August 11, 2015

Extreme Sports Challenge the Courts

Product Liability Law & Strategy, August 2015

Extreme sports are increasingly popular in the U.S., and participation is growing. "Extreme" means different things to different people. But participation is not only up in sports such as mountain biking and snowboarding, more people also are bungee jumping, hang gliding, wind surfing and rock climbing. As more Americans become involved in hazardous recreation, the number of personal injuries is also rising, especially among minors. With injuries comes litigation, of course, and the popularity of extreme sports raises challenging questions of liability.

Risky Business

A study presented at the 2014 Annual Meeting of the American Academy of Orthopedic Surgeons analyzed data reported to the National Electronic Injury Surveillance System (NEISS) to quantify injuries associated with extreme sports. The results were staggering, though not particularly unexpected. From 2000 to 2011, over four million injuries were reported for participants in all seven sports selected for study: surfing, mountain biking, motocross, skateboarding, snowboarding, snowmobiling, and snow skiing. Of these, 11.3% were head and neck injuries, with concussions the most common risk among participants of all types of extreme sports.

Virtually all participants in extreme sports voluntarily embrace the risks and thrills of going faster, higher and farther, but many enthusiasts also must pay for the privilege. Government agencies and private companies often charge admission to parks, slopes, and tracks, and one of the common conditions of admission is the requirement that participants sign releases waiving their right to sue for injuries, including those caused by the provider's negligence. Although these liability waivers can be enforceable in some states under certain circumstances, outcomes are highly fact-driven and often unpredictable.

Waiving Liability for Extreme Sports

As a general rule, exculpatory clauses are valid and enforceable under common law principles unless they violate public policy or the damage was the result of willful or wanton conduct on the part of the defendant. Some states have created statutory exceptions to this general principle. See, e.g., La. Civ. Code. Ann. art. 2004; N.Y. Gen. Oblig. Law 5-326; see also Alaska Stat. 05.45.120 (excepting "special events" from prohibition against use of exculpatory agreements by ski area operators). However, agreements to limit liability for injury are strongly disfavored by courts. Therefore, a pre-injury release will only be enforced if, in clear and conspicuous language, it explicitly indicates the intent to release the provider from liability for injury caused by that party's own conduct or negligence.

Even well-drafted releases and waivers can be invalidated as contrary to public policy. Each jurisdiction can apply slightly different factors when assessing the public policy exception, but the basic analysis can be boiled down to two interrelated inquiries.

Assuming that the terms of the waiver are clear and unambiguous, the most important factors governing the enforceability of a waiver are: 1) whether the party being released provides a necessity or other essential service; and 2) whether the agreement is inherently fair not unconscionable. Neither factor is dispositive by itself, but the two are always in the equation when assessing enforceability. Because recreational activities generally are not public necessities or essential services, courts generally find in favor of the released parties on the first factor. It is the second factor where decisions diverge.

The fairness of an exculpatory agreement generally boils down to a question of bargaining power. Almost all releases are provided as take-it-or-leave-it agreements, usually a preprinted form that must be signed before engaging in the desired activity. This fact gives some courts pause. See Stelluti v. Casapenn Enters., LLC, 1 A.3d 678, 688 (N.J. 2010) (discussing the fact that a fitness club exculpatory agreement was a contract of adhesion due to its "take-it-or-leave-it basis," but ultimately holding that the agreement was not unconscionable). Still, most courts conclude that, when participation in recreational activities is purely voluntary, i.e., no one is compelled to engage in extreme sports, the relative inequality of the parties' bargaining power is not sufficient to invalidate the release.

For instance, white-water rafting is a recreational activity that is "not the sort where one party is at so great a disadvantage as to render the agreement void." Lahey v. Covington, 964 F. Supp. 1440, 1445 (D. Colo. 1996); see also Saenz v. Whitewater Voyages, Inc., 276 Cal. Rptr. 672 (Cal. Ct. App. 1990). Similarly, skydiving is not an "essential service, so no decisive bargaining advantage exist[s]" in the agreement to waive liability for injury caused by negligence. Schutkowski v. Carey, 725 P.2d 1057, 1060 (Wyo. 1986). And in the context of amateur auto racing, the Sixth Circuit not only considered the voluntary nature of the activity, but also the fact that "the races could not continue without such protection from liability" Donegan v. Beech Bend Raceway Park, Inc., 894 F.2d 205, 207 (6th Cir. 1990).

A Nation of Daredevils in a Changing Legal Landscape

Looking for legal trends, a category of extreme sports that is nearly ubiquitous—downhill skiing and snowboarding—makes a useful bellwether. Participation is certainly high in these sports. Snowsports Industries America (SIA) calculates that more than 16 million people participated in skiing and snowboarding in the 2013-2014 season. 2015 SIA Snow Sports Fact Sheet.

