Bartell v. Lte Club Operations Co.
| Decision Date | 23 February 2015 |
| Docket Number | Civil Action 2:14-cv-00401 |
| Parties | Laurence Bartell and Jerry Stauffer, Plaintiffs v. LTE Club Operations Company, Inc., Defendant |
| Court | U.S. District Court — Southern District of Ohio |
This matter is before the Magistrate Judge for a report and recommendation on defendant LTF Club Operations Company, Inc.'s December 11, 2014 motion to transfer venue (doc. 26).
The amended complaint makes the following allegations. Defendant LTF Club Operations Company, Inc. ("Life Time") advertises, solicits and encourages individuals to sign membership and service contracts. Am. Compl. ¶ 8. Life Time's membership contracts are standard form contracts titled "General Terms Agreement" ("GTA"). Id. at ¶ 9. To establish a gym membership, a consumer must sign the GTA and permit Life Time to collect joining fees, first month membership fees, and monthly membership dues via an electronic fund transfer from the members or credit account. Id. at ¶ 10. Prior to 2013, the GTA did not state that Life Time could increase the amount of the membership dues. Id. at ¶ 14. In 2013, Life Time inserted language in the GTA thatpermitted unilateral increases of membership dues. Id. at ¶ 15. By 2011, Life Time had begun increasing memberships and the amount of its EFT charges to members credit and bank accounts. Id. at ¶ 16.
On June 9, 2010, plaintiff Laurence Bartell signed a GTA. Id. at ¶ 21. Bartell did not authorize Life Time to unilaterally increase the amount of his recurring total monthly account or his membership dues when he signed the GTA. Id. at ¶ 22. Life Time increased Bartell's monthly membership dues on three occasions without his authorization. Id. at ¶ 26. The GTA did not include cancellation terms and conditions, an easily detachable notice of cancellation, and a notice of cancellation containing the name of the seller, the address of the seller's place of business, and the date of the contract as required by Ohio Revised Code § 1345.44. Id. at ¶ 29.
On December 7, 2013, Bartell delivered a notice of cancellation cancelling his membership, but Life Time failed to immediately cancel his membership or provide a refund as required by Ohio law. Id. at ¶¶ 31-32. In January 2014, Life Time charged Bartell an additional month's membership dues through an EFT charge. Id. at ¶ 33.
In January 2010, plaintiff Jerry Stauffer signed a GTA with Life Time. Id. at ¶ 34. The GTA did not authorize Life Time to unilaterally increase the amount of his recurring total monthly amount or his membership dues. Id. at ¶ 37. Without authorization, Life Time unilaterally increased Stauffer's monthly membership dues on at least four occasions. Id. at ¶ 40. The GTA did not include cancellation terms and conditions, an easily detachable notice of cancellation, and a notice of cancellationcontaining the name of the seller, the address of the seller's place of business, and the date of the contract as required by Ohio Revised Code § 1345.44. Id. at ¶ 43.
Plaintiffs bring this action on their behalf and as a class action on behalf of the following classes and subclasses:
The amended complaint asserts claims for breach of contract, violations of the Electronic Funds Transfer Act, fraud, violations of Ohio's Prepaid Entertainment Contract Act ("OPECA") and the Ohio Consumer Sales Practices Act ("OCSPA"), and for unjust enrichment.
Defendant Life Time seeks an order transferring plaintiff's proposed putative nationwide class action to the United States District Court for the District of Minnesota for the convenience of the parties and witnesses and in the interests of justice. Life Time argues that the amended complaint dramatically expanded plaintiffs' claims, which had previously been limited to Ohio statutes and common-law and Ohio residents. Plaintiffs now seek to certify a nationwide class and a subclass of Minnesota residents, including a new Minnesota named plaintiff.1
Life Time argues that because the amended complaint seeks to certify a nationwide class action, Minnesota is central to this claim. Life Time formulates its contracts, policies, and practices at its headquarters in Chanhassen, Minnesota. All determinations of dues increases are made at its headquarters and not at any individual club. Life Time maintains that significant non-party witnesses reside in Minnesota, including Lynn Pahl, defendant's past Vice President of Member Relations. Account representatives for vendors who sent email and paper mail notices of membership dues increases also reside in Minnesota. Life Time also notes that three corporate representatives have already been deposed in Minnesota, and all other current employees with knowledge relevant to plaintiffs' new allegations are based inMinnesota. More than 19,000 pages of documents have already been produced from the headquarters in Minnesota, and documents relevant to plaintiffs' new allegations are also there. Life Time further asserts that more putative class members reside in Minnesota than any other state.
