On October 17, 2002, Ms. O'Connor filed the instant action alleging negligence on the part of USFA in using unsuitable material for the fencing strips and failing to properly affix the strips to the ground. (Complaint ¶¶ 15-18, Defendant's Exhibit A). The complaint alleges that the injury occurred on July 3, 2001 (Complaint ¶¶ 12, 14), apparently as a result of a typographical error. (O'Connor Aff. at ¶ 11; Affidavit of Gary Port, dated February 24, 2003, at ¶¶ 10-14). USFA has moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) because it alleges that the injury occurred on July 3, a day on which Ms. O'Connor admittedly did not participate in any USFA sponsored competitions. In the alternative, USFA also seeks summary judgment on the basis of the two waivers of liability signed by Ms. O'Connor.
I. EXPRESS WAIVER OF LIABILITY
USFA moves for summary judgment on the basis of two express waivers signed by Ms. O'Connor, which purport to release USFA and its sponsors from any liability for injuries that may occur while competing in a USFA sponsored event. Ms. O'Connor argues that under New York law such waivers are void and unenforceable as against public policy. USFA argues for the applicability of California law, which does enforce waivers releasing liability for participation in recreational activities.
A. Conflict Between New York, Colorado and California Law
Before proceeding to engage in a choice of law analysis it is necessary first to determine that, at a minimum, a facial conflict exists between the laws of the forum state and the laws of the foreign state(s) asserted by the parties. The laws of three states are implicated here: New York, where the plaintiff is domiciled; Colorado, where the defendant is organized and has its principal place of business; and California, where the accident occurred.
1. New York Law
"New York has a longstanding policy disfavoring exculpatory contracts." Rivera v. Pocono Whitewaters Adventures, 241 A.D.2d 381, 660 N.Y.S.2d 723, 724 (1st Dep't. 1997). Indeed, the New York legislature passed a statute specifically disclaiming the legitimacy of exculpatory contracts in the context of recreational activities. General Obligation Law § 5-326 provides:
§ 5-326. Agreements exempting pools, gymnasiums,
places of public amusement or recreation and similar
establishments from liability for negligence void and
Every covenant, agreement or understanding in or in
connection with, or collateral to, any contract,
membership application, ticket of admission or
similar writing, entered into between the owner or
operator of any pool, gymnasium, place of amusement
or recreation, or similar establishment and the user
of such facilities, pursuant to which such owner or
operator receives a fee or other compensation for the
use of such facilities, which exempts the said owner
or operator from liability for damages caused by or
resulting from the negligence of the owner, operator
or person in charge of such establishment, or their
agents, servants or employees, shall be deemed to be
void as against public policy and wholly
This statute has been liberally construed to cover spectators and participants at sporting events and recreational facilities. See, e.g., Williams v. City of Albany, 271 A.D.2d 855, 706 N.Y.S.2d 240 (3rd Dep't 2000) (§ 5-326 applies to participants of a flag football league); Filson v. Cold River Trail Rides, 242 A.D.2d 775, 661 N.Y.S.2d 841 (3rd Dep't. 1997) (§ 5-326 applies to horseback riding academy); Owen v. R.J.S. Safety Equipment, 169 A.D.2d 150, 572 N.Y.S.2d 390 (3rd Dep't. 1991) (§ 5-326 applies to participant in auto racing competition).
USFA contends that § 5-326 does not apply in this case because it was not an "owner or operator" of "recreational facilities" and did not receive a fee for the use any such facilities. This argument is unavailing, as New York courts have rejected such a restrictive interpretation of the statute. The case of Williams v. City of Albany, 271 A.D.2d 855, 706 N.Y.S.2d 240, is particularly instructive. In Williams, the defendant Capital District Flag Football, Inc. ("CDFF") organized a recreational flag football league and ran games on six different public playing fields. The plaintiff, who was injured by falling on broken glass during the course of one of these games, brought suit against CDFF despite having signed an express waiver of liability as a prerequisite to obtaining membership in the league. Id. at 855-56, 706 N.Y.S.2d 240. CDFF contended that it was merely a "sponsor" of the event and could not be held liable under § 5-326. In ruling that CDFF was an "operator" subject to the provisions of § 5-326, the Appellate Division found that the defendant had "arranged for the use of six fields for [the purpose of flag football], provided referees for league play and acquired insurance for its protection in that regard. The fact that the CDFF did not own, maintain or control the playing field where the recreational activity took place is not controlling." Id. at 857, 706 N.Y.S.2d 240. See also Filson v. Cold River Trail Rides, 242 A.D.2d at 777, 661 N.Y.S.2d 841 (defendant who provided wilderness horseback riding excursions through public lands was an "operator" under § 5-326 even though it did not own or maintain the land).