The vast majority of courts considering the issue over the years concluded that properly drafted and executed releases of liability are valid and enforceable in the context of downhill skiing and snowboarding. See, e.g., Myers v. Lutsen Mountains Corp., 587 F.3d 891 (8th Cir. 2009); Platzer v. Mammoth Mountain Ski Area, 128 Cal. Rptr. 2d 885 (Cal. Ct. App. 2002); McGrath v. SNH Dev., Inc., 969 A.2d 392 (N.H. 2009); Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174 (Pa. 2010); Chauvlier v. Booth Creek Ski Holdings, Inc., 35 P.3d 383 (Wash. Ct. App. 2001). But see Dalury v. S-K-I, Ltd., 670 A.2d 795 (Vt. 1995) (finding "legitimate public interest" based on large number of people that "ride lifts, buy services, and ski the trails").

In December 2014, however, the Oregon Supreme Court rejected the traditional approach in an opinion which should certainly trouble organizers of extreme sport activities.

In Bagley v. Mount Bachelor, Inc., 340 P.3d 27 (Or. 2014), a young man was injured while snowboarding on the defendant's privately owned mountain. The snowboarder crashed while going off of a jump located in the "Air Chamber" in the resort's freestyle terrain park. The accident resulted in severe injury and permanent paralysis. See generally Park & Ride: Mt. Bachelor, Oregon., TransWorld SNOWboarding

(Apr. 30, 2004), (for description of the Air Chamber.) The defendant moved for summary judgment, and won, based on a signed waiver. Oregon's Supreme Court reversed, however, finding that the unequivocal release signed by the plaintiff violated public policy.

Unlike many previous courts, the Oregon Supreme Court did not think it significant that the plaintiff could have negated all risks by not snowboarding at the defendant's facility. Instead, the court concluded that the resort owner was in a superior bargaining position because the plaintiff had "no meaningful alternative to defendant's take-it-or-leave-it terms if he wanted to participate in downhill snowboarding." Id. at 562.

The court's themes in Bagley merit attention. First, the snowboarder was injured in a terrain park, while unsuccessfully attempting a "human-made jump," and he alleged negligence in "designing, constructing, maintaining, and inspecting the jump." Id. at 548. The fact that the jump was constructed by the ski company was critical to the result. The court relied heavily on the ski company's duty of reasonable care "to avoid creating risks of harm to its business invitees." Id. at 565.

This reasoning suggests that the result would have been different if the plaintiff had injured himself on a naturally-occurring hazard. Of course, since almost all ski resorts now include terrain parks in their list of attractions, this reasoning essentially establishes two separate classes of skiers and snowboarders: those who choose to ride manmade portions of the park and those who do not. Perversely, this division essentially immunizes the biggest risk-takers from the release of liability contained in the release agreement they are forced to sign.

In addition to applying premises-liability principles to undermine the ski resort's exculpatory agreement, Bagley also cited the high rates of participation in skiing and snowboarding. High rates of participation helped the court invalidate the agreement. The court observed that a ski resort is "open to the general public virtually without restriction, and large numbers of skiers and snowboarders regularly avail themselves of its facilities." Id. at 568. This fact, in light of the "limited number of ski areas that provide downhill skiing and snow-boarding opportunities in Oregon, and the generality of the use of similar releases among that limited commercial cohort," was ultimately central to the conclusion that the release in question violated public policy. Id. at 562.

In short, the combination of two factors, the popularity of the snow sports and the added dangers presented by the creation and maintenance of terrain park obstacles, led the court to conclude that the release of liability violates public policy. In essence, the court found it inequitable for the ski company to invite large numbers of people to a hazard it created, and then disclaim any liability for resulting injuries.

While Bagley can be viewed as an outlier, it may also signal a course correction in response to wider participation and increasing injuries in extreme sports. As participation in extreme sports becomes more common, we may see more courts viewing anticipatory releases like Oregon's Supreme Court, focusing less on the voluntary, recreational nature of the activity and more on the specific equities. This would obviously create greater uncertainty for the providers and organizers of extreme sport experiences and likely prompt new strategies for limiting their liability.

Future Releases

One way to limit the impact of decisions like Bagley would be to require a separate release for terrain parks and other man-made obstacles, similar to the registration requirements for amateur ski racing venues. How Do I Register to Race? Such waivers have been upheld in the racing context. See Collins v. Schweitzer, Inc., 774 F. Supp. 1253, 1263 (D. Idaho 1991); cf. Rowan v. Vail Holdings, Inc., 31 F. Supp. 2d 889, 898 (D. Colo. 1998) (finding that racing release violated public policy, but opining that "if the skiing were recreational in nature only, I don't think that the release would have been entered into unfairly since Rowan could simply have gone somewhere else to ski or chosen not to ski").

In other words, for skiing and snowboarding—nearly ubiquitous in many areas of the country—separating the more "extreme" aspects of the sport may help insulate providers from liability for the injuries.

On the other hand, the Bagley rationale does not bode well for sponsors of all those extreme sports that rely heavily on manmade tracks and terrain. Virtually any motocross park, for example, is at least partially designed or constructed to add jumps and bumps. Skateboard parks often are designed to give participants smooth half-pipes and faux rails. Even bike trails can be designed or constructed in some respects to add challenges to already challenging natural terrain. And one brand new category of extreme sports, military or adventure-style races, is totally fabricated. Participants in these so-called "Spartan" events often face unreasonably tough running terrain and seriously dangerous obstacles like fires and barbed wire fences. Some of these participants are being seriously injured, and a few have died. Can lawsuits be far behind?

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