LA Fitness Third Amended and Consolidated Class Action Complaint .10.12.2011

Case 2:10-cv-02326-MMB Document 35
Filed 10/12/11 Page 1 of 39
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA ____________________________________ : KENNETH J. SILVER, : CIVIL ACTION JOSHUA VAUGHN, : LORI C. BOHN, : Case No. 10-cv-2326-MMB SHARON N. LOCKETT and : JUSTIN P. BRONZELL, : JURY TRIAL DEMANDED on behalf of themselves and : all others similarly situated, : : Plaintiffs, : : v. : : L.A. FITNESS INTERNATIONAL, LLC, : : Defendant. : ____________________________________:
THIRD AMENDED AND CONSOLIDATED CLASS ACTION COMPLAINT
TABLE OF CONTENTS I. II. III. IV. NATURE OF ACTION ...................................................................................................... 1 JURISDICTION & VENUE ............................................................................................... 3 PARTIES ............................................................................................................................ 4 SUBSTANTIVE ALLEGATIONS .................................................................................... 4 A. B. C. Background Regarding Defendant LA Fitness ....................................................... 4 Defendant LA Fitness Monthly Dues Membership Agreement ............................ 5 Defendant LA Fitness Cancellation Practices Are In Breach of the Monthly Contracts and Are Unfair and Deceptive ................................................................ 8 1. LA Fitness Regularly Breaches Its Monthly Contracts and Engages in Deceptive Acts by Systematically Ignoring Cancellation Requests So that It Can Continue Extracting Monthly Dues ................................................. 8 LA Fitness Regularly Breaches Its Monthly Contracts By Requiring Members To Use the Companys Pre-printed Cancellation Form.............. 9 The Monthly Contracts 30-Day Notice Provision Is Misleading ............ 10
2. 3. D. E.
There Are Hundreds of Consumer Complaints About LA Fitness Unlawful Practices That Substantiate Plaintiffs Allegations ............................................... 11 Plaintiffs Experiences With LA Fitness .............................................................. 18 1. 2. 3. 4. Plaintiff Kenneth J. Silver ......................................................................... 18 Plaintiff Joshua Vaughn ............................................................................ 21 Plaintiff Lori Bohn .................................................................................... 24 Plaintiffs Sharon N. Lockett and Justin P. Bronzell ................................. 27
V. VI.
CLASS ACTION ALLEGATIONS ................................................................................. 31 LEGAL CLAIMS ............................................................................................................. 33
COUNT I -- BREACH OF EXPRESS CONTRACT ................................................................... 33 COUNT II -- VIOLATIONS OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT AND WASHINGTON CONSUMER PROTECTION ACT ............ 34 VII. VIII. JURY TRIAL DEMANDED ............................................................................................ 36 PRAYER FOR RELIEF ................................................................................................... 36
Plaintiffs hereby file this Complaint pursuant to this Courts Order and Memorandum entered on September 12, 2011. I. 1. NATURE OF ACTION
Plaintiffs bring this action on behalf of themselves and all other similarly-situated
persons who: (i) are former members of defendant L.A. Fitness International, LLC (LA Fitness or the Company) who have incurred at least one additional monthly billing charge after they timely cancelled their Monthly Dues Membership Agreements with LA Fitness, despite the fact that they were up to date with dues payments at the time they mailed their notice of cancellations; or (ii) are current members of LA Fitness who entered into Monthly Dues Membership Agreements which contain the misleading cancellation provisions set forth herein and who will be forced to pay dues for one or more months after they attempt to cancel their memberships (the Class). 2. Defendant LA Fitness owns and operates health and fitness clubs throughout the
United States. A new member may enroll under the Companys Monthly Dues Membership Agreement (also referred to herein as the Monthly Contract), in which case the new member pays an initiation fee, first month dues, and prepaid last month dues. Alternatively, a new member may enroll under the Companys annual Paid In Full Membership Agreement, in which case the member pays an entire years dues up front (which amounts to several hundred dollars). This action focuses on the Monthly Dues Membership Agreement. 3. At all relevant times, through the terms of the Monthly Contract and through the
systematic uniform representations of its sales representatives, LA Fitness represented to Class members that the Monthly Dues Membership Agreement was a monthly contract that members can sign up for, use the gym for their desired period of months, and then cancel at any time without incurring any further billing simply by following the Companys cancellation 1
procedures. This is not the case. 4. Although LA Fitness sells monthly dues memberships through its local clubs,
members cannot cancel their memberships at the clubs where their memberships were initiated (or at any other local LA Fitness location), nor can they cancel their memberships by telephone, or by facsimile, or by e-mail, or on the Companys Internet site. In fact, while it takes minutes for LA Fitness to sign up a person for a monthly dues membership, it is virtually impossible for a person to cancel the membership and stop paying dues when they want to. 5. LA Fitness breached its Monthly Contracts and/or engaged in unfair and
deceptive practices for the following reasons: The Monthly Contract states: If there are no back dues or a balance due on your membership, you may stop the billing of the monthly dues through EFT and cancel your membership by providing written notice of your request at least thirty days prior to your next billing date: Send the written notice to LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. (Emphasis added.) LA Fitness breaches its Monthly Contracts and commits deceptive acts when it systematically ignores and refuses to act on members properly-submitted written cancellation notices and continues automatic billing of monthly dues from members bank accounts and credit cards in blatant disregard of the Companys obligations under the Monthly Contract; LA Fitness also breaches the above provision because, as the Monthly Contract fails to disclose, members cannot send in their own written cancellation notices, but rather, they must use the Companys pre-printed notice of cancellation form obtainable primarily by visiting an LA Fitness facility in-person. This undisclosed requirement contradicts the terms of the Monthly Contract, is clearly intended to impede or delay members from cancelling their memberships, and enables LA Fitness to charge additional monthly fees after its services are no longer used or desired; and The Monthly Contracts 30-day notice period is misleading. In order for a person to have his last months prepaid dues be applied to a month when he is still using the gym and not pay an extra month of dues for a period after he has stopped using the gym he would have to cancel at least 61 days before his desired termination date. Since consumers do not understand this 61-day requirement when reading the Monthly Contract,
they end up paying for at least an extra month for services that do not want or use.1 6. In short, LA Fitness has acted in an unlawful manner so as to extract dues from
members for months after they attempt to cancel their Monthly Contracts and no longer wish to use the gyms. 7. Significantly, hundreds or thousands of consumers have complained about LA
Fitness cancellation practices and procedures on the Internet. These complaints demonstrate that consumers did not know that LA Fitness would be billing them after receipt of their cancellation notices and beyond their use of the gym. These complaints are corroborated by LA Fitness own employees who greatly criticize LA Fitness procedures and tactics. These hundreds of complaints show that LA Fitness has breached its Monthly Contracts and acted in an unfair and deceptive manner, and that Class members have been and are continuing to be harmed by such actions. 8. Plaintiffs seek damages suffered as a result of defendants conduct, including but
not limited to compensatory damages and injunctive relief. II. 9. JURISDICTION & VENUE
This Court has subject matter jurisdiction pursuant to the Class Action Fairness
Act of 2005, 28 U.S.C. 1332(d), because at least one class member is of diverse citizenship from at least one defendant; there are more than 100 class members nationwide; and the aggregate amount in controversy exceeds $5 million. This Court has personal jurisdiction over the parties because defendant LA Fitness maintains offices in this state and conducts business here.
All allegations concerning the Contracts 30-day notice provision also apply to LA Fitness newer Contracts that provide a 20-day notice period. Contracts with the 20-day notice period actually require a member to provide at least 51-days notice of cancellation before the desired termination date to avoid paying dues for services that are not wanted or used.
1
10.
Pursuant to 28 U.S.C. 1391(a)(2), venue is proper in the Eastern District of
Pennsylvania because a substantial part of the acts giving rise to Plaintiff Silvers claims occurred in this District. 11. Plaintiff Vaughns case was transferred to this Court from the Middle District of
Florida by an order dated April 14, 2011. This Court consolidated Plaintiff Vaughns case with the present action by Order dated September 12, 2011. III. 12. 13. PARTIES
Plaintiff Kenneth J. Silver is a resident of Pennsylvania. Plaintiffs Sharon N. Lockett and Justin P. Bronzell are an unmarried couple who
