Facts

The Massage Envy franchise network is a nationwide provider of therapeutic massages and skin care in the United States, and has approximately 1,100 independently owned and operated franchise locations, as of 2022. Baerbel McKinney-Drobnis, Joseph B. Piccola, and Camille Berlese brought a class action against Massage Envy Franchising LLC, the Massage Envy franchisor in 2016. The class included Massage Envy members whose monthly membership fees increased, during the class period.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that the Massage Envy members signed membership agreements that prohibited increases in their monthly membership fees and that plaintiffs were harmed when the monthly membership fees were nonetheless increased. The lawsuit asserted claims for breach of contract and covenant of good faith and fair dealing; intentional interference with contractual relations; violation of the California Consumer Legal Remedies Act; Violation of the California Business and Professions Code; and declaratory relief.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions. Defendant asserted that it was the franchisor and did not own or operate any of the Massage Envy Spas that plaintiffs visited.

Settlement Discussions

Following two mediations before David Rotman, Esq., the parties were able to reach a settlement which the district court granted final approval on March 2, 2020. A class member appealed and the Ninth Circuit vacated the district court's final approval order after finding the vouchers provided under the settlement were coupons under the Class Action Fairness Act, and the district court did not apply heightened scrutiny required for pre-certification class settlements. The parties participated in a third mediation with Mr. Rotman and agreed to an amended settlement, which the district court granted final approval on May 24, 2022.

Result

Massage Envy Franchising LLC agreed to provide class members who submitted claims vouchers with an aggregate value of $11,000,000.