Liability waivers have been a hot topic in Oregon since a 2014 court ruling made them difficult for places like ski resorts and climbing gyms to enforce. Recreational business owners say their insurance rates have soared as a result, but trial lawyers say the waivers discourage operators from keeping their facilities safe.
House Bill 3140 would allow recreational businesses to require customers to sign a release for claims of “ordinary negligence,” making it harder for customers to sue. Operators say they need the additional protection from frivolous claims, but attorneys say Oregon law already protects against spurious lawsuits.
Jim Zupancic is the board president of the Oregon Health & Fitness Alliance, which represents gyms, exercise studios and health clubs across the state. Gretchen Mandekor is the owner and lead trial attorney at Mandekor Law Firm. They join us to offer differing perspectives on this legislation.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. Liability waivers have been a hot topic in Oregon since a 2014 state Supreme Court ruling. The ruling made it difficult for places like ski resorts and climbing gyms to enforce their waivers. Recreational business owners say their insurance rates have soared as a result. So they are once again pushing for a bill in the legislature that would allow them to require waivers and make those waivers more enforceable. Trial attorneys are very much opposed. They say that Oregon law already protects businesses against spurious lawsuits and that waivers remove an important incentive that operators have to keep their facilities safe.
We’re going to hear from both sides right now. Jim Zupancic is the board president of the Oregon Health & Fitness Alliance, which represents gyms, exercise studios and health clubs across the state. Gretchen Mandekor is the owner and lead trial attorney at Mandekor Law Firm. Welcome to you both.
Gretchen Mandekor: Thank you.
Jim Zupancic: Hi, Dave, nice to be here.
Miller: Jim, I want to start with the basics. When customers sign liability waivers broadly, what is the business asking of the customer and what is the customer agreeing to?
Zupancic: Well, Dave, for decades, probably close to 100 years, people have been contracting with recreation providers to arrange for an acceptance of personal responsibility when they’re entering into potentially dangerous activities. And as long as that agreement has been fair and reasonable, those agreements have been upheld by courts, including in Oregon for about the last 100 years. All of the western states enforce them.
But in Oregon, as you mentioned, about 10 years ago that rule changed. This bill gives us an opportunity to rebalance Oregon law to bring it back into conformity with basically what the majority rule is throughout the entire country and certainly within all of the western states.
Miller: Gretchen, the case that we’re talking about here that changed the way waivers are viewed under state law involved a young snowboarder who became a paraplegic after hitting a jump. Can you explain the course decision in this case, that the waiver he signed was unconscionable and against public policy?
Mandekor: Yes, Dave. So that was Myles Bagley, a young man who was snowboarding. And he hit a defective jump, and he landed and became a paraplegic. Now, in that case, he had signed a waiver of liability. Mt. Bachelor had required that in order for him to use the ski run. And I don’t want to get too complicated, but at the trial court level, the case was thrown out on a motion for summary judgment. In other words, you don’t have a case because you signed this waiver, done. It went up on appeal and the appellate court held that waiver is unenforceable as against public policy. It’s a contract of adhesion, which means you’re forced to sign it and there’s unequal bargaining power between the parties.
Miller: Because the only way to ski or snowboard there was to sign this, then it’s not fair to require someone to have to sign it before they can enjoy the sport and enjoy what they wanted to do? And that’s why it wasn’t fair?
Mandekor: Well, it’s because there’s unequal bargaining power between the parties. You’ve got a big corporation and you’ve got a consumer. And the consumer becomes a victim because the negligence is this defective jump that caused his injury.
One of the things that the proponents of this bill are throwing around quite loosely, which Jim just mentioned, is personal responsibility. Oregon law already provides for personal responsibility. You cannot sue if you are the majority at fault for your own injury. The biggest problem with this bill is it would allow corporations to put profits before public safety. They could operate an unsafe facility, they could fail to maintain their premises, they could have dangerous hazards on their premises, and it would bar people from suing. There would be a disincentive to put public safety first.
Miller: Jim, I want to give you a chance to respond to this. What in your mind falls under the category of ordinary negligence?
Zupancic: Well, Dave, I have to disagree strongly with what Ms. Mandekor said. First of all, I think her characterization of what happened in the Bagley case is not correct. That jump was never really never shown to be defective. The case was settled by a settlement.