are residents of Pennsylvania. 14. Plaintiff Joshua Vaughn was a resident of Florida from the time he initiated his
membership with LA Fitness in January 2008, until the end of August 2010. He is presently a resident of New York. 15. 16. Plaintiff Lori C. Bohn is a resident of Washington. Defendant LA Fitness is a privately-owned limited liability company that operates
health and fitness clubs throughout the United States and Canada, and sells memberships to the public for these clubs. LA Fitness mailing address is P.O. Box 54170, Irvine, CA 92619 and it maintains its principal executive offices at 2880 Michelle Drive, Irvine, CA 92606. IV. A. 17. SUBSTANTIVE ALLEGATIONS
Background Regarding Defendant LA Fitness
LA Fitness was founded in 1984 to purchase and operate underperforming fitness
clubs. Through the mid-1990s, the Company grew its club portfolio both by acquiring and turning around existing clubs and by developing, opening, and operating newly-constructed properties. In 1995, LA Fitness designed and built a new 45,000 square foot multipurpose health 4
and fitness club that became the Companys signature look. In 1998, the Company began to rapidly increase its new club development and to expand into new geographic regions. 18. Currently, LA Fitness operates over approximately 360 fitness clubs from New
York to California with over 1,000,000 members. Clubs range in size from 20,000 to 60,000 square feet and typically offer access to circuit training equipment, free weights, cardiovascular equipment, aerobics programs, swimming pools, whirlpools, saunas, and racquetball and basketball courts. B. 19. Defendant LA Fitness Monthly Dues Membership Agreement
New members of LA Fitness may choose to enroll under the Companys Monthly
Dues Membership Agreement, in which case membership is on a month-to-month basis and purportedly may be canceled at anytime by using the procedures set forth in the Monthly Contract. 20. If a member selects the monthly membership, and signs LA Fitness Monthly
Dues Membership Agreement, he is charged a one time initiation fee, plus first month dues and prepaid last month dues. Monthly dues are typically around $35.00, but may vary. Additionally, a member must provide LA Fitness with a bank account or credit card from which additional monthly dues will be billed automatically by electronic funds transfer (EFT). Specifically, the Monthly Dues Membership Agreement states: YOUR EFT BILLING DATE: Your monthly dues will be billed and collected once a month beginning on _________ and continuing on the same day each month until terminated in the manner provided below. 21. The Monthly Dues Membership Agreement also purports to explain how
members can cancel their memberships and stop monthly dues billing. Specifically, the Monthly Contract in use when Plaintiff Vaughn joined LA Fitness requires members to mail a written notice of cancellation to an LA Fitness post office box in Irvine, California at least 30 days 5
before the next billing cycle, stating: How to stop your monthly EFT billing: If there is no back dues or a balance due on your membership, you may stop the billing of the monthly dues through EFT and cancel your membership by providing written notice of your request at least thirty days prior to your next billing date: Send the written notice to LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. If the notice is postmarked at least 30 days prior to your next billing date, no further billing will occur. If the notice is postmarked less than 30 days prior to your next billing date one or more billing will occur. In either case, your last months prepaid dues will extend your membership expiration by an additional 30 days or more, depending on your original sign up date.2 (Emphasis added.) 22. The version of the Monthly Dues Membership Agreement in use when Plaintiffs
Kenneth Silver and Lori Bohn joined LA Fitness requires that a notice of cancellation be postmarked at least 20 days before the next billing date in order to avoid being billed an additional month, stating: HOW TO CANCEL YOUR MONTHLY DUES MEMBERSHIP: You may cancel your membership and the continued billing of monthly dues through EFT or [credit card] by mailing written notice of your cancellation request to: LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170 or such other address designated by LA Fitness. A cancellation notice postmarked a minimum of 20 days prior to your next Billing Date will result in no further billing of monthly dues. A cancellation notice postmarked less than 20 days prior to your next Billing Date will result in one more monthly billing. Then your last months prepaid dues will be applied for your final monthly payment, extending your membership at least an additional 30 days, at which time your membership will expire.3 (Emphasis added.) 23. The version of the Monthly Dues Membership Agreement in use when Plaintiffs
Sharon Lockett and Justin Bronzell joined LA Fitness requires that a notice of cancellation be
A true and correct copy of the LA Fitness Monthly Dues Membership Agreement with the 30-day notification provision signed by Mr. Vaughn is attached hereto as Exhibit A.
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A true and correct copies of the LA Fitness Monthly Dues Membership Agreement with the 20-day notification provision signed by Mr. Silver and Ms. Bohn is attached hereto as Exhibits B and C, respectively.
postmarked at least 6 days before the next billing date in order to avoid being billed an additional month, stating: HOW TO CANCEL YOUR MONTHLY DUES MEMBERSHIP: You may cancel your membership and the continued billing of monthly dues through EFT or CC by mailing written notice of your cancellation to: LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. A cancellation notice postmarked at least 6 business days before your next billing date should result in no further Monthly Dues billing. A cancellation notice postmarked less than 6 business days before your next billing date may result in one more Monthly Dues billing. In either case, if such an additional Monthly Dues Billing occurs, L.A. Fitness will refund that billing. Your last months prepaid dues will be applied to the month after the month paid by your final EFT or CC billing, and your membership will expire at the end of that prepaid last month.4 24. The Monthly Dues Membership Agreements state that you may cancel your
membership by mailing written notice of your cancellation. The agreements do not state that a pre-printed form or any particular form of written cancellation is needed. 25. LA Fitness refuses to provide members with a facsimile number or e-mail address
for its Irvine, California corporate office, which would allow members to immediately send cancellation notices via facsimile or e-mail and to obtain prompt confirmation that the notification was received by the Company. Also, LA Fitness clubs refuse to assist members by having the Company send cancellation notifications via facsimile or U.S. mail to the Companys Irvine, California headquarters in the same manner in which membership initiations are communicated to its headquarters. Instead, members must send the cancellation notices themselves, via U.S. mail to a post office box. 26. By requiring members to send written notice via U.S. mail to LA Fitness Irvine,
California post office box rather than allowing members to immediately cancel memberships at the clubs where their memberships were initiated (or any other LA Fitness location), or by
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A true and correct copy of the LA Fitness Monthly Dues Membership Agreement with the 6-day notification provision signed by Mr. Bronzell is attached hereto as Exhibit D.
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telephone, or by facsimile, or by e-mail, or through the Companys Internet site, the Company substantially delays consumers from cancelling their memberships and terminating their monthly dues billing. 27. Furthermore, requiring that written notice of cancellation be mailed to a post
office box in Irvine, California, rather than an office staffed by LA Fitness employees during normal business hours when mail is delivered, prevents members from sending cancellation notices by any form of mailing that is subject to tracking and confirmation of receipt without incurring additional expenses, such as the cost of sending the notification via certified mail with a return receipt request. Indeed, the only method by which members can confirm that their cancellation request has been received and acted upon is by checking their next months bank statement or credit card statement to see if they are still being billed by LA Fitness. C. 28. Defendant LA Fitness Cancellation Practices Are In Breach of the Monthly Contracts and Are Unfair and Deceptive Defendant LA Fitness has engaged in unlawful conduct by engaging in the
practices set forth below. 1. LA Fitness Regularly Breaches Its Monthly Contracts and Engages in Deceptive Acts by Systematically Ignoring Cancellation Requests So that It Can Continue Extracting Monthly Dues
29.
The Monthly Contract states:
If there are no back dues or a balance due on your membership, you may stop the billing of the monthly dues through EFT and cancel your membership by providing written notice of your request at least thirty days prior to your next billing date: Send the written notice to LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. (emphasis added). 30. LA Fitness has a policy and practice of regularly and systematically ignoring
members cancellation notices which are sent in the manner prescribed by the Monthly Dues Membership Agreement. Although the Monthly Contract states that a member may cancel his 8
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membership and stop all billing by sending in any form of a written notice to a certain P.O. box, in actuality, LA Fitness systematically ignored cancellation requests, including those which were made using the Companys pre-printed form, and continued to bill its members. These practices and procedures are designed to extract additional monthly dues from LA Fitness members. By such conduct, LA Fitness has breached the Monthly Contracts and engaged in deceptive acts under the Florida Deceptive and Unfair Trade Practices Act and the Washington Consumer Protection Act. 2. 31. LA Fitness Regularly Breaches Its Monthly Contracts By Requiring Members To Use the Companys Pre-printed Cancellation Form
