In a setback for The Walt Disney Company (DIS), a widower is suing the entertainment giant over his wife’s death at Walt Disney World. Initially, Disney attempted to block the lawsuit using Disney+ streaming terms before agreeing to waive its right to arbitration. Here’s a closer look at the details of this lawsuit.
Lawsuit Against Disney
In October 2023, Dr. Kanokporn Tangsuan, wife of Jeffrey Piccolo, died of an allergic reaction after eating at Raglan Road Irish Pub restaurant. This restaurant is located in the Walt Disney World and Resorts theme park in Florida.
According to the lawsuit filed by Piccolo, the restaurant was chosen because both Disney and Raglan promoted accommodating people with food allergies. Despite assurances from the waiter that Tangsuan’s food was allergen-free, she had a fatal allergic reaction after eating her meal. The complaint states she died of anaphylaxis from elevated nut and dairy levels in her system.
Disney’s Response to the Lawsuit
Turning to Disney’s response, the company initially did not address arbitration, arguing that it could not be held liable as it only serves as Raglan’s landlord and does not manage its operations.
Nevertheless, in a recent development, Disney’s lawyers argued that by signing up for a free month-long trial of Disney+ in 2019 and purchasing theme park tickets through this account in 2023, Jeffrey Piccolo had agreed to the streamer’s terms of service. These terms include that “all disputes” with “The Walt Disney Company or its affiliates” be resolved through arbitration. Arbitration is a method where disputes are settled outside of court, usually by an impartial third party, instead of through a traditional jury trial.
Consequently, Disney’s lawyers requested the case to be dismissed, stating that the restaurant where Piccolo’s wife died isn’t owned by Disney.
Piccolo’s Lawyer’s Response, DIS’s Decision, and the Public Backlash
In response, Piccolo’s attorneys called Disney’s argument “surreal,” asserting that it unfairly prevents Disney+ users from accessing jury trials in disputes unrelated to the streaming service. As a result, Disney faced significant backlash on social media, with many users labeling the company’s argument as “ridiculous,” “abhorrent,” and “unbelievable.”
In light of this reaction, Disney has decided to “waive our right to arbitration and have the matter proceed in court,” according to Josh D’Amaro, Chairman of Disney Experiences, as reported by Reuters.
This decision comes as Disney’s U.S. theme parks struggle to attract visitors amid slowing demand and inflation. Therefore, it could be a move by the company to counteract negative publicity affecting its theme parks. Despite the challenges, the company’s overall experiences unit revenue grew by 2% to $8.38 billion in Fiscal Q3. However, U.S. parks’ operating income fell by 6%, while international parks saw a 2% increase.
Is Disney a Buy, Sell, or Hold?
Analysts remain bullish about DIS stock, with a Strong Buy consensus rating based on 19 Buys and five Holds. Over the past year, DIS has increased by 5.3%, and the average DIS price target of $117.60 implies an upside potential of 31.1% from current levels.