But going to your question, we really are trying to address an issue here that would put Oregon back in line with the other western states. All of the other western states allow people to be able to present their case in court, and only in those cases of what we call “ordinary negligence” they voluntarily waive those particular claims. Those kinds of ordinary negligence claims happen all of the time in recreational settings. In gyms, for example, when you’re putting a heavy weight above your head, it’s a dangerous condition. If that happens to fall out of your hands, those kinds of things are potentially an ordinary negligence kind of a claim. Or when you maybe slip on a treadmill …
Miller: So are you saying that it’s not uncommon for someone to bring to suit and be successful if they’re doing a chest press and they drop a dumbbell on their head? That would actually be a case that would be brought currently?
Zupancic: Accident attorneys will bring claims for all kinds of reasons. They’re economically incentivized to do that because they can literally make millions of dollars by stating these claims. And what this bill will do would bring us back into conformity with the rest of the rest of other western states. It’s reasonable to be able to assume that when you’re undertaking a potentially dangerous activity, that you’re going to assume certain professional responsibility.
And again, I have to disagree with Ms. Mandekor in terms of her characterization of Oregon law. Oregon law is now out of sync with the rest of the country. California and Washington do not have a similar law as Oregon. And this is driving businesses out of Oregon. It’s causing insurance rates to skyrocket. It’s causing businesses to close. We don’t have mountain biking anymore on Mt. Hood at Skibowl because of the fact that they can’t get insurance. This has created an incredible devastation, not just for the providers of the recreation but for the users. Because of the fact that these businesses are no longer able to offer these recreational activities is creating a less safe environment.
So if you want to talk about safety, public safety is actually enhanced by having these waivers. The reason that it’s enhanced is because when you sign a waiver, it raises a level of consciousness for you that you are undertaking an activity that is potentially dangerous ...
Miller: Gretchen, I want to give you a chance to respond. Jim said a lot of things.
Mandekor: Yes, well, I would like to start with Oregon law is not out of sync with other states. Colorado has the exact same law, which is that releases of ordinary negligence are unconscionable as against public policy. Colorado is another state, a big ski resort state. I only practice in Oregon, so I have not done a survey of all of the western states or the states all over the country, but I just want to make that correction there.
Another correction is Bagley went up to the Oregon Supreme Court. A Supreme Court decision was rendered. These releases are unconscionable as against public policy, and the reason is to protect consumers.
The other thing I would like to address is the insurance rates skyrocketing. Skibowl cannot get insurance because of its own negligence, not because of lawsuits. Lawsuits are something that sets the United States apart from the rest of the world. The civil jury trial only exists in the United States of America. When I first moved here from Canada, I’m a dual national, I had a conversation with a judge about why is money so important in this country that we pull 12 citizens out of their daily lives to become a jury, listen to cases for weeks and then render a verdict? In Canada and the rest of the world, only criminal trials where somebody’s freedom is at stake warrant a jury.
Well, that judge said something to me that I remember now 25 years later, which is corporations in the United States have so much power because they have so much money. And the only thing that keeps them in check is the civil jury trial. And that is what is at stake with HB 3410.
Miller: I feel like I’m still missing clarity from each of you about what exactly you think would change if this were to pass. So Gretchen, let me stick with you. If this were to pass, what’s an example of a liability claim that is currently successful or likely to be successful, that would not be, or vice versa? What is a specific case that you can either point to or give us as a hypothetical that would be handled differently as a result of this bill?
Mandekor: OK, I can give you a hypothetical. If a ski resort fails to maintain a ski lift, they decide we’re not going to spend money maintaining this lift, and as a result a chair falls off the lift and somebody plummets to their death. That person would have no recourse, they would not be able to sue. Or a better example would be a person who plummets and becomes a quadriplegic or a paraplegic. Now, they have astronomical medical bills to pay, they have to render their house accessible. It’s a very expensive thing …
Miller: In this scenario, the actual chair was not affixed properly to the cable, it falls, someone dies or gets paralyzed … you’re saying if this bill were to pass, the survivors or their family could not sue.
Jim Zupancic, is what Gretchen just described, what version of negligence, ordinary or otherwise, do you think that would fall under?
Zupancic: Well, I have to disagree with what Gretchen has said because, first of all, the Colorado matter that she just referred to, Colorado does enforce waivers for ordinary negligence. So her information is just not correct with respect to that.
In Oregon, if this bill passes, a claimant in that situation would still have a number of different causes of action in which they could bring even if this bill was enacted. If there is, for example, in Oregon, a reckless disregard for the safety of others, if there is a statute that provides for the protection of the public and those statutes are violated. If you think about negligence [as] a continuum or a chart, ordinary negligence would be on the far-left side and then immediately to the right of that would be what we call gross negligence. And then to the right of that would be what we call negligence per se. And to the right of that would be criminal negligence.
