9th Circuit Sides with Account Holder in ATM Fee Case
The Ninth Circuit Court of Appeals recently sided with an account holder suing her bank for charging double fees on balance inquiries at out-of-network ATMs: the bank charged a fee once when the account holder checked her account balance on the ATM screen and then again if the account holder opted to print a receipt showing that balance, even though the account holder received no indication that printing the receipt would trigger a separate balance inquiry. The Ninth Circuit held that charging double fees in this way was not permitted by the account documents.
The account documents permit the bank to charge a fee for each “balance inquiry,” so the court’s decision boiled down to a choice between two competing interpretations of that term. The bank argued—and convinced the district court—that “balance inquiry” meant any balance inquiry it received from an ATM. Thus, according to the bank, it would be permitted to charge for both the balance inquiry on the ATM screen, which the account holder explicitly requested, and for the balance inquiry that was triggered by the ATM when the account holder requested a printed receipt. The account holder, on the other hand, argued that “balance inquiry” could only fairly mean a balance inquiry initiated by the account holder herself. Thus, according to the account holder, the bank could charge a fee only for the balance inquiry she authorized on the ATM screen and not for the balance inquiry triggered by the ATM when she chose to print a receipt.
In reaching its decision, the Ninth Circuit rejected the interpretation of “balance inquiry” argued by the bank and adopted by the district court. First, the court held that the ordinary meaning of balance inquiry—i.e., the meaning a layperson would understand—is an objective request for balance information from the account holder, not a technical definition based on how ATMs work. Then, the court held that the bank’s and district court’s interpretation failed to read the account documents as a whole and would improperly render parts of them superfluous and inexplicable. Finally, the court held that allowing the bank to charge a fee even when the customer cannot reasonably know a balance inquiry is being triggered would be absurd and inequitable. Applying the principles of contract interpretation, the Ninth Circuit adopted the account holder’s understanding that a balance inquiry must be initiated by the account holder, not merely triggered by the ATM.
The case now returns to the district court for further proceedings consistent with the Ninth Circuit’s opinion.
