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Recently, infinite arbitration clauses have been the center of public outrage, resulting from a dispute where Disney argued that a Disney+ subscriber was required to arbitrate his wife’s wrongful death claim. Although Disney backed down on its stance, the argument left open an important question: would Disney have succeeded in compelling arbitration?
By: Magdee (Alex) Besharat
I. Introduction
For years, the Supreme Court has taken a pro-arbitration stance, encouraging drafters of arbitration agreements to broaden their clauses.[1] Drafters of arbitration agreements have pushed boundaries, crafting arbitration clauses that seem to extend indefinitely. Infinite arbitration clauses involve one or more of the following: (1) no limitation on the scope of disputes, (2) no limitation on the parties bound, (3) and no expiration date.[2] Numerous companies are adopting infinite arbitration clauses.[3] Recently, infinite arbitration clauses have been the center of public outrage, resulting from a dispute where Disney argued that a Disney+ subscriber was required to arbitrate his wife’s wrongful death claim.[4] Although Disney backed down on its stance, the argument left open an important question: would Disney have succeeded in compelling arbitration?
II. Facts and Holding
Jeffery Piccolo and his wife Kankokporn Tangsuan visited Raglan Road Irish Pub and Restaurant (“Raglan”) on October 5th, 2023, in Orlando, Florida.[5] The couple made the decision to dine at Raglan because The Walt Disney Company (“Disney”) and Raglan advertised that Raglan accommodated people with food allergies.[6] During the visit the couple received assurances from the wait staff that Mrs. Tangsuan’s food would not contain any of the ingredients she was allergic to.[7] Despite these assurances, Mrs. Tangsuan suffered from an acute allergic reaction to her meal and died of anaphylaxis shock.[8] Mr. Piccolo sued Disney and Raglan on behalf of Mrs. Tansguan for her death.[9]
Disney attempted to compel arbitration.[10] Disney cited the fact that Mr. Piccolo had signed up for a Disney+ trial subscription containing an arbitration clause in 2019.[11] Disney’s arbitration clause during this dispute read as follows:
There may be instances in which disputes arise between us. You, on the one hand, and Disney+ and/or ESPN+, on the other hand, agree to resolve, by binding individual arbitration, all Disputes (including any related disputes involving The Walt Disney Company or its affiliates) except for: (i) any claim within the jurisdiction of a small claims court consistent with the jurisdictional and dollar limits that may apply, as long as it is an individual dispute and not a class action; and (ii) any dispute relating to the ownership or enforcement of intellectual property rights.
“Dispute” includes any claim, dispute, action, or other controversy, whether based on past, present, or future events, whether based in contract, tort, statute, or common law, between you and us concerning the Services, or this exclusive authority to resolve any dispute relating to the interpretation, applicability or enforceability of these terms or the formation of this contract, including without limitation, the arbitrability of any dispute, and any claim that all or any part of this Agreement is void or voidable.[12]
Disney received “intense public backlash” after its efforts to force Mr. Piccolo into arbitration.[13] In response to this, Disney waived its arbitration argument and allowed the case to proceed in court.[14] This leaves the question of the validity of Disney’s arbitration clause open.
III. Legal Background
Part A of this section will discuss the Federal Arbitration Act (“FAA”) generally and the Supreme Court precedent on it. Part B will discuss infinite arbitration clauses and three circuit court interpretations and approaches to these clauses.
