{"id":3227,"date":"2026-09-16T15:22:58","date_gmt":"2026-09-16T19:22:58","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=3227"},"modified":"2026-09-17T12:24:12","modified_gmt":"2026-09-17T16:24:12","slug":"its-an-arbitration-agreement-after-all-disney-compels-arbitration-and-obtains-dismissal-of-class-claims-in-antitrust-suit","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/09\/16\/its-an-arbitration-agreement-after-all-disney-compels-arbitration-and-obtains-dismissal-of-class-claims-in-antitrust-suit\/","title":{"rendered":"It\u2019s An Arbitration Agreement After All: Disney Compels Arbitration And Obtains Dismissal Of Class Claims In Antitrust Suit"},"content":{"rendered":"
\n
\"\"<\/a><\/figure>\n<\/div>\n\n\n

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Mike Rosenblatt<\/strong><\/p>\n\n\n\n

Duane Morris Takeaways:<\/em><\/strong> On September 8, 2026, in Unger, et al v. The Walt Disney Company, No. 5:25-CV-01163 (N.D. Cal. Sept. 8, 2026), Judge Edward J. Davila granted <\/a>Defendant\u2019s motion to compel arbitration, ordered on a consolidated docket with Biddle, et al. v. The Walt Disney Company, No. 5:22-CV-07317 (N.D. Cal.).\u00a0 This decision serves as a clear example of arbitration agreements as a powerful tool for a company to dismiss class claims, and a critical reminder that a company that may not have signed an arbitration agreement can invoke an arbitration agreement in specific circumstances.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

Plaintiffs Cole Unger and Steven Prescott brought suit against the Walt Disney Company (\u201cDisney\u201d), alleging violations of the Sherman Act and corresponding state laws.  Unger filed the Complaint on January 14, 2025 and filed a First Amended Complaint, adding Prescott as a plaintiff, on April 28, 2025.  According to the First Amended Complaint, Disney allegedly undertook a \u201cmultifaceted campaign to suppress competition in the market for live television streamed over the internet to paying subscribers.\u201d  Specifically, Plaintiffs alleged that Disney used its ownership of ESPN to force streaming services to carry non-ESPN content in order to access ESPN, force streaming services to carry ESPN in its \u201cbase\u201d package for customers, inflated the price of streaming ESPN through most favored nation clauses with streaming services, and provided anticompetitive rebates to Disney-owned streaming service Hulu.  Plaintiffs brought claims on behalf of a putative class of fuboTV subscribers.  The Unger<\/em> lawsuit made similar allegations as another case, Biddle, et al. v. The Walt Disney Company<\/em>, 5:22-CV-07317 (N.D. Cal.), brought on behalf of a putative class of YouTube TV subscribers and DirecTV Stream subscribers.  The cases were consolidated on June 10, 2025.

Shortly before Unger filed his initial complaint, on January 6, 2025, Disney publicly announced its plan to purchase a 70% stake in fuboTV<\/a>.  The parties closed the deal<\/a> on October 29, 2025, creating a newly combined fuboTV and Hulu + Live TV business.

On December 19, 2025, Disney filed a motion to dismiss Plaintiffs\u2019 class claims, compel arbitration, and stay Plaintiffs\u2019 individual claims pending arbitration.  Disney filed its motion subject to fuboTV\u2019s terms of service because Plaintiffs had assented to fuboTV\u2019s terms of service when they subscribed to fuboTV.  fuboTV\u2019s terms of service included a provision compelling arbitration of all disputes and waiving class action claims subject to the terms of service.  Disney argued that fuboTV\u2019s terms of service, which authorized fuboTV\u2019s \u201cfuture affiliates\u201d to invoke fuboTV\u2019s rights under the terms of service, permitted Disney to compel arbitration of Plaintiffs\u2019 claims and dismissal of Plaintiffs\u2019 class claims.<\/p>\n\n\n\n

The District Court\u2019s Ruling<\/strong><\/p>\n\n\n\n

In a 26-page opinion, Judge Davila granted Disney\u2019s motion to compel arbitration, dismissed Plaintiffs\u2019 class claims, and stayed Plaintiffs\u2019 individual claims pending arbitration.  The opinion stressed that Plaintiffs did not dispute that they had assented to fuboTV\u2019s terms of service when they signed up as subscribers.  The Court held that the terms of service were \u201creasonably conspicuous\u201d and that Plaintiffs had \u201cunambiguously manifest[ed] assent\u201d to terms of service.  Op. at 9-10.

