judge kate is honoring us with his presence by video so be sure to speak up so that the video transmission can be heard thank you your honor all do that and in judge keith if you have trouble hearing me please let me know and i'll get even louder good morning your honor is may please the court i'm aaron van wert representing lifetime fitness here i reserve four minutes rebuttal this is a class action brought under the consumer sales protection act to enforce the provisions of the prepaid employment contracts act which i'm going to call pick up the remedy being sought here is the rescission of more than forty thousand fitness contracts after they're already performed it which would result in iraq fund of up to one hundred twenty million dollars in do the remedy being sought the reason for this remedy is that although lifetime fitness at all times gave its members a fourteen day free look period at the beginning it did not give them a duplicate tear off notice of a three day look period and the argument is that because it didn't do that therefore all of these results fall on appeal we have two arguments two reasons why we think that's not the right result the first reason correct you're right your honor that the the way the district court found article three standing which is one of the two is to say that because the remedy of the refund had not been provided that created a harm our view is that under may see and spoke you and all the other precedents that the harm creating article three standing has to come from the initial violation and that you can't piggyback the lack of a remedy to create the harm otherwise there'd be no effective limits at all and standing up to just to go back you know in terms of the two issues one of the issues that we have is the ohio state substantive law issue and that is that under the consumer sales protection act only actual damages can be sought in a class action that's the holding of the ohio supreme court and thirty years of ohio precedent hold that a rescission and refund is not actual damages with zero exceptions and so our view is that the rescission can't be awarded a class action on that that's a substantive law protection act and and let me just walk through this on this because i don't think very many parts of that are in dispute first of all the ohio supreme court and felix just a few years ago in two thousand and fifteen held that the consumer sales protection act limits the damages available in class actions to actual damages that's a hold in the auto supreme court and then this court followed up and grbac a couple years later and says that th p does not entitle a class to recover not economic damages than titles and recover actual damages that's so binding the ohio law says in a class action of the consumer sales protection act all you can get is actual damages and then in our briefs we cited literally nine cases over thirty years starting in one thousand nine hundred nine and coming all the way are at now that says rescission is not actual damages in fact it's mutually exclusive with actual damages because  of have addressed this directly in distinguishing between actual damages and not actual damages and they've held that you know for example the two hundred dollars statutory penalty is not actual damages they've held that and  understand the plaintiffs here to concede that the double refund is not actual damages and all of that the real thing fight their own point of contention as i understand it is whether the refund is actual damages on that in so you categorize the refund of past with the additional charge or one hundred twenty six dollars beyond the time period that there was a request for cancellation no that's right  and let me just point you directly at its record item seventy nine that's where his deposition transcript shows up in the page id's on this the specific ones are seventeen fifty four and seventeen seventy six and what he agreed is he said you know i agreed to this contract i agreed that i would have to give thirty days notice to cancel down the road not right away i mean fourteen days was a free look but done he agreed and so in on those pages he was ask you agree that these charges were appropriate on the contract he said yes his claim was that he got to undo the contract and so the weather was the dues that he paid for the first three and a half years while he was enjoying it or the dues that he paid the last month when he would or rather canceled right away he agrees that all of that was appropriate under the contract and he agreed to it in the in a way that begs the question because then the question is is this governed by contract law or are we in piqua and the consumer protection act and do those are those room and these distinct yeah you're right your honor and here's what the case is saying like i said i the plaintiffs have cited literally zero cases in ohio zero holding that a recession in a refund is actual damages and you can ask him this morning if they found another case i don't think they have and we cited nine we could have cited a dozen we could have cited twenty saying that  not and you know i can just let me just go to this the first case the earliest one we cite is the middle america case from one thousand nine hundred nine and what this says is the actual damages referred to in section thirteen forty five zero nine b that's the provisions that were under here represent the legislature's codification of the common law election between rescission on the one hand and retention of the contract will be recovering damages on the distinction are you walk through the because it seemed to me that that broglie addressed the issue to show that it's actual damages and was distinguishable from some of the other whitaker there were several sided that are distinct from this or at least europe posing council argues are distinct because they because the statutory provisions under which they're operating did not have the provisions contexts outside of people and we agree that the principle holds there too it actually goes back to the eighteen hundreds in the common law that's where it came from but piqua codified it that's what the ohio cases say and so we've cited that all of these other cases did apply this distinction in statutes that do provide for cancellation rescission so for instance the most recent one from two thousand and sixteen is smith versus sac that was the home sales  home solicitation sales act which also has a right to cancel and then is in force through the consumer sales protection act just like pete they're identical they both have the same cancellation language but do they have  