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I saw a recent article that was talking about signing up for a Disney+ account waives your right to sue Disney and it subsidiaries as as there is a binding arbitration clause in the user agreement. Is this something that the courts will take seriously?

It seems that the case involves a food allergy death at an allergy safe restaurant Disney Springs which is an outdoor shopping area in the Disney resort area.

Does signing up for Disney+ waive your right to sue the entertainment company — ever?

That is what Disney argues in a wrongful death lawsuit involving a 42-year-old New York doctor whose family claims had a fatal allergic reaction after eating at an Irish pub in Disney Springs in October.

Disney is asking a Florida court to dismiss a lawsuit brought against it by Jeffrey Piccolo, the husband of Kanokporn Tangsuan, a family medicine specialist with NYU Langone's office in Carle Place, on Long Island.

The company argues Piccolo had agreed to settle any lawsuits against Disney out of court through the arbitration process when he signed up for a one-month trial of Disney+ in 2019 and acknowledged that he had reviewed the fine print.

"The Terms of Use, which were provided with the Subscriber Agreement, include a binding arbitration clause," the company wrote in its motion. "The first page of the Subscriber Agreement states, in all capital letters, that 'any dispute between You and Us, Except for Small Claims, is subject to a class action waiver and must be resolved by individual binding arbitration.'"

Disney also notes in its response that Piccolo agreed to a similar arbitration provision when he created an account on Disney's website and app ahead of the ill-fated theme park visit.

But Piccolo's lawyer, in a response filed earlier this month, argued that it was "absurd" to believe that the more than 150 million subscribers to Disney+ have waived all rights to sue the company and its affiliates in perpetuity — even if their case has nothing to do with the popular streaming service.

"The notion that terms agreed to by a consumer when creating a Disney+ free trial account would forever bar that consumer's right to a jury trial in any dispute with any Disney affiliate or subsidiary, is so outrageously unreasonable and unfair as to shock the judicial conscience, and this court should not enforce such an agreement," Brian Denney, Piccolo's attorney, wrote in the Aug. 2 filing.

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  • Comments have been moved to chat; please do not continue the discussion here. Before posting a comment below this one, please review the purposes of comments. Comments that do not request clarification or suggest improvements usually belong as an answer, on Law Meta, or in Law Chat. Comments continuing discussion may be removed. Commented Aug 16, 2024 at 1:08
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    Just a minor correction, this event did not happen at a Disney park, it occurred at a public area called Disney Springs, completely open to the public with no entry fee, parking fee, etc. the area is similar to a strip mall and the stores aren't owned by Disney. Commented Aug 16, 2024 at 8:02
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    Another factual point is that Disney are claiming that the agreement accepted by this man binds not only him, but the estate of his late wife (who did not sign such an agreement herself). And another point is that the arbitration clause Disney are relying on is not contained in the agreement itself, but rather a separate document which is two hyperlinks away from the text of the agreement. Commented Aug 16, 2024 at 13:49
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    Worth noting that after the bad publicity it received, that Disney waived its right to arbitrate this case. Commented Aug 22, 2024 at 2:56
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    Link to story about Disney's waiver: boingboing.net/2024/08/21/… Commented Aug 22, 2024 at 3:01

2 Answers 2

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Maybe

It will depend on the wording of the arbitration clause and if Florida law has any consumer protection laws that would make such an agreement unlawful.

The law is very clear: if someone has a dispute which falls under an arbitration agreement that they have agreed to, they must arbitrate.

What falls within the scope of an arbitration agreement depends on the exact wording of the agreement.

Assuming this is the clause (my emphasis):

You and Disney agree to resolve, by binding individual arbitration as provided below, all Disputes (including any related disputes involving The Walt Disney Company, its subsidiaries, or its affiliates) except for: (i) any claim within the jurisdiction of a small claims court consistent with the jurisdictional and dollar limits that may apply, as long as it is an individual dispute and not a class action; and (ii) any dispute relating to the ownership or enforcement of intellectual property rights. “Dispute” includes any claim, dispute, action, or other controversy, whether based on past, present, or future events, whether based in contract, tort, statute, or common law, between you and Disney concerning the Disney Products or this Agreement, or this exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of these terms or the formation of this contract, including, without limitation, the arbitrability of any dispute, and any claim that all or any part of this Agreement is void or voidable.

It also goes on to say that this clause survives termination of the main agreement. It also includes an opt-out clause which almost certainly means that court will not find it to be unfair or unconscionable, since its not actually offered on a "take it or leave it" basis; if you choose not to read the agreement and exercise your opt-out rights - that's on you.

This is what we arbitrators call a broad arbitration agreement. On its face it would appear to capture any dispute that has or will ever occur between Disney and whoever agrees to it - not just disputes arising from the particular contract that contains the agreement.