A. The Federal Arbitration Act
The FAA governs contracts involving commerce and mandate arbitration when a contract contains an arbitration clause.[15] Because the FAA is federal law, it preempts any state law that “treats arbitration agreements differently than other contracts.”[16] Though the FAA preempts state law, it relies on state contract law to determine if it is enforceable.[17] The FAA’s purpose is to give “arbitration agreements the same force and effect as other contracts.”[18]
There are two elements to compel arbitration: “(1) whether a valid agreement to arbitrate exists, and, if it does, (2) whether the agreement encompasses the dispute at issue.”[19] To see if a valid arbitration agreement exists, courts rely on state contract law.[20] An arbitrable issue is a “controvers[y] or dispute[] which the parties” contemplated would be subject to arbitration in the agreement.[21] This is because “arbitrators wield only the authority they are given.” [22] The court’s role is only “to give effect to the intent of the parties.”[23] When doubt exists in the scope of an arbitration agreement, courts should resolve the doubt in favor of arbitration.[24] The presumption of arbitrability is particularly applicable when dealing with a broad arbitration clause.[25] Accordingly, under broad agreements, disputes are only deemed outside of the scope of an arbitration agreement when there is no possible interpretation of the arbitration clause that places the dispute within it.[26]
B. Infinite Arbitration Clause
An infinite arbitration clause is a provision that mandates that parties arbitrate any and all disputes between the parties.”[27] This is much broader in scope than standard arbitration agreements that limit arbitration to disputes that arise out of the agreement.[28] Further, they extend past the parties within the dispute.[29]
There is minimal case law discussing the issue of infinite arbitration clauses. However, the Fourth Circuit in Mey v. DIRECTV, LLC, the Ninth Circuit in Revitch v. DIRECTV, LLC, and the Eleventh Circuit in Calderon v. Sixt Rent a Car, LLC have discussed infinite arbitration clauses.[30] Mey and Revitch involve a class action against DIRECTV for violations under the Telephone Consumer Protection Act.[31] In both cases, the plaintiffs, Mey and Revitch, signed arbitration agreements within their phone plans with AT&T Mobility (“ATT”) stating they would arbitrate all disputes with ATT and its affiliates.[32] The plaintiff in Mey signed the arbitration agreement in 2012.[33] The plaintiff in Revitch signed ATT’s arbitration agreement in 2011.[34] Neither plaintiff had any dealings with DIRECTV.[35] However, through the infinite arbitration clause with ATT, DIRECTV argued the parties were obligated to arbitrate with it as an ATT affiliate.[36] Notably, ATT acquired DIRECTV in 2015, years after any of the plaintiffs entered into their phone service agreements with ATT.[37]
1. The Fourth Circuit Approach
Mey argued that the arbitration agreement required a contractual nexus in order to be within the scope of the arbitration agreement.[38] Mey alleged the allegations against DIRECTTV did not have a significant relationship to the governing contract.[39] The Fourth Circuit acknowledged that when the arbitration agreement requires disputes “‘aris[e] out of or related to’ the underlying contract,” then a contractual nexus is required.[40] However, the Fourth Circuit distinguished infinite arbitration clauses from arbitration agreements, using the arising out of language.[41] It found that since the language clearly states that all disputes between the parties are to be arbitrated, using the stricter standard for interpreting disputes arising out of contracts would not be proper.[42] Because the language within the arbitration agreement was broad, even if ambiguous on Mey’s claim, it must be read as mandating arbitration.[43]
2. The Ninth Circuit’s Work Around
The Ninth Circuit, facing the same issue as the Fourth Circuit, came to an opposite result mainly by using California contract rules.[44] Rather than answering the question regarding the scope of arbitrability, the Ninth Circuit focused on whether an agreement to arbitrate existed.[45] The Ninth Circuit began its analysis by looking at the intentions of the parties “‘as it existed at the time of contracting.’”[46] The Ninth Circuit acknowledged that DIRECTV qualified as an affiliate under the contract. However, the Ninth Circuit did not conclude its analysis there.[47] The Ninth Circuit noted that it would usually follow unambiguous text in a contract unless it would lead to an absurd result.[48] Here, the court found the absurd result was that “Revitch would be forced to arbitrate any dispute with any corporate entity that happens to be acquired by [ATT] even if neither the entity nor the dispute has anything to do with providing wireless services to Revitch.”[49]
The Ninth Circuit also looked to California’s reasonable expectation doctrine.[50] This doctrine considers the circumstances of the contract and the reasons the contract was created.[51] The Ninth Circuit reasoned that Revitch could not have reasonably expected that entering into an agreement with ATT for phone services would mandate Revitch to arbitrate a completely unrelated dispute with DIRECTV.[52] The Ninth Circuit noted one major caveat: if the agreement had stated that Revitch was obligated to arbitrate with future affiliates, the Ninth Circuit may have come to a different conclusion.[53] However, absent forward-looking language, no valid arbitration agreement existed between Revitch and DIRECTV.[54] Thus, because DIRECTTV was not a member of the agreement, it may not invoke the arbitration clause to compel arbitration.
