Our Chicago class action lawyers have noted a recent decision where an Illinois federal court dismissed several claims in a putative class action lawsuit against a nationwide chain of health spas, but allowed two causes of action for breach of contract to proceed. Grabianski, et al v. Bally Total Fitness Holding Corp., et al, No. 12 C 284, memorandum opinion and order (N.D. Ill., Feb. 21, 2013) (the “2013 Order”). The dismissed claims alleged additional breaches of contract and violations of state consumer protection statutes. The court had dismissed the plaintiffs’ original complaint in the same cause, granting them leave to amend, in an order dated September 11, 2012 (the “2012 Order”).
The plaintiffs purchased memberships at Bally Total Fitness (“Bally”), a nationwide chain of gyms, during a period from 1986 until 2002. They all purchased “Premier” or “Premier Plus” memberships, which gave them the right to use any Bally location in the country. Bally allowed transfer of these membership plans, so while some of the plaintiffs purchased their plans directly from Bally, others obtained them in a secondary market. After declaring bankruptcy, Bally sold 171 of its clubs, more than half of its total, to LA Fitness, subject to an Asset Purchase Agreement (“APA”) dated November 30, 2011. According to the plaintiffs’ amended complaint, LA Fitness assumed their membership agreements as part of the sale.
Plaintiffs allege that after the sale was completed, they were denied access to Bally clubs now owned by LA Fitness. They claim that LA Fitness denied them access because their “home clubs,” where their memberships originated, were not part of the APA. In the cases of plaintiffs who acquired their memberships via a secondary market, the “home club” might be in a different state. While the plaintiffs could still access clubs that Bally owned, they did not live near any of those clubs.
The plaintiffs filed suit against Bally and LA Fitness, asserting causes of action for breach of contract and violations of state consumer protection statutes, including the Illinois Consumer Fraud and Deceptive Business Practices Act (“IFCA”). After the court dismissed the complaint in the 2012 Order, it gave the plaintiffs thirty days to amend. The defendants brought another motion to dismiss after the plaintiffs filed an amended complaint, which the court addressed in the 2013 Order. It dismissed the claim alleging consumer protection statute violations against Bally and three claims against LA Fitness alleging breach of an implied contract, breach of the APA, and consumer protection violations. It declined to dismiss two claims for breach of contract against each defendant.
In the breach of contract claim against Bally, the court noted that the plaintiffs’ membership agreements did not give the plaintiffs the unrestricted right to cancel their membership, and that they were essentially trapped into paying dues with no accessible club nearby. This raised a valid claim for breach of contract. LA Fitness argued that it did not assume responsibility for the plaintiffs’ memberships under the APA, but the court held that the plaintiffs were at least entitled to discovery on that issue.
The Chicago class action attorneys of Lubin Austermuehle represent consumers who have suffered damages due to violations of state and federal consumer protection laws, breach of contract, and other fraudulent or deceptive business practices. We practice in the greater Chicago area, including Cook, DuPage, Kane, Lake, McHenry and Will Counties, and in the Mid-West region including Indiana, Wisconsin and Iowa. To schedule a confidential consultation with a member of our legal team, please contact us online, at 630-333-0333.
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