by Ray Keating
News/Commentary
DisneyBizJournal.com
April 26, 2023
What a strange story. One of the world’s largest entertainment businesses, The Walt Disney Company, has been doing battle with the Republican governor of Florida, Ron DeSantis. And now that battle is spilling into the courtroom, as Disney has brought a lawsuit against Governor DeSantis, the Central Florida Tourism Oversight District’s Board of Supervisors and other state officials.
Keep in mind that Disney is one of Florida’s largest employers, and Disney World is the nation’s largest single-site employer. And DeSantis is prepping to run for president … again, as a Republican.
In the lawsuit, Disney asserts, “A targeted campaign of government retaliation—orchestrated at every step by Governor DeSantis as punishment for Disney’s protected speech—now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”
It later continues: “At the Governor’s bidding, the State’s oversight board has purported to 'void' publicly noticed and duly agreed development contracts, which had laid the foundation for billions of Disney’s investment dollars and thousands of jobs. This government action was patently retaliatory, patently anti-business, and patently unconstitutional. But the Governor and his allies have made clear they do not care and will not stop. The Governor recently declared that his team would not only ‘void the development agreement’—just as they did today—but also planned ‘to look at things like taxes on the hotels,’ ‘tolls on the roads,’ ‘developing some of the property that the district owns’ with ‘more amusement parks,’ and even putting a ‘state prison’ next to Walt Disney World. ‘Who knows? I just think the possibilities are endless,’ he said.”
And regarding motivations, it is asserted in the lawsuit: “Governor DeSantis and his allies paid no mind to the governing structure that facilitated Reedy Creek’s successful development until one year ago, when the Governor decided to target Disney. There is no room for disagreement about what happened here: Disney expressed its opinion on state legislation and was then punished by the State for doing so.”
Disney also puts forth: “It is a clear violation of Disney’s federal constitutional rights—under the Contracts Clause, the Takings Clause, the Due Process Clause, and the First Amendment—for the State to inflict a concerted campaign of retaliation because the Company expressed an opinion with which the government disagreed. And it is a clear violation of these rights for the CFTOD [Central Florida Tourism Oversight District] board to declare its own legally binding contracts void and unenforceable. Disney thus seeks relief from this Court in order to carry out its long-held business plans.”
How did we get here? As DisneyBizJournal has explained before:
[O]n Monday, February 27, … Governor Ron DeSantis (R) signed House Bill (HB) 9-B. The law renames the Reedy Creek Improvement District as the Central Florida Tourism Oversight District, and it replaces the governing board – from those appointed by the landowners, i.e., Disney, to those appointed by the Florida governor, with approval by the state senate.
Reedy Creek had been established in 1967, and it allowed Disney to self-govern development and assorted services within the boundaries of the land upon which Disney World sits. This long-established set up came under attack last year.
Disney foolishly weighed in against a piece of Florida education legislation [the Parental Rights in Education Act] that had nothing to do with its business, doing so under pressure from various left-wing groups within and outside the company. DeSantis saw a political opportunity to gin up his base, and pushed legislation that would end Reedy Creek.
The details eventually were hammered out. And as expected, the appointees put forth by DeSantis for the governing board of the Central Florida Tourism Oversight District are his political allies.
Incidentally, there are hundreds of special districts like Disney’s – though smaller. As DisneyBizJournal has noted, “By the way, DeSantis made his announcement about Disney’s special district at The Villages, which benefits from its own special district. But The Villages happens to be home to many DeSantis’ political supporters, so…”
But that wasn’t the end of it. Before it was renamed and reconstituted, the Reedy Creek Improvement District’s Board of Supervisors passed restrictive covenants and a development agreement. As Disney explained in the lawsuit: “Amid great uncertainty about the lengths to which the State would go to keep punishing Disney for its views, RCID and the Company gave public notice, in January 2023, that they would enter into contracts to secure future development for the District and Walt Disney World—contracts that implemented a comprehensive plan for the District that the DeSantis Administration itself had found compliant with Florida law months earlier.”
Regarding such development, Disney, which pays $1.2 billion annually in state and local taxes in Florida, has said that its Disney World resort expansion plans for the coming decade feature $17 billion in investment and the addition of 13,000 jobs.
But, today, as reported by The New York Times:
On April 26, the board appointed by Mr. DeSantis voted to nullify the two agreements that gave Disney vast control over expansion at the complex. Earlier, a lawyer for the board said Disney’s maneuvers relating to the development agreements were “improper and illegal” and that the company had failed to comply with a state law requiring it to notify the public before taking any actions.
Immediately after the board nullified the agreements, Disney sued Mr. DeSantis, the board and other state officials in federal court, saying it was subjected to “a targeted campaign of government retaliation.” The company has maintained that its actions with the agreements were legal and were approved in open public forums.
As for the judge and Disney’s lawyer in the case, the Times reported, “Daniel M. Petrocelli, a high-powered Los Angeles litigator, filed the lawsuit in Tallahassee on Disney’s behalf. Mr. Petrocelli was the lawyer Mr. Trump turned to in 2016 when dealing with a class-action fraud case against the defunct Trump University. Disney’s case was assigned to Mark E. Walker, chief judge for the Northern District of Florida. Judge Walker, known for stinging rulings and appointed by President Barack Obama, has experience with First Amendment cases.”
As for the DeSantis side, the Orlando Sentinel reported, “The Central Florida Tourism Oversight District has hired four outside law firms, including the politically connected Cooper & Kirk firm. Cooper & Kirk’s lawyers will bill $795 an hour, according to the firm’s engagement letter. The boutique firm’s roster of lawyers includes Adam Laxalt, who roomed with DeSantis when he was training at the Naval Justice School in 2005 and made an unsuccessful bid for U.S. Senate last year in Nevada.”
Regarding the timing of the lawsuit, the Times also noted, “Disney filed its complaint minutes after a board appointed by Mr. DeSantis to oversee Disney World nullified two agreements that gave Disney vast control over expansion at the resort complex,” including giving “Disney the ability to build 14,000 additional hotel rooms, a fifth theme park and three smaller parks.”
And finally, don’t forget that politics drives this entire issue for DeSantis. But politics can be fickle, and he is getting push back from others who want to be the Republican presidential candidate in 2024. For example, the Sentinel noted:
Nikki Haley, the former South Carolina governor and United Nations ambassador now running for the Republican presidential nomination, took a dig at her potential primary rival as she reacted to the lawsuit.
“My home state will happily accept your 70,000+ jobs if you want to leave Florida,” Haley tweeted at Disney on Wednesday afternoon.
South Carolina is “not woke, but we’re not sanctimonious about it either,” she added — an unsubtle reference to DeSantis, whom Trump has nicknamed “Ron DeSanctimonious” on the campaign trail.
In the lawsuit, Disney declares, “In America, the government cannot punish you for speaking your mind.” Well, I guess this case will put this fundamental principle to the test.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
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