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Finding No Aggrieved Consumer, Appeals Court Shuts Down Planet Fitness Class Action

Planet Fitness/Credit: Ken Wolter/Shutterstock.com

Planet Fitness/Credit: Ken Wolter/Shutterstock.com

After finding no aggrieved consumers, a New Jersey appeals court has reversed a summary judgment and class certification award in a lawsuit over contract language at Planet Fitness health clubs.

Plaintiff Krystal Kauffman claimed a clause in the contract releasing Planet Fitness from liability for injuries suffered at one of its clubs violated the Truth in Consumer Contract, Warranty and Notice Act. But Kauffman, who suffered no adverse consequences from the contract language, is not an aggrieved consumer under the standard set by the state Supreme Court in its 2018 decision, Spade v. Select Comfort, the appeals court said.

The TCCWNA statute requires the consumer to be "aggrieved." In Spade, the court determined that to mean a plaintiff must have suffered actual harm, and was not merely exposed to unlawful language in a contract.

The Supreme Court issued its Spade ruling in response to the U.S. Third Circuit Court of Appeals’ direct certification of its questions on TCCWNA.

The April 2018 Supreme Court decision in Spade came after the trial court entered summary judgment for Kauffman as to liability under TCCWNA. The judge granted class certification to a class of New Jersey Planet Fitness members, and appointed Kauffman as the class representative.

At the Appellate Division, Judges Ellen Koblitz, Mitchel Ostrer and Heidi Currier said that in light of the Spade ruling, Kauffman's assertions do not make her an aggrieved consumer under TCCWNA.  Kauffman suffered no adverse consequences or damages from the contract language, but fit the scenario described in Spade where a consumer executed a contract that established a clearly established legal right, the judges said. And because Kauffman lacks standing under TCCWNA, she cannot be the named representative of the proposed class.

Enacted in 1980, TCCWNA bars language in consumer contracts that violate any clearly established legal right. The measure drew little attention until around 2015 when plaintiffs lawyers began filing numerous lawsuits claiming violations of the law, some targeting provisions in e-commerce terms of service.

The Supreme Court's decision in Spade has prompted dismissal of other TCCWNA cases for lack of an aggrieved consumer as well, including March's decision in federal court dismissing a class action against Public Storage.

Cherry Hill solo practitioner Charles Riley, who represented Kauffman in the latest ruling, said there is "not much you can do because of the way they have interpreted the word 'aggrieved' in the opinion. I'm not positive the Legislature intended to do that when they enacted the law."

Although Planet Fitness' contract clause disclaiming liability for on-premises injuries is vulnerable to a challenge by anyone who was, in fact, injured, the language of such clauses tend to deceive people into not filing suits, Riley said. And lawyers might be put off by the extra cost and effort of fighting such contract language, he said.

"Hopefully, the Legislature will look at this opinion and say 'that's not what we really intended. We don't want businesses lying to consumers,'" Riley said.

Anthony Twardowski of Zarwin, Baum, DeVito, Kaplan, Schaer & Toddy in Philadelphia represented Planet Fitness. He said in an email, "This is the latest in several recent state and federal decisions where courts, applying the Supreme Court’s decision in Spade, have dismissed TCCWNA class actions because the plaintiff suffered no harm and, therefore, was not an aggrieved consumer under the statue. With the clarity provided by Spade and cases like Kauffman applying it, businesses in New Jersey can rest a bit easier knowing that the growing number of no-harm TCCWNA class actions over the last several years should finally be coming to an end."