3. The Eleventh Circuit’s Opinion on Infinite Arbitration Clauses
In an unrelated case, Calderon v. Sixt Rent a Car, LLC, the Eleventh Circuit addressed the enforceability of infinite arbitration clauses.[55] The Eleventh Circuit adopted a different approach from the Ninth Circuit but still found the infinite arbitration clause unenforceable.[56]
Calderon involves a class action by Sixt Rent a Car (“Sixt”) customers against Sixt.[57] Sixt’s customers reserved the right to rent a car from Sixt through a website named Orbitz.com (“Orbitz”).[58] By booking through Orbitz, all customers signed an infinite arbitration clause.[59] Sixt’s customers filed suit against Sixt, alleging breach of contract.[60] In short, after construing the language of the agreement with Orbitz, the Eleventh Circuit determined that the customer’s claim against Sixt was outside of the scope of the arbitration agreement.[61]
The Eleventh Circuit then addressed the question of whether the presumption in favor of arbitration mandated arbitration.[62] The Eleventh Circuit, unlike the Fourth and Ninth, started this inquiry by stating the FAA “governs an arbitration agreement only to the extent that it compels arbitration of ‘controvers[ies]’ that ‘aris[e] out of’ the ‘contract.’[63] For an agreement to fall under the FAA, the dispute must be an “‘immediate, foreseeable result of the performance of contractual duties.’”[64] Since the dispute arose between Sixt and its customers while not involving Orbitz, it could not be argued that the dispute arose out of Sixt’s customers’ contract with Orbitz.[65] Thus, the Eleventh Circuit held that the Supreme Court’s presumption of arbitration was inapplicable in addressing the scope.[66]
IV. Comment
This section will first discuss how enforcing infinite arbitration clauses could, and have, led to absurd results. Second this section will discuss the weaknesses of the Ninth Circuit’s opinion and how matters of contract formation are not a long-term solution. Third, this section will discuss an alternative way to combat infinite arbitration clauses using the text of the FAA.
A. The Fourth Circuit is Consistent with Current Arbitration Doctrine, and the Ninth Circuit is Unlikely to Withstand Judicial Scrutiny.
The Ninth Circuit’s attempt to settle the dispute on assent likely would not withstand Supreme Court scrutiny and is too narrow to stop the enforcement of other infinite arbitration clauses.[67] As previously discussed, the Ninth Circuit held that the reasonable expectation doctrine coupled with the absurd result doctrine means that the parties never agreed to arbitrate with DIRECTV.[68] By stating that no valid agreement existed between Revitch and DIRECTV, the Ninth Circuit was able to circumvent the arbitration presumption.[69] However, what the Ninth Circuit was actually doing was making a scope argument and framing it as an issue with assent. In doing so, the Ninth Circuit was able to circumvent application of the arbitration presumption. However, its application of contract doctrine was vulnerable to attack.[70] Had the case been appealed, the Supreme Court easily could have determined that a valid agreement did in fact exist, and it was merely a question of whether Revitch’s dispute with DIRECTV was within the arbitration clause’s scope. Proof of this possibility is Mey.[71]
The Ninth Circuit avoided compelling arbitration, which is the fairest result. However, the Ninth Circuit did not go far enough. The Ninth Circuit’s holding used the assent of the parties as a work around the FAA.[72] Attacking assent and other forms of contract formation is a common band-aid against arbitration clauses.[73] However, it is only a band-aid and issues of assent only go so far, especially since sophisticated parties are unlikely to fail a second time. For instance, to avoid a Revitch issue, ATT need only edit their clause to include future affiliates. A better approach is to consider the language of the FAA.