The material facts here are indistinguishable from Williams. USFA organizes fencing tournaments throughout the country, including the National Championship competition in which Ms. O'Connor was injured, but argues that it is only a "sponsor." As in Williams, USFA arranged for the use of facilities for these events, provided referees, and acquired insurance for its protection. There is also evidence that it prepared these facilities for use in the fencing competitions. The fact that USFA does not own or maintain the Sacramento Convention Center is irrelevant. Under Williams, USFA is clearly an "operator" subject to the provisions of § 5-326.
USFA also contends that § 5-326 is inapplicable because it did not receive a fee for the use of the Sacramento Convention Center. The issue of whether a fee was paid is an important factor in triggering the protection of the statute. See Owen v. R.J.S. Safety, 169 A.D.2d at 153-54, 572 N.Y.S.2d 390; see also Williams, 271 A.D.2d at 857, 706 N.Y.S.2d 240 ("the relevant inquiry is whether the CDFF, as the operator of the recreational activity in question, received compensation [from the plaintiff] thereof'). USFA's contention is without merit, however, because it is clear that Ms. O'Connor paid a fee of $135.00 to attend the National Championship event.
In support of its contention, USFA cites Lago v. Krollage, 78 N.Y.2d 95, 571 N.Y.S.2d 689, 575 N.E.2d 107 (1991), in which the Court of Appeals held that defendant NASCAR was not subject to § 5-326 because there was no evidence that the plaintiff had paid a fee to use its facility. But Lago is distinguishable because the plaintiff in that case was a mechanic who paid only a single fee in connection with his application for a mechanics license. Id. at 98, 571 N.Y.S.2d 689, 575 N.E.2d 107. Indeed, the waiver specifically provided that it was executed "[i]n consideration of the acceptance by NASCAR of [his] license application, [and] issuance of [the mechanic's] license. . ." Id. Thus, the court concluded that "the statute is inapplicable to the release contained in the NASCAR license application" because "as is evident from the application itself, the fee was for a mechanic's license in the Grand American Stock Car, Modified & Late Model Sportsman division of NASCAR" not the use of any NASCAR facility. Id. at 101, 571 N.Y.S.2d 689, 575 N.E.2d 107.
Unlike the plaintiff in Lago, Ms. O'Connor did not execute a waiver in consideration of being issued a license. Rather, she paid a fee to secure membership in the USFA and then paid a separate and independent fee of $135.00 to participate in the National Championship competition. These facts are analogous to Owen v. R.J.S. Safety Equipment, 169 A.D.2d at 153-54, 572 N.Y.S.2d 390, where the plaintiff stock car driver paid a membership fee to NASCAR and then paid a separate fee to participate in a specific NASCAR-sponsored event. In distinguishing Lago, the Owen court reasoned that this additional fee, even though characterized by NASCAR as a "general admission fee" rather than a fee to participate in the event, was sufficient to trigger the provisions of § 5-326:
It is undisputed, therefore, that decedent paid a fee
in addition to the membership or license fee. Whether
that additional fee was a general admission fee or a
fee for entrance into the pit area is irrelevant.
Decedent could not participate in the race without
first gaining admission into the racetrack facility
and he could not gain admission into the facility
without first paying the admission fee. In these
circumstances, defendants' assertion that no fee was
paid by decedent to participate in the race is
insufficient to create a triable issue of fact since
plaintiff presented undisputed evidence that the
owner or operator received a fee or other
compensation for the use of the facility within the
meaning of GOL § 5-326.
Id. at 154.
