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Friedman v. 24 Hour Fitness USA

July 12, 2010

DANIEL FRIEDMAN, ET AL., PLAINTIFFS,
v.
24 HOUR FITNESS USA, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge: Hon. A. Howard Matz

CLASS ACTION

FINAL ORDER AND JUDGMENT GRANTING FINAL APPROVAL OF SETTLEMENT

Crtrm.: 14

FINAL ORDER AND JUDGMENT

On July 12, 2010, the Court held a Fairness Hearing for Final Approval of Settlement, pursuant to the Court's March 29, 2010 Order Granting Preliminary Approval of Class Settlement and Setting Schedule for Final Approval ("Preliminary Approval Order"). On June 28, 2010, Plaintiffs filed a Motion for Final Approval of Settlement and Memoranda of Points and Authorities, and the Declarations of Melissa Harnett, Jeffrey Keller, Daniel Friedman, Debra McKenna, Molly Kramer, Luis Riojas, Craig Jones, Thomas Hernan, Stephanie Dougherty, Kimberly Zander, Willman Alfaro, Scott Hardy, Kim R. Schmidt, Alicia Gehring, and the Mediator's Report of Antonio Piazza in support thereof. Plaintiffs further filed a Response to Objections to Settlement Agreement. 24 Hour Fitness ("24 Hour") also filed Supplemental Responses to Objections to Final Approval of Class Action Settlement, as well as declarations from Nick Kacprowski, Katheryn Healon, Nadia Brannon, and Joanna Tuttle. In addition, the Court received five timely objections on behalf of seven class members and two non-class members, and one untimely objections on behalf of one class member who failed to comply with the Court's Preliminary Approval Order with respect to the requirements governing the filing of an objection, which requirements were set forth in the notice disseminated to the class.

Having fully reviewed and considered the Settlement Agreement and all submissions, written and oral (which includes submissions not specifically described above), the Court finds that the Settlement Agreement is fair, reasonable, and adequate. The Motion for Final Approval of the Settlement Agreement is thus GRANTED.

IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED THAT:

1. The Capitalized terms in bold type used in this order shall have the same meaning as set forth in the Settlement Agreement.

2. The Court finds that the Settlement Agreement was arrived at in good faith, without collusion, following extensive arms' length negotiations by counsel for the parties, including two mediation sessions before the highly regarded mediators, Hon. Judge David Garcia (Ret.) and Antonio Piazza. The settlement was based on the parties' acceptance of Mr. Piazza's mediator's proposal, made after a full day at the second mediation between the parties. The terms of the mediator's proposal were further negotiated by the parties over 131/2 weeks following the mediation and then set forth in the Settlement Agreement signed by the parties.

3. The Court finds that the Settlement Agreement provides valuable benefits to the Settlement Class. The Settlement provides actual benefits to Settlement Class Members who previously had the Charges at Issue taken from their bank and credit card accounts after canceling their memberships.*fn1 At the Settlement Class Member's election, each will receive either a $20.00 monetary reimbursement or a certificate for a free three month gym membership. The parties have presented evidence that the average amount charged after cancellation was $25.00. (Declaration of Nadia Brannon ("Brannon Decl.") ¶ 29-30) The Court finds that the $20.00 benefit option reimburses approximately 80% of the average class member's actual damages for the Charges at Issue.

4. The parties have also presented evidence that the certificate for a free three month gym membership has a justifiable value of between $149.99 and $199.99, as stated in the Court approved notice. The evidence demonstrates that similar (though not identical) memberships are regularly sold by defendant for such amounts. However, these memberships only provide access to a single club, while the Certificate can be used at more than 400 of defendant's clubs in the United States.

5. The Court thus hereby finally approves the Settlement Agreement, and the Settlement contemplated thereby, as being a fair, reasonable and adequate settlement as to all members of the Settlement Class within the meaning of Federal Rule of Civil Procedure 23, and directs its consummation pursuant to its terms and conditions.

6. The Class preliminarily certified on March 29, 2010 is hereby finally certified, and defined as follows:

All Persons who incurred Charges at Issue during the Class Period. Charge(s) at Issue means an EFT from a Person's bank account or credit/debit/charge card for Dues Charges where 24 Hour's membership database file reflects the payment by EFT on or after the date in 24 Hour's membership database file for a Request for Cancellation or Termination of the Settlement Class Member's or Club Membership Holder's Monthly Membership Agreement. Charge(s) at Issue do notinclude: (1) pre-paid last months' dues; (2) Dues Charges paid by EFT on a date before the date in 24 Hour's membership database file for a Request for Cancellation or Termination of a Monthly Membership Agreement;or (3) Dues Charges paid by EFT after a Request for Cancellation or Termination that were charged by 24 Hour in order to reinstate a previously cancelled Monthly Membership Agreement or to pay Dues Charges on anew Monthly Membership Agreement. Class Period means the time from October 2, 2002 through February28, 2010. Excluded from this Settlement Class are (1) Persons who did not pre-pay last month dues and/or forwhom 24 Hour's membership database file reflects a fullrefund or return of the Charges at Issue; (2) Persons whowere and remain members of the certified settlement classin the matter of Weir v. 24 Hour Fitness USA, Inc., SanFrancisco Superior Ct. Case Number CGC- 05-438478;(3) 24 Hour, its subsidiaries and affiliates, officers,directors, and employees; and (4) any judge to whom thismatter is assigned, his or her court staff, and his or herimmediate family.

7. Solely for the purposes of effectuating the Settlement, the Court hereby further finds as follows:

a. Joinder of all Settlement Class Members in a single proceeding would be impracticable, if not impossible because of their numbers and dispersion;

b. The Class Representatives and Class Counsel have capably prosecuted the claims of the lawsuit;

c. No conflict exists between the Class Representatives or Class Counsel and the Settlement Class;

d. The Class Representatives and Class Counsel are adequate representatives for the Settlement Class;

e. The Class Representatives' claims are typical of the Settlement Class;

f. The Class Representatives are members of the Settlement Class and have claims representative of the claims and defenses presented in this case;

g. Commonality is satisfied in this case for settlement purposes as a number of common issues exist ...


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