Vail Resorts faces third class action over Epic Pass pricing

Shareholders claim the pricing scheme that doubled the cost to ski at Vail Resorts also violated the law.DENVER (CN) — In the wake of two consumer class actions by skiers claiming Vail Resorts’ Epic Pass prices were illegally set in cahoots with competitors, a shareholder levied a third class action against the major ski resort operator claiming the scheme also violated securities laws.“These wrongs resulted in significant damages to Vail’s reputation, goodwill, and standing in the business community, as well as exposing the company to two federal antitrust class actions seeking treble damages and structural relief,” shareholder Gary Peterson says in a 55-page complaint.Based in Broomfield, Colorado, Vail runs 42 ski resorts in four countries, topping $1 billion in gross profits annually. In addition to the original eponymous resort in Vail, Colorado, the company’s operations span from Northstar and Kirkwood in California, Canyons to Stowe Mountain in Vermont.Poking fun at the company’s massive reach one April Fool’s Day, Powder Magazine said Vail Resorts had “the rights to all North American snowfall for the 2018/19 season.”Claiming the company’s recent success was built on an illegal scheme, Peterson sued Vail Resorts and its board of directors in federal court Monday amid scrutiny over rising ticket costs and claims of price gouging.The Epic Pass provides visitors with access to Vail mountains, generating 65% of the company’s lift sales. Three-quarters of visitors to Vail resorts obtain an Epic Pass, or about 2.3 million people during the 2024-2025 season.“No decision the company makes carries greater consequences for stockholders than how it prices that pass,” Peterson argues in the complaint, adding that failing to ensure the Epic Pass remains within the bounds of the law amounts to “a mission-critical risk."Peterson claims in the lawsuit that in early 2020, Vail shared confidential information with competitors Alterra Mountain Company, Boyne Resorts, and Powdr Corp.The pooled data included revenue, operational costs and pricing which each company used “to fix, raise, maintain, and stabilize the prices of destination ski products,” Peterson claims in the lawsuit.“The scheme worked as designed, producing parallel, substantial, and lockstep price increases across the competitors’ passes, lift tickets, rentals, and lessons,” Peterson says in the complaint.Along with competitors Alterra Mountain Company and Boyne Resorts, Vail faces two class actions filed by consumers challenging the company’s coordinated increase in ski resort passes.In addition to using information gathered from competitors to raise the cost of the Epic Pass, Peterson claims Vail raised the price of single day passes to the point of being “economically irrational” in effort to coerce customers into purchasing the Epic Pass. Vail CEO Robert Katz bragged about about the strategy to The New York Times.As a result, during the 2023-2024 season, the average national cost to ski on a weekend hit $192 per day, double what it cost in the early 2010s. Last season, a day pass at Vail Mountain topped out at $356 and Park City cost $385 during the holidays.Meanwhile, a seasonal Epic Pass rose 39% from $783 in 2021 to $1,089 last year.This year’s all-access Epic Pass runs $1,119 and a localized Colorado pass $829. An all-access Ikon Pass currently costs $1,449 and a base pass $1,019.In addition to spending two decades on Vail’s board of directors, Katz served as executive chair for four years, during which his salary rose from $809,372 to $1.1 million, and his total take home pay fluctuated between $2 million and $3.9 million annually.According to Peterson, Vail’s ethics code prohibited the company from sharing future prices with competitors. Each time the company assured shareholders it was adhering to this code, Peterson argues, Vail was providing the class with misleading information.This misleading information led shareholders like Peterson to approve the 2024 Omnibus Incentive Plan providing members of the board of directors with performance bonuses, that Peterson now says followed “artificially inflated” profits.In the lawsuit, Peterson says each member of the board owed a fiduciary duty to the shareholders, as well as an obligation to ensure the company’s pricing scheme stayed within the bounds of the law.Besides overcharging visitors, Peterson says the price-fixing scheme left Vail resorts understaffed and overcrowded generating “what guests dubbed the lift line apocalypse” at Vail Mountain in Colorado and Park City Mountain in Utah.Peterson is represented by attorney Jeffrey Berens of Johnson Fistel in Denver. Neither party immediately responded to an inquiry for comment.Vail Resorts did not respond to a request for comment by press time.Claiming violations of the Sherman Act and the Clayton Act, the class asks for a jury trial and restitution.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads