() A U.S. District Court rejected JPMorgan Chase’s (JPM) motion to dismiss a lawsuit involving several home equity lines of credit the bank terminated. In the original complaint, which pulled in several different parties, the plaintiffs accused JPMorgan’s mortgage unit of reducing or suspending the homeowners’ lines of credit in a manner that violated state consumer protection laws, the federal Truth-in-Lending Act and other state laws. A representative with Chase declined to comment on the litigation and decision. In court records, Judge Rebecca Pallmeyer with the District Court of Eastern Illinois agreed to let the case move forward saying “the plaintiffs have adequately pleaded a violation of TILA and Regulation Z (part of the Truth-in-Lending Act), by alleging that defendant suspended or reduced HELOCs in the absence of a significant decline in the value of the property securing the HELOC.” The judge said the homeowners’ claim that the use of automated valuation models and the use of ‘unlawful triggering events’ cannot serve as a basis for their allegations alone. “Those practices are, however, relevant in all cases considering whether defendant reduced or suspended HELOCs even though the properties securing them suffered no significant decline in value,” Judge Pallmeyer said in her decision. Furthermore, the court decided several issues raised in the lawsuit “are sufficient to state claims for breach of contract” under applicable state laws in Minnesota, California, Texas and Delaware. The eight plaintiffs secured second loans on homes to pay for education, home improvements and medical bills, according to court records. In their initial claim, the plaintiffs admit JPMorgan had certain rights to suspend HELOCS when property values declined, but they believe the automated valuation models used to determine values lacked the mechanisms to ensure accuracy. Write to: Kerri Panchuk.