2. California Law
Under California law, express waivers of liability signed as a condition of participating in recreational athletic activities are valid and enforceable. See, e.g., Allan v. Snow Summit, Inc., 51 Cal.App.4th 1358, 1372-75, 59 Cal.Rptr.2d 813 (4th Dist. 1996) (ski instruction at ski resort); Randas v. YMCA of Metropolitan Los Angeles, 17 Cal.App.4th 158, 162, 21 Cal.Rptr.2d 245 (2d Dist. 1993) (swimming in YMCA pool); Coates v. Newhall Land & Farming, Inc., 191 Cal.App.3d 1, 8, 236 Cal.Rptr. 181 (2d Dist. 1987) (dirt bike park); Okura v. United States Cycling Federation, 186 Cal.App.3d 1462, 1468-69, 231 Cal.Rptr. 429 (2d Dist. 1986) (bicycle race). California courts have held that public policy concerns are not implicated by exculpatory agreements in the context of recreational sports, see Buchan v. United States Cycling Federation, Inc., 227 Cal.App.3d 134, 149-54, 277 Cal.Rptr. 887 (2d Dist. 1991); Madison Superior Court, 203 Cal.App.3d 589, 598-99, 250 Cal.Rptr. 299 (2d Dist. 1988); Raondas, 17 Cal.App.4th at 162, 21 Cal.Rptr.2d 245, and have determined that it is not objectively unreasonable to reallocate the risks to the user rather than the recreational services even where the waivers may be one-sided and adhesive. Kurashige v. Indian Dunes, Inc., 200 Cal.App.3d 606, 246 Cal.Rptr. 310 (2d Dist. 1988); Allan, v. Snow Summit, 51 Cal.App.4th at 1377, 59 Cal.Rptr.2d 813. In general, California courts look favorably on contractual waivers of liability even where such devices permit recreational establishments to wholly escape liability while blithely supplying defective equipment or services. See Bhardwaj v. 24 Hour Fitness, 2002 WL 373563, 2002 Cal.App. Unpub. LEXIS 3288 (6th Dist. Mar. 8, 2002) (defective weight machine in gym); Blau v. Mammoth Mountain Ski Area, 2001 WL 1299418, 2001 Cal.App. Unpub. LEXIS 2328 (3d Dist. Oct. 25, 2001) (defective ski bindings); Leon v. Family Fitness Center, 61 Cal.App.4th 1227, 71 Cal.Rptr.2d 923 (4th Dist. 1998) (defective sauna in health club).
3. Colorado Law
While Colorado law regarding exculpatory contracts is not identical to the statutory aversion expressed by N.Y. GOL § 5326, it is closer to the New York policy in this context than California's permissive treatment of adhesive waivers of liability by amateur athletes. See, e.g., B & B Livery, Inc. v. Riehl, 960 P.2d 134, 136 (Colo. 1998) ("exculpatory agreements have long been disfavored"). For instance, the Colorado Supreme Court recently held that any agreement by a parent or guardian to indemnify a tortfeasor for negligence committed against a minor child is void and wholly unenforceable as a violation of the state's public policy. Cooper v. Aspen Skiing Co., 48 P.3d 1229, 1235-37 (Colo. 2002). Thus, the primary waiver USFA relies on, the July 19, 2000 waiver signed by Ms. O'Connor and her mother as part of the USFA membership application, would be nullified by Colorado's public policy as well as New York's.
Enforceability of the remaining waiver is also suspect under Colorado law, as it lacks several crucial indicia of fairness. Although waivers of liability may be enforced if they are fairly bargained-for, unlike California, Colorado does not enforce adhesive exculpatory contracts. Waivers of liability are void where one party is "at such obvious disadvantage in bargaining power that the effect of the contract is to put him at the mercy of the other's negligence." Heil Valley Ranch v. Simkin, 784 P.2d 781, 783 (Colo. 1989). In this case, Ms. O'Connor was not in a position to negotiate a less onerous contract with USFA, as the waiver of liability was a prerequisite to participation in the National Championship competition. Given USFA's dominance over amateur fencing in the United States, and its position as the governing body of Olympic qualifications and selection for international competition, amateur athletes in Ms. O'Connor's position have few if any alternatives to participating in USFA-sponsored events. C.f. Jones v. Dressel, 40 Colo. App. 459, 582 P.2d 1057 (1978), aff'd 623 P.2d 370 (Colo. 1981) (finding that exculpatory provision in parachute-jumping agreement with air service was not a contract of adhesion precisely because the facts did not establish a great disparity of bargaining power or that the desired services could not be obtained elsewhere, and since it was not essential that plaintiff pursue his interest in skydiving with a particular air service).
Nor did the release adequately apprise Ms. O'Connor of the risks she was assuming such that her intent to extinguish liability for USFA's negligence was clearly and unambiguously expressed. The waiver merely stated "I enter this tournament at my own risk and release the USFA and its sponsors, referees and tournament organizers from any liability." (Def.Ex. E). While specific terms describing the risks for which the drafting party is being immunizing are not required, "when the parties adopt broad language in a release, it is reasonable to interpret the intended coverage to be as broad as the risks that are obvious to experienced participants." Heil Valley Ranch, 784 P.2d at 785 (emphasis added). Applying this aspect of Colorado law, the district court in Day v. Snowmass Stables, 810 F. Supp. 289 (D.Colo. 1993) denied the defendant stables' summary judgment motion based on a signed release, where the plaintiff was injured by a defective yoke ring on a horsedrawn wagon. In finding that the release did not clearly and unambiguously show plaintiff's intent to release the stables from liability for its negligent use of faulty equipment, the Day court reasoned: "In this case, there is no evidence that [plaintiff] had any experience with horse drawn wagons. Moreover, it is not an obvious risk that, while participating in a horse drawn wagon ride, the wagon team will become spooked because of the failure of a neck yoke ring." Id. at 295. Using this case by way of analogy, it is difficult to see how a person signing the agreement involved in this case would have been able to foresee the risk of inappropriate or defective flooring material. This is not a risk inherent to fencing nor would it be particularly obvious to an inexperienced amateur like Ms. O'Connor, who was competing in her first national tournament. At the very least, USFA would not be entitled to summary judgment under Colorado law on the basis of this waiver.
