Tue 05/10/2022 14:01 PM
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U.S. District Court Judge Cecilia M. Altonaga entered an order today dismissing without prejudice the lawsuit filed against the state of Florida, Gov. Ron DeSantis and other state officials by three resident taxpayers, who challenged the recently passed legislation that will eliminate the Reedy Creek Improvement District, or RCID. The court dismissed the lawsuit sua sponte, or on its own initiative.

The court concludes that “[a]t least three jurisdictional defects compel dismissal of the Complaint.” The district court finds that it lacks jurisdiction over the plaintiffs’ state-law claims. In a footnote, Judge Altonaga observes that while a state may consent to suit against it or its officials in federal court, the plaintiffs “do not allege that Florida has done so here.” Instead, as the court points out, Florida law “expressly forecloses any such waiver of Eleventh Amendment immunity.”

The court adds that “[s]ua sponte dismissal is proper when sovereign immunity bars a suit.”

The district court also finds that it lacks subject-matter jurisdiction over the plaintiffs’ sole remaining claim for violation of Disney’s First Amendment rights, explaining that the plaintiffs failed to “plausibly allege they have suffered any concrete injury as a result of the alleged violation of Disney’s First Amendment rights, and nothing in the Complaint shows Plaintiffs have a close relationship with Disney.”

Judge Altonaga points out that “[e]ven more critically, Plaintiffs have not plausibly alleged that Disney faces any hindrance in asserting its own First Amendment rights.” The order references the plaintiffs’ expectation that Disney and the state of Florida would “‘litigate this matter for a significant period of time,’” which on its own “warrants dismissal.”

The court also finds that the plaintiffs fail to qualify for “[a]nother notable exception to the general principle that a party may not sue for violations of others’ constitutional rights applies in the First Amendment context.”

Finally, the court concludes that none of the plaintiffs’ claims is ripe. Since the legislation does not take effect until July 1, Judge Altonaga reviews the appropriate standard for a pre-enforcement, constitutional challenge to a state statute and concludes that the plaintiffs fail to meet the necessary injury requirement. Instead, the court finds that “[t]he challenged law does not apply to them, they do not allege direct harm as a result of the challenged law, and they do not plausibly allege any credible threat of direct harm in the future.”

Judge Altonaga specifically addresses the plaintiffs’ theory of standing, which is that “the elimination of the Reedy Creek Improvement District might result in financial harm to Plaintiffs by virtue of a tax increase that has not yet been enacted,” and concludes that such an “indirect and highly speculative alleged injury cannot support federal jurisdiction. Senate Bill 4-C itself will not raise Plaintiffs’ taxes.” The court stresses that the bill “does not apply to Plaintiffs at all.”

In a footnote, Judge Altonaga observes that the complaint constitutes “an impermissible shotgun pleading,” but citing the court’s lack of subject-matter jurisdiction, the judge does not explore that defect further.

On Monday, May 9, Fitch Ratings announced that it was maintaining a rating watch negative on the $79.1 million in outstanding utilities revenue and refunding bonds series 2013-1, 2018-1 and 2018-2 issued by the RCID combined utility system. The bonds, along with RCID’s $766 million of outstanding ad valorem tax bonds, were initially placed on negative watch on April 22.
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