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More on Common Carrier Status · Jun 18, 05:09 PM

(Originally posted 6/18/05)

We’re getting ready for a vacation, but I’ve seen some fairly dramatic forecasts of doom for California amusement parks based on the California Supreme Court decision to treat at least certain amusement rides as common carriers, and I thought I’d jot down a couple of notes. Perhaps most notable is this one, quoted at RideAccidents.com:

“It puts roller coasters out of business.” – John Robinson, California Attractions and Parks Association

Heavens! That’s a rather disastrous outcome. Happily, it’s almost certainly wrong.

Two main reasons (and an aside or two) as to why the wholesale destruction of California’s amusement park industry is deeply unlikely:

First, if there’s even a hint that California’s massive theme park industry were going to go out of business, I think it’s fair to guess that the legislature might notice and make what would be a pretty simply statutory amendment. Disney is not without friends in the legislature or without lobbyists to talk to those friends.

Second, it ignores the fact that a number of other states already treat coasters as common carriers and somehow the parks there have continued to exist. Off the top of my head: Alabama has a relatively new park in Visionland; Missouri has Six Flags Over Mid-America, Worlds of Fun, and the various attractions in Branson (including the brand-new Celebration City); Oklahoma has Frontier City and Bell’s; Minnesota has Valleyfair! and Knott’s Camp Snoopy at the Mall of America; Tennessee has Dollywood, Libertyland, and had Opryland (whose demise had nothing to do with liability issues); Colorado has Elitch Gardens and the lovely Lakeside. (Note that I didn’t check the court’s citations to those states as applying common carrier liability, but I assume it to be accurate.)

Besides the fact that those parks simply continue to exist, many of the parks are part of publicly-traded entities, and I haven’t seen a single word mentioning common carrier liability as a substantial risk to their ongoing business. Dollars to donuts says this decision doesn’t make it into California-sited park chains’ 10-Qs either.

And it’s been at least an arguable question in California itself for decades, and these very same parks have continued to accept the risk that the court would come out the way it did, again—to my knowledge—without disclosing the risk that their prime attraction would be put “out of business” to stockholders. If in fact the coasters are out of business, some securities lawyers are going to have some good work in coming years. (It is, as always, possible that I missed those disclosures in the quarterly and annual reports; I don’t read every one. But I read enough of them that I think I would have noticed it. In the last couple of Disney quarterlies, at least, this case didn’t even merit a mention.)

In other words, yes, this decision may marginally increase the cost of doing business, but it’s also not a bad idea to be a little skeptical of pronouncements of doom.

The aside: I’m not so certain that the elevated standard of care genuinely makes a difference anyway. Recall that the default standard of care is simply “ordinary care under the circumstances,” a standard that is typically left to the jury to give content to. I’m aware of no jury research on the issue, but it seems to me that a jury might well say that the ordinary care required under the circumstances for an amusement ride operator is the highest standard of care. That doesn’t necessarily match up with the risk/benefit analysis that is typically associated with that standard of care, but that’s true in many circumstances.

None of that is to say that I think amusement rides should be treated as common carriers—only that such treatment is not going to suddenly make Disneyland a desolate ghost town with crying Mickeys on every corner and nothing but a single swingset for entertainment.

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California Applies Common Carrier Status to Amusement Rides Karl Mueller 1964-2005