pandemic refund claim plausibly alleged

Rothman
v. Equinox Holdings, Inc., 2021 WL 1627490, No. 2:20-cv-09760-CAS-MRWx (C.D.
Cal. Apr. 27, 2021)

Another
pandemic refund case. This one found a misrepresentation adequately pled with
respect to the refund provision of plaintiff’s membership contract with the
defendant, a gym company. The Membership Agreement allegedly said that: “Buyer
should be aware that if the Club closes, although the Club will remain legally
liable to Buyer for a refund, Buyer may risk losing his or her money if the
Club is unable to meet its financial obligations to Members.” This could have
misled a reasonable consumer to believe that the club would “provide a monetary
refund for any period during which their clubs are closed.” Equinox argued that
he hadn’t pled any representation that refunds would be automatic, and that the
contract statement was “a non-actionable statement of legal opinion.”

But
the statement was plausibly misleading and the agreement didn’t contain any
language requiring members to affirmatively request a refund. It plausibly
suggested that Equinox was required to issue a refund in the event of a club
closure, and it wasn’t a “mere prediction or opinion regarding uncertain future
events” but “a promise regarding the import of particular factual
circumstances, namely that when a club closes—as plaintiff alleges his
has—consumers will be entitled to receive a refund.”

Equinox
urged that it was implausible that a reasonable consumer would have anticipated
a global pandemic and public health orders closing the gym. But “[t]he relevant
question is not whether plaintiff could have anticipated that the club would
close due to a global pandemic. It is whether plaintiff reasonably attached
importance to the existence of a promise to refund his money in the event that
the club closed, for any reason.”

Equinox
sought dismissal of the equitable claims under Sonner. The court found
dismissal premature since there was no pending motion for injunctive relief
that would require the Court to determine the adequacy of plaintiff’s legal
remedies.  Anyway, the plaintiff couldn’t
necessarily “quantify [his] actual damages for future harm” with any certainty;
he cannot currently predict whether, when, or for how long Equinox may be
required to close the Equinox clubs in the future due to the ongoing pandemic. But
punitive damages claims were dismissed for want of an adequate basis.

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