A lawsuit brought against American Express Co. over the loss of its co-branded credit card contract with Costco Wholesale Corp. has been dismissed.
The suit alleged that American Express did not properly disclose the contract's size and its importance to the company, or that losing the contract would hurt the company's business. It also claimed that the prospect of the agreement not being renewed was more likely than the company originally told investors.
Costco had said that it would seek to partner with the company that offered the "cheapest" option for the co-branded program. But in dismissing the claims, a U.S. district judge wrote that American Express' interpretation of those comments as meaning Costco would negotiate aggressively, rather than indicating it would end the existing relationship, was reasonable.
The judge also noted that American Express did disclose in public filings that the loss of the contract would have a meaningful near-term impact on its business.