HP Dodges Suit Over Expensive Snapfish Offer

SAN FRANCISCO (CN) - Hewlett-Packard should not face claims it tricked Snapfish.com customers into signing up for an unaffiliated company's service with allegedly hidden fees, a federal judge ruled.

Carol Hill Castagnola and Ronda Maas sought to hold HP liable for a Snapfish Valuepass program run by Regent Group dba Encore Marketing International that charged $14.95 a month.

Castagnola and Maas claim that HP sent them to Regent's website after they used their credit cards to buy photography-related products on Snapfish.com, an HP subsidiary. They claim that Regent's website resembles the Snapfish site, so they did not realize that the two sites were not affiliated.

Presented with the option to join Regent's Snapfish Valuepass and claim a $10 gift card, both customers clicked "yes." But they say they did not know that the service came with a $1.95 activation fee and $14.95 monthly charge thereafter.

Castagnola's subscription ultimately cost her $134.95, and Maas paid $89.70.

HP and Regent moved to dismiss, and U.S. District Judge Jeffrey White complied Wednesday.

The court noted that customers enroll in the Valuepass program after first entering their email addresses and zip codes. Regent's webpage reveals the offer details four times, and the site states that clicking "yes" will activate a Snapfish Valuepass membership as described in the offer details.

White also found that Regent identified itself, rather than Hewlett-Packard, as the face behind the offer.

"Below the 'YES' button is a statement that 'Encore Marketing International (EMI) is the offerer and administrator of Snapfish Valuepass, a branded membership program offered to Snapfish customers,'" the decision states. "A similar disclosure is set forth in the left side of the Regent webpage. The Regent webpage also has a copyright reference at the bottom of the page which reads '©2011 Encore Marketing International.' The court finds that any ambiguity about who offers and administers the Snapfish Valuepass program is 'dispelled by the [webpage] as a whole."

"Although plaintiffs argue that the circumstances of this case are such that a 'reasonable consumer would not be expected to read the fine print on the webpage before providing his or her email address,' the court finds this argument unpersuasive," White added.

After tossing the unfair competition law claims, White refused to order an injunction, saying the class could not show that the challenged conduct would harm them in the future.

"Here, plaintiffs do not allege that they intend to purchase products from Snapfish.com in the future or that, if they did, they would seek to participate in the Snapfish Valuepass program," White wrote. "Even if they did include such allegations, however, plaintiffs now have knowledge of the terms and conditions of the program, how that HP would transfer the billing information to Regent, and know that Regent, rather than HP, administers the program."

Hewlett-Packard also survived the restitution claim because the class could not show that it received money from the fees Regent collected.

Though Castagnola's claims failed on the merits, White dismissed Maas as a plaintiff because she is a Minnesota resident and could not tie her claims to California, as required under the unfair competition law.White set a July 6 deadline for the plaintiffs to file an amended complaint.

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