Can an Event Host Cancel a Marathon Without Refunding Registration Fees?
I am officially at the end of the final stretch of marathon prep (translation: the "stay loose and rest" part!) because the Detroit Free Press/Chemical Bank Marathon is only a few days away! As it stands currently, the weather for the race looks like "blah" October weather consisting of a sunrise 45 minutes into the race, mostly clouds in the morning, a 60% chance of rain that hopefully stays in the afternoon, 80% humidity, warm, and windy. That being said, this lawsuit is right within the marathon theme, and I figured it was worth discussing.
This year would have been the seventh annual Vancouver USA Marathon from September 15-17 had it not been cancelled a month beforehand. Energy Events, the marathon event's host, claimed it decided to cancel the event, which was supposed to include a full marathon, a half marathon, a 5K, a kids' race, a bike ride, and a beer festival, after "careful consideration for several weeks and reviewing the finances." Typically, the Vancouver USA Marathon has approximately 3,000 registered runners, but at the time of cancellation, only about 65% of that had registered.
Naturally, registered runners probably wished they could get a refund considering it is not exactly cheap to participate in these races, but Energy Events declined to issue full refunds, citing a junk reason that it had already spent the money received on marketing promotions and such. If this happened to me after putting forth months of training and planning, I would be livid. That is why one Portland man, Corey Bradley, filed a class-action suit against Energy Events in August seeking restitution over the registration fees for unlawful trade practices and unjust enrichment.
The lawsuit states that Bradley believed he could attend the marathon on September 17 if he paid the registration fee for him & his wife, which totaled $183.24. It also argues, "No consumer would have paid defendant’s registration fee had defendant not made false representations and failed to disclose material information about its marathon."
It is relevant to note that the Vancouver USA Marathon website has a disclaimer at the bottom of its FAQ page stating the following, which supposedly was reiterated in the mandatory waiver registrants submitted with their registration either online or on paper (I checked on 10/11/2017 after the waiver link was removed and the race cancelled):
"I know that participating in an organized athletic event is potentially hazardous, and that I should not enter to participate unless I am medically able and properly trained. I HEREBY ASSUME THE RISKS OF PARTICIPATING IN THIS EVENT. I certify that I am physically fit and that I have sufficiently trained. I agree to abide by the competitive rules. I hereby take the following action for myself, my executors, administrators, heirs, next to kin, successors and assigns, or anyone else who might claim or sue on my behalf, and I hereby waive, release and discharge from any and all claims, losses, or liabilities for death, personal injury, partial or permanent disability, property damage, medical or hospital bills, or theft which may arise out of or relate to my participation in this event. I agree not to sue, and to hold harmless Vancouver USA Marathon or any and all persons, sponsors, landlords (members and affiliates), advisors, lenders, property managers, tenants, volunteers, participants or government agencies for any and all claims or liabilities that I have waived, released or discharges herein. ENTRY FEES ARE NON-REFUNDABLE & NON TRANSFERABLE."
So, an important questions follows: Can an event host cancel a marathon event without refunding race registration fees already paid?
First, we can see what precedence is available in other jurisdictions as secondary authority. It would not govern for sure, but it can provide some insight as to how courts interpret law and distinguish facts. We have seen many lawsuits filed across various US jurisdictions for event hosts cancelling marathons due to severe weather. We have also seen many lawsuits filed that use other reasons to justify cancelling races or, worse yet, try to keep the real reasons on the down low. We have even seen an example where both weather and other vague justifications played a role in cancelled races!
