Barclay v. iFIT Health & Fitness

CASE: Barclay v. iFIT Health & Fitness, Inc. f/k/a Icon Health & Fitness, Inc., and NordicTrack, Inc., No. 19-cv-2970 (ECT/DJF), United States District Court, District of Minnesota. JUDGE: Eric C. Tostrud, United States District Judge. DATE: October 27, 2025.

BACKGROUND: Plaintiffs Teeda Barclay, Jay Ovsak, and Nicole Nordick filed this putative class action in November 2019 alleging that NordicTrack treadmills could not achieve or sustain the continuous horsepower (CHP) levels — ranging from 2.6 to 4.25 CHP depending on model — that defendants advertised on packaging, websites, and point-of-sale materials. Plaintiffs alleged the treadmills could not reach those levels when drawing power from standard 120-volt, 15-amp residential outlets, and that they paid a price premium they would not have paid had they known the truth. The operative Fourth Amended Complaint asserted a breach of express warranty claim on behalf of a nationwide class, plus nine other claims (including Minnesota consumer-protection statutes and fraud) on behalf of a Minnesota subclass. The Magnuson-Moss Warranty Act (a federal warranty statute) claims were dismissed earlier in the case.

The case featured extensive procedural history: motions to dismiss (partially granted), motions to compel arbitration (granted as to Barclay and Nordick, but arbitrators ruled their claims fell outside the arbitration agreement's scope), multiple amended complaints, extensive discovery from July 2022 onward, two mediation attempts before retired U.S. Magistrate Judge Morton Denlow (a private mediator), a class certification motion filed in December 2023, and a summary judgment motion filed by defendants. The parties reached a settlement in principle in May 2024 before those motions were fully briefed, executed a written settlement agreement in July 2024, and obtained preliminary approval on September 17, 2024.

SETTLEMENT CLASS: All persons in the United States and its territories who purchased as original purchasers a NordicTrack or ProForm treadmill from November 22, 2015 through January 15, 2020, primarily for personal, family, or household use, and not for resale. Standard exclusions applied (defendants, their officers/directors/lawyers, class counsel and their firms, and judicial officers assigned to the case). Estimated class size: 1,549,791 members.

SETTLEMENT TERMS: Claiming class members could choose: (a) a treadmill maintenance kit (retail $30) or treadmill mat (retail $69); or (b) as an alternative, one of four iFIT subscription options (three months free at $39/month tier for new subscribers; two months free for current subscribers; four months of a lower 'Train' tier at $15/month for current subscribers with non-tablet treadmills; or five months of the Train tier for new subscribers with non-tablet treadmills). Defendants also agreed to add prominent CHP disclaimers to their website, marketing, manuals, and product packaging, and to request retailers do the same. Defendants admitted no wrongdoing. Class members release all claims that have been or could have been asserted in the lawsuit. Approximately 38,000 (about 2.49%) of class members filed claims; 42 opted out; 3 filed objections.

NOTICE: Email notice sent March 12–14, 2025; mail notice followed for those with invalid email addresses; Facebook advertisements published April 2025; reminder emails sent May 13, 2025.

CLASS CERTIFICATION ANALYSIS (Federal Rule of Civil Procedure 23):

(1) Numerosity (Rule 23(a)(1)): Easily satisfied — approximately 1.54 million members.

(2) Commonality (Rule 23(a)(2)): Satisfied — common questions include whether defendants made false or misleading CHP representations, whether those representations were material, and whether class members paid a price premium as a result.

(3) Typicality (Rule 23(a)(3)): Satisfied — all three class representatives purchased NordicTrack treadmills for home use and allege they did not receive the advertised CHP, just like other class members.

(4) Adequacy (Rule 23(a)(4)): Satisfied — all three representatives have actively participated since joining the case (including depositions, twice for Ovsak); class counsel at Chestnut Cambronne PA, Hellmuth & Johnson PLLC, and Markovits, Stock & DeMarco LLC are experienced class action litigators with specific experience in treadmill horsepower misrepresentation cases.

(5) Predominance and Superiority (Rule 23(b)(3)): The court engaged in an extended choice-of-law analysis. Applying Minnesota's three-step choice-of-law framework, the court found that the laws of the fifty states on express warranty differ in material ways (e.g., California requires reliance on the warranty; some states require causation to prove breach; some require notice and opportunity to cure; states differ on whether reliance and 'basis of the bargain' are different standards). Because the 1.54 million class members were spread throughout the country and made purchases through national retailers (including online and brick-and-mortar stores like Dick's and Sears), no single state — including Minnesota or Utah, where defendants are headquartered — had sufficient constitutional contacts to apply its law nationwide. Therefore, each class member's home state law would apply to their claims.