B. The FAA does not Compel Arbitration for Disputes that do not Arise Out of a Contract.
There is a colorable argument that infinite arbitration clauses are beyond the scope of the FAA, and thus all Supreme Court rules are inapplicable to infinite arbitration clauses.[74] This subsection will first discuss court opinions interpreting the FAA as applied to infinite arbitration clauses. Second, this subsection will examine the validity of this argument and the likelihood of success.
1. The Supreme Court has Never Interpreted the FAA’s Language Mandating a Nexus, However Other Courts have.
Section 2 of the FAA makes “[a] written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy . . . arising out of such contract or transaction . . . valid, irrevocable, and enforceable.”[75] The plain language of the statute indicates that the dispute must arise out of the contract to fall within the scope of the FAA.[76] Thus, the determination of whether a dispute receives the protection of the FAA requires an analysis of whether a contractual nexus exists between the dispute and the mandate to arbitrate. The issue of contractual nexus appeared in both Mey and Revitch.
In Mey, the Fourth Circuit treated a contractual nexus as a requirement only if the contract language stated that arbitration of disputes must arise out of the contract.[77] However, infinite clauses are broader than the ordinary “arising out of” clauses, and thus, there is no need for a contractual nexus. But in stating this, the Fourth Circuit ignored the language of the FAA. Rather only judge Pamela Harris in her dissent was the only one to consider the FAA.[78] Judge Harris considered the language of the FAA, noting the “FAA presupposes a ‘contractual nexus,’” governing only those “disputes that are tied . . . in some meaningful way to the parties’ agreement.”[79] Ultimately, Judge Harris would not have upheld the arbitration clause, and one reason is that “without a link to the FAA itself,” there should be no “application of the presumption of arbitrability,” and likely no other application of Supreme Court rules on the FAA.[80]
Circuit Judge O’Scannlain authored the majority opinion in Revitch. In a separate, concurring opinion, he also discussed how infinite arbitration clauses may fall outside of the FAA.[81] Judge O’Scannlain noted that courts in the past have ignored the “arising out of” language within the FAA.[82] Judge O’Scannlain looked to insurance policies that have interpreted “arising out of” to mean “originating from,” “having its origin in,” “flowing from,” and “incident to, or having [a] connection with.”[83] Every definition cited, as applied to arbitration clauses, considers some type of connection between the underlying contract and the dispute. Though the language “arising out of” is broad, it was never interpreted so broadly that it required no connection to the original contract and the resulting controversy.[84] With this interpretation of “arising out of” in mind, Judge O’Scannlain stated that infinite arbitration clauses fall outside the scope of the FAA and thus do not receive the protection of the FAA.[85] This is the stance of the Eleventh Circuit as well.[86]
2. The Argument that Infinite Arbitration Clauses Fall Outside the Scope of the FAA is Likely a Winning Argument.
The Supreme Court has never interpreted the language “arising out of,” within § 2 of the FAA.[87] This is mainly because the Supreme Court has never had the opportunity to apply the “arising out of” language to a case before them.[88] However, requiring some connection to the transaction or contract is still proper. As Judge O’Scannlain noted, “[the Ninth Circuit] ha[s] never interpreted either ‘arising from’ or ‘arising out of’ so broadly such there need not be any relationship whatsoever between the original contract or event and the resulting controversy.”[89] Nor can any court interpret the language broad enough to circumvent the need for a connection because no matter how broad the language, it is not unlimited.[90] Although the Supreme Court has framed the FAA as a “liberal federal policy favoring arbitration,” this was regarding construing the language of an arbitration agreement, not the FAA itself.[91] Thus, the plain language of the FAA mandates that for an arbitration clause to receive the protection of the FAA, there must be some connection between the agreement and the dispute in question.[92]
C. If Disney had not Abandoned its Position, Piccolo Would not have been Compelled to Arbitrate Simply Because it is in the Eleventh Circuit.
The Eleventh Circuit precedent controls Mr. Piccolo’s dispute with Disney. The Eleventh Circuit utilizes the foreseeability test when interpreting whether an agreement contemplates a dispute.[93] Thus, the court considers whether it is foreseeable that when signing the contract, it would mandate arbitration for that dispute. When applying this test to Mr. Piccolo’s agreement with Disney+, it becomes clear that when Mr. Piccolo entered the agreement it was not foreseeable that Mr. Piccolo would be required to arbitrate his wife’s wrongful death lawsuit as it in no way relates to the streaming service.[94] Requiring a contractual nexus is the strength of the Eleventh Circuit approach. The approach allows for widespread application rather than relying on stretching traditional contract doctrine.
