Gyms sell access to their facilities, their equipment, sometimes to workout instruction, and other amenities. Each of these offerings require that the customer can enter the building – a matter which is suddenly an issue during this global pandemic as California gyms have been ordered to close due to the COVID-19 pandemic.[1]
Each gym has contracts with their customers, sometimes referred to as clients, members, trainees, or other marketing names. These contracts require their customers to pay a certain amount of money to the gym on regular intervals – quite often a monthly charge. What obligations, if any, does a customer have when the gym is shut down?
One would hope that gyms would not charge customers for services they are not providing. In fact, most major gyms have now published policies providing that the gym will either (1) not charge a membership fee; or (2) will stop charging a membership fee during this time on request. Moreover, there have already been a series of class-action lawsuits filed by customers of major chains addressing charges for membership fees.[2] It can safely be anticipated that there will be further lawsuits filed in the future, as well. As a practical matter, it therefore appears that most customers are not being charged membership dues during this time period and it is unlikely that the gyms will start charging dues until they re-open.
Notably, much of the litigation filed to date seems to focus on the idea that the gym has advertised something (the availability of facilities) and has failed to provide the thing advertised (access to the facilities). However, the argument appears to construe this as some kind of false advertisement. This is unusual, in that it supposes that the gym knew at the time of the advertisementthat the advertisement was false, e.g., that the gym knew at the time they signed up their customers that the gymwould be closed in the future due to COVID-19. It would appear unlikely that major gym chains had the ability to forecast the arrival of COVID-19 at the time they entered into contracts with their customers (including contracts signed some yearsago.) One may assume that these claims were chosen as the plaintiffs wanted to bring a class action and the theories sued for are a better fit for a class action, whether or not they are an ideal fit for the actual fact pattern.
What about disputes with smaller chains or single location gyms? Such locations are far less likely to be the subject of a class-action and therefore may require any individual customer to deal with such charges more directly.
As to cancellation of the gym contract, this may be permitted based on unique restrictions applied to gym contracts, which are covered by the California Health Studio Services Contract Law.[3] A customer may cancel their membership at any time where “the health studio eliminates or substantially reduces the scope of the facilities… [unless] the health studio, after giving reasonable notice to its members, temporarily takes facilities out of operation for reasonable repairs, modifications, substitutions, or improvements.”[4] There is a fair argument permitting a cancellation based on the closure (described by some gyms to be “indefinite”).
If the gym has already billed you and has the customer’s money (following an automatic payment, perhaps), then the matter is a question of how the customer may recover that payment. Such sums are likely to be clearly within the bounds of a small claims matter, unless a class action is pursued. Regardless, the most direct argument is simply breach of contract – the gym promised to provide a service and has not been able to provide such service. The remedy sought would be return of the funds paid under the contract - a contracting party cannot sell a good or service, fail to provide the good or service, and keep the purchase price.
If the gym is billing you, then you may start by discussing the matter with the gym and explaining why it is inappropriate to bill and why you do not believe paying the gym is appropriate. The gym is unlikely to commence litigation or otherwise make trouble. If they try to collect, then you are entitled to appropriate contract defenses. Much has already been discussed regarding unusual contract defenses unique to a pandemic.[5] Such discussion is interesting, but not particularly useful. In short, whether the pandemic is a unique ‘act of god’ that excuses contract performance depends entirely on the language of the contract. However, more standard contract defenses would apply.[6] Such defenses may be based on the simple inability of the gym to provide its service and therefore tending to render performance impossible or otherwise frustrate the purpose of the contract; these defenses are more formally known as impossibility or impracticability[7]and frustration of purpose[8]. The argument would follow that the purpose of the contract is access to a physical facility with appropriate equipment and the ordered closure of these facilities during this time either makes impossible the contract (because access cannot be provided) or otherwise frustrates the purpose of the contract as access would not be of value (for example, being also illegal for the members to appear at the facility).
Regardless, it is unlikely that individuals will be required to engage in significant litigation relating to gym memberships. This discussion is simply emblematic of the fact that COVID-19 is causing truly unusual disruptions to almost all industries and will create broad classes of litigation more generally. Other facilities, such as golf courses, have not all closed. Further, those that have closed, may only be partially closed, or have closed only certain locations. With respect to these facilities, there are a host of issues to evaluate in determining whether the purpose of the member’s agreement with the facility has truly been frustrated. In the end, these matters will require a case-by-case breach of contract analysis. In resolving these concerns, customers and business owners may have new and pressing legal questions. If you believe you are improperly being charged dues and fees related to golf, tennis, or other memberships, or have questions regarding whether you are entitled to charge such fees, you may contact us to evaluate a potential claim based on the particular contract and situation.
[1]See California Executive Order N-33-20; see also local county health orders, e.g., Orange County Health Officer’s Order Issued 3/18/2020; Los Angeles County Safer at Home Order for Control of COVID-19: Temporary Prohibition of All Events and Gatherings and Closure of Non-Essential Businesses and Areas dated 3/21/2020; San Diego County Order of the Health Officer and Emergency Regulations dated March 29, 2020,
[2]See e.g., Brenda Labib v. 24 Hour Fitness USA Inc, Case No. 4:20-cv-02134 [regarding 24 Hour Fitness]; see also Barnett vs. Fitness International, LLC [regarding LA Fitness]
[3]Civil Code § 1812.80, et seq.
[4]Civil Code § 1812.85(c).
[5]See e.g., “Is the Coronavirus a Force Majeure that Excuses Performance of a Contract?” at https://www.americanbar.org/groups/litigation/committees/real-estate-condemnation-trust/articles/2020/winter2020-coronavirus-force-majeure-clauses-real-estate-contracts/; see also “Contractual Performance In The Age Of Coronavirus: Force Majeure, Impossibility And Other Considerations” at https://www.natlawreview.com/article/contractual-performance-age-coronavirus-force-majeure-impossibility-and-other
[6]Consider defenses relating to frustration, impracticability, impossibility, and otherwise.
[7]See e.g., Mineral Park Land Co. v. Howard(1916) 172 Cal. 289, 292
[8]See e.g., Lloyd v. Murphy(1944) 25 Cal.2d 48, 53