The Court held that Disney, as a non-signatory to the terms of service, could invoke fuboTV\u2019s terms of service under the \u201cfuture affiliates\u201d provision.  The Court stressed that under \u201cthe ordinary definitions of the words within the Future Affiliates Provision\u201d were \u201cclear and unambiguous, such that the Court will rely on its terms so long as this reliance would not lead to an absurd result.\u201d  Op. at 14.  The Court then rejected Plaintiffs\u2019 enforceability argument that Disney had not undertaken reciprocal contractual obligations, stressing that Disney was not required to \u201cshow that it undertook reciprocal obligations.\u201d  Op. at 15.  Finally, the Court found that enforcement of the arbitration clause by a non-signatory would not lead to absurd results, distinguishing cases cited by Plaintiffs where disputes wholly unrelated to a company\u2019s terms of service were found not to encompass the terms of service.  Instead, the Court was unsympathetic to Plaintiffs\u2019 argument that they did not expect to be entering into a contract with Disney when signing up for fuboTV, explaining that \u201ccourts have repeatedly found that future affiliates provisions, or clauses granting rights to successors, are valid, despite the existence of some inherent uncertainty.\u201d  Op. at 17-18.

The Court then undertook an unconscionability analysis, rejecting Plaintiffs arguments that fuboTV\u2019s terms of service were procedurally and substantively unconscionable.  The Court rejected Plaintiffs\u2019 argument that the terms of service were substantively unconscionable as having \u201cnear infinite scope,\u201d stressing that the canon of ejusdem generis<\/em> requires courts to read broad contractual language in the scope of the specific language of the contract.  Therefore, the terms of service had practical limitations based on the context of the agreement as a whole.  Regarding procedural unconscionability, the Court found that the terms of service were not unconscionable because the terms were inconspicuous, included the ability for users to opt out, and were \u201cnot concealed in dense legalese inaccessible to lay consumers.\u201d  Op. at 24.<\/p>\n\n\n\n

Implications for Companies<\/strong><\/p>\n\n\n\n

When addressing class action claims, companies should scour for any potential arbitration agreements a plaintiff may have signed, even where the plaintiff signed an arbitration agreement not directly with the Company.  Courts regularly hold that non-signatories to arbitration agreements can invoke arbitration with a signatory based on multiple legal theories, including the explicit language of the arbitration agreement vesting rights in non-signatories, assignment clauses, estoppel, and a non-signatory\u2019s third-party beneficiary status.  Company mergers, like the Disney-fuboTV merger, can change a lawsuit\u2019s calculus and require a plaintiff to individually arbitrate claims rather than petition for class certification in court.

The financial implications of invoking an arbitration agreement are substantial, as shown here.  A plaintiff\u2019s individual and class action claims can be dismissed in federal court even after the plaintiff survives a motion to dismiss.  In this case, Disney had originally agreed to settle the case with all three subscriber classes for $55 million.  Disney and the YouTube TV and DirecTV subscriber classes have since filed for settlement approval for $50 million.  Given the reduced settlement now that the fuboTV subscriber class is not included, Disney may have saved $5 million in a settlement award it otherwise would have owed to fuboTV subscribers.

Finally, corporate counsel should regularly update its terms of service to comply with requirements for invoking arbitration in its jurisdiction.  Though courts regularly enforce arbitration agreements, an otherwise valid arbitration agreement can be undone if a court finds that the agreement is unconscionable.  Helpful provisions for conscionability include permitting the ability to opt out of mandatory arbitration, drafting class waivers and mandatory arbitration provisions in clear and non-legalese language, and allowing signatories time to review provisions.  Companies should also require signatories to terms of service to review and affirmatively agree to updates to terms of service and include any waiver of rights in large, clear language.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Mike Rosenblatt Duane Morris Takeaways: On September 8, 2026, in Unger, et al v. The Walt Disney Company, No. 5:25-CV-01163 (N.D. Cal. Sept. 8, 2026), Judge Edward J. Davila granted Defendant\u2019s motion to compel arbitration, ordered on a consolidated docket with Biddle, et al. v. The … <\/p>\n

Continue reading “It\u2019s An Arbitration Agreement After All: Disney Compels Arbitration And Obtains Dismissal Of Class Claims In Antitrust Suit”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[41],"tags":[],"ppma_author":[7,9,177],"class_list":["post-3227","post","type-post","status-publish","format-standard","hentry","category-arbitration-issues"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","author_category":"","last_name":"Maatman Jr.","first_name":"Gerald L.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/geraldmaatman.html","description":"Read Gerald's bio.<\/a>"},{"term_id":9,"user_id":576,"is_guest":0,"slug":"jariley","display_name":"Jennifer A. Riley","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/08\/rileyjennifer-100x100.jpg","author_category":"","last_name":"Riley","first_name":"Jennifer A.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/jenniferriley.html","description":"Read Jennifer's bio.<\/a>"},{"term_id":177,"user_id":776,"is_guest":0,"slug":"mrosenblatt","display_name":"Michael Rosenblatt","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/fce60523394ef4b156ce633cf85acc37b6ec519eb2ff553a67561daeabb6ea3f?s=96&d=blank&r=g","author_category":"","last_name":"Rosenblatt","first_name":"Michael","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/michaelrosenblatt.html","description":"Read Michael's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=3227"}],"version-history":[{"count":2,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3227\/revisions"}],"predecessor-version":[{"id":3231,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/3227\/revisions\/3231"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=3227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=3227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=3227"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=3227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}