Your Jurisdiction and Venue clause must be relevant to the possible location of the accident. Screw this up and you can void your release as occurred in this ski racing case.Posted: April 3, 2017 Filed under: Jurisdiction and Venue (Forum Selection), Release (pre-injury contract not to sue), Skiing / Snow Boarding, Vermont | Tags: Amateur Racing, Choice of Law, Click Wrap Agreements. Nexus, Electronic Click Wrap Agreements, Jurisdiction, Jurisdiction and Venue (Forum Selection), Legal Relationship, Okemo, Ski Racing, United States Ski Association, USSA, Venue, Vermont Leave a comment
This is not the first decision I’ve read where the United States Ski Association (USSA) had its release laughed out of court. The court found ZERO legal arguments for the jurisdiction and venue clause in the release used.
Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011
State: Vermont, United States District Court for the District of Vermont
Plaintiff: Brian J Tierney
Defendant: Okemo Limited Liability Company, d/b/a Okemo Mountain Resort, and The United States Ski and Snowboard Association,
Plaintiff Claims: alleging negligent installation of safety netting during a downhill alpine ski race
Defendant Defenses: Release
Holding: for the plaintiff
The United States Ski Association (USSA) has members sign a release online before they can participate in any USSA as a ski race. Ski areas rely on this release when holding USSA sanctioned races. The USSA release, however, is a poorly written document and time after time the ski areas, and the USSA lose a lawsuit by a plaintiff because they relied on the USSA release.
The number-one reason why the USSA as a release is thrown out by the courts is the jurisdiction and venue clause. Jurisdiction is the law that will be applied case and venue is the actual location of where the trial will be held. The USSA release says the jurisdiction for any case is Colorado. The problem is unless the accident occurred in Colorado; no other relationship exists between Colorado and the parties to the lawsuit.
The USSA is based, located, in Utah. In this case, the defendant ski area was located in Vermont. There were zero relationships between the USSA in Utah the ski area in Vermont and the injured plaintiff who was from New York, and the state of Colorado.
Consequently, the court throughout the jurisdiction and venue clause and found as 99% of most courts would that the location of the lawsuit should be Vermont, the place where the accident happened.
Vermont, however, does not recognize releases. (See States that do not Support the Use of a Release.).
The plaintiff argued the release was invalid because a copy with his signature could not be produced. The plaintiff signed and agreed to the documentation, including the release when he became a member of the USSA. The plaintiff argued in court that he did not remember signing or agreeing to the release. However, the USSA could show through their IT expert the only way that the plaintiff could have become a member of the USSA was by signing the release. You either had to click on and accept the release, or you could go no further in signing up to be a member of the USSA.
The plaintiff was injured while competing in amateur downhill ski race at the defendant ski area at Okemo Mountain resort. The USSA sanctioned the race. To be eligible to participate in the race a person had to be a USSA member, had to have conducted a visual inspection of course, and had to have taken at least two official training runs prior to the race.
The defendant filed a motion for summary judgment based on the release. This ruling denied the motion for summary judgment.
Analysis: making sense of the law based on these facts.
The court first commented on the jurisdiction and venue issue.
The release also contained a choice-of-law provision, which stated that it would be “construed in accordance with, and governed by the substantive laws of the State of Colorado, without reference to principles governing choice or conflict of laws.”
The court then went through the various arguments of the plaintiff and defendant concerning the motion to dismiss, first off, with the plaintiff’s argument that he never remembered signing the release could not have signed release. The court termed the online release as a clip wrap release. This means that the release could not have been rejected by the plaintiff because the website only allows you to go forward after clicking yes to the release.
Because the click-wrap technology does not permit the customer to continue to use the website, unless he or she clicks on the required box on the screen, courts have accepted proof of use at the site as evidence of the customer’s agreement.
The court stated that generally clip wrap releases are upheld. The court went through several different decisions where clip-wrap releases had been decided. The court concluded that the plaintiff had to have signed the release because the plaintiff admitted that he had been charged for his USSA membership on his credit card and received an email about his membership from the USSA. “Plaintiff admits that he received a confirmation email from USSA and that his credit card statement reflects a payment for his USSA membership.”
The court then went into the choice of law clause. That means the jurisdiction and venue clause. A choice of law clause is not a clause that is controlled strictly by the contract.
Whenever there is a decision based on what law shall apply the law where the accident happened or where the court is sitting is the law that is applied to determine what law will apply. In many cases, such as this one, the choice of law decision leans toward granting the choice of law to the place where the test is being determined.
