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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