NEW YORK (Legal Newsline) – Peloton says class action lawyers have failed in a “do-over” to make claims under New York law as they push a lawsuit over the slashing of Peloton’s content library.
The company on Feb. 4 filed another motion to dismiss the case, in response to an amended complaint filed by attorneys at DiCello Levitt Gutzler in New York City and Keller Lenkner in Chicago.
A November decision by New York federal judge Lewis Liman allowed the case to proceed, but it tossed the claims of a Michigan woman under sections of the New York General Business Law.
“Despite the opportunity for a do-over, and with the benefit of discovery, Plaintiffs’ Amended Complaint suffers from the same deficiency as their original complaint: it fails to plausibly allege that Ms. (Alicia) Pearlman, a citizen and resident of Michigan, has standing…” Steven Feldman of Latham & Watkins wrote.
“Sections 349 and 350 have a statutorily defined territorial limitation, and both protect consumers in their transactions that take place in New York State. Despite this clear statutory mandate, Plaintiffs’ original complaint failed to allege any connection between Ms. Pearlman’s alleged purchase of Peloton products and services and New York State.”
The amended complaint fails to grow its argument, concentrating on Peloton’s New York headquarters instead, the motion says. It does not address the claims of co-lead plaintiff Eric Fishon.
The plaintiffs say Peloton deceived possible customers by calling its digital library of fitness classes as “ever-growing” before cutting 57% of content in March 2019.
Judge 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.
Eleven months before it slashed the library, the company knew or should have known that was going to happen, the plaintiffs say.
After an April 2018 cease and desist letter, Peloton removed almost 6,000 classes.