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Defendant, the owner and operator of a chain of fitness centers

Defendant, the owner and operator of a chain of fitness centers

Procedural Posture

Defendant, the owner and operator of a chain of fitness centers, filed a motion to dismiss plaintiff consumers’ putative class action alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USCS § 1961 et seq., The Electronic Funds Transfer Act (EFTA), 15 USCS § 1693, the California Consumer Legal Remedies Act (CLRA), and the California Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200.

Overview

corporate litigation lawyer San Diego manages large and small legal issues in lawsuits that any business may need to negotiate as a regular course of business. Plaintiffs alleged that defendant defrauded customers who signed up for gym memberships and withdrew membership fees from customers’ bank and credit card accounts without authorization even after members canceled their memberships. For purposes of RICO, plaintiffs adequately alleged an association-in-fact enterprise with two outside payment processing companies. Plaintiffs did not have to allege that the companies shared defendant’s fraudulent purpose. Also, plaintiffs adequately alleged ongoing organization and continuing unit. There was no law barring RICO enterprises from arising from a contractual relationship for ordinary financial services. Although plaintiffs could not seek injunctive relief under the UCL on behalf of the public without meeting class action requirements, it was acceptable to seek such relief on behalf of the general public under the CLRA. As to the EFTA claim, the notice requirements of 15 USCS § 1693g (a) did not apply to plaintiffs’ claim under 15 USCS § 1693m. The court concluded that the statutes of limitations would bar some putative class members’ claims under RICO, EFTA, and UCL.

Outcome

The court granted defendant’s motion to dismiss the EFTA claims of five plaintiffs based on the statute of limitations. The court granted defendant’s motion to strike the language requesting punitive damages, treble damages, and restitution in the EFTA claim. In all other respects, the court denied defendant’s motion. The court granted plaintiffs leave to file a fifth amended complaint to conform to the court’s rulings.

Procedural Posture

Defendants moved for summary judgment in plaintiffs’ action alleging that the merger of the two defendant corporations, together with an agreement between one of the defendant corporations and a non-defendant corporation, constituted restraints of trade and monopolization in violation of § 7 of the Clayton Act, 15 USCS § 18, § 1 of the Sherman Act, 15 USCS § 1, and a state anticompetitive statute.

Overview

Plaintiff medical corporations doing business as a laser eye center brought suit asserting federal antitrust claims and state unfair competition claims challenging the merger of two corporations engaged in the design, development, sale, and licensing of laser vision correction (LVC) equipment. Plaintiffs had never purchased LVC equipment from defendants and conceded that they had no intention of purchasing such equipment from the defendants. Although they had notice of the pending merger, plaintiffs did not file their suit until the day of the consummation of defendants’ merger. Plaintiffs asserted they had been injured in by higher prices it has paid for LVC equipment from a non-defendant seller. Defendants moved for summary judgment, contending plaintiffs lacked standing to sue for damages under § 4 of the Clayton Act, 15 USCS § 15, or for equitable remedies under § 16 of the Clayton Act, 15 USCS § 25, and that plaintiffs were barred by the doctrine of laches from pursuing any equitable remedy. The court granted defendants’ motion, declining inter alia to recognize purchases from a non-conspirator non-defendant as a sufficient basis to assert antitrust standing.

Outcome

The court granted defendants summary judgment, holding that plaintiffs lacked standing to pursue a private suit for damages under § 4 of the Clayton Act and were barred by laches from pursuing equitable remedies under § 16 of the Clayton Act, and declining to exercise supplemental jurisdiction over plaintiffs’ remaining state unfair competition claim.

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