When a California Appeals Court overturned a 2022 settlement agreement in an ongoing labor dispute between Vail Resorts and workers in 16 states, it also caused a chain reaction that could impact separate, similar case that has been ongoing in Colorado.

Vail Resorts has petitioned the California Supreme Court to review the appeals court decision. The company’s attorneys said the appeals court demonstrated a “split in authority” by saying a fairness test should not have been applied before the class was certified. The class is the people represented in a class-action lawsuit, and the certification of that class occurs when the total number of those people is determined.

“It is important that the Court resolve this split in authority because it impacts the settlement approval process with respect to the vast majority of class action settlements in this state, most of which are resolved before class certification proceedings,” Vail Resorts argues in its petition to the California Supreme Court.

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The attorneys for the workers who sought to have the settlement overturned responded to the petition in a filing saying the opposite was true, and that an approval of that settlement would have created a split in authority.

“There is not one published California appellate case that presumed that a class action settlement, which recovered pennies on the dollar, was fair and approved it where, as here, the case was settled prior to the filing of a class certification motion without any formal discovery, motion practice or the submission of any admissible evidence obtained through active litigation to the trial court,” the workers’ attorneys argue.

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The “pennies on the dollar” slogan became a rallying cry for the workers seeking to overturn the $13.1 million settlement agreement, which could have included a group of more than 100,000 workers, had the class been certified, and would have netted more than $4 million for the plantiffs’ attorneys.

In a June 2022 hearing on the matter, a judge heard from workers like ski instructor Bryan Griffith, who said he was required to be present at the resort for four to seven hours, but would only receive payment for the time he was in a lesson, which sometimes only amounted to one hour.

Griffith said his settlement offer was $7.46 — which would not even cover the $9 in fees he paid to the court in filing his objection — amounting to an estimated 0.25% of his likely damages.

Griffith also objected to the plaintiffs’ attorneys’ fees in the settlement, pointing out that one of the plaintiffs’ attorneys was billing $900 per hour when the average civil litigation rate in California is $333 per hour.

“They probably don’t even have $1 million of actual work in this case, but they’re going to walk away with more than $4 million in attorneys fees,” Griffith said.

The California Appeals Court, in addition to throwing out the settlement, also said a judge erred in not allowing the plaintiffs in a separate lawsuit, being heard in federal court in Colorado, to intervene in the California state court lawsuit.

The Colorado plaintiffs argued that the case should not have been litigated in California state court because it involves workers in 15 other states besides California, and the federal court in Colorado has general jurisdiction over the case because Vail Resorts is headquartered in Colorado.

California’s 3rd Appellate District mentioned that fact in its opinion, issued in October.

“We cannot say that defendants are essentially at home in California, as required for general jurisdiction,” according to the opinion. “Nor can we say on this record that the out-of-state claims had a sufficient link to California to warrant specific jurisdiction. So absent defendants’ consent to suit, California courts would appear to lack personal jurisdiction over these claims.”

The federal court in Colorado, in learning of the California appellate district’s decision, requested the plaintiffs file a brief further explaining why the federal court would be a more appropriate venue for the class action claim.

That brief was filed in November and said that the California settlement and the circumstances surrounding it “are precisely those against which courts and commentators alike have cautioned are indicia of a ‘reverse auction’ and ‘collusive’ or ‘sham’ settlement,” defining a reverse action as occurring when “a defendant in a series of class actions picks the most ineffectual lawyers to negotiate a settlement in the hope that the district court will approve a weak settlement that will preclude
other claims against the defendant.”