Javorsky v. W. Athletic Clubs, Inc., A142254

• Decision Date: 11 December 2015
• Docket Number: A142254
• Citation: 242 Cal.App.4th 1386,195 Cal.Rptr.3d 706
• Parties: Daniel JAVORSKY, Plaintiff and Appellant, v. WESTERN ATHLETIC CLUBS, INC., Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

242 Cal.App.4th 1386

195 Cal.Rptr.3d 706

Daniel JAVORSKY, Plaintiff and Appellant,

v.WESTERN ATHLETIC CLUBS, INC., Defendant and Respondent.

A142254

Court of Appeal, First District, Division 5, California.

Filed December 11, 2015

Finkelstein Thompson LLP, Rosemary M. Rivas, Caitlyn D. Finley ; Glancy Prongay & Murray LLP, Marc L. Godino for Plaintiff and Appellant.

Keker & Van Nest LLP, Susan J. Harriman, Benjamin W. Berkowitz and John C. Bostic for Defendant and Respondent.

NEEDHAM, J.

Daniel Javorsky appeals from a summary judgment entered against him on his claims under the Unruh Civil Rights Act (Civ. Code, § 51 et seq. ) and the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq. ). He urges that the court erred in ruling that a health and fitness club did not violate the Unruh Civil Rights Act by charging persons ages 18 to 29 a lower membership fee than it charged to persons age 30 and over. Finding no arbitrary, unreasonable, or invidious discrimination, we will affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

Respondent Western Athletic Clubs, Inc. (WAC)¹ owns and operates 10 "luxury" health and fitness clubs in the San Francisco Bay Area (with facilities in San Francisco, Marin, San Mateo, and Santa Clara counties), as well as a sports resort in San Diego. Members have access to services and activities designed to promote physical fitness and general well-being, including exercise equipment, swimming pools, basketball, squash, tennis courts, personal training services, and spa treatments.

A. WAC Membership Levels and Discounted Membership Programs

WAC offers a range of membership levels, providing various privileges at one or more of its locations. The Club West Premier membership is the most expensive, granting access to all of WAC's facilities and, in 2013, costing approximately $260 per month. By comparison, a standard membership granting access only to WAC's Bay Club San Francisco cost approximately $195 per month.

WAC also offers reduced-cost memberships. For example, a corporate discount program pertains to employees of companies that have partnered with WAC to promote their employees' health, fitness, and well-being. And a family membership is available to couples and families who join WAC together, offering memberships that are less expensive on a per-person basis.

The Young Professional program—at issue in this litigation—offers a reduced-cost membership for individuals ages 18 to 29. Launched in 2003, the program is offered at all WAC facilities except the Bay Club Ross Valley and Pacific Sports Resort San Diego. Due to capacity constraints, Young Professional members do not have access to two WAC clubs (the Courtside Club and the Pacific Sports Resort Redwood Shores) during specified "peak" hours.

In 2013, a Young Professional membership at the Bay Club San Francisco cost approximately $140 per month—$55 less than a standard membership. In 2008, members in the Young Professional program paid an initiation fee of $250 and monthly dues of $97 for a single-club membership at the Bay Club San Francisco, while members age 30 and over were charged an initiation fee of $975 and monthly dues of $154. Young Professional members also received reduced pricing for WAC's Executive Club Premier membership.

WAC maintains that the Young Professional discount reflects the reduced financial resources of the under–30 age group. WAC's chief executive officer (CEO), Matthew Stevens, retained the program to promote WAC's membership to younger individuals who might not otherwise be able to afford to join WAC's clubs. According to Stevens, WAC hopes its Young Professional program will inspire younger people to pursue a lifetime of health and fitness and eventually join WAC as full members.

WAC also offers a senior discount program to individuals age 65 and over. In 2013, members in this program at the Bay Club San Francisco paid just $80 per month, as compared to $140 for a Young Professional membership and $195 for a standard individual membership. However, senior members have access to the facilities only during nonpeak hours between noon and 5:00 p.m. on weekdays and cannot enter the facilities after 3:00 p.m. The senior discount is therefore an option for older members who desire a more affordable membership and are willing to use WAC's clubs during off-peak hours; customers age 65 and over may alternatively choose to pay the standard rate (higher than the Young Professional rate) for an unrestricted membership.

