In a December 18, 2014 decision, the Oregon Supreme Court concluded that a ski area’s anticipatory release exculpating it from personal injury negligence claims was unconscionable and therefore unenforceable. Bagley v. Mt, Bachelor, Inc., 2014 Ore. LEXIS 994.

The Facts

Plaintiff is a skilled snowboarder who sustained catastrophic injuries at the Mt. Bachelor “air chamber” terrain park. Plaintiff alleged his injuries were due to Mt. Bachelor’s negligent design and failure to maintain the snowboarding area. Mt. Bachelor moved for summary judgment of dismissal based on the release signed by the plaintiff when he purchased his ski pass. The trial court granted defendant’s motion for dismissal, finding that the release was both conspicuous and unambiguous and therefore enforceable.

The Holding

The Oregon Supreme Court disagreed with the trial court. In reversing the trial judge, it applied a multifactor analysis in concluding the release at issue violated public policy, was unconscionable and therefore was unenforceable.

The Court took care to state that not all anticipatory releases would be unenforceable in the state, but rather such releases would be subject to a case-by-case analysis. Courts will examine the terms of the release and the circumstances in which they were entered. This examination will include whether the release language is conspicuous and unambiguous, whether there is disparity in the parties’ bargaining position, whether the release is offered on a take-it-or-leave-it basis or if there is an opportunity to negotiate the terms of the release, whether it is offered in the course of a consumer transaction, whether enforcement would result in a harsh or inequitable result to the releasor, and whether the releasee provides an important societal function.

In this case, the Oregon Supreme Court agreed with the trial court that the release language at issue was both conspicuous and unambiguous and that the ski area provided a nonessential public service. Against those factors supporting enforcement, the Court weighed the disparity in the bargaining power between the parties to this consumer transaction, the fact that the release was offered on a take-it-or-leave-it basis, that enforcement would cause a hardship result to this plaintiff, ‎the ski area’s “superior ability to absorb and spread the costs associated with insuring against those risks,” and that enforcement would not deter future negligent conduct.

Going forward, businesses in the recreational and outdoor service industries that rely on anticipatory releases from their customers must re-examine whether their current releases will pass legal muster in Oregon. In an interesting footnote, the Oregon Supreme Court suggested one strategy would be to permit a patron to pay an additional reasonable fee to obtain protection against negligence, thereby suggesting a bifurcated fee structure as a workaround for the new paradigm in Oregon law.