As the Denver-based federal appeals court considers reinitiating a lawsuit against Vail Resorts from passholders seeking refunds for the 2019-20 ski season, the company’s attorney defended its actions to shut down operations on the eve of the deadly COVID-19 pandemic.
“People were going to die. So we closed,” Michael J. Hofmann told the United States Court of Appeals for the 10th Circuit on Friday. “We are here today because we did it, but we saved lives.”
Last year, a federal judge dismissed a class action lawsuit against The Vail Corporation and Broomfield-headquartered Vail Resorts, Inc., in which passholders alleged the company breached its contract with them by closing early due to the pandemic and not providing refunds. The plaintiffs then appealed to the 10th Circuit.
During oral arguments before a three-judge panel, some court members asked Hoffman why the company could keep customers’ money if they didn’t get what they paid for: access to leads. during the scheduled ski season.
“No one is saying your business is a bad business to shut down. That’s beside the point. The point is, why didn’t you give them their money back?” asked Chief Justice Jerome A. Holmes.
“What they’re saying is when you make the decision to close it has nothing to do with the ski conditions and you have a lot of snow,” Judge Carolyn B. McHugh added, “that It’s not the end of the season. It’s closing for a different reason and you should compensate these people for their lost hope of being able to ski while the conditions allow.”
At the same time, the panel struggled to understand the nature of the pass claimants’ claims against Vail. At one point, attorney Nyran Rose Rasche said her clients “don’t blame Vail” for the shutdown, while also alleging the shutdown amounted to a breach of contract.
“How can (Vail) violate when you say closure is appropriate?” asked Judge Allison H. Eid.
On March 14, 2020, Vail suspended North American operations shortly after the Trump administration declared the novel coronavirus a national emergency. The governor of Colorado also ordered ski areas closed the same day after seeing data linking COVID-19 infections to ski resorts. The order would eventually run until May 22.
Customers who purchased passes to ski at Vail resorts soon began filing lawsuits against the company, which were later consolidated into a single class action complaint. The named plaintiffs, including some Colorado residents, paid between $411 and $1,780 for ski passes. They had purchased different types of “Epic Passes” that allowed full or time-limited access to Vail’s trails.
Although the purchase agreement stated that Epic Passes were “not eligible for refunds of any kind”, the plaintiffs claimed they were relying on Vail’s historical practice of allowing skiing and snowboarding until snow conditions are no longer viable. The curtailment of the season due to a pandemic, they argued, did not deliver on Vail’s promise to give Epic Pass holders access for the entire 2019-20 season.
As a result, the plaintiffs brought a series of charges against Vail, each with a slightly different legal premise. For example, they alleged that Vail breached its contract by closing its resorts before the end of the ski season and withholding money from pass holders. Alternatively, they sued under various state consumer protection laws, claiming Vail’s actions were misleading and “unethical.”
In October of last year, Senior United States District Court Judge R. Brooke Jackson ruled that the plaintiffs had not brought a legal claim against Vail. No one thought passholders should have literally unlimited access to Vail property, Jackson explained, but rather a guarantee that they could use their passes without blackout dates or admission caps. Basically, he concluded that Vail was not obligated to grant access when conditions were unsafe.
“Whether the safety threat is from a deadly virus rather than thinning snow doesn’t matter – the skiing was too dangerous, so Vail closed its resorts,” Jackson wrote. “The plaintiffs nowhere allege that pass holders could safely ski and snowboard after March 15, 2020.”
The judge also observed that Vail had tried to remedy pass holders’ wasted skiing time by issuing credits that customers could use when purchasing future passes, which totaled more than $100 million. of dollars. The plaintiffs, he found, had no reasonable expectation of cash refunds.
The plaintiffs appealed to the 10th Circuit, mainly arguing that the pass holders understood the terms of the purchase contract to mean that there would be no refund if the customer changed their mind and could not ski – not if Vail unilaterally shut down operations early.
They cited court rulings in similar cases in which judges sided with pass holders. Months before Jackson’s decision, U.S. District Court Judge Raymond P. Moore declined to dismiss breach of contract claims against Alterra Mountain Company, finding that language in the contract to purchase Alterra suggested holders pass holders would only be ineligible for refunds if they were the ones attempting to cancel. The plaintiffs in that case have since reached a settlement with Alterra, in which the company will provide credit for future purchases — as Vail did — but no cash refunds.
The plaintiffs also pointed to a favorable ruling in April this year from a federal judge in Ohio, which allowed passholders to sue an amusement park operator for changing its 2020 schedule due to COVID-19. But unlike Vail, which involved a pandemic-induced shutdown at the end of a season, Ohio’s case involved a summer theme park season that the pandemic initially affected.
On appeal, Vail criticized the plaintiffs as unreasonable for challenging the ending of the ski season when conditions were unsafe to continue operations.
“No law or principle of morality requires that the economic consequences of COVID-19 cannot affect these plaintiffs in the least,” Hoffman wrote to the 10th Circuit.
During oral argument, Holmes questioned why security was necessarily tied to Vail’s promise to provide access for the ski season.
“If the wind is too strong, we will close an elevator. According to the plaintiff, we owe them damages for this,” Hoffman replied. “Security is inseparable from when we can provide access.”
Holmes countered with a hypothetical example of an Epic pass holder planning a vacation sometime after March 15, 2020, when he would normally expect the slopes to be open.
In this scenario, “they didn’t get what they paid for,” observed Holmes.
“We were open for five months,” Hoffman replied, calling it a “personal choice” to wait until the end of the ski season to use a pass.
McHugh and Eid, on the other hand, questioned whether the purchase agreement’s non-reimbursement clause could end the lawsuit.
“How can you win and get a refund when the contract says there’s no refund?” McHugh asked Rasche, the plaintiffs’ attorney.
“Plaintiffs explicitly allege that their understanding -” Rasche began.
“Their understanding is one thing, but their understanding has to be reasonable in plain language,” McHugh interrupted.
If the plaintiffs prevail, their lawsuit seeks monetary damages or that Vail return the amount pass holders paid them for the 2019-20 season.
The deal is McAuliffe et al. vs. Vail company.