NEW YORK (Legal Newsline) – Peloton will continue to face a proposed class action lawsuit over the slashing of its digital library, as a federal judge has permitted the claims of one of the two plaintiffs to proceed.
New York federal judge Lewis Liman on Nov. 9 ruled that Eric Fishon’s claims against Peloton Interactive have been pled well enough to survive the company’s motion to dismiss.
Fishon and a Michigan woman (whose claims under New York law were thrown out) say Peloton deceived possible customers by calling its digital library of fitness classes as “ever-growing” before cutting 57% of content in March 2019.
Liman turned back Peloton’s defense that its terms and services stipulated it could remove content at any time.
“(T)he language in the terms of service does not dispel the false inference allegedly created by Defendant’s advertising,” Liman wrote.
“Defendant’s advertising created the inference for reasonable consumers that Peloton’s library was ever-growing; that it would increase in size.
“The terms of service made clear to purchasers that they had no right to expect that any particular class or group of classes would remain available to them. It does not speak to the size of the collection.”
Calling its library “ever-growing” wasn’t mere puffery either, Liman wrote.
“On its face and accepting the allegations of the complaint as true, the statement that Peloton’s library was ‘ever-growing’ is an objective, factual statement,” Liman ruled.
“A reasonable consumer could understand it to mean that the library would ‘become larger or greater over a period of time’ or ‘increase.’ That statement is factual and quantifiable and testable. The library either increased in size or it shrunk.”
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.
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.
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.