LA Fitness also has breached the contract provision quoted above because, as the
Monthly Contract fails to disclose, members cannot send in their own cancellation requests, but rather, they must use the Companys pre-printed notice of cancellation form, which is obtainable primarily by visiting an LA Fitness facility in-person. In other words, if a member sent in a typed or handwritten letter which clearly stated: please terminate my membership now, LA Fitness would ignore such notice because it was not made on its pre-printed form. This undisclosed requirement contradicts the terms of the Monthly Contract and is clearly intended to impede or delay members from cancelling their memberships. It also enables LA Fitness to charge additional monthly dues after its services are no longer used or desired. 32. While the Companys website purports to allow members to download the
cancellation form, consumer complaints on the Internet report persistent computer glitches that prevented consumers from downloading the form from LA Fitness website. 33. As a result of defendants practices, LA Fitness members are delayed from
cancelling their memberships until such time as they learn of the undisclosed requirement to use the Companys pre-printed cancellation form, which often occurs after sending a prior 9
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cancellation notice that was ignored. 3. 34. The Monthly Contracts 30-Day Notice Provision Is Misleading
The Monthly Contracts cancellation policy is misleading because it requires 61
days notice, rather than the agreements stated 30 days notice, prior to cancellation in order to receive the benefit of the last months pre-paid dues. In order for a person to have his last months prepaid dues be applied to a month when he is still using the gym and not pay an extra month of dues for a period after he stopped using the gym he would have to cancel at least 61 days before his desired termination date. Consumers do not understand this 61-day requirement from reading the Monthly Contract, so they end up paying for at least an extra month of dues for services that do not want or use. 35. By signing an Agreement with LA Fitness, a member has committed to at least a
two month membership. However, to limit ones membership to this two month period, a member must cancel the membership on the date that he signed up. To limit the members obligation to three months, a member must cancel before the end of the first month. Moreover, reasonable members could infer from the no further billing and 30 day notice language of the Monthly Contract that they have acted diligently by mailing timely written notice 30 days prior to the date upon which they wish their membership to cease. In fact, such members would be misled in understanding that they would not have to pay dues both for the month during which the cancellation notice is received and have their last months dues applied for the next month. Such members who intend their memberships to cease at the end of a certain month, and cancel in the prior month, would not understand that they had to plan an additional month in advance and would not receive the benefit of their last months prepaid dues. 36. The chart below demonstrates that at least 61 days notice is required to cancel.
Specifically, this chart demonstrates that a customer who mails a cancellation request to LA 10
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Fitness using the Companys pre-printed cancellation form on July 14, would have his membership continue until September 15, i.e., 63 days after sending his cancellation request. The Monthly Contract Cannot be Cancelled in 30 Days; At Least 61-Days Notice is Required
DATE (2008) PAYMENTS ACTION TAKEN BY MEMBER Customer signs Monthly Dues Membership Contract at local LA Fitness Gym N/A Customer sends pre-printed cancellation form to LA Fitness Irvine, California P.O. box N/A MEMBERSHIP STATUS
Thursday May 15 Sunday June 15 Monday July 14 Tuesday July 15 Friday August 15 Monday September 15
Pays first & last months dues (2 x $35 = $70) and an initiation fee (typically $99) LA Fitness automatically bills customer $35 monthly dues N/A LA Fitness automatically bills customer $35 monthly dues Pre-paid last months dues billed to extend membership at least 30 days N/A
Membership Begins
Membership Continues
N/A
N/A
Membership Expires
D. 37.
There Are Hundreds of Consumer Complaints About LA Fitness Unlawful Practices That Substantiate Plaintiffs Allegations Internet websites that allow consumers to post complaints about businesses,
including the Better Business Bureaus national website, are filled with hundreds of grievances by current and former LA Fitness members who have experienced endless delays by LA Fitness in their attempts to terminate memberships and monthly dues billing, resulting in additional monthly dues charges after they have attempted to cancel. The common thread that runs through all of these complaints is that LA Fitness claims to have never received the cancellation notice, and continues monthly billing for one or more additional months. 38. The fact that hundreds or thousands of consumers have complained clearly
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demonstrates that LA Fitness has breached its Monthly Contracts and acted in a deceptive manner in a systematic and wide-spread basis, and that Class members have been harmed by LA Fitness unlawful practices. The following excerpts below are just a few examples of existing complaints. 39. From the Better Business Bureau (BBB) website, dated February 3, 2010, an
LA Fitness member complained: [W]hen I tried to cancel my membership, we went in to cancel and the girl did it for us, told us it was cancelled (although it might not have been early enough to escape the next months payment. You have to cancel 20 days in advance, which is ripoff enough already. However, didnt everyone have to pay the first and last months dues when you sign up? Whats that for?) and gave us a receipt. 2 months later, they were still charging me. We went in to find out what was going on and were told that they never cancel memberships in the store, they cant do it; they give me a form I have to send in to corporate. 40. vented: When I signed up, it took them like 15 minutes to get me enrolled right there at my gym in Corona. When I decided to cancel however, and went back to the same gym in Corona - I was told that they did not have access to my account and wouldnt be able to cancel it for me. They told me Id have to deal directly with there Corporate office in Irvine. Theres no phone contact. I mailed in my request to cancel. 30 days later, they pretended they hadnt received it. So they continued to bill me. So I mailed in other request, and they pretended not to receive it - again. So I went to the post office and mailed out a 3rd one via certified mail, some time went by, and finally, I received an e-mail confimation [sic] from them stating that my account would be billed as scheduled and canceled within 30 days. Dont get me wrong, I love going green however, why do I have to mail in my request to cancel via certified mail, because theres no available phone number or e-mail address, but then they go ahead and e-mail me from an unmonitored address? Hows that fair? Is becasue [sic] they didnt want my e-mails in regards to why Im still getting billed for a service Ive been trying to cancel 3 months aga [sic]? (emphasis added.) 41. A complaint on the BBB website dated September 29, 2009, stated: Also from the BBB website, dated December 26, 2009, an LA Fitness member
I am a very pro-business person. I ordinarily find, contrary to common belief, that 12
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large companies are the easiest to deal with and the most respectful of their customers, because that is the way they establish lasting relationships and achieve long term success. However, after dealing with LA Fitness, I am pretty sure that their business is *actually* a scam. They signed my husband and myself up for a joint family plan gym membership, on a single contract which referred to the membership as shared. When we decided to cancel, we experienced all of the same run arounds that everyone else seems to have experienced, but we did finally get them to cancel the membership (several months and several undeserved payments after we first initiated the process). The real problems came later. Even AFTER sending us an email confirming that the account was closed, LA Fitness didnt stop the automatic debits from our account. Instead, they *halved* them. We didnt realize this until 9 months later, because the debits were coming out of a bank account that we dont normally use very much. I called them to explain the mistake and get a refund. I assumed that my experience would be as it has been with numerous other companies that I have dealt with, and that I would simply explain what had happened and they would refund the money. Interestingly, when I spoke to the receptionist at the local branch, *she* was very respectful and helpful, and said, yes, we have a bad cancellation policy Ill get back to you within the week about this. But then what I got instead of a call back from her, was a call from corporate. The contrast was STRIKING. It was clear that their *conscious and deliberate approach* was to try to intimidate and badger me into just giving up. At first, the woman I spoke with refused to even cancel the account over the phone, much less refund the money. She wouldnt even let me speak, but just jumped in with some story about how we had two accounts not one, and we only closed one of them. (First I heard about it!) She was belligerent and patronizing. When she realized she was actually dealing with someone calm and articulate, she switched tacks a little and tried to get me to agree that if she cancelled the account over the phone, I would waive any claim to have past amounts refunded. Pretty ballsy. Of course I refused that. I actually spent about an hour on the phone, and I made her give to me another representative to talk to. He took exactly the same approach. Finally, I had to give up and just file in small claims court to get back the $300 they stole. It really was an incredible experience. They are a very dishonest company. Im sure they wont last, with these kinds of fraudulent practices, but until they gasp their last gasp I highly recommend that you stay away. (emphasis added.) 42. Another BBB complaint dated September 16, 2009, stated:
