Disney’s Arbitration Maneuver: A Real Mickey Mouse Operation

Photo by Walt Disney, Public domain, via Wikimedia Commons

The House of Mouse is at it again, and I don’t mean Toy Story V. Rather, I refer to their exercise of some, shall we say, creative lawyering. And by creative, I mean the type of lawyering that makes people hate the legal profession and lawyers in general even more than they already do. (Thanks, Disney!)

In October 2023, Jeffrey Piccolo and his family ate at a restaurant at Disney World called Raglan Road Irish Pub, which was advertised as being especially sensitive to food allergy needs. His wife, Dr. Kanokporn Tangsuan, alerted the restaurant to her severe nut and dairy allergies. and was repeatedly assured that the food she ordered would be safely prepared and allergy free. Tragically, that was not the case, and Kanokporn died of anaphylaxis shortly after eating, despite the use of an EpiPen and attempts to save her life. Tests showed elevated levels of both nuts and dairy in her system.

Mr. Piccolo subsequently filed a wrongful death lawsuit, naming the Disney corporation, as well as the restaurant itself (which is owned and operated by a different company, albeit under Disney policies.) Fairly standard and not an unexpected move, given the circumstances. And of course, various motions by the company’s lawyers attacking the lawsuit followed. That’s just how the system works. As much as we would like for giants like Disney to acknowledge their mistakes and throw a little money at a grieving family, that’s just not how it goes.

So why is this case in the news?

Well, because Disney didn’t just say “hey, it’s not our fault” and ask for a dismissal (though they did do that, too). The pleading that has people talking is the attempt by Disney to force Piccolo to take his case to arbitration rather than through the traditional court system. The justification for this?

Because four years prior to the visit to Disney, Piccolo downloaded the Disney+ streaming service, which he canceled prior to the end of the free trial phase. At some point during the sign-up process, he clicked “accept” on the terms of service, that densely-worded-in-8-point-font document most all apps have and which no one ever reads (not even lawyers.) Somewhere within the Disney+ terms of service, there is a provision in which the user agrees that all disputes with Disney will be arbitrated.

So, a word about arbitration: It is a type of “alternative dispute resolution,” in which a case is heard not in a court of law but by a private party finder of fact called an arbitrator. The arbitrator listens to the facts and evidence and makes a decision, which is usually binding. It’s not always bad; there are situations in which it can be more efficient and cost effective. Arbitration is often used in business disputes and employment matters. However, its use in things like wrongful death cases is not ideal for plaintiffs, who would no longer enjoy the benefit of the fullness of the rules of civil procedure, the robust discovery process, and most importantly, a trial by jury. The former of these things may be severely curtailed in an arbitration procedure, and the latter is not available at all.

But turning to Disney’s argument on its face, the general response by lawyers on social media was laughter and incredulity, with a few begrudging nods to the creativity of the lawyer who came up with the idea.

For one thing, Mr. Piccolo’s brief dalliance with Disney+ ended years before the fated trip to Orlando. And while terms like this can survive termination – that is, still be in force even after the contract ends – that is typically applicable to causes of action arising out of the contractual relationship itself. For example, imagine a case of a contract for employment that includes an arbitration clause. The contract ends, but six months later the employee files suit against the employer for something that occurred during the course of the employment. If he or she had agreed to arbitration when signing the contract, then it would likely still apply to the post-employment claim, because it arose under the contract. Hopefully, that makes sense.

So imagine, for example, that during his one month free trial of Disney+, Mr. Piccolo was somehow injured by the use of the service. Such a scenario is hard to conjure, but let’s say Disney charged a large sum of money to Mr. Piccolo’s credit card, even though it was supposed to be a free trial, and refused to issue a refund. Mr. Piccolo then ends the trial. Sometime after that but before the statute of limitations runs out, he sues Disney because of the charges. This is a situation in which that arbitration clause would likely come into play.

Obviously, the trip to Disney World was not related to the brief agreement for digital streaming services 4 years earlier. The attempt to hold Mr. Piccolo to the arbitration agreement was absurd to me, and to most lawyers who have opined on this case. The better argument would be the fact that Disney neither owns nor operates the restaurant where the incident occurred, but even that is not a cut and dried issue since it occurred on Disney-owned property.

Apparently, Disney has realized the idiocy of their argument– or, rather, have shied away from the bad publicity it generated, as it has just this week backed off of its position. In an all-timer of a face-saving statement, the Disney spokesperson stated

“We believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss. As such, we’ve decided to waive our right to arbitration and have the matter proceed in court.”

Mr. Piccolo will be able to continue fighting the giant in a court of law. This doesn’t mean Disney is going to roll over; motions to dismiss on less specious grounds will undoubtedly proceed.

What happened to Dr. Tangsuan was tragic, and based on the facts presented, it seems there is blame to go around. At least now, her family may avail themselves of the fully functional version of our civil justice system.

Personally, I hope the enterprising Big Law associate who tried this nonsense is searching for a job right about now, right along with the senior partner who allowed it.