“The validity of a contractual choice-of-law clause is a threshold question that must be decided not under the law specified in the clause, but under the relevant forum’s choice-of-law rules governing the effectiveness of such clauses.” As this is a diversity action, the court looks to Vermont’s choice-of-law rules to determine which law applies.
A jurisdiction and venue clause is also not solely determined based on the four corners of the document. Meaning, just because you have a jurisdiction and venue clause in the document does not mean that is what is going to be upheld by the court. Here the court applied the choice of laws test as set forth in Vermont to determine what law should apply in governing where the suit in the law to be applied is suit to take place.
Simply put the court found there was no relationship between the choice of law clause in the release and the parties or where the accident occurred. The test for what choice of law applies a substantial relationship test. That means that the law that should be applied should be the one that has the greatest relationship to the parties and or the location of the incident giving rise to the lawsuit. In this case the court found, there was no relationship to the parties of the transaction. Plaintiff was a resident of New York the USSA was a Utah corporation, and the defendant ski area was a defendant was a Vermont location.
The arguments made by the USSA as an aid to justify Colorado’s choice of law clause were just plain weak. They argued that the majority of their races occurred in Colorado and that there was a good chance that the plaintiff would race in Colorado. The court found neither of those arguments to be persuasive.
The chosen state of Colorado has no “substantial relationship” to the parties or the transaction. Plaintiff is a resident of New York. USSA is a Utah corporation and Okemo is a Vermont entity. The incident in question did not occur in Colorado. The only facts Defendants have offered in sup-port of applying Colorado law to this case are: (1) Colorado is home to more USSA member clubs than any other state and hosts the majority of USSA’s major events, and (2) there was a possibility that Plaintiff could have competed in Colorado at some point during the relevant ski season. The court finds that such a tenuous and hypothetical connection does not vest in the state of Colorado a substantial relationship to the parties or specific transaction at issue in this case.
The court did find that Vermont had a substantial and significant interest in the transaction. The defendant was based in Vermont. The accident occurred in Vermont. The plaintiff was issued a lift ticket by the defendant ski area that required all disputes to be litigated in Vermont. The plaintiff participated in the inspection and training runs as well as the race in Vermont.
In contrast, Vermont’s relationship to the parties and transaction is significant. Okemo is a Vermont corporation, the competition was held in Vermont, Plaintiff was issued a lift ticket by Okemo requiring all disputes to be litigated in Vermont, Plaintiff participated in inspection and training runs in Vermont, and Plaintiff’s injury occurred in Vermont.
(Of note is the fact the court looked at the writing on the lift ticket as a quasi-contract. Rarely are lift tickets anything more than simple “signs” providing warnings rather than contracts or quasi contracts. See Lift tickets are not contracts and rarely work as a release in most states.)
The court then took apart the choice of law provision in the USSA release. It found no substantial relationship of the parties to the transaction in Colorado. The minimal facts offered by the USSA to support Colorado did not establish a reasonable basis for choosing Colorado.
The court also reasoned that finding Colorado as the applicable choice of law would violate a fundamental policy of Vermont law, which is releases for skiing or void under Vermont law.
First, applying Colorado law would undoubtedly produce a result contrary to a fundamental policy of Vermont. Whereas exculpatory clauses in ski contracts have been held to be enforceable under Colorado law, courts applying Vermont law consistently hold such re-leases to be void as contrary to important public policies of the state.
The court also found the Vermont had a materially greater interest in case then Colorado. Colorado’s interest in the case is minimal. Vermont had a great interest in applying Vermont law to issues, transactions and accidents that occur in Vermont. Skiing is a significant and important recreational activity in Vermont, and the Vermont Supreme Court has repeatedly stated that they have a significant interest in holding ski resorts responsible for skier safety in Vermont.
Second, Vermont has a “materially greater interest” than Colorado in the determination of this issue.4 Colorado’s interest in this case is minimal. The fact that Plaintiff may have competed there in the course of the relevant ski season and that USSA hosts many events in that state does not create a significant interest in a case concerning a Vermont ski race. Conversely, Vermont’s interest is plain. Vermont has a general interest in having its laws apply to contracts governing transactions taking place within the state. Vermont also has a significant interest in the conduct at issue here. Skiing is an important recreational activity for Vermonters and those visiting the state, and the Vermont Supreme Court has repeatedly noted its interest in holding ski resorts responsible for skier safety.
The court then held the choice of law provision in the USSA release did not control, and the Vermont law would apply to this case.
