Trade secrets
JP Morgan Chase v. Argus Information & Advisory Services Inc. (Argus)
Date: Feb. 5, 2025
Issue: Whether banks continue to have property rights in information created for business purposes after it is shared with regulators.
Case Summary: A Delaware federal court granted in part and denied in part Argus, Verisk Analytics and TransUnion’s (collectively Argus) motion to dismiss JP Morgan’s lawsuit claiming it misused credit card data collected from banks on regulators’ behalf.
JP Morgan alleged Argus engaged in a decade-long scheme to secretly misappropriate the bank’s valuable trade secret data, comprising of millions of users’ anonymized monthly account and portfolio credit card data. According to JP Morgan, Argus obtained the bank’s trade secret information as a data aggregator for the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (the Fed), and the Federal Reserve Bank of Philadelphia. JP Morgan claimed Argus covertly used, retained, and disclosed the bank’s trade secrets for its own commercial purposes. As a result of the alleged conduct, Argus agreed to pay $37 million to resolve the U.S. Department of Justice’s claims alleging it violated the False Claims Act. JP Morgan sued Argus, alleging Argus misused credit card data obtained from banks under contracts with federal regulators over a decade.
Argus moved to dismiss, arguing JP Morgan failed to state a claim under the federal Delaware Trade Secrets Act (DTSA). Further, Argus claimed the disputed data is confidential supervisory information (CSI) that belongs to the regulators under both OCC and Fed regulations. Argus also argued that JP Morgan has no claim under the Delaware Uniform Trade Secrets Act (DUTSA) and JP Morgan lacks standing.
ABA filed a coalition amicus brief urging the District Court of Delaware to deny Argus’ motion to dismiss, making three main arguments. First, agency rules establish that banks continue to have property rights in information created for business purposes after sharing it with the regulators. Second, the regulators’ possession of copies of bank data does not extinguish banks’ property rights to it. Finally, policy considerations require banks to maintain property rights in their trade secret data.
Judge Stephanos Bibas of the United States District Court of Delaware declined to dismiss JP Morgan’s lawsuit, ruling it has Article III standing. Argus argued that JP Morgan failed to show concrete harm from the alleged trade secret misuse, but Judge Bibas disagreed, citing the Supreme Court’s TransUnion LLC v. Ramirez decision. TransUnion held that an injury is concrete if it “has a close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” Judge Bibas explained that misappropriation qualifies as a concrete injury, as American courts have recognized misappropriation claims since 1837. Because JP Morgan sufficiently alleged that Argus improperly used its trade secrets, Judge Bibas found it had suffered a concrete injury and had standing to sue.
Next, Judge Bibas ruled that JP Morgan properly stated a claim under the federal DTSA by alleging a trade secret, a connection to interstate commerce, and misappropriation. JP Morgan met all three requirements by showing: it took reasonable steps to protect its trade secret, which had economic value from being kept confidential; its data, collected from nationwide credit card transactions, contributed to its revenue as a national bank; and Argus misappropriated the data without consent and under a duty to maintain its secrecy. Judge Bibas, however, rejected Argus’s argument that JP Morgan lost ownership of its data when providing it to regulators. He found that contracts between Argus and regulators did not affect JP Morgan’s ownership and that federal regulations cited by the defendants did not transfer JP Morgan’s trade secrets to the government. Instead, these regulations only ensured the OCC and the Fed retained control over information they already owned.
At the same time, Judge Bibas dismissed JP Morgan’s DUTSA claim without prejudice, ruling that Delaware law does not apply to out-of-state conduct, absent clear legislative intent. He found no such intent and noted JP Morgan did not allege misappropriation occurred in Delaware. Because Argus’s main business locations are outside Delaware, he dismissed the DUTSA claim but allowed JP Morgan to amend its complaint.
Judge Bibas also declined to dismiss Verisk or TransUnion from the lawsuit. Judge Bibas determined that JP Morgan plausibly alleged misappropriation by both Verisk and TransUnion. As a result, all defendants will stay in the case at this time.
Bottom Line: Trial is set for the Summer of 2026.
Document: Brief
