Last week, the Oregon Supreme Court held that enforcement of an anticipatory release of a ski area operator’s future liability for its own negligence in a ski pass agreement would be unconscionable. In Myles A. Bagley et al. v. Mt. Bachelor, Inc., et al., the highest state court reversed the decision of the Court of Appeals and the trial court, and remanded the case back to the trial court for a jury trial.

The Supreme Court issued a media release, which in part reads:

In late 2005, plaintiff Myles A. Bagley purchased a season pass from defendant Mt. Bachelor, Inc.’s ski area. Upon purchasing the pass, Bagley executed a written release, which Mt. Bachelor required of all its patrons, that released Mt. Bachelor from any claim against it for any injury suffered at its ski park, even if the injury was caused by negligence. In early 2006, Bagley sustained serious injuries, resulting in his permanent paralysis, while snowboarding over a human-made jump at Mt. Bachelor’s “terrain park.” Bagley subsequently brought a negligence action against Mt. Bachelor, asserting negligence on Mt. Bachelor’s part in designing, constructing, maintaining, and inspecting the jump on which he was injured.

Mt. Bachelor asserted the affirmative defense of release, and it later moved the trial court for summary judgment on the ground that the release that Bagley had signed clearly and unambiguously disclaimed future liability for negligence. Mt. Bachelor further asserted that the release was neither unconscionable nor contrary to public policy, because snowboarding is a recreational activity and not an essential public service. The trial court agreed and granted Mt. Bachelor summary judgment. On appeal, the Court of Appeals affirmed.

In an unanimous opinion authored by Justice David V. Brewer, the Supreme Court observed that unconscionability may be procedural (relating to the conditions of contract formation) or substantive (referring to the terms of the contract itself), and that, in this case, both procedural and substantive factors point to the conclusion that enforcement of the release would be unconscionable. The Court noted that relevant procedural considerations include the facts that Mt. Bachelor was in a superior bargaining position, exercising its superior strength by requiring its patrons to sign anticipatory releases on a take-it-or-leave-it basis as a condition of using its facilities, and that patrons had no meaningful alternative to Mt. Bachelor’s terms if they wanted to participate in snowboarding. Substantive factors include (1) the harsh and inequitable result of enforcement of the release in light of the fact that Mt. Bachelor, and not its patrons, had the expertise, opportunity, and duty to foresee and avoid unreasonable risks of its own creation on its premises, as well as the ability effectively to spread the cost of guarding against such risks among its many patrons; and (2) the public interest affected, insofar as Mt. Bachelor’s ski area is open to and serves large numbers of the general public virtually without restriction, and, to an important degree, the personal safety of Mt. Bachelor’s patrons is subjected to the risk of Mt. Bachelor’s carelessness. Finally, the Court concluded that those unconscionability considerations are not outweighed by Mt. Bachelor’s interest in enforcing the release, in light of the fact that Mt. Bachelor was in a better position than its patrons to guard against risks created by its own conduct.

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