Morgan Stanley (MS) charged what was described as a handling, postage and insurance (HPI) fee in relation to each trade confirmation it mailed out to investors. Susan Appert initiated class proceedings to recover HPI fees charged since 1998, on the grounds the fees bore no relation to MS’s actual charges: insurance may not have been applicable to all transactions, actual mailing costs were never disclosed, multiple confirmations may have been sent in a single mailing etc. She estimated that actual costs to MS were 42 cents per transaction; the fee in 2005 was $5.25.  

The district court in Chicago dismissed her claim, a ruling upheld by the 7th Circuit: Appert v Morgan Stanley Dean Witter Inc (7th Cir, 8 March 2012). Disclosure of a fixed fee for something like shipping and handling does not necessarily mean that the stipulated amount is the actual cost of those services, and a court’s focus will be on whether the amount was disclosed – not whether it is unreasonable or excessive. MS disclosed the amount of the HPI fee and noted that it was subject to change upon notice to the customer. The confirmation slips themselves said the fee represented HPI charges, ‘if any’. There was therefore no breach of the MS customer agreement, and no claim in unjust enrichment either. If Appert didn’t like the fee, she was free to take her business elsewhere.