Cancelled: Legal Waivers Make Refunds a Long Shot for Covid-19-Related Outdoor Race Cancellations

Cancellations and Postponements
As explored in my recent article, the Covid-19 pandemic has wreaked havoc on the 2020 outdoor race season. Athletes hoping to kick-start the season with spring and early summer races have seen those races either postponed or cancelled. With the notable exception of the Boston Marathon, few if any offer money-back options, instead offering automatic deferral to a different date, or transfer to a different race (though, in fairness, at least one Ironman brand race (Ohio 70.3) offers racers a partial refund — $75 — if withdrawal is requested up to 45 days before race-day). Likely representative of other athletes in a similar boat, registrants for one of the three Ironman races canceled outright (Connecticut 70.3) have reacted with confusion and anger.

Why Refunds are a Long Shot
Racers, especially those with conflicts that make deferral/transfer difficult or impossible, are understandably upset over losing registration fees of over $700. For two reasons, it is unrealistic to expect a money-back option for a canceled/postponed race. First, the practical reality is that race directors are unlikely to have funds ready in their coffers, or from insurance coverage, to pay back to registered athletes. The second, perhaps more compelling, reason is that no-refund policies are clearly spelled out in the legal waivers all athletes sign at registration. Let’s examine each in turn.

(1) Dire Times for Race Directors, Too. What some frustrated athletes may not realize is that their registration fees fund what is a year-long race operation, that has employee salaries to pay and other overhead costs (as I can personally attest, having worked in the Penn Relays office during college, someone has to do the grunt work of registration intake), whether the races ultimately go forth or not. In other words, it is not out of greed that race directors don’t give your money back — as one race director explains, it’s because they’ve to a large extent already spent it (on, e.g., race permits from local authorities, shutting off race routes, medals/t-shirts, etc.).

Talk of race operations being saved by a panacea-like “business interruption” insurance policy are murky at best (as restaurants and gyms have quickly learned; indeed class action litigation is already brewing, with some businesses arguing it was not the pandemic, but the resulting state- and city-mandated closures, that caused their business interruption, thus triggering coverage under their policies). While some race directors have apparently managed to obtain coverage for the pandemic, others had no such luck.

(2) Legal Waivers. Races have express waivers by which registrants generally waive their rights to sue the race, and acknowledge that the race director has sole discretion to delay or cancel a race for any reason, including if conditions become unsafe, and that no refund will be provided in the event of any such cancellation. In the Ironman race registration waiver, for example, athletes acknowledge and agree that Ironman ownership (World Triathlon Corporation (“WTC”)):

[I]n its sole discretion (whether for safety reasons, legal reasons, or any other reason), may: (a) at any time, with or without notice, change or modify the race course, distances, routes, elevation, ascents, difficulty level, or any other race-course or Event aspect; or (b) delay or cancel the Event (or any leg(s) of the race) if it believes the conditions are unsafe or otherwise unsuitable for the Event. If the race course or Event is changed, modified, delayed, or cancelled for any reason, including but not limited to acts of God or the elements (including without limitation, wind, rough water, rain, hail, hurricane, tornado, earthquake), acts of terrorism, fire, threatened or actual strike, labor difficulty, work stoppage, insurrection, war, public disaster, flood, unavoidable casualty, race course conditions, or any other cause beyond the control of WTC, there will be no refund of WTC’s entry fee or any other costs incurred in connection with the Event.

Hammering the point home, the third-party vendor through which athletes go to register for their Ironman race — Active.com — requires a similar waiver:

You understand and agree that the Event organizer reserves the right to cancel the Event in the event of weather (including, but not limited to, heat, tornadoes, earthquakes, fires, storms, lightning and floods), accidents, acts of war or terrorism, military conflicts or riots, or for any reason that would affect the safety and security of Event participants and/or spectators or the feasibility of the Event to be held. In the event of such cancellation or any other cancellation for any reason, there will be no refund of your payment unless authorized and paid by the Event organizer.

DelMoSports, a Jersey Shore-based regional multi-race operation, has a strikingly similar waiver:

I acknowledge and agree that Event Producer, in its sole discretion, may delay, modify, or cancel the Event for any reason, including if it believes the conditions on the race day are unsafe. In the event the Event is delayed, modified, or cancelled, including but not limited to acts of God or the elements (including without limitation, wind, rough water, rain, hail, hurricane, tornado, earthquake), acts of terrorism, fire, threatened or actual strike, labor difficulty, work stoppage, insurrection, war, public disaster, flood, unavoidable casualty, race course conditions, or any other cause beyond the control of Event Producer, there shall be no refund of entry fee or any other costs incurred in connection with the Event.

Such waivers — all electronically signed by the athletes during online registration — are not necessarily favored by the law, but are nonetheless generally upheld, whether in Pennsylvania (see Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174 (Pa. 2010)), New Jersey (see Bartlett v. Push To Walk, 2018 WL 1726262, (D.N.J. Apr. 10, 2018)), Delaware (under the Active.com choice of law provision; see Lynam v. Blue Diamond LLC, 2016 WL 5793725 (Del. Super. Oct. 4, 2016)), or Florida (under the Ironman choice of law provision; see Sunny Isles Marina, Inc. v. Adulami, 706 So. 2d 920 (Fla. Dist. Ct. App. 1998)). They very likely serve to eliminate any legal entitlement racers may have to a refund.

Eyes Wide Open
None of this is to say that any racer can’t try to negotiate with their race director for money back, especially if the options offered simply do not work. But, given the practical and legal realities, athletes should be well aware that their chances of a refund from the race director are slim.

Roman T. Galas is Partner in our Pennsylvania office.