Barclay v. iFit Health & Fitness Inc.

Background

Teeda Barclay, Nicole Nordick, and Jay Ovsak alleged that NordicTrack treadmills they purchased could not achieve or maintain the continuous-horsepower ratings that Defendants represented. They asserted claims for themselves and proposed nationwide and Minnesota-specific classes.

The defendants moved to dismiss after arbitrators dismissed Barclay’s and Nordick’s arbitration claims for lack of arbitrability. The court also granted the defendants’ request to update the caption to identify Icon Health & Fitness, Inc. as “iFit Health & Fitness Inc., f/k/a Icon Health & Fitness, Inc.”

Minnesota Deceptive Trade Practices Act claim

The court held that the plaintiffs lacked standing—the constitutional requirement that a plaintiff show a sufficient injury and a real threat of future harm—to seek an injunction under the Minnesota Deceptive Trade Practices Act. The alleged past injury was paying a premium for treadmills based on horsepower representations. The court found that Ovsak’s alleged possibility of future treadmill repairs was not connected to the alleged deceptive horsepower practices. It therefore dismissed Count 6 for lack of subject-matter jurisdiction, without prejudice.

Alleged damages and warranty claims

The court rejected the defendants’ argument that the plaintiffs had not plausibly alleged injury. The plaintiffs alleged that they paid more for treadmills because of the horsepower representations and would not have purchased them, or would have paid less, had they known the treadmills’ actual capabilities. The court found those allegations sufficient to plead price-premium damages and standing.

The court dismissed the plaintiffs’ written-warranty claim under the Magnuson-Moss Warranty Act, Count 2, with prejudice and on the merits. That statute requires the alleged written promise to specify a period during which the product will meet a stated level of performance. The court found that the alleged promise of “continuous” horsepower did not identify a sufficiently specific duration.

The court found that the plaintiffs plausibly alleged state-law express-warranty claims based on advertisements and other representations that the treadmills could achieve specified continuous-horsepower levels during residential use. But the plaintiffs did not allege when they discovered the alleged breach. Because that date was necessary to determine whether their pre-suit notices were timely, the court dismissed the remaining warranty claims in Counts 1, 3, 4, and 5 without prejudice and granted leave to amend.

Minnesota statutory claims and choice of law

The court held that the Utah choice-of-law clause in the Terms of Use applied to Barclay’s and Nordick’s claims because those claims depended on their use of the NordicTrack website. The clause therefore precluded Barclay and Nordick from asserting the challenged Minnesota statutory claims. Their claims under the Minnesota Consumer Fraud Act, False Statement in Advertising Act, and Unlawful Trade Practices Act—Counts 7, 8, and 9—were dismissed with prejudice and on the merits.

The court reached a different result for Ovsak. It found that he plausibly alleged false or misleading representations, reliance where required, causation, and a public benefit from advertisements directed to the public at large. The defendants’ motion was denied as to Ovsak’s claims under Counts 7, 8, and 9.

Count 10 and final order

Count 10 was titled negligent misrepresentation, but the complaint also alleged facts supporting fraud. The court granted the plaintiffs leave to amend Count 10 to clarify that it asserts a fraud claim and to remove the conflicting negligence allegations.

The court granted in part and denied in part the defendants’ motion to dismiss. It dismissed Count 6 without prejudice for lack of subject-matter jurisdiction; dismissed Count 2 with prejudice and on the merits; dismissed Counts 1, 3, 4, and 5 without prejudice with leave to amend; dismissed Barclay’s and Nordick’s Counts 7, 8, and 9 with prejudice and on the merits; and denied the motion in all other respects. Any amended complaint addressing the identified issues was due by March 11, 2022. Judge Eric C. Tostrud signed the order.