By Lauraann Wood

Law360 (March 26, 2021, 11:01 PM EDT) -- An Illinois federal judge on Friday tossed out a lawsuit filed by two Planet Fitness members claiming that the gym unlawfully charged them fees while the COVID-19 pandemic kept facilities closed, saying one member must arbitrate his claim and the other can't litigate his in the state.

U.S. District Judge John Blakey said Planet Fitness Inc. member Jason Williams can't pursue his claim over allegedly improper fees in federal court because the contract he signed with the company requires disputes to be resolved through arbitration. And gym member Gunnar Amos needs to add Idaho company CM3 CDA Silver Lake LLC to his claim, but Silver Lake has "a complete lack of presence" in Illinois, so his allegations must also be dismissed, Judge Blakey said.  

Williams, an Illinois resident, launched the proposed class suit in state court in May, and Planet Fitness removed the case to federal court about a month later. Amos, an Idaho resident, joined the suit when he and Williams filed an amended complaint in July, according to court records. Both men claimed that the company violated state consumer protection laws by charging them monthly membership fees even though the COVID-19 pandemic restricted access to the gyms they'd signed up for. 

Williams paid $10 a month and $39 annually to Planet Fitness in Logan Square, Chicago, which billed him on March 17, 2020, the judge said. The next day, Planet Fitness announced the closure of all its corporate locations and urged its franchisees to close as well to slow the spread of the virus. The judge added that Planet Fitness offered Williams a future monthly credit or an extension of his membership term when the gyms reopened.

Williams argued that he shouldn't be held to the arbitration agreement in his membership contract because Planet Fitness buried it in fine print at the bottom of its contract, and nothing earlier in the contract alerted him to its existence. But Judge Blakey rejected that argument, saying arbitration provisions don't need to be emphasized with a special font to be "procedurally conscionable."

"Moreover, no authority requires an agreement to preview an arbitration provision on its first page, particularly where, as here, the agreement is short — just two pages long — and well organized, with clearly labeled introductory titles," the judge said.

Judge Blakey also rejected Williams' argument that the gym's arbitration agreement improperly fails to explain its reference to the American Arbitration Association's rules, or where they can be found. An arbitration agreement that incorporates outside yet accessible arbitration rules allows plaintiffs to get familiar with the arbitration process and the rules to which they agreed, he said.

"Because AAA rules and procedures are easily accessible — for example, through a simple internet search — the membership agreement's reference to the AAA rules precludes a finding of substantive unconscionability," the judge said.

Planet Fitness had also argued that Amos' claim should be dismissed because Silver Lake, the sole company with which Amos entered his gym contract, is a necessary party for his claim but cannot join the suit in Illinois. Judge Blakey agreed, noting that Silver Lake is based in Idaho, conducts no business in Illinois and has never registered to do business in the Prairie State.

"For obvious reasons, a judgment here regarding a contract to which Silver Lake is a party would undoubtedly prejudice Silver Lake," Judge Blakey said. And even if the court adjudicated Amos' remaining claims, he'd still have to inevitably sue Silver Lake to obtain a binding judgment on the contract only they are parties to, he said.

Plus, Planet Fitness has asserted that Amos would be able to pursue his claim against Silver Lake in Idaho, "and Amos has not disputed this statement," the judge said.

Representatives for neither side immediately responded Friday to a request for comment.

Williams and Amos are represented by Andrew Heldut and Paul Geske of McGuire Law PC. 

Planet Fitness is represented by Richard H. Tilghman IV, Henry Caldwell and Dan Deane of Nixon Peabody LLP. 

The case is Williams et al. v. Planet Fitness Inc. et al., case number 1:20-cv-03335 in the U.S. District Court for the Northern District of Illinois. 

--Editing by Karin Roberts.

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