Disney, Contracts of Adhesion, and Arbitration-Clause Bootstrapping

Disney is in the news this week, and not in a good way.  For the truly awful facts of the case, you can't do better than Emily Crane's and Alexandra Steigrad's reporting in the New York Post here and here.  In short, Dr. Kanokporn Tangsuan had severe allergies.  She ate in a Disney restaurant.  She informed the restaurant of her allergies and the restaurant staff gave repeated assurances that her food was allergen-free.  Soon after her meal, she was dead, and an autopsy revealed that her death was caused by allergens. 

Okay, those are terrible facts. But what's going on with arbitration clauses in contracts of adhesion is, perhaps less dramatic, but still highly concerning.  Christopher Leslie has described what he terms "arbitration bootstrapping."  Professor Leslie defines bootstrapping as the corporate practice of loading "mandatory arbitration clauses with unconscionable contract terms."  Richard Frankel has published a thoughtful response here.  Increasingly, we are seeing a new form of arbitration bootstrapping; let's call it "arbitration-clause bootstrapping."  Once a consumer has "agreed" to an arbitration provision through one interaction with a business entity, that entity then tries to apply that same arbitration provision to some completely unrelated interaction with the entity.  I've been stockpiling posts all summer, and I keep on coming across these situations.  Earlier in the summer, we wrote about Andrea Boyack's scholarship on abuse on contract, and there's plenty more where that came from.

Image by DALL-E

So, getting back to the case, when Dr. Tangusuan's husband, Jeffrey Piccolo, sued Disney for negligence, Disney responded with a motion to compel arbitration.  It did so on two grounds.  First, Mr. Piccolo years ago signed up for a trial subscription to Disney +, and when he did so he "agreed" that all disputes should go to arbitration.  Second, one month before his wife's death, Mr. Piccolo bought tickets to the Epcot theme park using the "My Disney Experience" app, which also has an arbitration provision.  So, Disney's argument seems to be if you "agree" to arbitration with respect to one transaction with the company, you are agreeing to arbitration with respect to all interactions with the company.  And, as Christopher Leslie's scholarship suggests, that arbitration provision can be used to bootstrap additional terms, that otherwise might not be enforceable, into the parties' "agreement."  As Andrea Boyack's scholarship illustrates, consumers do not read the boilerplate terms of contracts of adhesion, hence the scare quotes bracketing forms of the word "agree" throughout this post.  

You might wonder what's so bad about arbitration.  Substantively, there might not be any difference in this case.  Still, I can think of at least two reasons why Mr. Piccolo and his attorneys might prefer litigation.  First, they might trust a jury rather than an arbitral panel to appropriately value their claim.  Second, they might want the publicity associated with litigation to shine a spotlight on Disney's conduct.  Of course, Disney's arbitration-clause bootstrapping has not helped it to avoid publicity in this case.  Nonetheless, both of those reasons to prefer litigation are also reasons why the threat of litigation enhances the settlement value of the claim.

None of this might matter in this case.  Even if the court allows Disney to engage in arbitration-clause bootstrapping, it might not think that the arbitration clause applies in this case, given that the suit is being brought on behalf of Dr. Tangusan's estate, which never "agreed" to arbitration.

UPDATE: David Horton (left), who is either maddeningly youthful or really needs to update his website, has provided a link to Disney's motion to compel.  My post noted that the estate is not a party to an arbitration provision.  David adds that neither is the defendant in the case, Walt Disney Parks and Resorts, U.S., Inc.  David's forthcoming article Accidental Arbitration, which was on my summer reading list but is now on my urgent reading list, covers the subject matter that I have called arbitration-clause bootstrapping.  He speaks of it in terms of defendants attempts "to enforce ultra-broad arbitration agreements that nobody at the time of contracting could have foreseen would be relevant to the lawsuit."  It is a topic that he also addressed in his already-published article Infinite Arbitration Clauses.