Thus, if California law applies, the waivers signed by Ms. O'Connor will act to bar her suit. If New York law applies, GOL § 5-326 voids the waivers and Ms. O'Connor is free to pursue her tort action against USFA. The same is true with respect to Colorado law. Thus, there is a facial conflict of laws.
B. New York Choice of Law Rules
In a diversity action, a federal district court must apply the choice-of-law principles of the state in which it sits. See Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). New York employs an "interest analysis," whereby the court determines which jurisdiction has an interest in applying its law to the litigation. See Padula v. Lilary Properties Corp., 84 N.Y.2d 519, 620 N.Y.S.2d 310, 644 N.E.2d 1001 (1994). This analysis begins by examining the location of the contacts each jurisdiction has with the event giving rise to the cause of action. "[T]he only facts of contacts which obtain significance in defining State interests are those which relate to the purpose of the particular law in conflict." Schultz v. Boy Scouts of America, 65 N.Y.2d 189, 198, 491 N.Y.S.2d 90, 95, 480 N.E.2d 679 (1985) (citations omitted). "Once these contacts are discovered and analyzed they will indicate (1) that there exists no true conflict of laws, . . . as in most choice of law cases, or (2) that a true conflict exists, i.e., both jurisdictions have an interest in the application of their law." Matter of Crichton, 20 N.Y.2d 124, 135 n. 8, 281 N.Y.S.2d 811, 228 N.E.2d 799 (1967) (Keating, J.). Where no true conflict exists, the law of the only jurisdiction with an interest in the application of its law will be applied. See, e.g., Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519, 249 N.E.2d 394 (1969) (Keating, J.). Where a true conflict exists, New York leaned initially towards a resolution of the conflict in favor of the application of its own law. Crichton, 20 N.Y.2d at 135 n. 8, 281 N.Y.S.2d 811, 228 N.E.2d 799.
Many of the early choice of law cases involved guest statutes which limited, or precluded altogether, negligence actions by a passenger against the owner of a vehicle. In Neumeier v. Kuehner, 31 N.Y.2d 121, 128, 335 N.Y.S.2d 64, 286 N.E.2d 454 (1972), the Court of Appeals promulgated a set of rules to resolve such choice of law problems:
1. When the guest-passenger and the host-driver are
domiciled in the same state, and the car is there
registered, the law of that state should control and
determine the standard of care which the host owes to
2. When the driver's conduct occurred in the state of
his domicile and that state does not cast him in
liability for that conduct, he should not be held
liable by reason of the fact that liability would be
imposed upon him under the tort law of
the state of the victim's domicile. Conversely, when
the guest was injured in the state of his own
domicile and its law permits recovery, the driver who
has come into that state should not — in the
absence of special circumstances — be permitted
to interpose the law of his state as a defense.
3. In other situations, when the passenger and the
driver are domiciled in different states, the rule is
necessarily less categorical. Normally, the
applicable rule of decision will be that of the state
where the accident occurred but not if it can be
shown that displacing that normally applicable rule
will advance the relevant substantive law purposes
without impairing the smooth working of the
multi-state system or producing great uncertainty for
"Although drafted in terms of guest statutes — drivers and passengers — these rules could, in appropriate cases, apply as well to other loss allocation conflicts." Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 73, 595 N.Y.S.2d 919, 612 N.E.2d 277 (1993) (citations omitted).