Meanwhile, under the Ninth Circuit approach, a court would be forced to find an issue of assent, or the arbitration presumption would mandate arbitration.[95] That argument is destined to fail. Unlike in Revitch, Mr. Piccolo cannot argue he and Disney did not have a valid agreement to arbitrate. A court’s analysis would be limited to the scope element, and thus the arbitration presumption would apply and mandate arbitration like in Mey.[96] This demonstrates the issue with the Ninth Circuit’s assent approach: it only goes so far. Thus, Disney was destined to fail because the dispute was within Florida, governed by the Eleventh Circuit’s law.
Disney’s argument was destined to fail simply from the happenstance of being under the Eleventh Circuit’s law. However, there are one hundred fifty-three million Disney+ subscribers across the country, many of whom are not within the Eleventh Circuit’s jurisdiction and not receive the protection of the Eleventh Circuit ruling. To address this significant and increasingly prevalent issue, courts must begin confronting infinite arbitration clauses directly rather than relying on combatting assent and should adopt the Eleventh Circuit’s rule.
[1] David Horton, Infinite Arbitration Clauses, 168 U. Pa. L. Rev. 633, 639–641 (2020).
[2] Ava McCartin, Reigning in Infinite Consumer Arbitration Agreements: A Comment on the Eleventh Circuit’s Calderon v. Sixt Rent A Car, 15 Arb. L. Rev. 38, 38 (2024) (quoting Horton, supra note 1, at 639-641).
[3] See e.g., Legal: Subscriber Agreement, DisneyPlus (Jan. 20, 2025), https://www.disneyplus.com/legal/subscriber-agreement; Walmart.com Terms of Use, Walmart (Feb. 3, 2025), https://www.walmart.com/help/article/walmart-com-terms-of-use/3b75080af40340d6bbd596f116fae5a0.
[4] Sean O’ Driscoll, Disney Backtracks on Wrongful Death Lawsuit After Public Fury, Newsweek (Aug. 20, 2024), https://www.newsweek.com/disney-wrongful-death-lawsuit-waive-arbitration-humanity-1941631.
[5] Jenna Greene, Column: Disney’s Bid to Arbitrate Husband’s Wrongful Death Suit has a Chance, WestLaw Today (Aug. 16, 2024, 4:55 PM), https://today.westlaw.com/Document/I4ee040205bf111ef9703ba4728c0b4ce/View/FullText.html?transitionType=Default&contextData=(sc.Default)&VR=3.0&RS=cblt1.0.
[6] Id.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] DisneyPlus, supra note 3 (emphasis added). Disney’s arbitration agreement for theme park tickets contains similarly broad language with some minor differences in the language that are not relevant. English – Disney Terms of Use – United States, TheWaltDisneyCompany: Terms Of Use (May 24, 2024), https://disneytermsofuse.com/english/#BINDING-ARBITRATION-AND-CLASS-ACTION-WAIVER.
[13] Driscoll, supra note 4.
[14]Id.
[15] 9 U.S.C. § 2.
[16] Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir. 2005).
[17] Id. at 1368.
[18] Id. at 1367–68.
[19] Revitch v. DIRECTV, LLC, 977 F.3d 713, 716 (9th Cir. 2020).
[20] Id.
[21] Royal Pro. Builders, Inc. v. Roggin, 853 So. 2d 520, 523 (Fla. Dist. Ct. App. 2003).
[22] Lamps Plus, Inc. v. Varela, 587 U.S. 176, 184 (2019).
[23] Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010).
[24] Levin v. Alms and Associates, Inc., 634 F.3d 260, 266 (4th Cir. 2011).
[25] AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986).
[26] Jones v. Halliburton Co., 583 F.3d 228, 235 (5th Cir. 2009).
[27] Horton, supra note 1, at 633.