And so negligence that we’re talking about here, ordinary negligence, would only be to the far left side of that chart. It would only be the ordinary type of negligence that all of the other states in the West allow people to freely contract to waive liability for. And so my question to Gretchen is, why did the accident attorneys not want competent adults to be able to contract away so that they can participate in these activities, and have it be a more balanced approach? Why are the accident attorneys so opposed to that?
Mandekor: Protecting victims from being taken advantage of by large corporations.
What I would like to correct, what Jim just stated, is gross negligence is not immediately to the right of ordinary negligence. It is on the far, far end on the right side of the scale. The proponents of this bill are confounding two very different legal standards, ordinary negligence and gross negligence. As Mark Twain famously said, the difference between lightning and the lightning bug is one word. So it goes with negligence and gross negligence. They are very different standards.
Gross negligence requires reckless disregard. Which means that the actions of the defendant go beyond ordinary carelessness and it demonstrates a reckless disregard for the safety of others.
Miller: But what you just described, having a chair not be affixed to the cable, that to me would qualify as what you’ve just described as gross negligence. I’m not a lawyer, but as a skier, I sure hope that that would be considered gross negligence.
Mandekor: So my example was a failure to maintain. A failure to maintain caused it to become unaffixed …
Miller: It was a lack of good enough maintenance. That’s what you mean by the failure to maintain.
Mandekor: Precisely. So it happened over time, simply because they didn’t spend the money to maintain the equipment, which is what is the situation with Skibowl and their inability to get insurance.
But what I would like to say to Jim, and I turn a question to you, in my 25 years of practicing the law of torts on both sides, defending and plaintiffing negligence cases of all kinds in all different scenarios, I would say that less than 1% of those cases included claims of gross negligence, because these claims are rarely made, because it is such a high standard. An example I would like to give to you is an ordinary negligence claim would be if you’re rear ended and you sustain injury as a result, versus driving 100 MPH the wrong direction on the freeway or driving drunk. Those things are gross negligence.
Zupancic: I would like to have an opportunity to respond, can I do that?
Miller: You will. I’m not sure if we’ve gotten the question yet though.
Mandekor: Jim, I would like to know how many cases you have handled over the course of your career that involved claims of gross negligence?
Zupancic: Well, I will tell you this …
Mandekor: I think you should answer the question, Jim.
Zupancic: Over my 45-year career, where I practiced throughout most of the western states, I’ve handled all kinds of different claims. We have a retired senior judge who has submitted testimony to the Judiciary Committee in the House that calls for the passage of this bill. This senior judge articulates why it’s important for the legislature to adjust this public policy decision that was made by the Bagley Court. So you don’t have to believe me, you can believe somebody who has presided over 760 cases, a senior judge in Oregon that is calling upon the legislature to pass this bill.
I would say that the hundreds if not thousands of organizations that are in support of this bill speaks volumes as to why we need it, and why it’s important for us to bring a balance back to Oregon. There’s new federal law right now, which basically expresses a support for these kinds of waivers. It was passed by Congress almost unanimously and signed by President Biden. We think that it’s very important for us to bring some balance back to Oregon law and public policy. The senior judge that submitted the testimony to the committee was very articulate in the way that she suggested that the Oregon Legislature needs to address this issue.
So I not only stand upon my 45 years of experience, but I stand with those who stand beside me on this. And we’re talking about hundreds if not thousands of organizations that range all the way from the Portland Business Alliance to the Oregon House Council …
Miller: We are almost out of time, but I do want to just see if I can get a clear answer to the question. The point you made is, don’t worry, the falling chair from the chair lift wouldn’t have to meet the bar of general negligence, it could be higher than that. But she’s saying that the higher bar is rarely even argued in court. So what’s your response to that specific point?
Mandekor: And Jim, your experience, how many gross negligence cases have you handled?
Zupancic: I’ve tried gross negligence cases.
But I will also tell you that in other states, plaintiffs are allowed their day in court. Whether it’s how they plead the case as either ordinary negligence or gross negligence, they have remedies in California, Washington, Colorado, Idaho, Nevada – all of these places allow these people to state their claims.
The one that Gretchen gave as a hypothetical, not only would they have a right to be able to state that claim in other states, but even after this bill was passed, they would have a right to be able to plead that claim in Oregon and be able to receive justice …
Miller: I’m sorry to say we are out of time. But Jim Zupancic and Gretchen Mandekor, thank you very much.
Mandekor: Thank you, Dave Miller.
Zupancic: Thank you, Dave. Thank you very much.
Miller: Jim Zupancic is board president of the Oregon Health & Fitness Alliance. Gretchen Mandekor is the owner and lead trial attorney at Mandekor Law Firm.
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