Barclay v. iFIT Health & Fitness

Background

Plaintiffs Teeda Barclay, Jay Ovsak, and Nicole Nordick filed this class action in November 2019, alleging that defendants iFIT Health & Fitness, Inc. (formerly Icon Health & Fitness, Inc.) and its subsidiary NordicTrack, Inc. falsely advertised the continuous horsepower (CHP) of their treadmills. CHP measures a motor's ability to sustain power over an extended period. Defendants advertised their treadmills as operating at 2.6 to 4.25 CHP, but Plaintiffs alleged the machines could not achieve those levels when drawing power from a standard 120-volt, 15-amp residential outlet — the type found in most American homes. Plaintiffs claimed they relied on those representations and paid a price premium they would not have paid had they known the truth.

The litigation was lengthy and contentious. After the Second Amended Complaint was filed, Defendants moved to dismiss and to compel arbitration; both motions were granted in part. Plaintiffs Barclay and Nordick were sent to arbitration, where arbitrators found their claims fell outside the arbitration agreement's scope. The case proceeded through a Third and then Fourth Amended Complaint. The operative complaint asserts a breach of express warranty claim on behalf of a nationwide class, with additional state-law and fraud claims preserved for other stages. After years of discovery, two rounds of mediation before former U.S. Magistrate Judge Morton Denlow (serving as a private mediator), and extensive motion practice — including motions for class certification and summary judgment that were not fully briefed — the parties reached a settlement in principle in May 2024 and executed a formal settlement agreement in July 2024.

The Settlement

The proposed settlement class covers all persons in the United States and its territories who purchased a NordicTrack or ProForm treadmill as an original purchaser from November 22, 2015 through January 15, 2020, primarily for personal or household use and not for resale. The settlement administrator identified approximately 1,549,791 class members. About 38,000 (roughly 2.49%) filed valid claims.

Class members who timely file valid claims receive one of the following non-cash benefits: (1) a treadmill maintenance kit (retail value $30) or a treadmill mat (retail value $69); or (2) in lieu of the products, a free subscription to iFIT's fitness platform for two to five months depending on the member's subscriber status and treadmill type, at retail values of $15 to $39 per month. Defendants also agreed to display prominent disclaimers about CHP limitations on their website, marketing materials, manuals, and product packaging, and to ask retailers to do the same. Defendants admitted no wrongdoing. Class members release all claims that were or could have been asserted in the lawsuit.

The court gave preliminary approval in September 2024. Between March and May 2025, notice was sent by email and mail to class members, and settlement advertisements were published on Facebook. Three class members filed objections; none appeared at the August 25, 2025 final fairness hearing. Forty-two class members opted out.

Class Certification Under Rule 23

The court analyzed all Rule 23(a) prerequisites and the Rule 23(b)(3) requirements.

Numerosity (Rule 23(a)(1)) The class of approximately 1.55 million members easily satisfies the requirement that the class be so large that joining all members individually would be impractical.

Commonality (Rule 23(a)(2)) Plaintiffs identified multiple common questions: whether Defendants made false or misleading CHP representations, whether those representations were material, and whether class members paid a price premium as a result. The court found Rule 23(a)(2) satisfied.

Typicality (Rule 23(a)(3)) All three class representatives purchased NordicTrack treadmills for home use and allege they did not receive the advertised CHP. Their claims are essentially identical to those of other class members, satisfying typicality.

Adequacy (Rule 23(a)(4)) The class representatives have participated actively — including sitting for depositions, twice in one case — and their interests do not diverge from those of the class. Class counsel are experienced class action litigators who have handled multiple treadmill-horsepower cases, and the court confirmed from its own six-year observation of the case that counsel litigated diligently and competently.

