Equinox Membership Cancellation Class Action Lawsuit Filed in N.J.

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A class action lawsuit accusing Equinox Holdings Inc. of imposing unreasonable gym membership cancellation policies and billing practices on its members was filed last week in New Jersey federal court.

In their class action lawsuit, named plaintiffs Lesley McCarthy and Kim Kennedy accuse Equinox of violating the New Jersey Consumer Fraud Act (CFA) and other statutes by making it difficult for customers to cancel their gym memberships. They allege the fitness company uses membership agreements that obligate customers to automatically renew their membership contracts, imposing “unreasonable and unduly onerous requirements” to cancel their memberships.

According to the class action lawsuit, Equinox has “violated the CFA by their cancellation policies and billing practices, which have the primary and/or sole purpose of discouraging and impeding their customers from canceling what are otherwise perpetual and automatically self-renewing monthly memberships.”

The plaintiffs also allege Equinox violated the Truth in Lending Act and Regulation Z by using membership agreements that do not meet the legal requirements to provide clear, tabular account-opening disclosures for an open-end credit plan.

The Equinox membership cancellation class action lawsuit also alleges violations of the Truth-in-Consumer Contract, Warranty and Notice Act by using membership agreements indicating that some of its provisions may be void, unenforceable or inapplicable in some jurisdictions, but failing to indicate which provisions are not applicable in New Jersey.

According to the class action lawsuit, McCarthy sought to enroll as a member of the Equinox club in Summit, N.J. in October 2013. She signed a membership agreement that authorized a monthly deduction of $144 from her bank account. The contract indicated that this agreement was effective for a minimum of 12 months, after which time McCarthy could terminate her membership at any time by providing 45 days’ written notice in person or via registered mail. The contract allegedly did not indicate McCarthy’s total payment obligation.

Kennedy sought to enroll at the Equinox club in Summit, N.J. in June 2013 and signed a contract with materially similar terms to the membership contract signed by McCarthy. According to the class action lawsuit, the agreement she signed also included provisions indicating that she would by charged an additional $25 if her bank or charge card was not honored, and that she could cancel her contract within three days of the agreement.

The plaintiffs filed the Equinox class action lawsuit on behalf of themselves and similarly situated individuals who enrolled for Equinox memberships since Jan. 3, 2008 and signed membership agreements that:

• Obligate them to automatically and perpetually renew their monthly memberships for 12 months, after which point a customer can terminate the agreement by providing 45 days’ written notice;
• Do not conspicuously set forth the customers’ total payment obligation for the health club services;
• Do not “state that a bond, irrevocable letter of credit or securities, moneys or other security is filed or deposited with the Director of the Division of Consumer Affairs for the State of New Jersey, to protect customers who are damaged or suffer any loss by reason of breach of contract or bankruptcy”;
• Has a provision for a $25 charge assessed if any check or credit card payable to Equinox is not honored; and
• Fails to inform them of their right to cancel their membership within three days of receipt of a copy of the contract, by providing written notice by personal delivery.

The Equinox membership cancellation lawsuit was filed just three months after a federal judge approved a $3.8 million class action settlement involving similar allegations against LA Fitness. In that class action lawsuit, plaintiff Sophia Martina accused LA Fitness of violating the CFA by improperly collecting membership dues through the automatic membership renewal process.

McCarthy and Kennedy are represented by Joseph K. Jones.

The Equinox Membership Cancellation Class Action Lawsuit is Lesley McCarthy, et al. v. Equinox Holdings Inc., et al., Case No. 2:14-cv-00037, in the U.S. District Court for the District of New Jersey.