Defendant argues that given Minnesota's centrality to the amended complaint, plaintiffs' interests in maintaining an Ohio forum carries little weight. Plaintiffs' choice of forum is entitled to less weight once a case has been removed, as in this case. Defendants also argue that because plaintiffs seek to certify a nationwide class action, Ohio's interest in the dispute is considerably weakened.
Life Time works with outside vendors in Minnesota to send notifications of dues increases. Its current mail vendor involved with sending notifications is the Japs-Olson Company, located in Saint Louis Park, Minnesota. A prior vendor, Quantum Graphics, is located in Shelby Township, Minnesota. Life Time has worked with NCR Corporation to send electronic notices through its Minnesota account representative.
According to Life Time, it was founded in Minnesota in 1992. It now operates 117 health clubs in 25 states, but only 6 of those clubs are located in Ohio. Minnesota has 24 clubs, more than any other state in the country. Minnesota also has had more memberships than any other state and has roughly four times as many memberships as Ohio.
Life Time argues that there is no doubt that this case could have originally been filed in the District of Minnesota. Life Time's corporate headquarters and principalplace of business are located in that district and a substantial part of the events underlying plaintiffs' claims occurred there. As a result, Life Time contends that the issue turns on whether the convenience of the parties and witnesses and interests of justice favor a transfer. Life Time maintains that the balance of factors weighs heavily in favor of Minnesota.
Life Time argues that plaintiffs' choice of Ohio as a forum should not be given deference because they seek a nationwide class. Each of the many potential plaintiffs may claim the right to have the action heard in his forum and that the nominal plaintiff's role in the litigation is likely to be quite minimal. Defendant argues that the alleged conduct underlying the claims has no meaningful connection to Ohio and the operative facts occurred in Minnesota. The claims arose at the location where the corporate decisions were made. Defendant contends that although the individual claims of the named plaintiffs Bartell and Stauffer have a limited connection to Ohio, the primary conduct at issue for both the individual claims and for the putative nationwide class occurred in Minnesota. Moreover, all of the critical documents and witnesses are located in Minnesota.
Life Time contends that nearly every essential witness, party and non-party, is located in Minnesota. No third-party vendor is located in Ohio. All of the relevant employees of defendant are located in Minnesota. Defendant argues that the fact that the plaintiffs reside in Ohio does not tip the balance in favor of Ohio. The role of a class representative is largely nominal.
Defendant argues that the interests of justice favors transfer to Minnesota. The local interest in the controversy strongly favors Minnesota, and in class actions, courts give weight to the jurisdiction where the corporation is located because that jurisdiction would have a particular interest in the outcome of the case. The remaining factors are neutral and do not favor Ohio. If a judgment is eventually entered, it would be equally of not more easily, enforceable in Minnesota. A transfer would not waste judicial resources. Although the case has been pending for a little more than eight months, the Court has not yet rendered any substantive rulings.
Plaintiffs argue that Life Time's motion to transfer venue should be denied because plaintiffs selected Ohio as their forum, they are located in Ohio, potential witnesses who sold and serviced plaintiffs' contracts are in Ohio, and Ohio has the most significant legal connection because there are three subclasses alleging violations of Ohio law. Plaintiffs also contend that this Court is less congested and resolves cases more efficiently than the District of Minnesota. This case has been pending in this Court since March 2014, and it has been actively litigated. No attorneys licensed in Minnesota have appeared for either party, which will mean both parties will be burdened with...
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