SoulCycle Agrees to Reinstate Up to 229,646 Studio Classes in Lawsuit Settlement

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(Image courtesy SoulCycle.) Plaintiff Rachel Cody in 2015 accused SoulCycle of coercing customers into purchasing gift cards with expiration windows that did not comply with California’s state policy of five years.

U.S. District Judge Michael W. Fitzgerald consented to an Oct. 2, 2017, settlement between SoulCycle, New York, and the plaintiffs in an ongoing class action lawsuit regarding the indoor cycling company's alleged sale of expired class certificates.

In 2015, plaintiff Rachel Cody accused SoulCycle of coercing customers into purchasing gift cards with expiration windows that did not comply with California’s state policy of five years. SoulCycle has agreed to electronically reinstate as many as 229,646 classes in question to settlement class members' accounts, according to the proposed settlement filed with the United States District Court, Central District of California on Sept. 1. Alternatively, the terms will allow members to receive up to $25 in cash for each reinstated class to which each member is entitled.

An "effective date" for the reinstatement process will be set in the Oct. 2 Final Approval Hearing. Based on that date, SoulCycle will reinstate 5 percent of the total number of classes to members, in alphabetical order, every month for a period of six months. After this, SoulCycle will reinstate 11.7 percent of the remaining classes per month for another six-month period, according to the terms.

"The Court finds that the Settlement is fair, adequate, and reasonable in light of the strength of Plaintiffs’ case, the risk, expense, complexity, and likely duration of further litigation, the risk of maintaining class action status throughout the trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, and the experience and views of Class Counsel," Fitzgerald said in an Aug. 28 order. "[T]he Settlement reflects the strength of Plaintiffs’ case as well as the Defendant’s position. The Court is also satisfied that the Settlement was reached after arms-length negotiations by capable counsel, and was not a product of fraud, overreaching, or collusion among the parties."

Prior to the settlement proposal, SoulCycle’s legal counsel had insisted the expiring purchases in question were individual classes, not gift certificates. The plaintiffs counter-argued the company’s strategy is a "relentless effort to maximize its profits." SoulCycle reportedly earned $25 million in expired gift cards in 2014, according to court documents.

SoulCycle opened its first New York City club in 2006 and now has more than 70 locations open or in-development in the United States. It is a sister company to Equinox. Both companies are owned by Equinox Holdings. 

As of Sept. 6, SoulCycle had not responded to a request for comment. 

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