot back at JPMorgan Chase Bank NA's bid to escape a lawsuit claiming it improperly withheld agent fees to the firm for its work on Paycheck Protection Program loans, saying Monday federal guidelines clearly specify that lenders, not borrowers, are on the hook for such fees.

Radix Law PLC said Chase's October motion to dismiss filed in Arizona federal court "does a nice job of generally explaining the purpose of the PPP," but "ignores clear and unambiguous language requiring lenders to compensate borrowers' agents."

Congress specified that lenders — not borrowers — would pay agent fees, including attorney fees, Radix said. Chase's failure to pay these fees makes the firm "an unwitting volunteer in a process that generated lenders billions of dollars while Radix did the bulk of the work," their response said.

Radix initially sued Chase in a county court in Maricopa County, Arizona, in August, citing a fact sheet issued in March and a final rule issued in April by the U.S. Treasury Department for the PPP. The case was removed to federal court in September.

The law firm said in their complaint it was the agent for 10 Chase clients who got PPP loans totaling over $700,000. The program was established by Congress in March as part of the Coronavirus Aid, Relief and Economic Security Act.

In their motion to dismiss filed in October Chase said Radix's suit should be dismissed because the firm did not sign an agreement with Chase that would entitle it to fees for helping borrowers obtain the loans.

"The CARES Act and SBA regulations do not entitle purported agents to fees from lenders in the absence of a written agreement for said fees," Chase's motion said.

Radix said Monday that "such paperwork is at most procedural" because the information sheet specifically says that lenders will pay agents and agents can't collect fees on their own. The law firm is accusing Chase of pocketing the 5% fee from the borrowers that was meant for agents.

Chase noted in October that other federal courts ruled in favor of lenders in similar cases. Radix said Monday that the cases highlighted by Chase argue a different set of facts and none have been upheld on appeal or decided in the Ninth Circuit.

Jonathan Frutkin, a Radix attorney representing the firm, told Law360 that Chase "received more than $800 million in fees from the PPP and is refusing to pay the agents who did the work."

"Although Chase is a behemoth faceless bank with a giant processing center, we had real people working overtime, interacting with our clients to get their PPP loans," Frutkin said.

Radix Law is seeking an unspecified amount of damages, interest, costs and attorney fees, according to their complaint.

Counsel for Chase did not immediately respond to a request for comment.

Radix Law is represented by two of their own attorneys, Jonathan B. Frutkin and Robert Neil Mann.

JP Morgan Chase is represented by Nicole M. Goodwin and Adrianna Griego Gorton of Greenberg Traurig LLP.

The case is Radix Law PLC v. JPMorgan Chase Bank NA, case number 2:20-cv-01810, in the U.S. District Court for the District of Arizona.

--Additional reporting by Kevin Penton. Editing by Amy Rowe.

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Case Information

Case Title

Radix Law PLC v. JPMorgan Chase Bank NA

Case Number




Nature of Suit

Other Statutes: Other Statutory Actions


Susan R Bolton

Date Filed

September 16, 2020

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