provision you're right that this a doesn't have a separate damages regime but we aren't arguing about the separate damages provision here because the plaintiffs in this case are not trying to seek double damages in in the class action what they're trying to seek is the refund and you can counsel can clarify that if it turns out that that's wrong but what we're talking about is the refund and the question is after you've gotten all way to the end of a contract and spend performed and now you cancel it to sue it and in that contest the question is there any injury at all here that the testimony from mr barr tell is that he would have done anything different had he gotten the duplicate three day notice instead of the fourteen day notice which stands to reason he chose to use the club for three and a half years what maisie holds in this court holds is that a legislature can turn something that is intangible into tangible that finds that there's a concrete interest behind it and that the violation threatened that concrete in trust and so that you know the concrete interest is not getting deceived in not getting locked in making sure you have the free look period mr barr tell admitted that there was no risk to that interest here he testified and again this is his deposition its record seventy nine in this place is seventeen fourteen in the record he agreed there were no high pressure sales tactics in fact he toured it with his wife and grandson and he loved it and he agreed in the district court found in this is page thirty four forty five the district court found that he suffered no injury at all from not getting the three day as opposed to the fourteen day because it came to life in his where the alleged injury arises because didn't he testified that he called to cancel and they said no you have to come in and he said he would have cancelled earlier if he had not had to physically show up at the location in order to cancel if he had had the notice as the act provided he could have done it in writing you're correct your honor it's right that he claims that his injury is the cancellation that occurred three and a half years in now he could doesn't create a right to cancel three and a half years in it creates a right to cancel and three days and then it requires notice of that and if you don't give the notice that as a remedy for that procedural notice provision it extends it so it true that way down the road he argues that you know what i would really like to cancel e mediately and get all my money back three and a half years later he doesn't argue that that made any difference to what he did signing up so for example if you've gotten a duplicate notice he doesn't say i would have signed up in the first place and the reason i'm distinguishing between that your honor is that if failing to get a remedy that a statute provides is enough to create standing then there really are no limits at all because you that's that's exactly the right question the question here then is translated to that is is not getting a duplicate three day notice did that create any material risk of harm to him when in fact he considerably got fourteen day notice and didn't want to use it ok thank you thank you your hon morning may please the court person counsel i want to begin my comments by picking up on judge donald's question related to the statutory provision that specifically addresses damages and then i'll come back around and talk about the stand in question thirteen forty five point forty eight b is the statute the judge donald reference it is a specific provision contained in piqua that instructs courts how to calculate damages for a violation of pekoe that provision appears in no other statute within the ohio consumer sales practices act and that makes this case different from all the home solicitation sales that contract cases and all the other cases cited by lifetime and its papers now let's talk about actual damages the ohio supreme court has defined determine what losses are recoverable as a matter of right point forty eight b is titled the title of that section is deceptive acts or practices damages specifically addressing damages and it says if a seller of a pre paid entertainment contract fails to comply with division d for which we all know a lifetime failed to comply with that fact is undisputed then the buyer may recover the amount of money due to him under that section and we all know that under that section plaintiff cartel was entitle to recover all monies paid under the contract minus ten dollars now here in oral argument and in their papers lifetime never addresses  statute they completely ignore it what they do is they try to draw analogies to the home solicitation sales act and they try to call this remedy a rescission this is not a rescission res equitable remedy this is a remedy available by law the ohio legislature specifically drafted it into the statute having addressed the damages question the judge donald posed and i want to turn back and talk about the issues of standing the merits of the first issue on appeal standing exists in this case for two reasons neither reason is our primary reason as alleged by life time in their papers but both reasons standing on their own independently justify article three standing first as determined by the district court plaintiff martel suffered an actual monetary injury when lifetime refused to accept his cancellation notice when they charged him the additional one hundred twenty six dollars over his protest and when they never refunded the money is due paid under the contract second even ignoring that actual monetary injury lifetimes procedural violation alone confer standing under this court's recent decision and macy's so let's talking a little bit more detail about the actual monetary injury because again that was the justification relied upon by the district court in finding actual monetary harm the district court did nothing but simply applied the plain language of the statute there is no ambiguity to be interpreted there is no unclear provision of the statute the district court started by looking at point forty four c which specifically says the free look period as it's referred to by lifetime fitness it says that period within which the buyer ma cancel the contract begins to run from the time the seller complies with peak periods undisputed it's undisputed lifetime never complied with peak of that period never began to run so we turn to section forty four d four to find out what the substantive conduct of what people requires for the substantive conduct of the parties section forty four de force no sell or shelf fail or refuse to honor