KELLER ROHRBACK L.L.P. AND THE CITY OF RICHMOND, CALIFORNIA: City of Richmond, CA Files Lawsuit Against JP Morgan Chase, Royal Bank of Canada and Financial Advisors Over Alleged Illegal Derivative Contracts

RICHMOND, Calif.--(BUSINESS WIRE)--On March 17, 2025, the City of Richmond filed a lawsuit against two major investment banks, JP Morgan Chase and Royal Bank of Canada, as well as against the city’s former financial advisors, Public Resources Advisory Group and The Majors Group. The lawsuit seeks to recover at least $60 million in payments made on derivative contracts that did not comply with California law. The derivatives provided no benefit to the public and diverted critical city resources away from essential services.

"For the banks, the tens of millions of dollars that Richmond paid on these derivatives amounted to money for nothing," said Vice Mayor and City Councilperson Claudia Jimenez. "Meanwhile, our residents have had to endure higher taxes and reduced public services." Mayor Eduardo Martinez said, “We want JP Morgan Chase and RBC to make the City whole by paying back the money they took from the City in illegal payments.”

The City asserts that the banks promoted complex, arcane financial products under the guise of saving money. In fact, the transactions were costly and illegal under California law.

California law strictly limits the conditions under which cities may enter derivatives. The law only allows derivatives for specific purposes and requires the derivatives be connected to highly rated bonds. The derivatives did not meet those requirements. The City seeks to enforce California’s clear legal requirements governing municipal contracts.

Gary Gotto of Keller Rohrback, attorney for the City, said, "California law is clear: a city's contract is void if it did not comply with statutory requirements. The recipient of money paid under a void contract is obligated to return the payments.”

In its suit, the City notes that the legal requirements at issue exist to protect public funds—not the parties to government contracts. Brad Miller, another of the City’s attorneys, said, “The laws are there to protect the public interest. The legal requirements are designed to prevent waste and the improper use of public funds, and to ensure transparency and accountability.”

The City asserts that the payments made under on the derivatives greatly worsened its already challenging financial condition and led credit rating agencies to downgrade the City’s credit. The credit downgrades made additional funding even more difficult and expensive.

The City of Richmond remains committed to protecting taxpayer dollars and ensuring financial accountability.

The attorneys for the City of Richmond are Gary Gotto and Matt Melamed of Keller Rohrback L.L.P., and R. Bradley Miller of R. Bradley Miller Law. The City is also represented by the City Attorney Dave Aleshire and Floy Andrews of Aleshire & Wynder, L.L.P.

About Keller Rohrback L.L.P.

Keller Rohrback’s Complex Litigation Group has a national reputation as the go-to plaintiffs’ firm for large-scale, complex individual and class action cases. We represent public and private investors, businesses, governments and individuals in a wide range of actions, including securities fraud, fiduciary breach, antitrust, insurance coverage, whistleblower, environmental and product liability cases. Founded in 1919, Keller Rohrback has eight offices across the country in Seattle, Portland, Oakland, Santa Barbara, Phoenix, Denver, Missoula, and New York. Over the past century, our firm has built a distinguished reputation by providing top-notch representation.

Keller Rohrback has won verdicts in state and federal courts throughout the nation and have obtained judgments and settlements on behalf of clients in excess of $94 billion.

About R. Bradley Miller

Brad Miller is an attorney and former congressman for North Carolina’s 13th congressional district from 2003 to 2013. A graduate of UNC-Chapel Hill, the London School of Economics, and Columbia Law School, he has extensive experience in consumer protection, financial regulation, and legislative policy. As congressman, he championed mortgage reform, education access, and civil rights and advocated for economic fairness and consumer rights.