Disney, the American media giant, got itself into a mess when it attempted to avoid a wrongful-death lawsuit filed against its parks and resorts division by using arbitration clauses that were agreed upon by the plaintiff of Disney+.
The company retracted its request for arbitration on Monday and decided to allow a court to handle the case following widespread criticism.
ICD breaks the sequence of events down:
What is the Disney wrongful-death lawsuit?
Jeffrey Piccolo, a lawyer for Disney, filed a lawsuit earlier this year after his wife Dr. Kanokporn died from an allergic reaction in 2023 after eating at Raglan road. Raglan Road, a restaurant located in Disney Springs at the Walt Disney World Resort is Florida.
Dr. Tangsuan suffered from severe allergies to nuts and dairy. Piccolo’s argues that the restaurant was chosen because the online Disney map showed it accommodated allergy sufferers.
The widower claims that, despite the assurances of the waiter that his wife was fine later in that day, she collapsed and died due to anaphylaxis caused by dairy and nuts.
Piccolo claims that Disney’s wait staff is negligent. The company has filed a lawsuit for damages in excess of $50,000, which will cover medical costs, funeral expenses and pain and suffering.
What did Disney do?
Disney has taken out clauses from the Disney+ subscription that Piccolo signed up for in 2019 and EPCOT tickets, in an attempt to reach an out-of-court settlement.
Lawyers for Walt Disney Parks and Resorts stated in a legal filing that the matter should go to an external arbitrator, as Piccolo agreed to arbitrate any disputes with the company when he signed up for a Disney+ Account in 2019 and purchased tickets to EPCOT through the Disney website in the year 2023.
Disney noted that Raglan Road Irish Pub, located in Disney Springs, the section of the resort where it is located, was owned and operated independently.
The company has defended themselves as follows:
We are saddened and sympathize with the family. We are not Disney and this restaurant is neither operated nor owned by Disney. Therefore, we merely defend ourselves from the plaintiff’s lawyer’s attempt to add us into their lawsuit against the Restaurant.
Piccolo’s attorneys criticized Disney for its attempt to dismiss the lawsuit, calling it “surreal.” The lawyers claimed that Disney was attempting to stop the 150 million Disney+ members from ever filing wrongful death suits in court, regardless of whether the case has anything to do with Disney+.
What was the reaction on social media?
After Disney tried to dismiss the case using the Disney+ Arbitration clause, social media was flooded with criticism.
Users found it “absurd and callous” that Disney+ subscribers could waive their rights to sue for unrelated incidents.
Disney was accused of prioritizing legal loopholes above compassion for a grieving family. This led to widespread negativity online.
Arbitration clauses in corporate law: Examples of how corporations use them to resolve disputes
Legal experts said that it is not uncommon for companies to use tactics similar to Disney. They claim that arbitration clauses are applicable to all affiliates within the corporate structure of the company and can cover any claims, including those that have nothing to do with the original transaction which led to the arbitration agreement.
Airbnb cited the arbitration clause of the contract the man signed when he opened an Airbnb account. This was despite the fact that the deceased had not rented out the property in which his fatal accident occurred.
The Nevada Supreme Court’s ruling in favor Airbnb cited an unanimous 2018 US Supreme Court decision that stated courts could not decide whether an arbitrator must resolve a dispute when the contract language states an arbitrator must do so.
Walmart, another corporate giant, is also well-known for successfully using an arbitration clause in order to fight a civil rights suit it was facing.
A Black family sued Walmart for falsely accusing them of shoplifting without any evidence. This created an embarrassing situation in front of their neighbors and schoolmates.
A federal judge ruled the civil rights suit could not be brought in her court because one of the family members had signed an agreement containing an arbitration provision in order to drive Walmart’s grocery delivery services. Instead, most cases are sent to arbitration.
Her decision cited precedent from the 2019 Supreme Court case Lamps Plus, Inc. V. Varela.
Disney withdraws its arbitration claim
Disney announced on Monday that it would let the court deal with the lawsuit.
Josh D’Amaro stated, in an emailed reply to Reuters: “We believe that this situation merits a compassionate approach for the grieving families to quickly resolve the issue.”
We have therefore chosen to waive our arbitration rights in order to allow the case to be heard by a court.”
Brian R. Denney said that Disney’s attempts to stop the case going to trial must be “viewed with skepticism”.
Denney stated that, “although Disney retracted its motion, arbitration clauses are still present on all of their platforms.” This could put other people who have been injured by Disney’s negligence in a similar situation.
Matt Adler, partner at Troutman Pepper, who represents clients regularly in arbitration, stated in a New York Times article that it is very rare for a party withdraw their request for arbitration rather than letting a court decide. He said that arbitration agreements are generally upheld. However, this case was “a little bit of a stretch.”
Adler, who is not representing Disney, said: “My guess would be that they decided the damage they were causing in the public’s eye was greater than losing money on this lawsuit.”
The lawsuit’s significance and Disney’s handling it
The Disney wrongful death suit is important for many reasons. Not least, it shows how corporations use arbitration clauses as a way to avoid legal action that was not part of the original contract.
These developments have also made consumers aware of the fine print that is often overlooked by them in contracts. It could change the outcome of future actions against the company.
The book also raises issues of corporate responsibility, accountability and how businesses handle disputes. It also discusses the rights of individuals and their right to justice.
This post may be updated as new information becomes available.
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