any valid notice of cancellation by a buyer and within ten days after that notice of cancellation refund all monies paid under the contract we all know lifetime did not do that either they substantive violated the requirements of the statute now to avoid this inevitable conclusion lifetime has proposed a remedy theory in their papers and it was mentioned here during oral argument this  theory is not supported by the law as i've just quoted for you and its strange logic this faulty reasoning is exposed by looking at a simple example had life time i pathetically speaking had lifetime accepted plaintiff's bar tells a notice of cancellation when it was submitted on december seventh had it immediately accepted that cancellation had it not charged him the additional one hundred twenty six dollars and had it refunded the dues paid under the contract minus ten dollars there would be no substantive violation of point forty four d four because there would be no substantive violation of forty four d four you can't have a remedy you simply can't have a remedy without having first an injury a substantive violation the absurdity of lifetimes argument can also be demonstrated by looking at it from the other direction as i've already talked about point forty eight b deals with the damages for the violation of point forty four d for if lifetimes argument were to be correct and that forty four d for provides the remedy then point forty eight b would just be surplusage it would be an extra remedy general contract law and you're saying we don't need to go to general contract law because we've got that out in the fact that really addresses this and we don't we don't get there that's exactly the point there is the ohio legislature set forth a strict regulatory regime to govern health spa or health club contracts they were specifically concerned with abusive practices of health clubs they drafted piqua and it's requirements are very strict they're very clear but the ohio school legislature also made it very easy they put the required language right in the statute all lifetime or any other health club past due to comply is simply copy what's in the statute so to your question we never get to contract law because we have a specific statutory provision that's been violated the ohio legislature specifically said that any violation of piqua is i'm sorry that any waiver of peak is void as against public policy this was a law that they wanted enforced they specifically drafted a statute to enforce that and they told courts that if they health club tries to get its members to waive the requirements of piqua it's void void as a matter of public policy so is there a distinction between the cancellation provisions that would be a refund of all of the services all of the payments for services over the years and the additional one hundred twenty six dollars that was required post cancellation there is not a difference in the terms of the statute in the sense that the statute clearly indicates that both of those losses are recoverable as a matter of right for a violation of pekoe now their argument appears to be it works on unfairness to require a payment all the way back to the beginning for services rendered and then that leaves one hundred twenty six dollar question al there and your response to the ideas yes and then i guess the second part of the of that question would be i think one hundred twenty six dollars is is a clear obvious injury because they cancelled and that was money charged after the cancellation so getting to the fairness question that i think your second question alluded to it is entirely fair it is exactly what the legislature intended lifetime and let's take a step back and look at what lifetime was doing with the additional charges after cancellation what they were doing is they were forcing members to be a member of their gym for an additional fifty five days when they didn't want to be that serious that you know there's argument i wondered what would this what was the state of the record regarding that timeframe that was a couple of things on the record on that regard in the sense that when members went in to cancel like you said earlier during our oral argument plaintiff cartel wanted to do it by phone he was told he had to come in when he came in to cancel he was specifically told you have to sign this electronic screen that has provisions on it that by those it's called determination agreement that lifetime used and within the termination agreement lifetime would get members to concede that they're agreeing to the additional fifty five days in charges when in fact you know they were not but plaintiff martel was told this is the only way you can cancel you have to sign this document so he did and then also according to that that the additional days was clarified for me was that the initial contract set forth during the course of the class period there were three different cancellation time frames used by life time but they all operated generally the same in the sense that you had to give a certain amount notice and then if you cancel your contract would continue on for a certain period of that to happen to come in and want that pressure what with the injury well according to the district court underlying holding which is now on appeal the district court found there was no concrete injury prior to him coming in to cancel and being you know them not honoring the cancellation in the lower court our position was that there were still a concrete injury because pico provide specific provisions there's a number of them members are supposed to orally informed about their rights to cancel which it's undisputed was not done in this case again they're supposed to be provided the duplicate tear off notices of cancellation which they were not provided here so there were a number of substantive violations of pi that we argued in the district court constituted concrete injuries and therefore in our initial motion for class or vacation and in our national complaint we had we had two classes we had a class of people that had already cancelled and had suffered that injury at the time of cancellation we also had a class of people that were current members and were denied the substantive rights that pekoe provides even though they were still members of the joe the lower court again did not agree with our arguments on that point and  appeal we only have the class of individuals that have canceled i only have a few minutes remaining so i want to close with a couple of thoughts related to both the standing issue and damages lifetime's primary argument really and it was touched on by justice question