Dont join LA Fitness. LA Fitness lie to their customers. They are not trustworthy to do business. Busines[s] practice is terrible. I join them for a few weeks and decided to cancel due to their business dishonesty. [O]nce they have your credit card, they will charge whatever they come up with the amounts and say you sign up for their training. Their cancelation process took a few months to process even [if] you make it to cancel in the current month. Thats a scam / red flag of their company. Be wise do not join LA Fitness. I joined just because 13
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their facility looks nice outside but it is very scary inside when it comes to payment. They are very greedy and fraudulent practice business. Better watch out... (emphasis added.) 43. 8, 2009: LA fitness purposefully makes it extremely difficult to cancel membership. I have read many online reviews and it seems like many people went thru the exact same experience as me. I had to go to the club to pickup the cancellation form (big RED flag). I mailed a certified letter 20 days prior to billing cycle but still got charged. Called into their 800 number and the representative immediately cancelled the membership but claimed he never received the letter. Many people have been through the same. I believe LA fitness purposefully misleads people on their cancellation policy in hopes of continue to charge them. In this day and age we shouldnt have to drive/pickup/mail letters. It should be done either via phone or online. I understand the notice period but the whole certified letter and them claiming to many people that they never received it sounds like a big scam. (emphasis added.) 44. Another BBB website complaint dated April 16, 2009 reveals the same Yet another LA Fitness member added this complaint to the BBB website on July
frustrations in cancelling membership: L.A. Fitness seems like a good club, reasonably priced, unless you want to cancel. You have to fill out a form and mail it 20 days before you want to cancel. BUT when you sign up you have to pay the first and last months membership. So unless you have the keen insight that you want to cancel 50 days before you want to stop using LA Fitness you have to pay for that last months membership anyway... seems a bit ridiculous that you have to mail in a certified letter in this day and age when canceling via the web is very easy... heck I can pay taxes online, but cant cancel my gym membership???? What gives.... Seems like a nice way of keeping you paying when you dont even want to go. (emphasis added.) 45. ComplaintsBoard.com reveals more of the same, including this complaint made
on January 26, 2010: I wasnt using my membership enough, so I decided to cancel it in July of 2009. I went in to cancel and they said you cant cancel here, you have to send in written cancellation and it will take a couple of months. That should have been my first clue. 14
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I got the form, and sent it off. I also learned this, keep a copy and send registered mail! Everything I do is electronic. I dont get paper copies of any bills to try and be more green. I rarely use my credit card anymore, so when I logged on to check it the other day, I noticed that LA Fitness was on there and had been all of the previous bills. I called immediately...and gee, guess what they said? Oh, it looks like we never received it. I hate dealing with dishonest people. I played their game and did as I was told. They are the ones who got my letter and pitched it in the garbage. Why not? It wasnt registered, so I cant prove that I sent it. Sometimes it is really embarrassing [sic], or maybe just depressing to know that companies like this exist. I know I have no way to get back my fees for the past seven months. What I am really hoping is that someone will read this and realize they are dealing with a dishonest company and take their business to someone who is trying to do a service rather than steal money from their customers. The people that run the individual clubs were great. It is just the people who call the shots that I am so disappointed with. (emphasis added.) 46. A complaint submitted to ComplaintsBoard.com, on December 21, 2009, stated:
I sent the membership cancellation form as instructed via certified mail. LA Fitness claimed they never received it. So after ripping their butts and 3 phone numbers later I got membership cancelled over the phone They make it very difficult so they can keep taking your money. (emphasis added.) 47. Yet another ComplaintsBoard.com post on September 22, 2009, complained:
LA Fitness makes it impossible to cancel their membership. I contacted them months ago to try to cancel their cancel anytime membership. In order to cancel online you must sign up for an online account. They make you sign in to your account at sign up. If you go with them save your sign in information. It is a nightmare to get through to them to get your information. This is a planned by the company so that you will have other things to do and forget about your 30.00 a month. It worked on me. It was such a problem that I did forget. They have their cancellation form on line but for some planned reason you can not open the file. I disputed it with my bank and ultimately they continued to charge my card. Four months later I went through the steps again and once again you can not download their cancellation form. Finally I went to their building 15
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where they try to talk you out of leaving but ultimately they gave me a cancellation form which you have to send in by regular mail. They also tell you that they need to receive it ten business days in advance to stop from charging you again on their next billing cycle. If they put as much time into customer service as they do into making sure you cant [sic] cancel they [would] be a much better company. (emphasis added.) 48. In a June 29, 2009 post on ComplaintsBoard.com, another former LA Fitness
member relates being charged monthly membership dues after sending a cancellation notice: I recently moved and a[m] now living far from the nearest LA Fitness center. I stopped by before I moved out to terminate my membership. They told me I need to send them a filled out form by mail. Ridiculous. I printed it ou[t] and sent it. A month later I saw I am still being charged. I called them. They said they have no record of my cancellation. How convenient! I filled [out] the form again and sent it as a certified mail to have the proof of me mailing and them receiving. The charges continued. I closed my bank account, and now I am getting calls from LA Fitness asking me to update my banking account information. I said I canceled my membership but for some reason its still open. (emphasis added.) 49. In a June 8, 2009 post on ComplaintsBoard.com, a former LA Fitness member
relates similar difficulties in cancelling monthly dues membership: I complied to the letter with instructions in my contract for cancelling membership...but I did not send the letter by certified mail. After about two months, I began receiving collection calls from LA Fitness. They never received my letter and want to collect additional months membership fees that I do not owe. Im sending another letter...this time to the CEO, but I should not have to go through all of this hassle. 50. Similar consumer complaints are found on my3cents.com, including the following
February 25, 2010 post: Never trust the word of the people at LA Fitness when it comes to billing!! They keep giving me wrong instructions to cancel the membership purposely so that they can keep charging me every month even after 6 months!!! Total scam!! Worst dishonest business ever!!! (emphasis added.) 51. Significantly, former LA Fitness employees have corroborated the consumer 16
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complaints. For example, in a February 19, 2010 post on PissedConsumer.com, a former LA Fitness employee confirmed that the Company continues billing members after they have mailed a notice of cancellation, and advises members to cancel their credit cards, stating: I worked for LA Fitness for 2 years, until I decided that I couldnt handle all the lies, scams, injustices and harassment going on in this place. You would think nothing crazy really goes on here, but youre in for a big surprise. [P]ersonally, I think the people who suffer at LAF the most (besides the members) are the Operations and janitors. They are the ones who get paid the least and are the most unappreciated of the bunch. And yet they work the hardest. Lets break it down: * * *
Cancellations: they give you a form and tell you to mail it. But youre still getting billed? Cut off your credit card, cannot stress this enough. You as a member dont owe them anything, because with over 300 clubs opened nationwide, they dont need your last payment of 34.99. But they will sure as *** deny to help you. (emphasis added.) 52. The above post is corroborated by another former LA Fitness employee, who
posted the following on the PissedConsumer.com web site on January 27, 2010: I love this I am a form[er] MSM who has been with the company for 10yrs and started as an opener and worked my way up. This is all very true what I hate Lafitness is saying when ever you call so called corp to complain your not really reaching CORP your reaching a manager at a local club across the usa thats [sic] why you hear gym music in the back ground and why its very loud. LA [Fitness] does not care about there [sic] mbrs they only care about there [sic] money..In this day in age why would you have to cancel a membership by sending in a letter 30 days in advanced[.] I hated telling my members that[.] Well here is a little secret you can cxl at any point in time and they do have the ablity [sic] to cancel in the clubs by any Operations Manager so dont [sic] let them tell you u cant[.] [R]emember the whole sales pitch!! (by paying your first and last months dues there will be no contract but by the time they cxl by snail mail you have been billed again and they get your last months up front[.] [T]here [sic] CROOKS BEWARE[.] [I]f you would like secrets to canceling or even recieving [sic] a refund let me know..i will check back (emphasis added.)
