Law360 (March 10, 2021, 9:18 PM EST) -- ClubCorp USA Inc. urged a California federal court Tuesday to reconsider its refusal to send to arbitration a suit claiming the private club operator wrongly charged fees during the pandemic, arguing that its members indisputably had access to club bylaws stating they were bound by arbitration agreements.
California club members Jeffrey Cuenco and Linda Hong claim in their proposed class action that the club operator charged its monthly membership fees at full price even while its clubs were shut down last year due to COVID-19. ClubCorp had asked the court to toss the suit or send it to arbitration, arguing that the bylaws of its individual clubs — which include arbitration clauses — were incorporated by reference into their membership applications.
Last week, U.S. District Judge Dana M. Sabraw rejected ClubCorp's request, finding that there was a factual dispute about whether Cuenco and Hong were actually bound by arbitration agreements. The judge noted that the members have argued the bylaws were neither known nor easily available to them when they applied for membership.
There was "clear error" in that arbitration ruling, ClubCorp said in Tuesday's motion for reconsideration, adding that any additional discovery "would be unjust." In particular, ClubCorp said California case law is clear that a document doesn't need to be physically handed to contracting parties for it to be incorporated into a document. And documents that are available on request or made available after the parties have entered into an agreement count as being "easily available," the company said.
"Defendants submitted undisputed evidence that the bylaws were available to plaintiffs upon request," ClubCorp said. "Defendants also submitted undisputed evidence that the bylaws were immediately available to plaintiffs online."
Whether ClubCorp actually provided copies of the bylaws to Cuenco and Hong and whether Cuenco and Hong actually requested or accessed the bylaws online doesn't change the fact that the bylaws were made available to them, ClubCorp argued.
"Accordingly, under applicable case law, defendants respectfully request that the court reconsider the order and grant defendants' motion to compel arbitration," it said.
Ronald Marron, counsel for Cuenco and Hong, told Law360 on Wednesday that ClubCorp's motion contains the same arguments from the company's initial moving papers — just "repackaged."
"Defendants are tempting fate, and sanctions, by bringing such a motion," Marron said. "I'd urge them to 'reconsider' and withdraw their frivolous motion for reconsideration."
Counsel for ClubCorp didn't immediately return a request for comment Wednesday.
ClubCorp, which is based in Dallas, operates about 200 private clubs, including country clubs, throughout the U.S. Its monthly membership fees range from $120 for social memberships to $800 for some golf club memberships, according to the suit.
Cuenco was a member of the University Club in San Diego and pays $184 a month, he told the court. And Hong said she was a member of the Silicon Valley Capital Club, where she paid nearly $200 a month in fees.
The suit was filed last April, at which time the plaintiffs' attorney, Ronald Marron, told Law360 it had been filed in error. Marron said the complaint would be withdrawn because ClubCorp was filing for bankruptcy.
However, a ClubCorp spokesperson said the company was not in fact filing for bankruptcy. The suit was never withdrawn.
Cuenco and Hong are represented by Ronald A. Marron, Michael T. Houchin and Lilach Halperin of the Law Offices of Ronald A. Marron APLC and L. Timothy Fisher and Yeremey Krivoshey of Bursor & Fisher PA.
ClubCorp is represented by Ana Tagvoryan and Julianna Simon of Blank Rome LLP.
The case is Jeffrey Cuenco v. ClubCorp USA Inc., case number 3:20-cv-00774, in the U.S. District Court for the Southern District of California.
--Editing by Daniel King.
Update: This story has been updated to include comment from the plaintiffs' attorney.
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