Friday, September 03, 2021

Pandemic ski resort closures allow both contract and advertising claims

Goodrich v. Alterra Mountain Co., 2021 WL 2633326, No. 20-cv-01057-RM-SKC (D. Colo. Jun. 25, 2021)

Unlike the education cases so far, this pandemic case sustains both consumer protection and contract claims. “Plaintiffs purchased Ikon ski passes for the 2019-20 ski season but, due to the COVID-19 pandemic, Defendants closed their ski resorts on March 15, 2020.” Defendants declined to refund their money. The passes were allegedly offered as offering “unlimited access” to “ski or ride as many days as you want” with (in some instances) some blackout dates at covered resorts during the 2019/20 ski season.

California UCL, CLRA, FAL: First, defendants argued that under Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020) and its progeny, everything but the CLRA claim for damages should be dismissed because these equitable claims were only available if legal claims failed. Plaintiffs argued that they were allowed to plead in the alternative, but the court found that they had failed to do so. Thus, Sonner “dooms the claim for equitable relief at any stage.”

Did the CLRA damages claim survive? Defendants first argued that passes didn’t not qualify as “goods or services” under the CLRA, but were only temporary licenses, with services provided only ancillary to the license. The court found that plaintiffs plausibly showed that ski passes were encompassed within the definition of “services.” Ski pass holders plausibly purchased more than just a license to be on the slopes, including services such as providing groomed trails and ski lifts and gondolas to reach the trails, which were “at heart of what a ski pass holder purchased.”

Deception: Assuming Rule 9(b) applied, plaintiffs satisfied it. Defendants argued that the alleged promise of “unlimited access” for a “complete season” (the 2019/20 ski season) was not a “ ‘specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact’ ” because they made no representations about the length of the 2019/20 ski season. But “a reasonable consumer would understand this was a promise for a definite period: the period of the 2019/20 year ‘during which snow conditions allow for skiing and when people typically go skiing.’”

Defendants argued that their statement wasn’t deceptive when made because they couldn’t have known about the pandemic or ensuing governmental closure orders. The court was persuaded that plaintiffs were plausibly misled about what would happen if the resorts closed, for whatever reason: defendants kept all their money. Defendants argued that they disclosed the payments were “non-refundable,” but that plausibly didn’t apply to these circumstances.

Was there an actionable omission? Previous cases hold that “to be actionable the omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose,” in particular a safety hazard/physical defect going to central functionality. With services, though, matters were less clear, and the court found that omission claims shouldn’t be dismissed. And the relevant knowledge, for the omission claim, is knowledge that they’d keep the money if they had to close before the end of the “ski season,” that is, the period “during which snow conditions allow for skiing and when people typically go skiing.”

Loss causation: Plaintiffs alleged that they wouldn’t have purchased the ski passes on the terms offered had they known that, if defendants did not provide the promised resort access during the 2019/20 ski season, they would nonetheless retain all pass fees. That was sufficient. Illinois and Wisconsin consumer claims shook out similarly: no equitable relief, but where damages were available, those claims survived.

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