PIEGARO v. BALLY TOTAL FITNESS HOLDING CORP. et al

Filing 64

MEMORANDUM and ORDER that the motion to enter final judgment of no cause of action in favor of Defendants, L.A. Fitness International, LLC (n/k/a Fitness International, LLC and Fitness International, LLC (n/k/a Fitness & Sports Clubs, LLC) pursuant to Fed. R. Civ. P. 54(b) (ECF 47 ) is denied. Signed by Judge Peter G. Sheridan on 1/15/2014. (mmh)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

GEORGE PIEGARO
on behalf of himself and the putative class,

Civil Action No. 12-4595 (PGS)

Plaintiffs,
MEMORANDUM AND
ORDER

v.
BALLY TOTAL FITNESS HOLDING
CORP., et al.
Defendants.
SHERIDAN, U.S.D.J.

This matter is before the Court on a motion to enter final judgment in favor of
Defendants, L.A. Fitness International, LLC (n/k/a Fitness International, LLC and Fitness
International, LLC (n/k/a Fitness & Sports Clubs, LLC) (hereinafter “L.A. Fitness”) pursuant to
Fed. R. Civ. P. 54(b). For the following reasons, the Court denies the motion.
Generally a Rule 54(b) motion concerns an application by a single party, in a suit where
there are multiple parties, requesting that the Court enter a final judgment in favor of that single
party while the remainder of the suit against all other defendants is ongoing. Historically, Courts
have been reluctant to permit same because it leads to “piecemeal disposal of litigation” that is
"inefficient and uneconomical.” Federal Practice and Procedures, Vol. 12B, pp. 912-916 (2008).
As a result, Rule 54(b) allows the District Court to act as a "dispatcher" and allow such final
judgments so long as three criteria are met. Curtiss-Wright Corp. v. General Elec. Co., 446 U.S.
1, 8 (1980). The three criteria are (1) multiple claims or parties are fully resolved; (2) no just
cause for delay exists; and 3) there must be an entry of judgment. Usually, Rule 54(b) tests the

separability of claims, and “asks whether that claim so overlaps the claims that remain for trial
such that an appeal of the case on the retained claims would compel the court to retrace the same
ground it would have addressed had the first claim received a 54(b) determination; if so, then the
Rule 54(b) determination must be denied.” Federal Practice and Procedure, Vol. 12B, p. 914
(2008).
Here there are the overlapping facts. Most notably, the relationship between Defendants
Bally Total Fitness Holding Corp. (“Bally”) and L.A. Fitness emanates from a bankruptcy
proceeding that occurred in August 2009. At that time, the Bankruptcy Court prohibited
members of Bally from prosecuting any claim involving any member’s right to lifetime
membership. (T. 5, 6-12)1. Subsequently, in November, 2011, L.A. Fitness, relying on the
Bankruptcy Order, acquired a portion of Bally’s facilities, plus some of its members. (T. 5, 1216). This arrangement is enumerated within an Asset Purchase Agreement executed by Bally
and L.A. Fitness. (T. 5, 16-20). Under the Asset Purchase Agreement, real estate, leases and
some assumed contracts (including membership rights) were transferred from Bally (T. 5, 1718).
Although the claims in this case against Bally and L.A. Fitness are arguably different, the
Asset Purchase Agreement and the Order of the Bankruptcy Court are the root of all of the
issues, and the interpretation of them is likely to be the source of any appeal for both defendants.
Therefore, Rule 54(b) certification is inappropriate here due to the overlapping facts and
relationships which would require the Third Circuit to retrace its steps if two separate appeals
occur. Id. at 914-915. To enter a final judgment now in favor of L.A. Fitness is an inefficient
way to proceed.

1

Transcript of Bankruptcy Court 

ORDER
For the reasons set forth above,
IT IS on this 15th of January, 2014;
ORDERED that the motion to enter final judgment of no cause of action in favor of
Defendants, L.A. Fitness International, LLC (n/k/a Fitness International, LLC and Fitness
International, LLC (n/k/a Fitness & Sports Clubs, LLC) pursuant to Fed. R. Civ. P. 54(b) (ECF
47) is denied.

s/Peter G. Sheridan
PETER G. SHERIDAN, U.S.D.J.