Under Vermont law releases for skiing activities are unenforceable. (See Federal court voids release in Vermont based on Vermont’s unique view of release law). The Vermont Supreme Court had determined that it was a violation of public policy under Vermont law to allow ski area to use a release to avoid liability for its own negligence. The court used a totality of the circumstances test to make the determination that the ski areas had the greater responsibility and the greater ability to keep its patrons out of harm’s way.
The Court concluded that “ultimately the determination of what constitutes the public interest must be made considering the totality of the circumstances of any given case against the backdrop of current societal expectations.” It then went on to make its public policy determination largely on the basis of two factors derived from the seminal case of Tunkl v. Regents of University of California, 383 P.2d 441 (Cal. 1963): (1) ski areas are open to the general public without regard to special training or ability, and (2) the longstanding rule that premises owners are in the best position to assure for the safety of their visitors.
(Using Tunkl to void a release seems to be an extremely odd reading of Tunkl. The Tunkl decision is a California case setting forth requirements for Assumption of the Risk.)
The court also looked at the difference between skiing in Vermont participating in a ski race. Here too though, the Vermont Supreme Court already ruled. The Vermont Supreme Court found that there was really no difference between ski racing and skiing in Vermont, and the releases would be void in both cases.
There had been Vermont decisions upholding release law based on restricted access to the race or because total control for the majority the control for the welfare of the racers was in the racer’s hands. These decisions concerned motorcycle racing.
The defendant argued that ski racing was much like motorcycle racing in Vermont. However, the court found that although membership in the motorcycle racing was restricted, it was not restricted in the ski racing case. Any person could become a member of the USSA, and any person could race, as long as they inspected the course and made two runs and. That effectively was not a bar to anyone participating in the race.
The Court saw “no salient distinctions between [its case] and making clear that, under Vermont law, ski areas and sport event organizers will not be absolved from liability by virtue of an exculpatory clause even in the context of amateur racing.
The court in evaluating the release law and ski areas in Vermont determined that the cases were based on a premise’s liability argument. Premise’s liability says that the owner of the land has a duty to inform guests of the risks on the land. This responsibility included eliminating any known risks or risk the by the landowner should discover. It did not find in the motorcycle cases that a premise’s liability relationship existed because the risk was largely in control of the racer on the motorcycle.
Consequently, the court ruled that the release was invalid under Vermont law, and dismissed the defendant’s motion for summary judgment.
So Now What?
I suspect that USSA wanted to take advantage of the Colorado Statute that allows a parent to sign away a minor’s right to sue: Colorado Revised Statutes 13-22-107. Colorado’s release law is clearer and there is no issue with a release stopping suits by ski areas. Utah has mixed issues with releases and ski areas. However, to use Colorado as the site of the lawsuit, there must be a nexus to the state of Colorado, not just one created on paper.
Not only must the language stating the jurisdiction and venue be correct; the clause must also contain the reasoning why the jurisdiction and venue should be in a location other than location where the accident happened. In this case that would mean that there was an agreement between the parties that outlined all the reasons why the lawsuit should be brought back to Utah would be the only state, based on the contractual law of Utah.
I doubt there is any way that you could really write a release based on the law of a state that had no relationship, no nexus, to the accident or the parties in the case.
Vermont was the obvious answer, and that is what the court found. They might’ve been able also argued New York law, which would’ve been better than Vermont law. However, that would require them to litigate a case wherever the people who are racing in their events are located.
To be effective the jurisdiction and venue claw must have a nexus to either the parties in the case of the place of the accident occurred. USSA could move to Colorado, and that would provide a much better argument that Colorado law could apply. The USSA could argue that since they’re facing litigation from across the United States that they need to have one law apply to their releases and lawsuits, and that law should be the law where the located.
Whenever you’re stretching the jurisdiction and venue clause, you need to make sure that you incorporate in the clause all the legal reasons for picking the venue where the clause says the accident or location will occur. You just can’t state venue, and jurisdiction will be here.
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Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011Posted: March 30, 2017 Filed under: Legal Case, Ski Area, Skiing / Snow Boarding, Vermont | Tags: Amateur Racing, Choice of Law, Click Wrap Agreements. Nexus, Electronic Click Wrap Agreements, Jurisdiction, Jurisdiction and Venue (Forum Selection), Legal Relationship, Okemo, Ski Racing, United States Ski Association, USSA, Venue, Vermont Leave a comment
Kearney, v. Okemo Limited Liability Company, 2016 U.S. Dist. LEXIS 106011