## Facts

- Oscar S. Gray held an American Express charge card account since 1964.
- In 1981, Gray used the card to buy airline tickets under a program permitting deferred payment in installments over a year.
- American Express mistakenly included deferred travel charges as current charges on Gray’s March 1981 statement, prompting a dispute over the amount due.
- On April 22, 1981, Gray sent American Express a written letter disputing the charges and explaining the alleged billing error.
- Gray later sent another written letter in September 1981 and withheld payment of the disputed portion.
- American Express referred the account to a collection agency and cancelled Gray’s card without prior notice.
- Gray learned of the cancellation on April 8, 1982, when a restaurant refused to accept the card for a meal and told him American Express had directed the restaurant to confiscate and destroy the card; an American Express employee confirmed by phone that the account was cancelled.

## Issues

1. Whether summary judgment was proper on Gray’s Fair Credit Billing Act claim, including whether his correspondence constituted timely, adequate written notice of a billing error and, if so, whether American Express complied with its statutory duties before taking adverse action.
2. Whether summary judgment was proper on Gray’s contract claim where the cardmember agreement stated American Express could cancel “at any time and for any reason,” but Gray asserted enforceable limits on how cancellation could be exercised.

## Decision

- The D.C. Circuit vacated the district court’s summary judgment for American Express and remanded for further proceedings.
- The court held the district court acted prematurely in concluding the FCBA afforded Gray no protection, because the record raised genuine disputes about whether Gray’s April 22, 1981 letter satisfied the FCBA notice requirements.
- The court held summary judgment on the contract claim was also improper because general contract doctrines could constrain even broadly worded cancellation discretion, and the record did not permit resolution as a matter of law.

## Legal Principles

- Under the FCBA, a consumer’s timely written notice identifying an asserted billing error can trigger statutory creditor obligations to investigate and respond within prescribed procedures.
- If FCBA procedures are properly invoked, a creditor may be restricted from treating the disputed amount as delinquent or taking adverse action based on that disputed amount until statutory duties are discharged.
- On summary judgment, courts must treat disputed facts and reasonable inferences in the nonmovant’s favor; unresolved disputes about statutory compliance preclude judgment as a matter of law.
- Contract clauses granting one party broad discretionary power (including cancellation “at any time”) may still be limited by ordinary contract interpretation rules and implied duties such as good faith and fair dealing, depending on the agreement and circumstances.

## Conclusion

The court vacated summary judgment because fact disputes remained as to whether Gray’s written dispute triggered FCBA protections and whether American Express complied with the Act before cancelling the card, and because standard contract doctrines could limit the issuer’s asserted unfettered right to cancel on the present record.


Gray v. Am. Express Co., 743 F.2d 10 (D.C. Cir. 1984)