Fishon v. Peloton Interactive, Inc.

Background

Peloton sells exercise equipment and subscriptions providing access to live and on-demand fitness classes. Plaintiffs alleged that Peloton marketed its class library as “ever-growing” even after receiving notice that some music used in the classes allegedly lacked proper licenses. After music publishers sued Peloton, Peloton removed more than half of the classes from its on-demand library.

Eric Fishon asserted claims under New York General Business Law §§ 349 and 350. Alicia Pearlman asserted a claim under the Michigan Consumer Protection Act. The plaintiffs alleged that Peloton’s statements and omissions caused customers to overpay for its equipment and subscriptions. The plaintiffs also sought certification of proposed New York and Michigan customer classes.

Motion to Dismiss Pearlman’s Claim

Peloton moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court held that Pearlman’s Michigan claim was based on alleged misrepresentations and omissions suggesting fraudulent conduct, so Federal Rule of Civil Procedure 9(b) required her to plead the circumstances of the alleged fraud with particularity.

The court found that Pearlman identified the alleged misrepresentation—the claim that Peloton’s library was “ever-growing”—and alleged why it could have been misleading. But she did not plead where or when she encountered the statement, or facts specifically describing the circumstances of her reliance on it. Her general allegation that she relied on Peloton’s representations was insufficient. The court also rejected the argument that a class-action plaintiff could avoid pleading her own reliance based on a reasonable-consumer standard applicable to classwide proof.

The court therefore granted Peloton’s motion to dismiss Pearlman’s claim and dismissed her complaint without prejudice. The opinion states that any amended complaint had to be filed by February 18, 2022.

Class Certification

Because Pearlman’s claim was dismissed, the court considered class certification only for the proposed New York class, with Fishon as the named plaintiff. Rule 23 requires, among other things, that a proposed class representative adequately protect the class’s interests.

The court found that Fishon had sent Peloton emails using “lawyerabco@gmail.com” and the name “Barbara Diperio LLP,” and that he had misrepresented his identity to obtain better service and compensation. The court also found that his deposition testimony about those communications was evasive and misleading. Because this conduct related to communications with Peloton before the lawsuit and could undermine Fishon’s credibility on issues central to the case, the court concluded that he was not an adequate class representative.

The court denied the motion for class certification without deciding the remaining Rule 23 requirements. It also rejected, at that stage, the plaintiffs’ request to substitute two absent class members as proposed representatives. The opinion stated that any new representatives would need to be added through an amended complaint, with opportunities for Peloton to respond and depose them.

Expert Testimony and Disposition

Peloton moved to exclude the testimony of J. Michael Dennis, Ph.D., and Colin B. Weir, whose work concerned the alleged value and price premium associated with Peloton’s “ever-growing” library. Because the court denied class certification, it denied Peloton’s motion to exclude that testimony as moot.

The court directed the Clerk of Court to close Dkt. Nos. 107, 117, and 135. The opinion does not resolve Fishon’s individual New York claims on the merits; it states that an earlier motion to dismiss those claims had been denied.