The Boulder County District Attorney's office sued Boulder Marathon LLC and its owner (and event director) Jeff Mason for the roughly $200,000 in registration fees paid for the 2013 and 2014 races that never took place. The complaint stated that Mason chose to continue collecting fees although he had not secured the requisite permits to hold the events, and instead of refunding the registrants their paid fees, he offered to roll them over to the 2015 race. Keep in mind, Mason allegedly had "no financial reserves" for the next year's event and had failed to follow through with the event two years in a row. In 2013, the race was cancelled for the huge flood, which was probably the right decision, but in 2014, Mason cancelled the Boulder Marathon two weeks before the scheduled October 5 event for "insurmountable 'hurdles and challenges'". He claimed he failed to get the permits because he wanted to change the course after a runner had died earlier that year during a half marathon. With the lawsuit, the DA's office sought to give registrants full refunds, to penalize Mason up to $2,000 for each violation (i.e., each registrant) and up to $10,000 for each violation that involved an elderly registrant - a total fine that cannot exceed $500,000 - for violating the Colorado Consumer Protection Act, and to prevent him from organizing similar future events in Boulder (i.e., where the district court has jurisdiction). The parties reached a partial agreement where Mason would not organize race events in Boulder for seven years, but the financials were not part of the deal, and I could not find the outcome of that portion of the case.
Here, for the Vancouver USA Marathon situation, the facts alleged are somewhat comparable. Energy Events continued to collect registration fees although whether the event would in fact take place was under "careful consideration for several weeks and reviewing the finances". Also, both complaints allege violations of statutory law intended to protect consumers. The suit filed in Portland argues that "Defendant’s violation of (Oregon Unlawful Trade Practices Act) as alleged above was reckless, in pursuit of profit, and constituted a wanton, outrageous and oppressive violation of the right of Oregon consumers to be free from unlawful trade practices." Unlike in Boulder, a law firm and an individual are filing a class-action lawsuit for Oregon citizens who registered against the event host rather than a municipal office suing the event host on behalf of its citizens. It is unclear whether one tactic has a stronger power punch than the other.
Second, we can review the terms and conditions agreed upon by registrants when they sign up and pay the race fee. For example, the Detroit Free Press/Chemical Bank Marathon makes available a protection plan that only costs $7.99 or 6.75% of the registration fee, whichever is greater depending on the race selected, that allows the runner to be reimbursed 100% of the fee paid due to injury, illness, normal pregnancy, employer termination, and military duty. In other words, it offers an option where a runner cancels his or her participation for personal reasons separate from the event host's plans. It also offers a 10-day window after the event for runners to apply for a refund if not totally satisfied. On the other hand, runners agree to a Cancellation Waiver where runners acknowledge they will get neither a refund or a roll-over for a cancelled race, and you can see the event cancellation policy readily available to registrants to the right. This policy expressly reserves the right to cancel for emergency purposes and, furthermore, states, "If such emergency conditions force cancellation, refunds cannot be provided since funds will have been spent in preparation for Race Day." This is in deep contrast to the Vancouver USA Marathon situation, and Detroit is not alone in making its policy public. The Boston Marathon will not refund fees, allow deferments, or transfer bib numbers for any reason whatsoever, according to its FAQ section.
Here, the Vancouver USA Marathon requires a waiver of certain rights and acknowledgement that fees are non-refundable and non-transferable, akin to Detroit's Cancellation Waiver, but I could not find an express cancellation policy. If the host failed to provide one, that fact could make it less likely that the defendant would receive a ruling weighing in its favor in addition to the business factors considered in deciding when and whether to cancel the event. Those facts, together with the likelihood of race experience being less or closer to novice than at an event like the Boston Marathon, which requires runners to participate in qualifying events and meet fast qualifying times in order to enter the registrant lottery, could help the court decide that the defendant did violate Oregon's consumer protection laws that exist to do just that - protect consumers from shady business practices and being taken advantage of.
Fun Sports Law Blonde Fact: I never thought I would call myself a "runner," but I ran my first marathon last year at a killer pace!
Therefore, the answer is a lawyer's favorite go-to response: It depends! If there's an express waiver of rights & a clear policy stated before the registrants pay, it is pretty safe to say a host can cancel a race without offering refunds or deferments. Without such language that gets the event host and the registrants on the same page, and especially where reasons are a bit shady or focus on financials as opposed to emergency situations where runner safety is at high risk (e.g., severe weather and terrorist threats), registrants have a stronger argument in their favor. This Portland lawsuit is certainly an engaging one, and it will be interesting to see which party receives a favorable ruling.