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E.
Plaintiffs Experiences With LA Fitness 1. Plaintiff Kenneth J. Silver
53.
Plaintiff Kenneth J. Silver, a college student, signed and entered into a Monthly
Dues Membership Agreement with defendant LA Fitness at the beginning of his summer break, on or about May 21, 2010. See Exhibit B. Plaintiff Silver always wanted his membership to terminate at the end of June 2010, when he would be returning to college. At that time he paid an initiation fee of $25.00 plus his first and last month dues for a total of $114.98. 54. The LA Fitness salesperson failed to provide Mr. Silver with a copy of his
Monthly Dues Membership Agreement. Despite Plaintiffs repeated requests that LA Fitness provide him with a copy of his signed Contract, LA Fitness failed to do so until after the instant litigation was commenced. 55. Plaintiff Silvers monthly dues were $44.99 and he paid his monthly dues by a
Visa credit card account on or about the twentieth day of each month beginning with the month immediately after he entered into the Monthly Dues Membership Agreement with LA Fitness. 56. Plaintiff Silver first inquired about cancelling his membership at the time he
entered into his Monthly Contract, on or about May 21, 2010. Specifically, Mr. Silver informed the LA Fitness salesperson that he was a college student on summer break and that he would be returning to school in State College, Pennsylvania in late June 2010. Since there are no LA Fitness gyms within 50 miles of State College, Mr. Silver would be unable to continue using his membership after he returned to school. Accordingly, Mr. Silver explained to the LA Fitness salesperson that he only wanted to pay for two months of dues. Indeed, he asked specifically what steps he needed to take to cancel his membership so that he would not incur any monthly dues payments during time periods when he would be unable to use the gym. 57. The LA Fitness salesperson failed to disclose to Mr. Silver that in order to cancel 18
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his membership, he needed to send a notice of cancellation on LA Fitness pre-printed form, and that this cancellation notice needed to be postmarked at least 51 days before the date on which he wanted his membership to terminate. In particular, the LA Fitness salesperson failed to advise Mr. Silver that to avoid incurring any further dues billing, he would need to send a notice of cancellation on LA Fitness pre-printed form no later than Saturday, May 29, 2010 only 8 days after he initiated his membership to avoid paying more than two months of dues (i.e., providing at least 20-days notice before the June 20th billing date).5 The LA Fitness salesperson also failed to provide Mr. Silver with a copy of the required cancellation form. 58. Instead, the LA Fitness salesperson told Mr. Silver that this was a monthly
contract that he could cancel at any time, and that it would not be a problem to terminate his membership when he returned to college at the end of June. The salesperson also told Mr. Silver that all he needed to do was come in to the gym when he was ready to cancel right before he returned to school. 59. As instructed, on or about Friday, June 25, 2010 the day before he was returning
to State College Mr. Silver traveled to the LA Fitness gym in Bala Cynwyd, Pennsylvania (the location where his membership was initiated) and requested that his membership be cancelled. At that time, Plaintiff was advised by a female LA Fitness staff member that they were having a problem with their computer system, so they could not print out a cancellation form for him. However, the LA Fitness staff member asked Mr. Silver to sign a form (but did not give him a copy) and represented that she would immediately process his cancellation, including filling out the cancellation form and sending the form to Irvine, California as soon as their computers were working. The next day, Mr. Silver returned to State College believing that his membership had Monday, May 31, 2010 was Memorial Day, making it impossible for Mr. Silver to send his cancellation notice on that date. 19
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been cancelled. 60. In early November 2010, Mr. Silver discovered that his membership had never
been cancelled and that LA Fitness was still billing him monthly dues, despite the representations by LA Fitness personnel that he could cancel at any time and that he would not be billed after June 2010. 61. Believing that he had been deceived by LA Fitness, Mr. Silvers father, an
attorney, wrote a letter to LA Fitness Irvine, California corporate headquarters dated November 15, 2010 requesting that Kenneth Silvers membership be cancelled, that LA Fitness refund all monthly dues that had been billed after June 2010, and that LA Fitness provide Plaintiff with a copy of his signed Monthly Contract. This letter was returned as undeliverable. Mr. Silvers father also mailed in another cancellation form for Kenneth and followed up with telephone calls to confirm that the membership would be cancelled and again requesting a copy of the Monthly Contract signed by his son. 62. Finally, Kenneth Silver filed a complaint with the Better Business Bureau
regarding LA Fitness deceptive and unfair practices. LA Fitness response to the Better Business Bureau complaint attempted to evade responsibility for the Companys wrongdoing by claiming that Mr. Silver had simply entered into a month-to-month membership, but had never attempted to cancel prior to November 2010, which was an outright falsehood in light of Mr. Silvers repeated attempts to limit his membership to two months and to cancel in June. Specifically, LA Fitness response stated: [M]embership was signed up on a month to month membership, membership cancellation was processed on 11/l5/2010 by our local manager when members[] father called in to dispute the membership. A refund was also granted for Sept[.] and Oct[.] dues and processed. [N]o prior cancellation received prior to this date so no further refund was granted.
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63.
However, LA Fitness tacitly acknowledged its wrongdoing by cancelling Kenneth
Silvers membership, and providing him a partial refund in the amount of $89.98, reflecting monthly dues paid in September and October 2010. Significantly, Mr. Silver was never refunded dues for July and August 2010 (at least $89.98), which were billed by LA Fitness beyond Mr. Silvers promised cancellation date and beyond his use of the gym. 64. As a result, Plaintiff Silver was damaged because he: (i) reasonably relied on LA
Fitness representations and Contract provisions that the Monthly Dues Membership Agreement was a monthly contract that could be cancelled at any time without further billing; (ii) would have timely sent in a notice of cancellation had he been able to cancel with any written form, as the Contract states; (iii) was further delayed by LA Fitness undisclosed requirement that he needed to obtain and mail in the pre-printed cancellation form; (iv) was not provided a preprinted cancellation form at the time he desired to cancel his membership; (v) was billed for months after his cancellation form was to have been processed; and (vi) could not cancel within the 20-day period because of these delays and misrepresentations thereby resulting in additional billing. 2. 65. Plaintiff Joshua Vaughn
Plaintiff Joshua Vaughn signed and entered into a Monthly Dues Membership
Agreement with defendant LA Fitness on January 25, 2008. Mr. Vaughn initiated his membership at an LA Fitness club located at 4550 East Michigan Street, Orlando, Florida. At the time, Mr. Vaughn resided in Orlando, Florida. The form of written Monthly Dues Membership Agreement entered into by Mr. Vaughn is substantially identical in all material respects to that entered into with other members of the Class. See Exhibit A. Mr. Vaughns monthly dues was then $34.99, but it later increased to $37.26. Mr. Vaughn paid an initiation fee as well as first and last months dues upon initiation of his membership. 21
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66.
Mr. Vaughn paid his monthly dues by EFT from a bank account, however, his
billing date often changed from month to month. For instance, Mr. Vaughn was billed monthly dues on the following dates: August17 and September 17, 2010; but was billed on October 18, 2010; December 6, 2010; January 3, 2011; February 2, 2011, and February 16, 2011. 67. In late July or early August 2010, Mr. Vaughn inquired about canceling in-person
at the LA Fitness gym where he initiated his membership. Specifically, Mr. Vaughn told the LA Fitness representative at the front desk of the gym that he was moving out of the State of Florida and wanted to cancel his membership. The LA Fitness representative told Mr. Vaughn that he could not cancel his membership in-person at the gym, but would have to send a notice of cancellation form to Irvine, California. 68. Mr. Vaughn obtained a cancellation form that day, affixed proper postage to the
cancellation form, and mailed it via U.S. mail to LA Fitness Irvine post office box on the following day. LA Fitness received Mr. Vaughns cancellation notice as it was not returned to Plaintiff as undeliverable. Mr. Vaughns notice of cancellation was postmarked more than 30 days before the September 17, 2010 billing date. 69. At the end of August 2010, Mr. Vaughn moved to a new residence in Portland,
Oregon. Because Mr. Vaughns membership was a Single Club membership that allowed him access only to the gym he joined in Orlando, his membership did not allow him to use any LA Fitness facilities in the Portland area. 70. Unbeknownst to Mr. Vaughn, who had followed all of LA Fitness cancellation
