Until now it has been an open question as to whether health club membership agreements in New Jersey are subject to the fee restrictions of RISA. On October 17th, the New Jersey Supreme Court answered that question with a significant victory for health clubs and others facing similar TCCWNA class actions.
In Mellet v Aquasid, Sean X. Kelly, Sean Robins and Melissa Kanbayashi of Marks O’Neill’s Cherry Hill office represented the defendant health clubs. Plaintiff’s class action complaint included various theories, including an allegation that RISA’s fee restrictions governed health club membership agreements, rendering them illegal on their face. On the basis of these alleged violations, plaintiff’s asserted claims under TCCWNA and the CFA and sought millions in statutory damages and fees on behalf of a class of over 18,000 members.
Plaintiffs moved for certification. On behalf of our clients, we opposed certification, but also cross moved for summary judgment directly attacking the underlying merits. The trial court not only denied certification, but dismissed the individual claims as well with prejudice. On appeal, the appellate division affirmed the decision of the trial court in an unpublished decision. In specifically holding that RISA simply does not govern health club memberships, the court observed:
“Defendant argues plaintiffs were paying not to eventually own but rather to utilize the gym’s facilities and equipment, and, thus, the RISA claim was properly dismissed. We agree.”
The Court held that, in the absence of an underlying statutory violation, plaintiff’s TCCWNA claim could not survive.
On October 16th 2017, the New Jersey Supreme Court denied certification. In addition, the Court approved the appellate decision for publication, rendering it precedential. The decision is expected to provide guidance to trial courts in other similar health clubs cases pending in New Jersey.
The case illustrates the importance of a strategic and aggressive approach to defending class certification motions. Given the requirement that courts undertake a “rigorous analysis” of the underlying legal theories, strategies such as directly attacking the underlying legal merits can provide a path to victory.