B. Javorsky's Lawsuit

In January 2013, Javorsky filed a complaint against WAC alleging that he joined the Bay Club San Francisco in approximately 2008, purchased a standard individual membership at the rate of $145 per month, and remained a member until he terminated his membership in June 2011 due to cost. Purporting to represent a class of similarly situated individuals, Javorsky asserted that the Young Professional discount constituted illegal age discrimination and violated the Unruh Civil Rights Act, the Consumers Legal Remedies Act (CLRA) ( Civ.Code, § 1750 et seq. ), and the UCL.

1. WAC's Demurrer

WAC filed a demurrer to the complaint, arguing among other things that businesses may offer reasonable age-based discounts that promote access to beneficial activities for age groups with lower incomes, and its Young Professional discount is a reasonable measure to enable greater access to WAC's facilities.

Javorsky opposed the demurrer, contending that WAC's age-based pricing policy was unlawful because it could not be justified by any "compelling societal interest" or strong public policy demonstrated by legislation.

The trial court sustained WAC's demurrer as to Javorsky's CLRA claim without leave to amend, but overruled the demurrer as to Javorsky's claims under the Unruh Civil Rights Act and the UCL.

2. WAC's Motion for Summary Judgment

WAC thereafter moved for summary judgment on Javorsky's remaining claims.

WAC again argued that its age-based pricing practice "promotes access to its clubs for those who might not otherwise be able to afford to join them" and California law permits reasonable discounts for this purpose. In support of its motion, WAC submitted a declaration from its CEO describing the Young Professional program and other membership programs as discussed ante. WAC also relied on a declaration from Shelley Lapkoff, Ph.D., an expert demographer, who analyzed publicly available income data and concluded that the median income of 18– to 29–year–olds (the group pertinent to the Young Professional program) was lower than the median income of individuals over 30.

More specifically, Dr. Lapkoff analyzed income data from the U.S. Census Bureau's American Community Survey and concluded that, in each of the five counties where WAC operates—and California-wide—individuals under age 30 had significantly lower median income than individuals over age 30. In San Francisco County, where the disparity between the two age groups was the smallest, adults under age 30 earned only about half as much as those ages 30 to 64. In Marin County, individuals ages 18 to 29 earned only 23 percent as much as those over 30. Dr. Lapkoff also organized the data into 10–year age groups and confirmed that, in each relevant geographical region, individuals ages 18 to 29 had significantly lower median income than individuals in their thirties, forties, fifties, and sixties. Dr. Lapkoff concluded that "the financial resources of the 18–29 population are substantially less than those of the 30–64 population."

3. Javorsky's Opposition to the Summary Judgment Motion

After a period of discovery, including Javorsky's deposition of WAC's CEO and Dr. Lapkoff, Javorsky filed his opposition to WAC's summary judgment motion.

Javorsky argued, essentially, that charging persons over the age of 30 a higher price than persons 18 to 29 violated the Unruh Civil Rights Act because the practice was not supported by a compelling societal interest or other strong public policy. In addition, Javorsky questioned WAC's true purpose behind the Young Professional program and contended there were triable issues of material fact as to whether WAC's age discrimination was supported by any legitimate business interest.

Javorsky also relied on his own expert witness, Ernest H. Manuel, Jr., Ph.D., who analyzed Dr. Lapkoff's opinion and evaluated whether, from an economic standpoint, WAC's Young Professional program was arbitrary or unreasonable. Like Dr. Lapkoff, Dr. Manuel focused on data from the American Community Survey and on median rather than mean income, and his tabulation of median personal and household incomes was substantially the same as Dr. Lapkoff's. Dr. Manuel criticized Dr. Lapkoff's analysis, however, in several respects.

Dr. Manuel found Dr. Lapkoff's analysis flawed because she defined "income" and "financial resources" in a limited manner without considering expenses such as health care costs, child care costs, or housing and food costs, which are likely to be higher for people over 30. Moreover, Dr. Manuel faulted Dr. Lapkoff for not analyzing single-person households, which he opined provide a purer measure of income than the measures analyzed by Dr. Lapkoff.

Dr. Manuel further criticized Dr. Lapkoff's reliance on median incomes for large age groups, on the ground that median income, which merely represents the midpoint of an income distribution, says nothing about whether any individual has higher or lower income than the median of his or her own age group, the median of any other age group, or an individual in any other age group.

For example, Dr. Manuel observed, inclusion of lower-earning 18– to 24–year–olds in the 18–to–29 age group reduces the median income for the 18–to–29 age group. Looking solely at 25– to 29–year–olds (that is, singling out a part of the group WAC makes eligible for its Young Professional discount), Dr. Manuel found (1) the median personal and household incomes for individuals ages 25 to 29 is higher than the...