NEW YORK (Legal Newsline) – Peloton’s plans to defend itself from a class action lawsuit received a possible boost this week when a federal judge allowed it to ask 10 potential class members if they relied on certain claims when buying their exercise equipment.
Peloton faces a class action in New York federal court over the cutting of 57% of its digital library. The suit says before that reduction, Peloton’s ads said the library was “ever-growing,” even though the company knew or should have known a licensing agreement on much of it was about to expire.
Three plaintiffs filed the class action, while 21 other customers went to arbitration. Peloton refused to pay arbitration fees, and those 21 are now potential members of the proposed class.
On July 27, Judge Lewis Liman allowed Peloton to depose 10 of them to ask whether they actually saw the “ever-growing” claim before they bought their exercise bike, over the objection of plaintiffs counsel.
Those depositions will help Liman decide whether the experiences of customers were common enough to certify a class.
“There is no evidence here that the discovery sought to harass or alter membership of the class,” Liman wrote.
“Peloton has articulated a reasonable basis to believe that the absent class members have information which could help inform the Court’s decision whether to certify a class and which could rebut Named Plaintiffs’ showing at class certification.
“There is no reason to doubt the good faith of that assertion. There is also no reason to believe that the requested depositions… would impermissibly alter the membership of the class or undermine the efficiencies sought to be achieved by the class action.”
Peloton actually asked to depose all 21 former arbitration claimants, but Liman ruled that was unnecessary. The judge also wrote Peloton will depose the three named plaintiffs, and two days later, one of those plaintiffs withdrew from the case.
Peloton first tried to fight the case by pointing to an arbitration clause in its terms of service, but it appears to prefer defending one class action instead of dozens of arbitration claims.
The plaintiffs attorneys – from DiCello Levitt Gutzler in New York City and Keller Lenkner in Chicago - argue their clients relied on Peloton’s “ever-growing” claims to provide a library that would justify spending thousands of dollars on an exercise bike.
“But, it turns out, Peloton was cutting corners,” they say. “Peloton had failed to secure the media rights for the songs used in most of its classes.”
Eleven months before it slashed the library, the company knew or should have known that was going to happen, the plaintiffs say.
“But Peloton never disclosed to its customers Peloton’s lack of licensing or that it was on notice of alleged infringement regarding more than half the classes in its library.”
After an April 2018 cease and desist letter, Peloton removed almost 6,000 classes.