A federal court judge has denied a motion filed by LA Fitness seeking arbitration in a dispute over one-month membership practices.
U.S. District Court for the Central District of California Judge Josephine Staton on August 5 denied the request to compel arbitration through a clause in signed membership agreements between plaintiff Beau Briones and LA Fitness. Fitness International LLC, Fitness & Sports Clubs LLC, and LAF Canada Company are named as defendants in the class-action lawsuit.
Briones alleges in the complaint filed with the court on Jan. 12 that representatives of LA Fitness pressure people to sign agreements for yearlong memberships by "misleading consumers into believing that they were only obtaining and obligated to pay for one month membership."
Briones alleges that when his yearlong membership expired at a Long Beach club in November 2014, a sales representative with LA Fitness persuaded him to buy one more month of membership at the same monthly price of $140. That membership was paid under Briones prior, expired membership, according to the lawsuit. Briones signed an agreement on an electronic device, allegedly only being shown the signature line, not the whole document he was signing. Briones states in the lawsuit that he never saw a written copy of what he was signing.
The suit states Briones never authorized withdrawal of the $140 from his bank account and instead came in the next day to pay for the extra month in cash. LA Fitness proceeded to automatically deduct from Briones' bank account $110 every other week from November 2014 to March 2015, according to the suit. When Briones protested the withdrawal with LA Fitness, he was told that he had signed a 52-week agreement for $2,860 that authorized the club company to withdraw $110 from his account every two weeks, the suit alleges.
LA Fitness provided the court with copies of the membership agreement, a 2013 personal training agreement and a 2014 personal training agreement that contained Briones' transposed signatures and initials, according to the order. All three documents include an arbitration clause stating both LA Fitness and the member consent to arbitrate before a single arbitrator rather than litigate any potential contract dispute in court. The clause also provides a delegation provision where if the arbitrator finds the arbitration agreement, including the class waiver, is unenforceable, the entire arbitration provision "shall be null and void and either party may file action in court," according to the order.
LA Fitness argued that Briones was shown each agreement before signing, but Briones claims he was never informed verbally or in writing that the agreements contained an arbitration clause. Because there is no evidence that Briones saw or was aware of the arbitration provision before signing, LA Fitness failed to demonstrate an agreement to arbitrate, according to the order.
Alleged stickers placed on the electronic signing devices at the club stating "Review Agreement Before Signing; by Electronically Signing You Agree to All of its Terms" also failed to establish an agreement to arbitrate, according to the order.
Further, LA Fitness sent e-mail copies to Briones of the signed agreements, which he acknowledged receiving, according to the order. However, Staton ruled that LA Fitness failed to argue or provide any legal authority that post-signature delivery of copies of an agreement by itself binds an individual to unviewed and unacknowledged arbitration terms.
LA Fitness declined to comment on Staton's ruling for this story citing the pending litigation.
Club Industry's Director of Content and Engagement Pamela Kufahl contributed to this report.
Staton's order filed with the court can be read below: