SoulCycle Class Action Customers Fight Dismissal Bid

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SoulCycle customers are fighting back against a recent bid to toss a proposed nationwide class action lawsuit. Earlier this week, the indoor cycling chain filed a motion to dismiss the second amended complaint, but customers dispute that the motion only reprises arguments that a California federal court already denied in the first amended complaint.

“SoulCycle points to no factual changes beyond the addition of a plaintiff whose factual allegations are nearly identical to those already alleged in the FAC,” the plaintiffs argued. “SoulCycle’s assertion that the addition of a plaintiff and filing of an amended complaint entitles SoulCycle to re-litigate the same arguments it raised in its early motion to dismiss is unsupported by law.”

Plaintiff Rachel Cody, a California resident, filed the class action lawsuit, accusing SoulCycle of a “relentless effort to maximize profits” by defrauding customers by requiring them to purchase certificates for classes with “unreasonably short expiration periods.”

SoulCycle does not allow customers to purchase exercise sessions directly using cash or credit cards. Instead customers must purchase a “Series” which is the name SoulCycle gives its gift certificates that can be redeemed for one or more indoor cycling sessions.

According to the lawsuit, Cody paid $30 for a certificate towards a future class which expired before she could make it to SoulCycle. Her complaint alleges that SoulCycle’s classes at peak times can fill up rapidly and it can be difficult to get into classes which in turn increases the risk of unused balances, which SoulCycle pockets.

The class action claims that SoulCycle’s business model violates the Credit Card Accountability and Disclosure Act. Given that customers must purchase “certificates” in order to receive classes, the lawsuit likens these purchases to gift certificates, which are not allowed to have expiration dates shorter than five years under the law.

“SoulCycle’s deliberate use of expiration dates harms and deceives customers throughout the United States,” plaintiffs’ counsel stated. “SoulCycle’s expiration dates rob customers of their money, creating illegal profits for SoulCycle.”

SoulCycle sought to dismiss the claim back in January, arguing that it sells classes on its website, not gift cards, and so it is not subjected to the Electronic Funds Transfer Act and is not in violation of the Consumer Legal Remedies Act.

However, while Chief U.S. District Judge George H. King dismissed claims for CLRA, he disagreed on the other motions and sided with Cody, ruling that SoulCycle’s class passes are gift cards and as such are subjected under two laws, the federal CARD Act and the California Gift Certificate Law.

“Defendant’s sale of classes are tethered to a specific monetary value of the class being purchased,” the order said. “Thus, Defendant’s class sales more closely resemble a ‘certificate redeemable for a spa treatment up to $50,’ rather than merely a ‘spa treatment.’”

Cody is represented by Daniel P. Hipskind, Dorian S. Berger, Matt Olavi and Brian J. Dunne of Olavi Dunne LLP.

The SoulCycle Class Action Lawsuit is Cody v. SoulCycle Inc., Case No. 2:15-cv-06457, in the U.S. District Court for the Central District of California.

UPDATE: On Apr. 22, 2016, a California federal court judge has once again denied SoulCycle’s motion to dismiss a consumer class action lawsuit alleging the indoor cycling chain violates the law by imposing a 30-day expiration date on some of their class passes.

UPDATE 2: On Oct. 21, 2016, plaintiffs in a SoulCycle class action lawsuit asked the court to compel the defendant to divulge relevant documents.

UPDATE 3: On April 21, 2017, SoulCycle and Cody agreed to settle the class action. They requested the court vacate the remaining hearings in the lawsuit. Additionally, the parties said they will submit a motion for preliminary approval of the proposed settlement in early June.

UPDATE 4: On June 16, 2017, SoulCycle agreed to pay up to $9.2 million to settle a class action lawsuit alleging the fitness company sells gift certificates that can only be redeemed in a short period of time and then fails to offer refunds for the expired gift certificates.

UPDATE 5: On July 12, 2017, the SoulCycle gift certificate class action settlement is now open. Click here to file a claim.