April 3, 2020 / Law Alert

Beyond common law: Coronavirus implicates statutory cancellation provisions

As part of the continuing fallout from coronavirus, a consumer has sued her gym in New York City for its alleged failure to discontinue her monthly membership dues. The plaintiff, Mary Namorato, filed the putative class action in the U.S. District Court for the Southern District of New York on March 26, 2020.

According to the complaint, Ms. Namorato has been a member of the New York Sports Clubs at Grand Central Station since January 2019. Ms. Namorato alleges that, despite paying the monthly $69.99 membership dues on March 1, the club “ceased providing [her] any gym services or gym accessibility” on March 16. Ms. Namorato asserts that the gym’s closure will be “continuing indefinitely,” and that she has not yet received a refund or been able to cancel her membership. In addition to bringing a claim for breach of contract, Ms. Namorato is seeking recovery under a New York law related to the operation of health clubs.

Specifically, a subdivision of New York’s Health Club Services Law requires that every gym membership contract contains the following language: “ADDITIONAL RIGHTS TO CANCELLATION: If the services cease to be offered as stated in the contract.” § 624(3) (emphasis in original). Ms. Namorato is claiming that coronavirus has caused her gym to do just that - cease its services to her. Because she has been unable to cancel her membership, Ms. Namorato argues, the gym is in violation of the statute. The defendant has not yet filed a response to Ms. Namorato’s complaint.

Regardless of this lawsuit’s outcome, it highlights the potential for the coronavirus pandemic to trigger statutory options for the cancellation of certain contracts. The health club industry alone, for example, reveals the patchwork of cancellation statutes that could apply to coronavirus-impacted businesses in different jurisdictions. See, e.g., 73 P.S. § 2163 (Pennsylvania law addressing cancellation where health club has closed for more than 30 days) and ORC 1345.42(b)(8) (Ohio law addressing circumstance of closure of health club) and Md. 14-12B-04 (Maryland law addressing remedies where health club is closed for longer than one month) and 815 ILCS § 645/6 (Illinois law addressing circumstances for cancelling health club contract).

For more information, please contact any member of Porter Wright's Class action, mass torts and MDLs practice group.