Wed 04/26/2023 15:29 PM
Share this article:
Relevant Documents:
CFTOD Documents
CFTOD Meeting (Video)

Walt Disney Parks and Resorts U.S. Inc., or Disney, the operator of the Walt Disney World Resort in Florida, today filed a lawsuit against Gov. Ron DeSantis and other Florida officials, alleging that the company is a victim of a “targeted campaign of government retaliation” that “threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.” The company asserts the campaign has been “orchestrated at every step” by DeSantis as “punishment” for Disney exercising its protected speech.

The complaint was filed as a new board whose members were appointed by DeSantis moved today to declare void a development agreement and related declaration of restrictive covenants that were approved by the outgoing Reedy Creek Improvement District board during its final days in power. The newly appointed Central Florida Tourism Oversight District , or CFTOD, board approved a resolution today declaring those contracts void ab initio, an action that constitutes “a present and continuing infringement of Disney’s constitutional rights,” according to the lawsuit. The board also approved today a resolution prohibiting Covid-19 restrictions within the special district in which Disney World operates.

The complaint alleges that in a “patently retaliatory, patently anti-business, and patently unconstitutional” move, the state’s new oversight board, allegedly at the governor’s bidding, purported to declare “void” publicly noticed and duly agreed development contracts, which provide a foundation for billions of Disney’s investment dollars and thousands of jobs. The complaint also cites DeSantis’ recent comments that his administration would look to void the Disney development deal and explore taxing Disney World hotels, instituting tolls on its roads and developing amusement parks and a state prison adjacent to the property.

“Disney regrets that it has come to this. But having exhausted efforts to seek a resolution, the Company is left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint unpopular with certain State officials,” according to the complaint.

The complaint states that an “actual and justiciable controversy” between Disney and defendants is of “sufficient immediacy and concreteness … to warrant relief” due to recently approved legislation overhauling the special district under which Disney World has operated for 50 years and today’s CFTOD declaration that Disney’s contracts are “void and unenforceable.”

In addition to DeSantis, the lawsuit also names Meredith Ivey, the acting secretary of the Florida Department of Economic Opportunity; the five members of the CFTOD appointed by the governor; and John Classe, the district administrator appointed by the CFTOD.

Asked for comment on the lawsuit, Taryn Fenske, the governor’s communications director, released the following statement: “We are unaware of any legal right that a company has to operate its own government or maintain special privileges not held by other businesses in the state. This lawsuit is yet another unfortunate example of their hope to undermine the will of the Florida voters and operate outside the bounds of the law.”

The lawsuit asserts five causes of action, including violations of the Contracts Clause, Takings Clause and Due Process Clause of the U.S. Constitution and the First Amendment. As part of the requested relief, the company asks the court to declare CFTOD’s legislative declaration “unlawful and unenforceable” based on the violations of the U.S. Constitution outlined above.

Disney also asks the court to declare that the development agreement and related restrictive covenants remain in effect and are enforceable. In addition, the company seeks a court order declaring Senate Bill 4C, which eliminated certain independent state special taxing districts, and House Bill 9B, which established new rules for Disney’s special taxing district, including creating a new board whose members are appointed by the governor, “unlawful and unenforceable” because they were enacted in retaliation for Disney’s political speech in violation of the First Amendment. Disney also asks the court to issue an order enjoining defendants from enforcing Senate Bill 4C and House Bill 9B.

Disney asserts that DeSantis and his political allies “paid no mind to the governing structure that facilitated Reedy Creek’s successful development” until Disney was targeted for expressing its opinion on state legislation last year.

“Since then, the Governor, the State Legislature, and the Governor’s handpicked local government regulators have moved beyond threats to official action, employing the machinery of the State in a coordinated campaign to damage Disney’s ability to do business in Florida,” the lawsuit states, adding that state leaders “have proudly declared that Disney deserves this fate because of what Disney said.

“This is as clear a case of retaliation as this Court is ever likely to see,” according to the complaint.

Despite its “regrettable position,” Disney says it is fortunate to have the resources for a legal fight against the state’s retaliation. “In America, the government cannot punish you for speaking your mind,” the lawsuit states.

The complaint also asserts that the company has had “an immeasurable impact” on Florida’s economy, establishing Central Florida as a top global tourist destination and attracting tens of millions of visitors each year. Disney is also one of the state’s biggest taxpayers and employers, paying $1.1 billion in state and local taxes the previous year and employing more than 75,000, according to the lawsuit.
Share this article:
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2023 Reorg Research, Inc. All rights reserved.
Thank you for signing up
for Reorg on the Record!