Heath v. Aspen Skiing Corporation, Civ. A. No. C-2890.

• Court: United States District Courts. 10th Circuit. United States District Court of Colorado
• Writing for the Court: WINNER
• Citation: 325 F. Supp. 223
• Parties: Jack HEATH, Plaintiff, v. ASPEN SKIING CORPORATION, a Colorado corporation, Aspen Highlands Skiing Corporation, a Colorado corporation, D. R. C. Brown, Tom Richardson, and Whipple V. N. Jones, Defendants.
• Docket Number: Civ. A. No. C-2890.
• Decision Date: 30 March 1971

325 F. Supp. 223

Jack HEATH, Plaintiff,
v.
ASPEN SKIING CORPORATION, a Colorado corporation, Aspen Highlands Skiing Corporation, a Colorado corporation, D. R. C. Brown, Tom Richardson, and Whipple V. N. Jones, Defendants.

Civ. A. No. C-2890.

United States District Court, D. Colorado.

March 30, 1971.

325 F. Supp. 224

A. Bob Jordan, Oklahoma City, Okl., Carl R. Nutzhorn, Aspen, Colo., for plaintiff.

Ireland, Stapleton, Pryor & Holmes, by Monte D. Pascoe and Kenneth L. Starr, Denver, Colo., Holland & Hart, by William C. McClearn and James J. Moran, Denver, Colo., for defendants.

325 F. Supp. 225

MEMORANDUM OPINION

WINNER, District Judge.

Defendant Aspen Skiing Corporation operates three major ski areas in Pitkin County, Colorado. They are Aspen Mountain, Buttermilk and Snowmass-at-Aspen. Defendant Aspen Highlands Skiing Corporation operates a nearby major area, Aspen Highlands. Skiers come from throughout the fifty states and from many foreign countries to take advantage of the snow conditions available at these areas and other ski resorts in Colorado, among which are Vail, Breckenridge, Steamboat Springs, Keystone, Arapahoe, Loveland and Winter Park. The questions raised in this action are of importance to the western ski industry, because almost every major ski area in the west operates as a permittee of the United States Forest Service, and Forest Service regulations and policy are here under attack. The four areas involved have been granted 30-year Forest Service Temporary Use Permits, and nineteen percent of Aspen Mountain's trails, eighty percent of Buttermilk's trails, seventy-eight percent of the Snowmass trails and ninety-six percent of Aspen Highland's trails are on public land.

All of the permittees have built expensive lifts; all maintain ski patrols and all conduct ski schools headed by famous skiers.¹ Typically, the lower lift terminals, the hotels, lodges, restaurants and shops are on fee land, while the majority of the ski trails are on Forest Service land. The investment of each major area permittee is in the millions of dollars, and the area operators, the airlines, ski equipment manufacturers, and others, including the State of Colorado, have advertised nationally to attract skiers and to promote tourism. In recent years, skiing has become one of Colorado's major industries, and the state's development of the sport has resulted in the naming of Colorado as the site of the 1976 Winter Olympics.

It is against this background that plaintiff claims a right to conduct an independent ski school on lands to which defendants hold a Forest Service permit and on trails built by defendants at their own expense. We learn that plaintiff is and for more than ten years has been certified as a ski instructor by the Rocky Mountain Ski Instructors Association. This is a private organization which tests the qualifications of ski instructors, but it has no official sanction from any governmental agency, although it is the organization mentioned in the use permits as the certifying body for ski instructors. In his complaint, plaintiff avers:

"8. That since February, 1966, until mid-December, 1970, the plaintiff was an independent ski instructor, employing a rather unique style of skiing and instruction, although affiliated with a ski school operated through the defendant Aspen Highlands Skiing Corporation. That the plaintiff, as an independent businessman, solicited his own clients through the means of public advertisement and personal contact, scheduling the teaching thereof and receiving remuneration directly therefrom, paying a percentage of what he received to the ski school at Aspen Highlands Ski Area when teaching his clients at said area. That in the conduct of his business, the Plaintiff regularly contacted his clients, by United States mail and through the facilities of long distance telephone transmission lines and radio, often contracting therewith for his various clients to travel from the place of their residence (generally without the State of Colorado and usually by instruments of interstate commerce) to Aspen, Colorado, to there be instructed in the sport of skiing by the Plaintiff at one or more areas operated by the corporate Defendants. That on other occasions, clients of the Plaintiff travel to Aspen, Colorado, from their residency, (generally without the State of Colorado and utilizing instruments of interstate

325 F. Supp. 226

commerce) and there contract with the plaintiff to be taught the sport of skiing at one or more of the areas operated by the corporate Defendants. That the Plaintiff enjoyed a successful business."