[28] Id. at 639.
[29] Id. at 640.
[30] 971 F.3d 284 (4th Cir. 2020); 977 F.3d 713 (9th Cir. 2020); 5 F.4th 1204 (11th Cir. 2021).
[31] See Mey v. DIRECTV, LLC, 971 F.3d 284 (4th Cir. 2020); Revitch v. DIRECTV, LLC, 977 F.3d 713 (11th Cir. 2021).
[32] Mey, 971 F.3d at 286; Revitch, 977 F.3d at 715.
[33] Mey, 971 F.3d at 286.
[34] Revitch, 977 F.3d at 715.
[35] See Mey, 971 F.3d at 286; Revitch, 977 F.3d at 715.
[36] Mey, 971 F.3d at 287; Revitch, 977 F.3d at 715.
[37] Mey, 971 F.3d at 287; Revitch, 977 F.3d at 715.
[38] Mey, 971 F.3d at 292.
[39] Id.
[40] Id. at 293.
[41] Id.
[42] Id.
[43] Id.
[44] Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir. 2020).
[45] Id. at 716.
[46] Id. at 717 (quoting Cal. Civ. Code § 1636).
[47] Id.
[48] Id.
[49] Id.
[50] Id.
[51] Id. at 717–18.
[52] Id. at 718.
[53] Id.
[54] Id.
[55] Calderon v. Sixt Rent a Car, LLC, 5 F.4th 1204 (11th Cir. 2021).
[56] Id. at 1214.
[57] Id. at 1208.
[58] Id. at 1206.
[59] Id. at 1207.
[60] Id. at 1208.
[61] Id. at 1211–12.
[62] Id. at 1212–14.
[63] Id. at 1212.
[64] Id. at 1213 (quoting Hearn v. Comcast Cable Commc’ns, LLC, 992 F.3d 1209, 1213 (11th Cir. 2021)).
[65] Id.
[66] Id. at 1213–14.
[67] Michael Russo, A Simple Solution to an Infinite Problem: Curbing Arbitration Provisions That Exceed the Scope of the Federal Arbitration Act, 97 St. John’s L. Rev. 247, 263 (2023).
[68] Revitch v. DIRECTV, LLC, 977 F.3d 713, 717 (9th Cir. 2020).
[69] Revitch, 977 F.3d at 718.
[70] Russo, supra note 67, at 262–63
[71] Mey v. DIRECTV, LLC, 971 F.3d 284 (4th Cir. 2020).
[72] Revitch, 977 F.3d at 721.
[73] See, e.g.,Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014); Revitch, 977 F.3d 713.
[74] See Russo, supra note 67.
[75] 9 U.S.C. § 2 (emphasis added)
[76] Russo, supra note 67, at 250.
[77] Mey v. DIRECTV, LLC, 971 F.3d 284, 293 (4th Cir. 2020).
[78] Mey, 971 F.3d at 305 (Harris, J., Dissenting).
[79] Id. (quoting Horton, supra note 1, at 643).
[80] Id.
[81] Revitch v. DIRECTV, LLC, 977 F.3d 713, 721 (9th Cir. 2020) (O’Scannlain, J., concurring).
[82] Id. at 722.
[83] Id. at 722 (O’Scannlain, J., concurring) (quoting Red Ball Motor Freight, Inc. v. Emps. Mut. Liab. Ins. Co. of Wis., 189 F.2d 374, 378 (5th Cir. 1951)).
[84] Id.
[85] Id.
[86] Calderon v. Sixt Rent a Car, LLC, 5 F.4th 1204 (11th Cir. 2021).
[87] Revitch, 977 F.3d at 722.
[88] Id. at 723–24.
[89] Id. at 722.
[90] Russo, supra note 67, at 250.
[91] Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983).
[92] Calderon v. Sixt Rent a Car, LLC, 5 F.4th 1204, 1213–14 (11th Cir. 2021).
[93] Id. at 1213.
[94] Id.
[95] See Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir. 2020).
[96] See Id.; Mey v. DIRECTV, LLC, 971 F.3d 284, 293 (4th Cir. 2020).