ClassPass Displays Non-Partners on Partners Network Class Action

ClassPass, Inc. is a “digital middleman” company that allows subscribers to book classes at gyms and fitness studios, and lately, also for services like manicures, massages, and haircuts. This class action brings suit against ClassPass, its CEO Fritz Lanman, and its Founder and Executive Chairman Payal Kadakia, claiming that it has presented itself as offering bookings at businesses that have not actually agreed to partner with it.

The Nationwide Class for this action is all businesses or entities, or individuals with ownership interest in such entities, in the US who do not do business with ClassPass but who have a landing page on a ClassPass website or its mobile app. A New Jersey Class has also been defined, for such businesses, entities, or individuals in New Jersey.

ClassPass offers subscribers an app it can use to book classes and other appointments with businesses in its Partner Network. Thus it is a middleman between two different groups—consumers seeking services and businesses that provide the services. The complaint notes that “the number of participants on one side affects the number of participants on the other.”

ClassPass claims to have a lot of businesses on the service side of its ClassPass Partner Network. The size of this group benefits ClassPass in a number of ways: “to (a) attract more customers to purchase ClassPass memberships, (b) entice other businesses to choose to partner with it, and (c) to sell corporate-wellness programs to major corporations that wish to purchase memberships as an employee benefit.”

The plaintiff in this case, Tipsy Nail Club, LLC, which does business as Leeah Nails, discovered it was listed as a partner with ClassPass when, the complaint claims, “a customer attempted to use a service that it had booked through ClassPass…” Leeah gave the customer the nail service she wanted, but when it asked for payment, the complaint alleges, the customer looked confused, “claiming she had already paid for the service because she booked it using ClassPass.”

Leeah had never signed up with ClassPass’s Partner Network, the complaint alleges, and while the booking appeared in Leeah’s online booking system, no prepayment was entered.

The complaint alleges, “Leeah Nails contacted ClassPass customer service multiple times, but they refused to assist on the grounds that Leeah Nails did not have an account with ClassPass.”

Subscribers pay a monthly fee of between $15 and over $200 to ClassPass and receive credits in return. They can use the credits to book services with the partners. ClassPass takes a 5% commission of the services booked through its network.

ClassPass claims to have more than 50,000 partners in its worldwide network.

The counts include Unfair Competition and False Affiliation and False Advertising, among other things.

Article Type: Lawsuit
Topic: Unfair Competition
Tags: Deceptive Advertising, False Affiliation, Unfair Competition