(CN) – Best Buy should not have to face claims that it concealed an annual fee to drive membership in its credit card rewards program, the 9th Circuit ruled.
The federal appeals court in Pasadena affirmed dismissal of a proposed class action against the consumer-electronics retailer and HSBC Bank Nevada.
The 2009 complaint claimed that Best Buy and the bank had failed to properly disclose a $59 annual fee in advertisements and applications for the Reward Zone Program MasterCard.
Though lead plaintiff Gary Davis could have canceled the card the avoid the fee, he instead refused to activate it and continued to pay the annual fee for five years.
U.S. District Judge George King dismissed the Los Angeles case, and a three-judge appeals panel unanimously affirmed on Friday.
Neither Best Buy’s online application nor its advertisements violated federal disclosure laws, according to the ruling. Furthermore, whatever alleged harm Davis suffered could have been easily avoided.
“The advertisement contained the disclaimer, ‘other restrictions may apply,’ which would have motivated a reasonable consumer to consult the terms and conditions,” Judge Dorothy Nelson wrote for the court. “If that were not enough, the online application used boldface and oversized font to alert Davis to the Important Terms & Disclosure Statement, instructing him to ‘read the notice below carefully.’ The disclaimer and the terms and conditions were enough to give a reasonable consumer ‘reason to anticipate’ the possibility of fees. Additionally, the fact that Davis was required to check the box indicating his assent before completing the application meant that he could have aborted his application upon reading the terms and conditions. This provided ‘the means to avoid’ the alleged harm.”
Davis could even have received a refund of the annual fee if he canceled the card within 90 days.
“Because Davis failed to read the terms and conditions before agreeing to them, and because he refused to cancel his card within 90 days, even when viewing the facts in Davis’s favor, we must conclude that any harm he suffered was the product of his own behavior, not the advertisements,” Nelson wrote.