Column-Bumps ahead for Vail ski resorts in wage and hour class action

By Jenna Greene

April 21 (Reuters) - The ski season is winding down, but legal troubles for Vail Resorts are heating up in a long-running wage-and-hour class action with more twists than a slalom course.

For Colorado-based Vail, which owns 42 mountain resorts including Heavenly in California, Park City in Utah and Stowe in Vermont, the stakes are high: a potential class of 100,000 current and past hourly employees including ski instructors, chair lift operators and ticket scanners, with damage claims topping $100 million.

Some of the fiercest fighting to date has been between plaintiffs' lawyers, ultimately leading a California state appeals court last fall to void a $13.1 million “final” settlement that would have resolved the case.

The battle not only involves millions in lawyer fees but also sets up a clash over where these ski resort workers can pursue their claims.

A Vail spokesperson said the company does “not comment on ongoing litigation.”

The case is now on remand to the trial court in El Dorado County (which encompasses the South Lake Tahoe area) after the California Supreme Court declined review – but whether it will remain there is an open question.

In a motion to dismiss filed on Friday, plaintiffs' lawyer Edward Dietrich, an intervenor in the case, argues that the matter belongs in U.S. District Court in Colorado, where Vail is headquartered and where he filed a proposed class action in December 2020.

Dietrich, a former partner at the now-defunct Milberg Weiss Bershad Hynes & Lerach who launched his own firm in 2009, declined comment for this column.

How the El Dorado suit leapfrogged ahead of Dietrich's federal case stems from an unconventional series of procedural maneuvers by Vail and rival plaintiffs' lawyers that injected a black diamond level of complexity into the litigation.

Hourly resort workers across 16 states allege they were wrongly denied pay for things like overtime, donning and doffing uniforms, and training. Employees also claim they were not reimbursed for work-related equipment and cell phone costs, nor were they allegedly compensated for missed rest or meal breaks.

Vail, represented by outside counsel from Ogletree Deakins, in court papers denies the allegations.

Plaintiffs' lawyers from Katz Banks Kumin; King & Siegel; Ottinger Employment Law; Diversity Law Group and James Hawkins APLC did not respond to requests for comment.

Here's the backstory. Vail was hit with a series of similar wage and hour suits in California, starting with a claim by a former security guard at Heavenly, who sued on October 9, 2020, in El Dorado County Superior Court. The 19-page complaint on behalf of all hourly workers at the Lake Tahoe resort alleged violations of California labor laws, as well seeking additional civil penalties under the California Private Attorneys General Act.

Eight weeks later, Dietrich followed with a 167-page complaint against parent company Vail in Denver federal court. The proposed nationwide class alleges violations of the federal Fair Labor Standards Act and the laws of nine states.

Given the multi-state allegations and scope, you might think the federal case in Colorado would take the lead.

You would be wrong.

In early 2021, Vail removed the El Dorado County case and three follow-on state court actions to federal court in Sacramento, noting that the publicly traded company is “neither formed nor incorporated in California.”

So far, pretty standard. But here’s where things get unusual.

While Dietrich was charging ahead with litigation in Colorado, Vail and the California plaintiffs were working out a deal in mediation.

In August 2021, they told the federal court in Sacramento that they had reached a tentative settlement – news that Dietrich in court papers said left him “blindsided.” If approved, the deal would extinguish the claims in his case.

Vail and the California plaintiffs in court papers said they would submit their settlement to the Eastern District of California for review.

That didn’t happen. Two months later, the parties told the court they decided to seek approval of their settlement in El Dorado Superior Court instead, where a newly-filed class action was pending.

Why the course change? They don’t explain. But the record shows the El Dorado County Superior Court judge denied Dietrich’s motion to intervene, then granted final approval of the settlement on September 1, 2022.

Dietrich on appeal cried foul, arguing that the $13.1 million payout divided among 103,000 class members was too low. Plaintiffs' lawyers stood to pocket about $4.3 million in legal fees.

Both Vail and the California plaintiffs in court papers defended the deal as proper.

There were “significant risks” that the class would not have been certified, the California plaintiffs wrote, pointing to a lack of evidence of uniformly applied company policies to create class-wide liability and individualized differences in class members' jobs.

The real issue, Vail added, “is Colorado Plaintiffs' desire to eliminate a threat to their potential claims for attorneys' fees in their own pending Colorado litigation.”

The Third Appellate District Court in Sacramento found that Dietrich should been allowed to intervene, but also more broadly that there was an issue with litigating the class in state court. As an out-of-state company, Vail isn’t at home in California, as required for general jurisdiction. Nor did it appear that the claims by out-of-state class members would have a sufficient link to California to warrant specific jurisdiction, the court held.

In practical terms, this meant that the California plaintiffs “could pursue the out-of-state claims only with (Vail’s) blessing,” the Third District held. That created “a powerful incentive (and more, an inescapable need)” for the plaintiffs to settle. Otherwise, Vail could turn around and say the claims should be dismissed for lack of jurisdiction.

Compared to the Colorado plaintiffs, the California plaintiffs “had a diminished bargaining position,” the appeals court said, and the trial court “wrongly presumed” the proposed settlement, which came before the class was certified, was fair.

A hearing on the motion to dismiss before a new judge in El Dorado is set for June 6.