One World Fitness Faces Unauthorized Credit Lines Class Action

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Last week, a federal judge issued an order granting the plaintiff’s motion for discovery on jurisdiction in the class action lawsuit accusing One World Fitness of taking out fraudulent lines of credit for gym members from JPMorgan Chase and Synchrony Bank.

Lead plaintiff, Valerie McMullen, filed a class action lawsuit against One World Fitness, a Washington D.C. area gym, and JPMorgan Chase and Synchrony Bank in September 2014. In her class action lawsuit, McMullen alleged that when she joined One World Fitness, its parent company Bullen Wellness took out a line of credit against her without her consent. She further alleges that One World took lines of credit out against many of their customers without their knowledge or consent and JPMorgan and Synchrony Bank provided the lines of credit.

McMullen further argued that when One World Fitness took out the lines of credit they harmed her and other customers and violated the D.C. Consumer Protection Procedures Act, committed fraud, conspiracy to commit fraud, conversion, and breach of contract.

Last week, U.S. District Court Judge John D. Bates issued an order granting the plaintiff’s motion for discovery on jurisdiction. The order was written in response to a notice of removal filed by JPMorgan Chase then filed a Notice of Removal that sought to move the case to the federal court in Washington D.C. In response, the plaintiff asked the court to keep the case in state court or allow for limited discovery.

In response, JPMorgan Chase and Synchrony Bank, filed motions against keeping the case in state court. JPMorgan Chase also filed a motion opposing discovery. JPMorgan Chase argued that removal to federal court is appropriate under the Class Action Fairness Act. Judge Bates did not disagree in his order, but found that more information was necessary to make a determination about jurisdiction.

Judge Bates outlined the criteria for a case to be tried in state or federal court under the Class Action Fairness Act. Judge Bates explained that although JPMorgan Chase and Synchrony Bank had established that the case should be tried in federal court under the Class Action Fairness Act, additional information was necessary to determine whether an exception applied. The exception that may apply to this class action lawsuit, explained Judge Bates, is the local controversy exception. This exception “‘is intended to respond to concerns that class actions with a truly local focus should not be moved to federal court under this legislation because state courts have a strong interest in adjudicating such disputes,’” wrote the judge in his order.

“Upon careful consideration of the motion and the parties’ memoranda, the applicable law, and the record, and for the reasons set forth below, the Court finds that it has jurisdiction under CAFA, but that the local controversy exception may apply,” said the judge in his order. “Hence, the Court finds that expedited discovery on the issue of class citizenship is appropriate and required here,” he concluded.

The One World Fitness Unauthorized Credit Lines Class Action Lawsuit is McMullen v. Synchrony Bank, et. al., Case No. 14-1983 in the U.S. District Court for the District of Columbia.