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Fruitstone v. Spartan Race Inc.

United States District Court for the Southern District of Florida

May 28, 2020, Decided; May 29, 2020, Entered on Docket

Case No. 1:20-cv-20836-BLOOM/Louis

Opinion

ORDER

THIS CAUSE is before the Court upon Defendant's Motion to Transfer this Case under 28 U.S.C. § 1404(a) or, in the Alternative, Motion to Dismiss Plaintiff's Amended Complaint, ECF No. [24] ("Motion"). Plaintiff filed a Response, ECF No. [32] ("Response"), to which Defendant filed a Reply, ECF No. [34] ("Reply"). The [*2]  Court has considered the Motion, the Response, the Reply, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied.

I. BACKGROUND

On April 13, 2020, Plaintiff filed the operative First Amended Class Action Complaint, ECF No. [15] ("Complaint"). The Complaint asserts three causes of action: violation of the Massachusetts Consumer Protection Law, Massachusetts General Laws, Chapter 93A (Count I), violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. ("FDUTPA") (Count II), and unjust enrichment (Count III).

According to the Complaint, Defendant is a widely-known obstacle course race organizer that conducts the "Spartan Races," which races have attracted millions of participants worldwide. Id. at ¶¶ 1, 16. Plaintiff alleges that, in addition to collecting funds based on registration racer fees, parking services and bag check fees, Defendant has "extracted millions of additional dollars from consumers, through an unfair and deceptive self-enrichment scheme that violates state consumer protection laws" in Massachusetts and Florida based on a "mandatory 'Racer Insurance Fee.'" Id. at ¶¶ 2, 17. Specifically, [*3]  Defendant "purchased a group insurance policy through CHUBB that covers each racer and costs Spartan Race much less than what they represent ($14) to all racers." Id. The Complaint states that each time a consumer registers for a Spartan Race event, Defendant "charges a mandatory, non-transferable, and non-refundable 'Racer Insurance Fee'" of $14, which operates as a "secret revenue source" because the insurance fee costs Defendant less than $1 per racer per day. Id.1Id. at ¶¶ 2-4. Defendant's website allegedly represents that, in reference to the Racer Insurance Fee, Defendant "purchases accident medical insurance from a licensed third-party insurance carrier[.]" Id. at ¶¶ 4, 19. This fee, moreover, is billed to race registrants as a distinct line-item entry that is separate from Defendant's registration fee and from other fees and taxes collected by Defendant. Id.

Plaintiff alleges that the racer insurance Defendant requires is "basically worthless" because it is "(1) always secondary to any insurance that most of the racers already have, (2) it is non-refundable if the race is canceled, postponed, or delayed by Spartan or the racer, (3) has a large $500 deductible, and (4) is required [*4]  along with a waiver absolving any liability by Spartan for any resulting injury." Id. at ¶ 5. Further, registrants must pay the Racer Insurance Fee again each time they defer or reschedule their race. Id. at ¶¶ 5, 18. According to Plaintiff, Defendant's representations and marketing materials "create in a reasonable consumer the false impression that the $14 'Racer Insurance Fee' is used solely to pay for accident insurance for the benefit of the registrant." Id. at ¶ 6. "In truth, Spartan secures that insurance through a group policy, issued by a third-party insurer, that affords racers secondary insurance coverage at a tiny fraction of the cost Spartan charges them," and Defendant "pockets nearly all of the $14 Race Insurance Fee as a hidden profit center for the company, undisclosed to consumers." Id. See also id. at ¶ 21.

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2020 U.S. Dist. LEXIS 93682 *

AARON FRUITSTONE, on behalf of himself and all others similarly situated, Plaintiff, v. SPARTAN RACE INC., Defendant.

Subsequent History: Stay denied by Fruitstone v. Spartan Race, 2020 U.S. Dist. LEXIS 93990 (S.D. Fla., May 29, 2020)

CORE TERMS

Racer, consumer, enrichment, unjust, convenience, weigh, registration, deceptive, third-party, mandatory, unwilling, unfair, Reply, deference, attendance, non-party, carrier, Additionally, misrepresentation, coverage, website, movant, ease