It is worth noting that arbitration agreements are separate contracts from any other contract they might be written within. So, when you sign up to Disney+ you are entering into two contracts: the Disney+ contract and the arbitration contract.

Unless there is a law in Florida that would limit the scope of this arbitration agreement to only disputes associated with the particular contract (unlikely), or an unfair contracts regime that would make this unlawful (even more unlikely), Disney appears to have a pretty good prima facie case.

Note that it is unlikely that this will actually be tested in this particular case as its far more likely that Disney will be able to have the case against them dismissed because they're just the landlord - they didn't actually do anything negligent.

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    "and if Florida law has any consumer protection laws that would make such an agreement unlawful." Not this. The Federal Arbitration Act pre-empts state laws of this kind. Commented Aug 16, 2024 at 12:24
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    I see how the point of it not being a park but an outdoor shopping center open to the public is critical now. If they are just the landlords I don't see how there is much of a case and how the arbitration even factors in. Commented Aug 16, 2024 at 13:09
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    @JoeW Disney probably indirectly owns the restaurant as a subsidiary and probably isn't just a landlord. But, the Disney+ contract and tickets to Epcot (which the restaurant is not within) are the only contracts with arbitration clauses in them. The survival of termination clause probably only applies to disputes arising while the primary contract is in force but brought afterwards. But whether the arbitration clause is reasonably interpreted to apply so far afield from the contexts in which they were entered into is a contract interpretation question. Commented Aug 16, 2024 at 16:46
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    @ohwilleke information like this and what both answers have provided are good and why I asked the question. Commented Aug 16, 2024 at 17:10
  • @ohwilleke just that under florida law, afaik, binding arbitration clauses of a family member can not be used to bind the estate for which the family member sues. Commented Aug 30, 2024 at 23:04
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This is a close call.

The question isn't quite "I think the question will be is if the binding arbitration can be applied to other unrelated parts of a large corporation or not."

It is more of a contract formation/interpretation/unconscionability analysis of whether the Disney+ agreement was intended and reasonably understood to apply to this kind of situation.

The express terms of the arbitration clause seem to apply it, but the immediate contract at the restaurant didn't include the term, the wife who died didn't sign anything, the arbitration clause was not easily located in the agreements to which it purported to apply directly, and a consumer wouldn't necessarily known that Epcot Center and Disney+ were within the group of parties to be bound without knowledge beyond what was expressly stated in the arbitration clauses.

The case law on that is mixed. The case law is also mixed on when the court v. the arbitrator gets to decide if the arbitration clause applies, and whether arbitration is favored only once it is clear that an arbitration agreement was entered into, or to contract formation of an arbitration agreement, and which issue is really at stake here - a scope of an arbitration agreement that was entered into issue or a contract formation issue.

The inquiry isn't blind to the implications of a ruling either - that could remove big companies from the courts entirely (and there are whole industries like securities brokers that are). If the courts ultimately rule in favor of Disney, this could push legislators to amend the Federal Arbitration Act to legislatively overrule the court's ruling in new cases, and that might hurt supporters of arbitration agreements more than a loss in this somewhat quirky outlier case.

Applying an arbitration clause in a context like this could also pose anti-trust implications. There are circumstances where a doctrine similar to constitutional avoidance is used in anti-trust situations, where contracts are interpreted in a manner calculated to avoid interpretations that would pose anti-trust issues. In other words, perhaps the Disney+ arbitration clause should not be interpreted as applying to the restaurant, because if it did, then Disney might have entered into an illegal tie-in agreement.

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  • It seems completely ridiculous regardless. If Disney can do this, what is preventing even more absurd things, like the following case? I do some plumbing work and ask all my clients to sign a long agreement with some text saying that any disputes will be handled through arbitration. At some point later on, for unrelated reasons, I murder someone for the thrill. Their surviving family member tries to sue me for a wrongful death, but because they agreed to arbitration when I fixed their toilet, the suit is thrown out. Commented Oct 23, 2024 at 17:06
  • Or: I write an article and post it on my website, but to access the website people have to click a little box saying that they agree to the terms and conditions. Decades later, I sexually harass one of my employees, who naturally tries to sue me. However, because they read the article and clicked the box years before, the case gets thrown out. That is, some lucky or powerful individuals might also be able to mostly remove themselves from civil judicial authority using the same strategy. Commented Oct 23, 2024 at 17:10
  • @Obie2.0 I think that this substantive law is horrible and have litigated and lost cases where the argument for arbitration was much weaker more than once. But the law is what the law is and if somebody wants to change it the federal arbitration act needs to be amended. Also, arbitration doesn't mean that you automatically lose, but it does mean that if the arbitrator ignores the evidence or disregards the law, you can't do anything about it. Commented Oct 24, 2024 at 0:50

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