Only the first Neumeier rule was a restatement of a rule that derived from prior New York Court of Appeals cases. The second and third Neumeier rules lacked any sound precedential bases. Indeed, what later became known as the Neumeier rules were first suggested in Chief Judge Fuld's concurring opinion in Tooker v. Lopez, 24 N.Y.2d at 583-85, 301 N.Y.S.2d 519, 249 N.E.2d 394. They were later elevated to dicta in his majority opinion in Neumeier. They reflected what Judge Friendly described, at the time, as the "new practice of fashioning `guideline decisions,' formerly known as dicta, which . . . suffer the danger and pitfalls that usually go with judging in a vacuum and are apt in their application to carry unintended consequences which once accomplished are not easy to repair. . ." Henry J. Friendly, Remarks at Proceedings of the Bar of the Supreme Court of the United States In Memoriam of Justice Harlan, 92 S.Ct. 1, 30 (1972) (internal quotation omitted). These shortcomings notwithstanding, the Neumeier rules still survive, although not without significant gloss. Because that gloss includes a return to the governmental interest analysis, some prefatory discussion of the Neumeier rules is useful to reconcile them with the governmental-interest analysis to which New York law continues to adhere.
The first Neumeier rule is a classic example of a case in which "there exists no true conflict of laws." Crichton, 20 N.Y.2d at 135 n. 8, 281 N.Y.S.2d 811, 228 N.E.2d 799. Tooker v. Lopez, is an example of such a case. The guest driver and host passenger were both domiciled in New York, which did not have a guest statute limiting recovery by a passenger against the hostdriver. The accident occurred in Michigan, which limited recovery by a guest to cases in which wilful misconduct or gross negligence of the driver was shown. Judge Keating, who has been described as "the persistent, consistent, and ultimately prevailing champion of governmental interest analysis of all conflict of laws problems," Hans W. Baade, Judge Keating and the Conflict of Laws, 36 BROOK. L. REV. 10, 15 (1969), explained why this was "one of the simplest in the choice of law area . . . [i]f the facts are examined in light of the policy considerations which underlie the ostensibly conflicting laws. . ." Tooker, 24 N.Y.2d at 576, 301 N.Y.S.2d 519, 249 N.E.2d 394.
Judge Keating observed that New York did not place any restriction on recovery by a guest. On the contrary, it has an affirmatively expressed legislative policy reflecting a strong interest in allowing "innocent victims of motor vehicle accidents [to] be recompensed for the injury and financial loss inflicted upon them." Id. (quoting N.Y. Vehicle and Traffic Law § 310). By contrast, the purpose of the Michigan guest statute is the "prevention of fraudulent claims against local insurers or the protection of local automobile owners . . . This purpose can never be vindicated when the insurer is a New York carrier and the defendant is sued in the courts of this State. Under such circumstances, the jurisdiction enacting such a guest statute has absolutely no interest in the application of its law." Tooker, 24 N.Y.2d at 575, 301 N.Y.S.2d 519, 249 N.E.2d 394. In sum, Judge Keating concluded:
New York's "grave concern" in affording recovery for
the injuries suffered by Catharina Tooker, a New York
domiciliary, and the loss suffered by her family as a
result of her wrongful death, is evident merely in
stating the policy which our law reflects. On the
other hand, Michigan has no interest in whether a New
York plaintiff is denied recovery against a New York
defendant where the car is insured here.
Tooker, 24 N.Y.2d at 577, 301 N.Y.S.2d 519, 249 N.E.2d 394.
The holding in Tooker, which is codified in the first Neumeier rule, is particularly significant here because it stands for the proposition that the mere fact that an accident occurred in a particular State is not sufficient to give that State an interest in the application of its law with respect to issues relating to the allocation of damages. Something more is required.
Neumeier's second rule provides the answer to what is required to tilt the decision in favor of the law of the situs.
The rule provides that when the driver's
(defendant's) conduct occurred in the State of
domicile and that State would not impose liability,
the driver should not be exposed to liability under
the law of the victim's domicile. Conversely, when
the plaintiff-passenger is injured in the place of
domicile and would be entitled to recover, the
out-of-State driver should generally be unable to
interpose the law of his or her domicile to defeat
recovery (31 N.Y.2d at 128, 335 N.Y.S.2d 64,
286 N.E.2d 454). In essence, then, the second Neumeier
rule adopts a `place of injury' test for true
conflict guest statute cases.
Cooney, 81 N.Y.2d at 73, 595 N.Y.S.2d 919, 612 N.E.2d 277 (emphasis added). In each of the two examples in the second Neumeier rule, the fact that the State of the driver's domicile afforded a particular statutory defense, which is contrary to the law of the passenger's domicile, gave rise to a true conflict of laws. New York resolves such a conflict by deferring to the law of the situs of the tort as a "tiebreaker" Cooney, 81 N.Y.2d at 74, 595 N.Y.S.2d 919, 612 N.E.2d 277. While the facts of this case do not implicate the second Neumeier rule, that rule is significant here because it demonstrates the kind of connection the law of the place of the accident must have to warrant deference: it must, at a minimum, have a clear interest in the application of its loss allocation rule.