Unwavering: Despite Waivers, Class Action Seeks Refunds for Covid-19-Related Ironman & Rock ‘n’ Roll Marathon Series Race Cancellations

Outdoor Race Postponements/Cancellations and Legal Waivers
As posited in a recent article, in the face of 2020 outdoor race postponements/cancellations due to the Covid-19 pandemic, racers should brace themselves for the reality that express legal waivers they are typically required to sign — in which they waive any right to sue the race and agree that no refund will be provided in the event of any cancellation made in the race director’s sole discretion — make refunds a long shot. Based on those waivers, athletes will, rather, most likely have to settle for other options offered by race directors: automatic deferrals to a re-scheduled date, to the same race next year, or to a different race.

Class Action Suit vs. World Triathlon Corporation (“WTC”) & Competitor Group, Inc. (“CGI”)
Despite that legal reality, one disappointed racer took the baton on to spearhead a class action lawsuit against WTC and CGI, the respective owners of the popular Ironman and Rock ‘n’ Roll Marathon Series race brands. In a 3-count breach of contract action filed May 22 in the U.S. District Court for the Middle District of Florida, No. 8:20-cv-01182-TPB-AEP, Plaintiff Mikaela Ellenwood seeks certification of a class that includes all persons in the U.S. “who registered for and purchased access to an IRONMAN or Rock ‘n’ Roll Marathon Series event scheduled to take place in 2020 which was postponed or cancelled, and who were not provided a refund.”

In her complaint, Ellenwood claims WTC and CGI “have not delivered the events for which” she and other class-members paid. Given that she and other class-members “may not be able to arrange for, or feel comfortable with, participation in an event rescheduled for later in 2020, be able to participate in an event in a different city at another date, or be able and/or willing to have their registration deferred to a similar event in the same city in 2021,” she alleges the deferral options offered “are not equivalent to what” they “bargained for.” She further claims WTC and CGI “are not realizing the same level of operating costs for those events” (a dubious proposition, for the reasons noted in my last article; namely, race directors in fact spend much of the overhead costs months before the race takes place) and calls their refusal to refund entry fees a tactic “to maintain revenue and profit.” She ultimately seeks refunds for herself and the class.

Chances of Success?
Racers hoping to draft behind Ellenwood’s efforts may not want to get their hopes up. Not acknowledged in her complaint is the fact that Ironman and Rock ‘n’ Roll race registrants alike signed the same exact legal waiver. In it, athletes expressly agree that the race director has “sole discretion (whether for safety reasons, legal reasons, or any other reason)” to “delay or cancel” a race “for any reason,” including conditions it believes “are unsafe or otherwise unsuitable,” and if the race is “delayed, or cancelled for any reason,” there is “no refund of [the] entry fee or any other costs incurred in connection with the Event.” They further agree “[t]o release and not to sue” WTC or CGI for “any and all claims, liabilities, suits or expenses” related to their race “enrollment,” including claims for “breach of contract or any other claim.”

Such waivers, though not necessarily favored, are nonetheless generally upheld under Florida law. As the Eleventh Circuit recognized in Cooper v. Meridian Yachts, Ltd.:

Under Florida law, “[e]xculpatory provisions which attempt to relieve a party of his or her own negligence are generally looked upon with disfavor, and Florida law requires that such clauses be strictly construed against the party claiming to be relieved of liability.” Sunny Isles Marina, Inc. v. Adulami, 706 So.2d 920, 922 (Fla. Dist. Ct. App. 1998). “Such provisions, however, have been found to be valid and enforceable by Florida courts where the intention is made clear and unequivocal.” Id.

575 F.3d 1151, 1166–67 (11th Cir. 2009). In other words, such waivers are enforceable as long as they are “made clear and unequivocal in the contract, and the wording must be so clear and understandable that an ordinary and knowledgeable party will know what he is contracting away.” Id. (quoting Murphy v. Young Men’s Christian Ass’n of Lake Wales, Inc., 974 So.2d 565, 568 (Fla. Dist. Ct. App. 2008)). Releases like those signed by Rock ‘n’ Roll and Ironman athletes have been enforced by Florida courts in a variety of contexts, including gym membership, cruise spa services, and construction. See, respectively, Gayon v. Bally’s Total Fitness Corp., 802 So. 2d 420, 421 (Fla. Dist. Ct. App. 2001); Arch Ins. Co. v. NCL (Bahamas), Ltd., No. 11-20577-CIV, 2012 WL 4896045, at *4 (S.D. Fla. Oct. 15, 2012); Bartram, LLC v. C.B. Contractors, LLC, No. 1:09-CV-00254-SPM, 2011 WL 1299856, at *2 (N.D. Fla. Mar. 31, 2011).

More aptly, such releases have been enforced in the specific context of recreational activities and sporting events such as wave running, scuba diving, racetrack spectating, sprint car racing, and even triathlon. See, respectively, In re Complaint of Royal Carribean Cruises Ltd., 459 F. Supp. 2d 1275, 1278–79 (S.D. Fla. 2006); Borden v. Phillips, 752 So. 2d 69, 73–74 (Fla. Dist. Ct. App. 2000); DeBoer v. Florida Offroaders Driver’s Ass’n, Inc., 622 So.2d 1134, 1135-36 (Fla. 5th DCA 1993); Theis v. J & J Racing Promotions, 571 So. 2d 92, 94 (Fla. Dist. Ct. App. 1990); Banfield v. Louis, 589 So. 2d 441, 444 (Fla. Dist. Ct. App. 1991). While claimants invariably try to evade such releases by claiming they, e.g., are unconscionable, or the product of an imbalance in bargaining power, Florida courts have rejected such claims, finding “that in recreational settings there is no inequality of bargaining power.” DeBoer, 622 So. 2d at 1136.

Ellenwood also pleads claims for unjust enrichment and violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). While the express waiver likely applies to both, it is worth noting that, as to the former, under Florida law, unjust enrichment claims are “precluded by the existence of an express contract between the parties concerning the same subject matter.” Alhassid v. Bank of Am., N.A., 60 F. Supp. 3d 1302, 1322 (S.D. Fla. 2014) (quotation omitted). As to the latter, “[w]hile conduct constituting a breach of contract may be actionable under FDUTPA, absent significant allegations of unfair or deceptive conduct, a complaint that merely alleges intentional breach of contract is insufficient to state a claim under FDUTPA.” Grossman v. Porter, Inc., No. 09-81600-CIV, 2011 WL 13268865, at *6 (S.D. Fla. Feb. 15, 2011) (quotation omitted).

Looking Ahead
With counsel for both WTC and CGI having executed a Waiver of the Service of Summons in accordance with Fed. R. Civ. P. 4(d), each has 60 days, or until July 27, to file an answer or motion under Rule 12. Given that a court can “properly consider a motion to dismiss for failure to state” a breach of contract claim when the contract “terms are unambiguous,” Alhassid, 60 F. Supp. 3d at 1312, a motion to dismiss may be forthcoming. We will stay tuned.

Roman T. Galas is Partner in our Pennsylvania office.