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24 Hour Lawsuits Involve Payment Processing, Group Ex Instructors

LOS ANGELES — Two courts recently ruled that class action may proceed in two separate lawsuits against 24 Hour Fitness, San Ramon, CA.

Last month, in the case of Friedman vs. 24 Hour Fitness USA Inc., which was filed on behalf of 1.5 million former 24 Hour members in U.S. District Court, Central District of California, the U.S. Court of Appeals, Ninth Circuit, rebuffed 24 Hour's petition to appeal the class-action certification order. This was 24 Hour's final attempt to prevent a trial prior to the case going to trial, which could happen next year, according to Robert Esensten of Wasserman Comden & Casselman, the law firm representing the plaintiffs.

The lawsuit claims 24 Hour Fitness violated the Racketeer Influenced and Corrupt Organization Act (RICO) and the Electronic Fund Transfer Act (EFTA). A similar lawsuit involving approximately 1.8 million current or former 24 Hour members was settled in 2007 in San Francisco Superior Court.

Esensten and Melissa Harnett, also of Wasserman, say the case is not focused on what 24 Hour members did or did not understand about the cancellation policy. The attorneys claim 24 Hour defrauded payment processors Paymentech, now owned by JP Morgan Chase, and LaSalle, now owned by Bank of America, under the RICO statutes. If 24 Hour is found in violation of the RICO laws, the company faces potential liability of more than $100 million, Esensten says.

Also last month, a judge in San Diego Superior Court ruled in favor of class action in the case of Posadas-Romesberg vs. 24 Hour Fitness USA Inc. The lawsuit, which was originally filed in 2006, claims that 24 Hour's “session rate” compensation for group exercise instructors is not legal under California law, and that the instructors should be compensated for time spent attending training and certification courses.

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