However, the court held that these state-law variations do not defeat predominance in the settlement class context, citing the Third Circuit's en banc decision in Sullivan v. DB Investments, Inc., 667 F.3d 273 (3d Cir. 2011), the Seventh Circuit's decision in In re Mexico Money Transfer Litigation, 267 F.3d 743 (7th Cir. 2001), the Ninth Circuit's en banc decision in In re Hyundai & Kia Fuel Economy Litigation, 926 F.3d 539 (9th Cir. 2019), and Eighth Circuit authority in Rawa v. Monsanto Co., 934 F.3d 862 (8th Cir. 2019) and Keil v. Lopez, 862 F.3d 685 (8th Cir. 2017) (holding that '[a] nationwide settlement need not account for differences in state laws'). The manageability concerns driving the state-law variation problem do not arise in the settlement context. The class was not found overbroad because all members suffered a price-premium injury. Common questions about defendants' conduct — whether they misrepresented CHP and whether class members overpaid — predominate. Superiority was easily satisfied because individual claims are worth only $16–$160 at most, making individual litigation impractical.

FAIRNESS ANALYSIS (Rule 23(e)(2) and Eighth Circuit factors):

(A) Merits vs. settlement terms: Favored approval. Certification of a litigated class was uncertain. Even if certified, plaintiffs faced hurdles on summary judgment, Daubert motions challenging their price-premium damages expert (damages estimated at only 2–8% of purchase price), and jury persuasion. The case was a 'negative value' suit viable only as a class action, so denial of certification would likely have ended it. Defendants' financial weakness further reduced litigation value.

(B) Non-monetary award analysis: The court rejected the three objectors' argument that the awards were worthless. The court found that maintenance kits and mats are useful to treadmill owners generally (not brand-specific), and that the iFIT subscription memberships offer fitness content including yoga and other programs not requiring treadmill equipment, making them likely valuable to former treadmill purchasers who remain fitness-interested. The court also found the awards are not 'coupons' under the Class Action Fairness Act (28 U.S.C. § 1712), applying Second and Ninth Circuit factors: class members need not pay money to claim benefits, the awards are not credits providing discounts, and subscriptions do not auto-renew. Therefore, Section 1712's coupon-settlement fee restrictions did not apply.

(C) Defendants' financial condition: Record evidence showed defendants (iFIT) are in a weak financial condition, such that even a $10/person cash settlement would have created over $15 million in payment obligations the company could not sustain. This factor favored settlement.

(D) Complexity and expense of further litigation: Favored settlement. Continued litigation would require renewed class certification briefing (over 1,000 pages previously), Daubert proceedings on price-premium damages, and trial.

(E) Opposition: Minimal. Only 3 objections (0.0002% of class) and 42 opt-outs from approximately 1.54 million members. The court addressed and rejected each objection on the merits.

ATTORNEYS' FEES AND COSTS: The court applied the lodestar method (hours worked multiplied by reasonable hourly rates) rather than the percentage-of-fund method because there is no common monetary fund. Combined lodestar across three firms totaled approximately $3,800,509.50 (Chestnut Cambronne: $1,129,525.50 for 1,286.1 hours at $450–$1,050/hour for attorneys and $200–$325 for law clerks and paralegals; Markovits, Stock & DeMarco: $1,559,064.00 for 2,037 hours at $350–$995/hour for attorneys and $190–$250 for paralegals; Hellmuth & Johnson: $1,111,920.00 for 1,274.3 hours at $650–$875/hour). The requested fee of $1,946,733.97 represents a negative lodestar multiplier of 0.51 — meaning counsel sought less than half their calculated billable value — which the court found strongly supports reasonableness. The case lasted over 70 months and involved approximately 4.7 times the hours expended in the comparable Walker case and 2.7 times those in Bechtel. Documented litigation costs of $453,266.03 were also approved.

SERVICE AWARDS: $7,500 each to Barclay, Ovsak, and Nordick, found reasonable given their active participation throughout nearly six years of litigation including multiple depositions.

DISPOSITION: (1) Motion for Final Approval of Class Action Settlement — GRANTED; (2) Final certification of Settlement Class — GRANTED; (3) Motion for Attorneys' Fees, Expenses, and Service Awards — GRANTED; (4) Class counsel awarded $1,946,733.97 in fees; (5) Class counsel awarded $453,266.03 in costs; (6) Each class representative awarded $7,500 service award; (7) Notice plan finally approved; (8) Case DISMISSED WITH PREJUDICE; (9) Court retains jurisdiction over interpretation and implementation of the settlement agreement.