The evidence established and the Court finds the foregoing averments to be true, except that plaintiff's agreement with Aspen Highlands was that he was to remit the gross amounts he received for ski instruction to Aspen Highlands and that defendant was to then pay sixty percent of those gross amounts to plaintiff; and except that the evidence was a bit queasy as to the nature of the success of plaintiff's business. Plaintiff testified that for his services as a ski instructor, he charged $25.00 per hour for a two hour minimum period; that he charged $20.00 per hour for a half day's instruction, and $100 for six hours of teaching. Thrown in as a fringe benefit to plaintiff's pupils was an uncertain quantity of health food of plaintiff's manufacture. He testified that he taught almost every day of the 1969-1970 ski season which was of about four months duration, and that ninety percent of his teaching was at Aspen Highlands; yet, at these stout hourly and daily rates, he paid Aspen Highlands only $1,500, and claimed to have netted only $900 for the season. With this testimony of plaintiff, it is not difficult for the Court to accept, and the Court does accept and finds to be true, the testimony of Aspen Highland's witnesses that plaintiff admitted to them that he was pocketing a substantial part of his gross teaching revenues without bothering to remit any part thereof to Aspen Highlands as he had agreed. As will be discussed later, this has bearing on the case for the reason that Aspen Highlands is required by the terms of its use permit to remit to the United States Government a percentage of all gross revenues derived on the area under threat of forfeiture of the permit if it does not do so. Plaintiff also testified that his books of account consisted of some notations made on a calendar; but, unfortunately, the calendar has been destroyed. This would present some slight problems to the Forest Service should it wish to conduct an audit of plaintiff's books. Permittees agree to such audits as a condition of the permit, and such audits are authorized by the use permits.

That plaintiff is a good ski instructor is not disputed. Defendants admit it, and in support of his application for a temporary restraining order, plaintiff submitted an affidavit from Ingo Preminger who, together with plaintiff's counsel, for some obscure reason thought that the Court should know this about Mr. Preminger:

"I am a producer of motion pictures. Among my works is the recently released film entitled M*A*S*H which has received the first prize at the Cannes Film Festival, was awarded the first prize by the National Association of Film Critics last month and was awarded the prize as Best Picture of the Year by the Foreign Film Critics. This latter prize is also known as the Golden Globe Award."

Following this interesting bit of incidental but immaterial intelligence, Mr. Preminger explained that he was a student of plaintiff and thought that Heath was "an outstanding instructor who has a rare talent of communicating to his students the exact way of improving their technique," and who said, "I consider it a grave curtailment of my rights not to be able to ski on National Forest land with the instructor of my choice."

Plaintiff charges in his complaint that defendants have refused to permit him to conduct an independent ski school at the ski areas they operate a charge admitted by defendants and that "Defendants did conspire together to eliminate from business all independent skiing instructors including Plaintiff, thereby totally monopolizing the ski school business in Pitkin County, Colorado." a charge defendants deny. Plaintiff then charges, and defendants deny, that "Defendants, by vertical amalgamation and integration, are totally restraining all free trade and commerce in the ski instruction business in said area, completely

325 F. Supp. 227

eliminating all competition in said business by their acts and actions, the same being a violation of the anti-trust laws of the United States." Plaintiff could as well have sued every other major ski area in Colorado, because none of them allow paid ski instruction on their trails except through their own ski schools

Although plaintiff's exact accusations against the Forest Service are not exactly clear, plaintiff does seem to say that the Forest Service cannot lawfully issue an exclusive permit to an area operator without violating 16 U.S.C. § 497, which provides in material part:

"The Secretary of Agriculture is authorized, under such regulations as he may make and upon such terms and conditions as he may deem proper, (a) to permit the use and occupancy of suitable areas of land within the national forests, not exceeding eighty acres and for periods not exceeding thirty years, for the purpose of constructing or maintaining hotels, resorts, and any other structures or facilities necessary or desirable for recreation, public convenience, or safety * * *. The authority provided by this section shall be exercised in such manner as not to preclude the general public from full enjoyment of the natural, scenic, recreational, and other aspects of the national forests." emphasis supplied.

Plaintiff acknowledges that defendants have and that he has not obtained use permits from the Secretary of Agriculture under 16 U.S.C. § 497, but...