procedures as set forth in the Monthly Contract (as well as the undisclosed requirement of using the Companys pre-printed cancellation form), LA Fitness continued billing him monthly dues via EFT. Mr. Vaughn did not discover that LA Fitness had failed to cancel his membership until
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approximately February 14, 2011, when he was reviewing his monthly bank statement and realized that, despite sending a notice of cancellation at least 6 months earlier, he was still being billed monthly dues by LA Fitness. 71. Mr. Vaughn immediately went to LA Fitness website in an attempt to find
contact information for customer service or any other information that could assist him in stopping LA Fitness monthly dues billing. 72. Mr. Vaughn was unable to find any contact information for the Companys
corporate headquarters or customer service, so he telephoned the gym in Orlando where he initiated his membership. Mr. Vaughn told the LA Fitness representative in Orlando that he had attempted to cancel his membership in late July or early August 2010 by sending a notice of cancellation form to LA Fitness Irvine post office box, but he was still being billed monthly dues more than 6 months later. The LA Fitness representatives response was that Mr. Vaughn needed to talk to the operations manager, but no operations manager was available. Mr. Vaughn pressed the issue and was put on hold while the LA Fitness representative purportedly discussed the issue with the District Manager. The LA Fitness representative then told Mr. Vaughn that LA Fitness would cancel the membership immediately, but refund only his most recent billing. Mr. Vaughn advised the LA Fitness representative that he was not satisfied with that resolution. 73. On February 15, 2011, Mr. Vaughn received an e-mail from LA Fitness stating
that his final EFT billing date would be February 16, 2011, and that his membership would finally expire on February 15, 2011. 74. On February 18, 2011, Mr. Vaughn received an e-mail from LA Fitness
confirming that LA Fitness would refund Plaintiff only $37.26 (i.e., the amount he had been billed on February 16, 2011), and that this refund was being processed that day.
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75.
Because Mr. Vaughns Monthly Dues Membership Agreement provided, If the
notice is postmarked at least 30 days prior to your next billing date, no further billing will occur, Mr. Vaughn reasonably expected that after he mailed his cancellation to LA Fitness in late July or early August 2010, that his monthly dues billing would stop in August 2010, and that his membership would expire by September 2010. Instead, LA Fitness disregarded Mr. Vaughns cancellation and billed him for at least 7 months of dues after he mailed his notice of cancellation.6 76. As a result, Plaintiff Vaughn was damaged because he: (i) reasonably relied on
LA Fitness representations and Contract provisions that the Monthly Dues Membership Agreement was a monthly contract that could be cancelled at any time without further billing; (ii) relied on the Monthly Contracts provision that no further billing will occur after giving timely notice, when in fact LA Fitness ignored his cancellation notice and continued to bill him after such notice; and (iii) did not know that he needed to provide at least 61 days notice in order to receive the benefit of his prepaid dues and not pay dues for services that he did not want. 3. 77. Plaintiff Lori Bohn
Plaintiff Lori Bohn signed and entered into Monthly Dues Membership
Agreements for herself and her minor daughter, Dari Bohn, with defendant LA Fitness on April 17, 2010. Ms. Bohn initiated two Premier Single State memberships in-person at an LA Fitness club located at 27245 172nd Avenue S.E., Covington, Washington 98042. The form of written Monthly Dues Membership Agreements entered into by Ms. Bohn is substantially identical in all material respects to that entered into with other members of the Class. See Exhibit C.
This 7 months includes Plaintiffs prepaid last months dues, which was never applied to pay dues for any billing period in which Plaintiff resided in Orlando, Florida and was able to use the gym. Thus, he never received the benefit of his prepaid last months dues.
6
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78.
The monthly dues for Ms. Bohn and her daughter was $29.99 each ($32.57
including sales tax), for a total of $59.98 per month ($65.14 including sales tax). Ms. Bohn paid first and last months dues upon initiation of her memberships. Thereafter, Ms. Bohn paid monthly dues for herself and her daughter by a Visa credit card on or about the 18th day of each month. 79. In early July 2010, Ms. Bohn inquired about canceling in-person at the LA Fitness
gym where she had initiated her memberships. At that time, Ms. Bohn was advised by an LA Fitness representative that she could not cancel her membership in-person at the gym or by telephone, but would need to create an on-line account on the Companys web site and then download two cancellation forms, which she would then have to mail to Irvine, California. 80. Ms. Bohn created an online account on LA Fitness web site (www.lafitness.com)
as she was instructed to do by the LA Fitness representative with whom she spoke. Ms. Bohn then attempted to download cancellation forms for herself and her daughter, but LA Fitness web site did not allow her to do so. Out of frustration, Ms. Bohn searched the Internet in order to find the telephone number for LA Fitness corporate office, which is not disclosed on the Companys web site. Eventually, Ms. Bohn found a telephone number for the Irvine office and an LA Fitness representative there created and sent the cancellation forms to Ms. Bohn via email on Friday, July 30, 2010. These cancellation forms included Ms. Bohns and her daughters unique LA Fitness Barcode numbers and Ms. Bohns e-mail address. LA Fitness computer system created a permanent record reflecting the fact that Ms. Bohns cancellation forms were created on July 30, 2010, and the Companys computer system assigned unique tracking numbers to the forms: *14374377* and *14374378*. Copies of Ms. Bohns cancellation forms are attached as Exhibit E.
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81.
On or about Monday, August 2, 2010, Ms. Bohn affixed proper postage to the
cancellation forms and mailed them to: LA Fitness, P.O. Box 54170, Irvine, CA 92619. Thus, Ms. Bohns cancellation notices were postmarked more than 20 days before the September 18, 2010 billing date. LA Fitness received Ms. Bohns cancellation notices as they were not returned to Plaintiff as undeliverable. 82. Unbeknownst to Ms. Bohn, who had followed all of LA Fitness cancellation
procedures as set forth in the Monthly Contract (as well as the undisclosed requirement of using the Companys pre-printed cancellation form), LA Fitness continued billing her monthly dues to her credit card. Ms. Bohn did not discover that LA Fitness had failed to cancel her memberships until approximately August 25, 2011, when her husband was reviewing their monthly credit card statement and realized that, despite sending cancellation notices more than a year earlier, she was still being billed monthly dues by LA Fitness. 83. Ms. Bohn and her husband immediately searched the Internet to once again find
the telephone number for LA Fitness corporate offices in Irvine or any other information that could assist them in stopping LA Fitness monthly dues billing and obtaining a refund for the past year of improperly billed dues. 84. Thereafter, Ms. Bohn telephoned LA Fitness corporate office and told an LA
Fitness representative that she had attempted to cancel her membership in early August 2010 by sending two cancellation notices to LA Fitness Irvine post office box, but she was still being billed monthly dues more than a year later. The LA Fitness representatives response was that they had no record of her cancellation request. The LA Fitness representative then told Plaintiff that LA Fitness would cancel her memberships immediately, but refund only the last three months dues. Ms. Bohn advised the LA Fitness representative that this was not satisfactory.
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85.
On August 22, 2011, Ms. Bohn received two e-mails from LA Fitness confirming
that LA Fitness had cancelled her memberships, that her final billing date would be August 17, 2011, and that her memberships would finally expire on October 16, 2011. 86. Because Ms. Bohns Monthly Dues Membership Agreements provided, If the
notice is postmarked at least 20 days prior to your next billing date, no further billing will occur, she reasonably expected that after she mailed her cancellations to LA Fitness on July 12, 2010, that her monthly dues billing would stop prior to the August 18, 2010 billing date, and that her memberships would expire no later than September 18, 2010. Instead, LA Fitness disregarded Ms. Bohns cancellation notices and billed her for at least 12 months of dues after she mailed her cancellation notices. This conduct constitutes a breach of LA Fitness Monthly Contract and a deceptive act. 87. As a result, Ms. Bohn was damaged because she: (i) reasonably relied on LA
Fitness representations that the Monthly Dues Membership Agreement was a monthly contract that could be cancelled at any time without further billing; (ii) relied on the Monthly Contracts provision that no further billing will occur after giving timely notice, when in fact LA Fitness ignored such notice and continued to bill her after such notice; (iii) did not know that she needed to provide at least 51-days notice to avoid paying dues for services she did not use or want; and (iv) could not understand the misleading terms of her Monthly Contracts. 4. 88. Plaintiffs Sharon N. Lockett and Justin P. Bronzell
On or about February 19, 2011, Plaintiffs Sharon Lockett and Justin Bronzell
