L & J Crew Station, LLC v. Banco Popular de Puerto Rico

In June and July 2002, L & J Crew Station, LLC (L&J) (plaintiff) opened two accounts with Banco Popular de Puerto Rico (BP) (defendant). When L&J did so, it agreed that either party could end the account relationship by providing written notice. L&J was in the business of transmitting money but did not disclose this to BP when L&J opened the accounts. By August, BP became concerned about the volume and nature of L&J’s account activity and discovered that L&J had insufficient internal controls and procedures and had no, or did not follow an, antimoney-laundering program. In September, BP notified L&J in writing that BP was terminating L&J’s accounts because the accounts posed an undue regulatory and compliance burden on BP. In November and December, L&J opened accounts with FirstBank Puerto Rico (FirstBank) (defendant). L&J did not tell FirstBank that L&J was in the money-transmitting business or that BP had notified L&J that BP intended to close L&J’s accounts. BP closed L&J’s accounts in December. Also in December, FirstBank notified L&J of its intent to close L&J’s accounts; FirstBank closed the accounts in January 2003. L&J sued BP and FirstBank, alleging, among other things, that BP and FirstBank wrongly relied on the USA PATRIOT Act (Patriot Act) in closing its accounts. BP and FirstBank moved to dismiss L&J’s Patriot Act claim for failure to state a claim.