SoulCycle Agrees to Settle Gift Card Class Action Lawsuit

SoulCycle, a popular spin class chain, agreed to settle a class action lawsuit alleging the company sold gift cards illegally.

Lead plaintiff Rachel Cody alleged in her class action lawsuit filed in 2015 that SoulCycle tricked consumers into purchasing gift cards with expiration dates as short as 30-days and then refused to issue refunds for the expired gift certificates.

The plaintiff claimed that SoulCycle’s selling of the gift cards violated the Electronic Funds Transfer Act and the Credit Card Accountability and Disclosure Act.

According to court documents, SoulCycle and Cody have requested the court vacate the remaining hearings in the class action lawsuit. Additionally, the parties will submit a motion for preliminary approval of the proposed settlement in early June.

“The Parties also respectfully request that the Court refrain from issuing a ruling on Plaintiffs’ Motion for Class Certification currently under submission, and stay all deadlines in this Case and schedule a further Case Management Conference on the date of the hearing on the preliminary approval motion to be filed on or before June 2, 2017, to allow the Parties to focus on the settlement approval process,” the joint mediation status report submitted by the attorney representing Cody states.

In the class action complaint, the plaintiff argued that SoulCycle’s system was unfair because it only allows customers to purchase a series of classes using gift certificates and does not allow customers to directly purchase classes. Cody argued that the gift certificates expire before customers can use them because the classes fill-up quickly.

The plaintiff alleged that instead of providing a refund for customers with expired gift certificates, SoulCycle pockets the difference. A second plaintiff with similar claims was later added to the complaint.

SoulCycle fought the class action claims on two occasions, but a California federal court rejected their motion to dismiss the lawsuit. SoulCycle had argued that the Electronic Funds Transfer Act did not apply to them because they sold classes, not gift cards.

Cody’s complaint was trimmed by U.S. District Judge George H. King in January of 2016. The plaintiff’s claims that SoulCycle violated the California Consumer Legal Remedies Act, was unjustly enriched and breached the implied covenant of good faith and fair dealing were tossed. The class action claims under the U.S. Electronic Funds Transfer Act and California’s Unfair Competition Law remained.

Soulcycle also dragged its feet when asked to submit relevant documentation in the case, according to the plaintiff, who asked the court to compel discovery. The plaintiff claimed that the exercise company had only submitted 19-pages of documents one year into litigation.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The plaintiffs are represented by attorneys Dorian S. Berger and Daniel P. Hipskind of Berger & Hipskind LLP and Nicholas Diamand of Lieff Cabraser Heimann & Bernstein LLP.

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

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