The U.S. Court of Appeals for the Second Circuit has upheld a New York judge's dismissal of a proposed class action claiming that American Express Co. had hidden the importance of its co-branding agreement with Costco Wholesale Corp. and misled investors about the chances that it would collapse.

A three-judge panel of the Manhattan-based appeals court on Tuesday rejected an appeal by a union pension fund, which sued the credit card company in 2015 following a drop in AmEx's stock after it revealed that the longstanding agreement with Costco's U.S. business would not be renewed.

The plaintiffs had argued that AmEx's optimistic public statements about the relationship amounted to fraud, and that officials were not forthcoming about an industry trend of increasing competition for co-branding deals that had made Costco agreement even more important to the company's financial health.

U.S. District Judge Paul Gardephe of the Southern District of New York dismissed the claims in 2017, finding that no reasonable investor would have interpreted comments by Jeffrey C. Campbell to be false or misleading. AmEx was under no obligation at the time to update investors about behind-the-scenes negotiations because earlier statements about continuing to work with Costco were not intended to be forward-looking, Gardephe said.

On appeal, attorneys for the pension fund said the prospects for renewing the agreement deteriorated in January 2015, when AmEx chairman and CEO Kenneth I. Chenault called Costco's chief executive, Craig Jelinek, to discuss the relationship. According to court documents, Jelinek interrupted the call to say that AmEx was just another “vendor,” like those that sold ketchup at Costco, telling Chenault, “If I can get cheaper ketchup somewhere else, I will.”

Talks at that point had been underway between the companies for two months. But when Campbell addressed investors on the company's earnings, he downplayed the situation, saying that AmEx was “doing with Costco as we're doing with all of our partners at any time.”

The plaintiffs alleged in their brief that the statement amounted to a denial that the company was “making any special efforts” in regard to the Costco agreement and signaled to shareholders that there were no ongoing negotiations concerning the renewal of the o-branding agreement.

The Second Circuit, however, rejected those arguments in an eight-page summary order that embraced Gardephe's findings.

“No reasonable investor could have interpreted these statements as denying the existence of any ongoing renewal discussion with Costco,” the panel said. “Thus, the district court properly granted AmEx's motion to dismiss.”

Counsel for the pension fund was not immediately available to comment Wednesday afternoon, and an attorney for AmEx declined to comment, citing the need for his client's approval to publicly discuss the case.

The pension fund, Pipefitters Union Local 537 Pension Fund, was represented on appeal by Thomas A. Dubbs of Labaton Sucharow in New York and Douglas S. Wilens of Robbins Geller Rudman & Dowd in Boca Raton, Florida.

AmEx was represented by Stephen L. Ascher, Richard F. Ziegler and Jeremy H. Ershow of Jenner & Block in New York.

The case was captioned Pipefitters Union Local 537 Pension Fund v. American Express.