Predominance and Superiority (Rule 23(b)(3)) The key contested issue was whether state-law variations among the fifty states' express-warranty laws defeated predominance. The court conducted a Minnesota choice-of-law analysis — applicable because the case is in federal court in Minnesota — and concluded that no single state's law could constitutionally be applied to the entire nationwide class, because the 1.54 million purchasers made transactions in many states and no single state had sufficient contacts to justify applying its law to all. The court therefore concluded that each class member's home state law governs their individual claim.

However, applying the approach adopted in Sullivan v. DB Investments, Inc. (3d Cir. 2011) and recognized in Eighth Circuit decisions in Rawa v. Monsanto Co. and Keil v. Lopez, the court held that variations in state law matter less in a settlement class because the principal concern — instructing a jury on varied state laws — disappears when there is no trial. The court found the class was not overbroad because all members suffered a concrete injury (paying a price premium), and the common questions about Defendants' conduct — whether the CHP misrepresentations occurred and whether class members overpaid — predominate. Superiority was easily met because individual damages (estimated at $16 to $160 per treadmill) are too small to justify individual litigation.

Fairness, Reasonableness, and Adequacy of the Settlement

The court applied both the Eighth Circuit's four-factor Van Horn test and Federal Rule of Civil Procedure 23(e)(2)'s four statutory factors.

Merits vs. Settlement Terms This was the most important factor. The court found Plaintiffs' ultimate success at trial was uncertain: litigated class certification was not guaranteed, reliance and causation could undermine predominance, and the case would be effectively over if class certification were denied because individual damages were too small to pursue. Even if Plaintiffs prevailed, damages were modest — an expert estimated a price premium of only 2–8%, yielding roughly $16 to $160 per treadmill. The settlement's non-cash benefits were found to be meaningful, not coupons. Key to the coupon analysis: class members do not pay anything to use the mat, kit, or subscriptions; subscriptions do not auto-renew; and the fitness services (including yoga and other workout programs) are likely valuable to former treadmill purchasers who may still own exercise equipment or remain interested in fitness. The court rejected the three objectors' arguments that the awards had no value, and rejected claims of collusion between counsel and Defendants, noting the fee award is a significant reduction from counsel's lodestar.

Defendants' Financial Condition The record showed Defendants were in a weakened financial state. Counsel noted that a cash payment of even $10 per class member would trigger over $15 million in payments, a sum that posed real financial risk to iFIT. This factor favored the settlement.

Complexity and Expense of Further Litigation Continuing litigation would have required renewed class certification briefing (the prior round ran to over 900 pages combined), resolution of Daubert motions (challenging expert testimony admissibility) over price-premium damages, summary judgment, and potentially trial and appeal. This factor favored the settlement.

Volume of Opposition Only three of 1.54 million class members objected, and only forty-two opted out. The court found opposition minimal and considered the "silent majority" who did not object.

Rule 23(e)(2) Factors All four statutory factors supported approval: (A) class representatives and counsel adequately represented the class; (B) the settlement was negotiated at arm's length through a private mediator; (C) the relief is adequate given litigation risks and costs; and (D) the settlement treats class members equitably relative to each other.

Attorneys' Fees and Service Awards

The court used the lodestar method (hours worked multiplied by reasonable hourly rates) rather than a percentage-of-fund method because there is no common fund. The three plaintiffs' firms collectively reported approximately 4,597 hours of legal work and a combined lodestar of approximately $3,800,509.50. The requested fee of $1,946,733.97 represents a negative multiplier of 0.51 — meaning counsel asked for roughly half their calculated value. The court found hourly rates ($350–$1,050 for attorneys, $190–$325 for paralegals and law clerks) were reasonable given counsel's experience and were consistent with rates approved in comparable cases. The court also awarded $453,266.03 in documented litigation costs. The court awarded each of the three class representatives a $7,500 service award, noting that courts in the Eighth Circuit regularly approve service awards of $10,000 or more.

Disposition

The court granted all motions: final approval of the class action settlement, final certification of the settlement class, and the motion for attorneys' fees, expenses, and service awards. The action was dismissed with prejudice. The court retained jurisdiction to interpret and implement the settlement agreement.