SoulCycle Gift Payment Class Action Pedals Forward

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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.

Chief U.S. District Judge George H. King sided with the plaintiff’s on all but one dismissal opposition arguments, ruling that that the chain’s earlier March motion to dismiss the class’ second amended complaint merely repeated arguments in its previous attempts to dismiss the class action lawsuit.

“SoulCycle’s present motion appears to be nothing more than an attempt to get a second bite at the apple,” Judge King said. “While our consideration of the merits of SoulCycle’s motion will not be foreclosed, we strongly disfavor SoulCycle’s apparent attempt to circumvent the rules for a motion for reconsideration.”

This is the third unsuccessful attempt SoulCycle has made to toss the consumer claims.

The SoulCycle class action lawsuit was filed in August 2015 by lead plaintiff Rachel Cody claiming that her $30 single-class certificate expired before she was able to use it, a violation of several consumer protection laws, including the Electronic Funds Transfer Act and the Consumer Legal Remedies Act.

The spin club offers classes in different studios across the United States and the cost per class varies by region and studio. These classes are bought in packages ranging from one class up to 50 classes.

It has been found out that the expiration date for classes varies such as when one is enrolled for one class, expires after 30 days. When one enrolls for fifty classes, the pass expires after 12 months without a refund for unused classes.

According to court documents, SoulCycle made more than $25 million by forcing customers to purchase pre-paid class enrollment certificates and pocketing the unused balances when the passes expired. Cody’s lawsuit claims that SoulCycle purposely imposes short time frames on the certificates in order to “maximize its profits” at its customers’ expense.

SoulCycle, however, states that the certificates are not gift cards but rather actual classes and is therefore the Electronic Funds Transfer Act does not pertain.

Back in January, Judge King partially denied SoulCycle’s first motion to dismiss a class action lawsuit that accused the fitness chain of stealing from customers via class passes with “unreasonably short expiration periods.”

The judge ruled these class passes to be gift cards, which subjects them to the federal CARD Act (Credit Card Accountability Responsibility and Disclosure Act) which prohibits expiration periods of less than five years and the California Gift Certificate Law which prohibits expiration periods on gift cards such as the ones SoulCycle offers.

However, Judge King did grant SoulCycle’s request to dismiss claims for violations of the California Consumer Legal Remedies Act, unjust enrichment and breach of the implied covenant of good faith and fair dealing, but permitted claims for violations of the U.S. Electronic Funds Transfer Act and California’s Unfair Competition Law.

SoulCycle filed another motion to dismiss in March stating they were not in violation of the Consumer Legal Remedies Act but was again denied.

Now, in SoulCycle’ most recent attempt to toss the class action, Judge King granted only one of SoulCycle’s motion, specifically allowing the independent claim for violation of the Civil Code. However, he denied the motion with respect to all other claims.

“All of plaintiffs’ claims survive except for the independent claim for violation of California Civil Code,” Judge King said. “Thus, an actual controversy between the parties exists, and plaintiffs have not failed to state a claim for declaratory relief. SoulCycle’s motion is denied with respect to the declaratory relief claim.”

Cody is represented by Daniel P. Hipskind and Dorian S. Berger of Berger & Hipskind 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 Oct. 21, 2016, plaintiffs in a SoulCycle class action lawsuit asked the court to compel the defendant to divulge relevant documents.

UPDATE 2: 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 3: 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 4: On July 12, 2017, the SoulCycle gift certificate class action settlement is now open. Click here to file a claim.