initiated Premier memberships at the LA Fitness club located at 701 Cathedral Road, Philadelphia, Pennsylvania. Specifically, Mr. Bronzell signed and entered into a Monthly Dues Membership Agreement with defendant LA Fitness, Ms. Lockett signed a Family Add-On agreement to include her as an additional member on Mr. Bronzells Monthly Contract. The 27
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form of written Monthly Dues Membership Agreement entered into by Ms. Lockett and Mr. Bronzell is substantially identical in all material respects to that entered into with other members of the Class. See Exhibit D. 89. LA Fitness failed to provide Ms. Lockett or Mr. Bronzell with copies of their
Monthly Contract or Family Add-On agreement at the time they joined LA Fitness. However, after making numerous requests, LA Fitness finally provided Plaintiffs with a copy of Mr. Bronzells Monthly Contract, but the Company has never provided them with a copy of Ms. Locketts Family Add-On agreement. 90. The monthly dues for Ms. Lockett and Mr. Bronzell was $59.90 each. Ms.
Lockett and Mr. Bronzell paid first and last months dues upon initiation of their memberships. Thereafter, Ms. Lockett and Mr. Bronzell paid monthly dues by EFT from a joint bank account. Although Mr. Bronzells Monthly Contract indicates that the billing date was supposed to be on the 19th day of each month, their actual billing date varied from month to month. 91. In early April 2011, Ms. Lockett inquired about canceling their memberships
during a telephone call with the LA Fitness gym where they had initiated their memberships. At that time, Ms. Lockett was advised by an LA Fitness representative that she could not cancel her membership in-person at the gym or by telephone, but would need to create an on-line account on the Companys web site and then download two cancellation forms, which she would then need to mail to Irvine, California. 92. On or about Saturday, April 2, 2011, Ms. Lockett created an online account on
LA Fitness web site (www.lafitness.com) as she was instructed to do by the LA Fitness representative with whom she spoke. Ms. Lockett then downloaded cancellation forms for herself and Mr. Bronzell. These cancellation forms included their names, a unique LA Fitness
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Barcode number, and Ms. Locketts e-mail address. LA Fitness computer system created a permanent record reflecting the fact these cancellation forms were downloaded on April 2, 2011. 93. On or about Wednesday, April 6, 201l, Ms. Lockett affixed proper postage to the
cancellation forms and Mr. Bronzell placed them in mail. The cancellation notices were properly addressed to: LA Fitness, P.O. Box 54170, Irvine, CA 92619. Thus, Ms. Locketts and Mr. Bronzells cancellation notices were postmarked more than 6 days before the April 19, 2011 billing date. LA Fitness received Ms. Locketts and Mr. Bronzells cancellation notices as they were not returned to Plaintiffs as undeliverable. 94. Unbeknownst to Ms. Lockett and Mr. Bronzell, who had followed all of LA
Fitness cancellation procedures as set forth in the Monthly Contract (as well as the undisclosed requirement of using the Companys pre-printed cancellation form), LA Fitness continued billing them monthly dues to their bank account. Ms. Lockett did not discover that LA Fitness had failed to cancel their memberships until approximately May 25, 2011, when she was checking her bank account balance online and realized that, despite sending cancellation notices 50 days earlier, they were still being billed monthly dues by LA Fitness. 95. Mr. Bronzell immediately travelled to the LA Fitness gym where Plaintiffs had
initiated their memberships and asked the manager why their memberships had not been cancelled and why LA Fitness was continuing to bill them monthly dues. The LA Fitness managers response was that they had no record of their cancellation requests. LA Fitness also told Mr. Bronzell that they had no record of Plaintiffs printing out cancellation forms and refused to terminate their memberships. The LA Fitness representative also advised Mr. Bronzell that their monthly dues had been paid through July 2011. 96. At the end of July, Ms. Lockett began searching the Internet for information about
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how to terminate LA Fitness memberships and how to contact the Companys corporate offices. In addition to trying to cancel their memberships, Ms. Lockett wanted to make a formal complaint about LA Fitness erratic billing procedures it seemed like LA Fitness was constantly billing Plaintiffs in different amounts at unpredictable times. 97. Finally, on August 15, 2011, Ms. Lockett telephoned LA Fitness corporate
offices and told an LA Fitness representative named Tracey and then another named Steven Eggleson that she and Mr. Bronzell had attempted to cancel their memberships in April 2011 by sending two cancellation notices to LA Fitness Irvine post office box, but they were still being billed monthly dues more than 4 months later. Mr. Eggleson agreed to cancel their memberships that day, but refused to provide Plaintiffs with a refund despite the Monthly Contracts promise: if such an additional Monthly Dues Billing occurs [after mailing a cancellation notice], L.A. Fitness will refund that billing. 98. Because Ms. Locketts and Mr. Bronzells Monthly Dues Membership Agreement
provided, [a] cancellation notice postmarked at least 6 days before your next billing date should result in no further billing, they reasonably expected that after they mailed their cancellations to LA Fitness on or about April 6, 2011, that their monthly dues billing would stop prior to the April 19, 2011 billing date, and that their memberships would expire no later than May 19, 2011. Instead, LA Fitness disregarded Ms. Locketts and Mr. Bronzells cancellation notices and billed them for at least 4 months of dues after they mailed their cancellation notices. This conduct constitutes a breach of LA Fitness Monthly Contract and a deceptive act. 99. As a result, Ms. Lockett and Mr. Bronzell were damaged because they: (i) relied
on the Monthly Contracts provision that [a] cancellation notice postmarked at least 6 days before your next billing date should result in no further billing, when in fact LA Fitness ignored
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such notice and continued to bill them after such notice; and (ii) reasonably relied on LA Fitness representations that the Monthly Dues Membership Agreement was a monthly contract that could be cancelled at any time without further billing. V. 100. CLASS ACTION ALLEGATIONS
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiffs bring this
class action individually and on behalf of all other persons similarly-situated who: (i) are former members of LA Fitness who have incurred at least one additional monthly billing charge after they timely cancelled their Monthly Dues Membership Agreements with defendant LA Fitness, despite the fact that they were up to date with dues payments at the time they mailed their notice of cancellations; or (ii) are current members of LA Fitness who entered into Monthly Dues Membership Agreements which contain the misleading cancellation provisions set forth herein and who will be forced to pay dues for one or more months after they attempt to cancel their memberships. The Class does not include defendant or its officers or directors or their immediate families. 101. The claim for breach of contract (Count I) is asserted on behalf of a nation-wide
class, while the claim for violations of the Florida Deceptive and Unfair Trade Practices Act and the Washington Consumer Protection Act (Count II) is asserted on behalf of statewide classes comprised of members residing in Florida and Washington and/or member of LA Fitness Clubs located in Florida and Washington. 102. On information and belief, the Class is compromised of thousands of persons,
making joinder of such cases impracticable. Disposition of the claims in a class action will provide substantial benefits to the parties and the Court. 103. The rights of each Class member were violated in a similar fashion based upon
defendants uniform actions. Some common issues present here are: 31
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a.
Whether defendant participated in and pursued the course of conduct complained of herein; Whether defendants conduct complained of herein constitutes a breach of the Monthly Dues Membership Agreement; Whether defendants actions and Monthly Dues Membership Agreement constitute a violation of the Florida Deceptive and Unfair Trade Practices Act and the Washington Consumer Protection Act; and Whether Plaintiffs and Class members have sustained damages, and if so, what is the proper measure of those damages.
b. c.
d.
104. 105.
Plaintiffs claims are typical of the claims of the Class they seek to represent. Plaintiffs will fairly and adequately represent and protect the interests of the
Class. Plaintiffs have no interests that are antagonistic to or that irreconcilably conflict with those of other Class members. 106. Plaintiffs have retained counsel competent and experienced in the prosecution of
class action litigation. 107. A class action is superior to all other available methods for the fair and efficient
adjudication of Plaintiffs and Class members claims. Plaintiffs and the members of the Class have suffered similar harm as a result of defendants conduct. Certification of a class action to resolve these disputes will reduce the possibility of repetitious litigation involving thousands of Class members. 108. Class certification is appropriate under Fed. R. Civ. P. 23, as the Class satisfies
the requirements of Fed. R. Civ. P. 23(a) and 23(b)(3). Class certification is also appropriate under Fed. R. Civ. P. 23(b)(2) with respect to injunctive relief. Injunctive relief is required for current members of LA Fitness who have entered into Monthly Dues Membership Agreements with LA Fitness which contain the misleading provisions described above because money damages alone are insufficient to redress the irreparable harm that such Class members face. 32
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VI.
LEGAL CLAIMS
