It's hard to conceive of a more unlikely Business Court case than Keister v. National Council of the Young Men's Christian Assocation of the United States of America, a purported class action by YMCA members. The Opinion, 2013 NCBC 36, was issued late last week.
Keister and his family joined the YMCA in Asheville, North Carolina. They said they did so based on advertisements that the YMCA provides a "healthy and safe environment" for families.
The environment turned out to be anything but healthy and safe, according to Mr. Keister. The allegations in the Complaint were so graphic that Judge Jolly struck it in April 2012 and ordered it sealed. He said it contained "unnecessary, extremely offensive, outrageous and explicit allegations."
The toned down Amended Complaint alleged that Mr. Keister observed homosexual behavior in the men's locker room showers, and that he was twice thereafter sexually assaulted on the Y's premises by fellow members of the Asheville YMCA. He complained to the management and was told that the issue would be addressed.
The lead claim against the YMCA was that it engaged in an unfair and deceptive practice, in violation of G.S. § 75-1.1, by marketing its facilities as safe and healthy despite its knowledge of illicit sexual activities occurring at its facilities. Plaintiffs said that the Y had been aware of such conduct for decades.
In law school, we would have called statements like "safe and healthy" mere "puff," and Judge Jolly indeed said that "such phrases defy precise definition and are not capable of objective verification." Op. ¶27. He ruled that the advertising by the Y was "neither false nor misleading on its face." Op. ¶28.
He also dismissed a pretty weak claim for breach of fiduciary duty. Plaintiffs said that "they placed a special confidence" in the YMCA to provide a safe and healthy environment and that the Y therefore owed them a fiduciary duty. Judge Jolly said that Plaintiffs had "allege[d] nothing more than a traditional business-consumer relationship" (Op. ¶33) and that there was no fiduciary relationship.