is one of us and again as i've already mentioned lifetime operated numerous gyms in ohio tens of thousands of members never once consulted the ohio law that governs their business they either they did one of two things the other consulted it and ignored it or they didn't look into it at all and this court should not have sympathy for a corporation that operates in such a manner the a district court sitting in diversity said how his damages should be calculated like to quote your colleague chief judge cole in the recent decision of premium freight management vs pm engineers solutions in that case he opened his opinion by saying federal courts sitting in diversity may question the wisdom of state laws but they're powerless to change them here in this case we have no imbue would be in the statute there is nothing for this court to interpret it must simply apply the laws of ohio to the undisputed facts of this case and when the court does that it will result in an affirmative the lower court's decision thank you your honors we agree one hundred percent you know how law controls here and here is the ohio law that matters you know how supreme court said that in a kayak class action brought under this statute the only remedy of ailill is actual damages thirty years of ohio cases hold that rescission and refund is not actual damages the broglie case that they cite is an individual case it's not a class action it did not address the to the consumer after a rescission or cancellation does not constitute damage under chapter thirteen forty five language that  yes it's section thirteen forty five point forty eight the statute says two things it says violating this is a violation of the consumer sales protection acts you get those remedies and you can get double the amount as damages the double damages plaintiffs can see it at page thirty two of their brief they cannot recover in a class action what they're trying to recover is the refund and to repeat for a binding ohio law is that a refund after a rescission is not damages under chapter thirteen forty five you can get it you can seek it in an individual case and just to be clear if mr bar tel or anyone else in an individual case wants to try to get a complete refund even though they got everything they were promised after that or partial refund for that stop period they are free to do that in an individual case they cannot do it in a class action because as the supreme court found in felix the legislature made apologies see a decision not to have huge punitive awards and class actions that are not tied to actual harm if you're going to sue in a class action the only thing you can get is an actual damages for actual harm they argue that this rule that rescission and damages are mutually exclusive and are not the same does not apply to peka that's wrong the first case that we cited is the middle america case from one nine hundred eighty nine it applies a peek a claim brought under the consumer sales protection act exactly the same structure as here and it sets out the same reason for the holding that rescission and damages are mutually exclusive you have to choose one of the other you have to elect one of the other bar tell mr barr tell here is you elected to try to get the big thing in the recession he can do that in an individual case under ohio law but just like he said actions it is true that you cannot get tribute trouble statutory damages and there were double yeah isn't that the distinction that that would occur draws as opposed to the distinction that you are seeking to draw in would occur the issue was trouble overseas double that was issue there but in these nine other cases that we've cited it was precisely the actual the damages versus rescission question and the reason i say this if you go straight to the statute i fourteen forty thirteen forty five zero nine b and it says the consumer may rescind the transaction or recover damages that is a more for even a more fundamental difference than the difference between actual and double the holding of the supreme court in felix's that the only thing you can get in a class action is actual damages this court said the same thing and grbac and the law says recent but the law is that those cases were addressing aren't by distinct from the particular provision here i understand your argument and your concern with the question is is that directed to court's determination such that the court must look every time to the particular situation and then can overcome the intent of the legislature or is this a legislative question your opposing counsel would argue that this is the way the statute was formulated and that there was a reason to do that and one of the reasons that we might see here  signs a scoring he takes nothing back with him he stayed on but perhaps the next person who walks in the door to whom that happens doesn't realize there is an ability to automatically rescind and that's what the ohio legislature was concerned about you see where my question's going the i mean this is not just about this case this is about what the ohio legislature did and why they intended it perhaps to be a harsh reality in order to assure protection of ohio concerning years yeah i understand where your honor is going and i understand how that relates to the question of whether have standing to be hearable what i've been addressing is the different question also reflecting a policy judgment of what you can get in a class action versus what you can get in an individual individual action and you're to address your honor's question very directly piqua the provisions here are part of the consumer sales protection act they were all part of chapter thirteen forty five there are enforced through the provisions that i've been quoting thirteen forty five zero nine and there isn't you know in so the limitation the difference between class and individual is something that absolutely applies here i said ohio law has applied it in the middle america case in a peek a case that we've cited here and they they've conceded all along that this is brought under the consumer sales protection act and it's limited there so i think your honour's go through and read thirty years worth of cases you're going to find that recession in a refund is not actual damages especially when the contract has been performed case after case after case after case says that indistinguishable from this yes yeah under hitler you look up and thank you your honor for your arguments the case will be taken under advisement and we appreciate your arguments and your briefing and you will have a decision in the concourse thank you so much i mean my call