COUNT I -- BREACH OF EXPRESS CONTRACT (On Behalf of All Class Members Residing in the U.S.) 109. 110. Plaintiffs repeat and re-allege all preceding allegations as if fully set forth herein. Plaintiffs bring this claim on their own behalf and on behalf of all Class members
residing in the U.S. The relevant common law in each state of each Class member is materially uniform for purposes of this claim. 111. LA Fitness entire agreement is contained in its Monthly Dues Membership
Agreement entered into with Plaintiffs and Class members. 112. The Monthly Contract states that: If there is no back dues or a balance due on
your membership, you may stop the billing of the monthly dues through EFT and cancel your membership by providing written notice of your request at least thirty days prior to your next billing date: Send the written notice to LA Fitness, P.O. Box 54170, Irvine, CA 92619-4170. 113. LA Fitness breached this provision by systematically ignoring members written
cancellation notices, whether printed on the Companys pre-printed form or otherwise, and by continuing to bill them. 114. LA Fitness also breached this provision because members cannot send in their
own written cancellation notices, but rather, they must use the Companys pre-printed notice of cancellation form obtainable only by visiting an LA Fitness facility in-person to terminate their membership. This additional undisclosed requirement contradicts the terms of the Monthly Contract, and is clearly intended to impede or delay members from cancelling. This enables LA Fitness to charge additional monthly fees after its services are no longer used or desired. 115. There is a duty of good faith and fair dealing implied in the Monthly Dues
Membership Agreement between Plaintiffs and LA Fitness. Given LA Fitness actions described 33
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above, LA Fitness has breached its duty of good faith and fair dealing implied in the Monthly Contract, and thus, withheld from Plaintiffs and the Class the benefits of the Monthly Contract. 116. Consideration existed here as Plaintiffs and Class members paid money to LA
Fitness in exchange for LA Fitness services under the Monthly Contracts. 117. As a direct and proximate result of LA Fitness breaches of the Monthly Contract
and breaches of the duty of good faith and fair dealing, Plaintiffs and the Class have suffered and will continue to suffer substantial monetary damages including, but not limited to, overcharges of monthly membership dues. 118. Plaintiffs and Class members continue to suffer harm, as LA Fitness has failed to
refund Class members for dues charged to them after they sent in timely notices of cancelation of their memberships. COUNT II -- VIOLATIONS OF THE FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT AND WASHINGTON CONSUMER PROTECTION ACT (By Statewide Classes In Washington And Florida) 119. 120. Plaintiffs repeat and re-allege all preceding allegations as if fully set forth herein. The named Plaintiffs in Washington and Florida bring this claim on their own
behalf and on behalf of each member of the corresponding statewide class. 121. LA Fitness conduct as set forth herein constitutes the offering, advertising and
sale of goods, services and merchandise. 122. commerce. 123. LA Fitness conduct as set forth herein affects the public interest and is part of a LA Fitness conduct as set forth herein occurred in the course of trade or
generalized course of conduct affecting numerous consumers. 124. Plaintiffs are consumers. 34
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125.
Plaintiffs sought to obtain LA Fitness goods and services primarily for personal,
family or household use. 126. LA Fitness engaged in deceptive and misleading acts, statements and omissions,
including: (1) LA Fitness systematically ignored all forms of cancellation notices in order to continue monthly dues billing to Plaintiffs and members of the Statewide Classes in Florida and Washington; and (2) the Monthly Contract represents that membership can be cancelled by giving 20 or 30-days notice, but, in fact, it requires at least 51 or 61 days notice for the member to receive the benefit of his/her last months prepaid dues. 127. LA Fitness made these statements and omissions knowingly and willfully and
with the intent that Plaintiffs and the Statewide Classes in Florida and Washington would rely on them and would enter into contracts or obligations as a result. 128. LA Fitness conduct was likely to induce reliance and to create confusion and
misunderstanding. 129. Plaintiffs and the Statewide Classes in Florida and Washington did rely on LA
Fitness statements and omissions. 130. 131. LA Fitness conduct as set forth herein is deceptive, unfair and unconscionable. LA Fitness conduct as set forth herein is not required, permitted or authorized by
any state or federal law. 132. LA Fitness conduct as set forth herein violates established public policy, and the
harms caused to consumers greatly outweighs any benefits associated with that conduct. 133. LA Fitness conduct as set forth herein proximately caused injury in fact to the
business or property of Plaintiffs and the Class. 134. Both the Washington and Florida consumer protection statutes create a private
35
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right of action for individuals who are aggrieved by an unfair and/or deceptive trade practice by another person. 135. The remedies available under the Washington and Florida consumer protection
statutes are in addition to any other remedies otherwise available for the same conduct under state or local law. a.LA Fitness conduct as set forth herein violates the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. 501.201 et seq. 136. LA Fitness conduct as set forth herein violates the Washington Consumer
Protection Act, R.C.W. 19.86.010 et seq. 137. Plaintiffs and the Statewide Classes in Florida and Washington suffered actual
damages and ascertainable losses as a result of defendants deceptive and/or unfair trade practices, and therefore, Plaintiffs and the Class are entitled to an award of actual damages, statutory and exemplary damages, restitution, attorneys fees and costs, equitable relief, including an order enjoining such defendant LA Fitness from committing such acts, and all other relief as provided by state law. VII. 138. JURY TRIAL DEMANDED
Plaintiffs hereby demand a trial by jury on all issues so triable. VIII. PRAYER FOR RELIEF
WHEREFORE, Plaintiffs, individually and on behalf of all others similarly situated, respectfully requests that the Court enter an Order: a. Certifying the proposed Class under Fed. R. Civ. P. 23 and appointing Plaintiffs and Plaintiffs counsel to represent the Class; Finding that defendant is liable under all legal claims asserted herein for its improper billing of monthly membership dues, as alleged herein; Ordering injunctive relief, including but not limited to: (i) ordering LA 36
b.
c.
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Fitness to immediately cease and desist its practice of ignoring written cancellation requests; (ii) requiring LA Fitness to devise practices and procedures that allow consumers and the Company to track cancellation requests; (iii) revising the Monthly Dues Membership Agreement to clearly disclose the requirement for a pre-printed form or eliminate such undisclosed requirement; (iv) reducing the notification period required to cancel a membership from 20 or 30 days to 5 days; and (v) providing members with alternative methods to transmit their cancellation notifications, including without limitation, in-person at LA Fitness clubs, or via e-mail, or facsimile, or on the Internet; d. Awarding damages to Plaintiffs and Class members under the common law and statutory theories alleged herein, including compensatory damages, consequential damages, treble damages, punitive damages, and any other damages provided under relevant laws; Declaring that defendant has breached the Monthly Dues Membership Agreements and allowing Class members to terminate those Contracts; Awarding litigation costs and attorneys fees; Awarding pre and post judgment interest; and Awarding any other legal or equitable relief as justice requires.
e.
f. g. h.
Dated: October 11, 2011
BERGER & MONTAGUE, P.C. By /s/ Sherrie R. Savett Sherrie R. Savett (PA Bar No. 17646) Michael T. Fantini (PA Bar No. 57192) Barbara A. Podell (PA Bar No. 28583) Eric Lechtzin (PA Bar No. 62096) 1622 Locust Street Philadelphia, PA 19103 Tel: (215) 875-3000 Fax: (215) 875-4636 Counsel for Plaintiffs and the Class
kal785826_920_17
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EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E

LA Fitness Third Amended and Consolidated Class Action Complaint .10.12.2011

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LA Fitness Third Amended and Consolidated Class Action Complaint .10.12.2011

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THIRD AMENDED AND CONSOLIDATED CLASS ACTION COMPLAINT

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CLASS ACTION ALLEGATIONS ................................................................................. 31 LEGAL CLAIMS ............................................................................................................. 33

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Pursuant to 28 U.S.C. 1391(a)(2), venue is proper in the Eastern District of

Background Regarding Defendant LA Fitness

LA Fitness was founded in 1984 to purchase and operate underperforming fitness

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The Monthly Contract states:

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The Monthly Contracts cancellation policy is misleading because it requires 61

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I am a very pro-business person. I ordinarily find, contrary to common belief, that 12

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Plaintiffs Experiences With LA Fitness 1. Plaintiff Kenneth J. Silver

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However, LA Fitness tacitly acknowledged its wrongdoing by cancelling Kenneth

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Because Mr. Vaughns Monthly Dues Membership Agreement provided, If the

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