Disney backs down from arbitration claim

Did you know that if you have a Disney+ account you have waived the right to sue Disney before a jury and agreed instead to arbitration?

That might not seem like such a big deal. What legal issues might arise from your Disney+ subscription? Except that Disney has claimed that this waiver of rights doesn't just apply to your Disney+ subscription, but potentially includes a wrongful death claim over an issue at a Disney park.

The issue is complicated. This is not about a wrongful death caused by a Disney employee or by mechanical failure on a park ride. The main defendant is a third party supplier of food at a Disney park, and Disney is potentially implicated by representations it apparently made on its website. There's a better link between a Disney+ subscription and the content on a website than there is with the maintenance of a Disney ride. But the widest reading of Disney's case in this instance is very wide indeed. It could potentially cover companies which Disney does not currently own, but might acquire in the future.

Disney has agreed to waive its claim of arbitration in this case and allow the case to go to trial. But that is not the same as a judge dismissing Disney's claim. The company could potentially make the same claim in a future case.

I have no insight into whether Disney thought it would win on the claim it could push the matter to arbitration, but it does seem as though the reputation backlash here was a factor in getting the corporation to waive its claim of arbitration. There are over 150 million Disney+ subscribers, and it seems unlikely that more than a handful of them knew they were signing away their right to take court action against other Disney subsidiaries.

For more detailed legal analysis, see Devin Stone of Legal Eagle.