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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Partial Dismissal of Claims Results in Reconsideration of CAFA Jurisdiction Over Remaining Claim

Posted in Case Summaries

Truglio v. Planet Fitness, Inc., 2016 WL 4084030 (D.N.J. July 28, 2016).

In this action, while dismissing the plaintiff’s claims in part, a District Court in New Jersey questioned whether it had subject-matter jurisdiction under CAFA over the plaintiff’s remaining claim and ordered the defendants to show cause as to why the action should not be remanded to state court based on a lack of subject-matter jurisdiction under CAFA.

The plaintiff brought a putative class action in the Superior Court of New Jersey, Monmouth County, alleging that she entered into a health club services agreement with the defendants, which, inter alia, failed to state that a bond or other security was filed with the Director of the Division of Consumer Affairs, failed to conspicuously disclose her total payment obligation, and imposed misleading membership cancellation requirements in violation of the Health Club Services Act (“HCSA”), the Consumer Fraud Act (“CFA”) (Count II) and the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) (Count I).

Defendant, Planet Fitness, Inc., timely removed the action pursuant to CAFA. Once in federal court, the defendants moved to dismiss the complaint arguing that the plaintiff failed to adequately allege that she suffered an ascertainable loss caused by the alleged unlawful practices and, therefore, failed to state a claim under the HCSA, CFA, and TCCWNA.  The District Court granted the defendants’ motion to dismiss in part, leaving only the plaintiff’s TCCWNA claim in Count I of the complaint.

As a result, the District Court was called to question whether it still had subject-matter jurisdiction over the one remaining TCCWNA claim for statutory damages of $100 per class member under CAFA. Specifically, the District Court questioned the number of potential plaintiffs in the class and whether the aggregated claims would exceed $5 million dollars.

The District Court noted that the defendants removed the action from state court, pursuant to CAFA, based on their representation that the complaint asserted six claims under the HCSA and CFA, potentially representing $600 in statutory damages per class member under TCCWNA. The defendants reasoned that a purported class of 8,334 persons, each potentially receiving $600 in statutory damages, would exceed CAFA’s $5 million threshold.  The defendants also asserted that the amount of people who entered into the membership agreements in New Jersey during the putative six-year class period “far exceeded the threshold figure of 8,334 persons.”

However, the District Court opined that because only the plaintiff’s TCCWNA claim with respect to her claim that the membership agreement’s cancellation provisions violated the CFA remained, which would result in a $100 statutory remedy per class member, it was unclear whether the defendants’ basis for removal remained valid.

Accordingly, the District Court declined to address the TCCWNA claim and ordered that the defendants instead show cause, within 20 days from the date of the opinion, as to why the matter should not be remanded to state court based on a lack of subject-matter jurisdiction under CAFA.

-Melissa Broussard