Disney World Sues DeSantis (Amended Complaint Update)

Walt Disney World is suing Ron DeSantis and the Central Florida Tourism Oversight District (CFTOD) board members that the Florida Governor appointed. This post covers allegations of the lawsuit, plus developments from the meeting of the CFTOD that precipitated this litigation. (Updated May 8, 2023.)

Let’s start with the latest update, which is that Walt Disney Parks & Resorts filed its First Amended Complaint on May 8, 2023. In this, Disney argues that the recently-passed and signed into law Senate Bill 1604 was drafted such that it would target only contracts between Reedy Creek Improvement District (RCID) and the Walt Disney Company.

Disney contends that “Governor DeSantis and his allies have no apparent intent to moderate their retaliatory campaign any time soon,” and the amended complaint cites several (additional) instances of Florida politicians advancing the legislation voluntarily admitting that they were targeting Walt Disney World, punishing the company for its speech, and using them to set an example for other companies.  

The amended complaint also takes aim at an amendment added to a Senate transportation bill (later substituted as House Bill 1305) that would give the state the ability to regulate, and even shut down, the Walt Disney World monorail system. “In what has now become a familiar practice, the proposed amendment was precision-engineered to target Disney alone, just as Governor DeSantis intended and previewed — imposing state oversight over only those private monorail systems located ‘within an independent special district created by local act which have boundaries within two contiguous counties,” the lawsuit alleges. “Disney is the only company affected by House Bill 1305.”

Beyond the additional legislation, Disney pointed to statements made by DeSantis on May 5 during a press conference commemorating the end of the Florida Legislative session. After being asked about how he was “handling” the Reedy Creek situation, without hesitation or prompting, Governor DeSantis admitted: “[T]his all started, of course,with our parents’ rights bill.”

The lawsuit further alleges that in “a separate interview that same day, Governor DeSantis trumpeted the unequivocal intent and perceived success of his retribution campaign: ‘Since our skirmish last year, Disney has not been involved in any of those issues. They have not made a peep. That, ultimately, is the most important, that Disney is not allowed to pervert the system to the detriment of Floridians.'”

In terms of new commentary, we’ll reiterate that the punishment is the point. It may seem like a comedy of errors with DeSantis and his allies are giving the game away with these dozens of public statements that they’re retaliating against Walt Disney World with this legislation as it weakens their legal position.

In reality, that’s the entire end game. Had Governor DeSantis woken up one day in early 2020 and come to the conclusion that RCID needed to be eliminated or replaced for some boring procedural or administrative reason, no one would have cared. Walt Disney World might’ve lobbied against it, and the local newspapers and fan-centric blogs would’ve picked up the story, but it would not be making the nightly news on a regular basis for over a year. The vast majority of the public wouldn’t hear about it, and probably wouldn’t have an opinion even if they did.

This is only making the mainstream news and raising the profile of Governor DeSantis because it’s controversial. There’s literally no other reason why this is a major story. The retaliatory angle and what people think of that, for better or worse, is it.

As noted in the amended complaint, DeSantis recently boasted about how Disney has “not made a peep” since the skirmish last year. That’s certainly a clever card for him to play, intimating that he’s won in the way that counts most. However, I suspect that he would actually far prefer Disney clumsily voicing opinions on more pending Florida legislation, as that would give him more red meat for the base. (And to be sure, Bob Iger has responded to DeSantis’s statements and actions, and the amended complaint’s allegations also serve as statements, but some of that is probably better left ignored.)

Turning back to the original complaint, we’ll start with the CFTOD meeting that precipitated Walt Disney World filing suit against the governor and board. During this meeting, the new district’s Board of Supervisors declared that the Development Agreement and Declaration of Restrictive Covenants entered into by and between the (former) Reedy Creek Improvement District (RCID) and Walt Disney Parks & Resorts was void and unenforceable.

The new CFTOD board asserted that these agreements between Disney and RCID–which made national news for use of the “King Charles Clause” and other fanciful expressions–rendered them powerless to offer any oversight over Walt Disney World’s tourist district, effectively undermining their very name. They’ve repeatedly called these eleventh-hour, last-minute, or clandestine covenants that were made unlawfully, that they have numerous legal deficiencies, and were a subversion of the will of Florida voters, among many other claims.

The Central Florida Tourism Oversight District Board of Supervisors also approved the “Superior Authority” amendment at the same meeting today. This essentially does what the name suggests, giving the new board final decision-making authority for the District and declaring that no further administrative appeal is available for decisions made by said board.

The new board chair argued during the meeting that Disney was the one to pick this fight with his board,” and claimed that the board was not looking for a fight. But also that, factually and legally, what Disney created is an “absolute legal mess, and will not work.” With that, the board approved findings by its general counsel, declared the company’s February 8 agreements with RCID legally void and unenforceable, and moved to have them stricken from the public records of Osceola and Orange Counties.

That brings us to the juicier development, which is that Walt Disney Parks & Resorts has filed suit against Florida Governor Ron DeSantis. In addition, also names Meredith Ivey, Acting Secretary of the Florida Department of Economic Opportunity; as well as Central Florida Tourism Oversight District Board Members: Martin Garcia, Michael Sasso, Brian Aungst, Ron Peri, Bridget Ziegler, and Administrator John Classe.

In the 77-page lawsuit filed with the U.S. District Court for Northern District of Florida, Disney Parks & Resorts alleges “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.”

“Today’s action is the latest strike: 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,” Disney alleges in the lawsuit.

The lawsuit continues: “…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,’ [Florida Governor DeSantis] said.”

“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.”

“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.”

“Governor DeSantis announced that Disney’s statement had ‘crossed the line’ —a line evidently separating permissible speech from intolerable speech—and launched into a barrage of threats against the Company in immediate response,” the lawsuit continues. It further alleges that DeSantis and his allies have since “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 points out that state leaders have “not been subtle” about their reasons for taking retaliatory action against Disney. DeSantis and co. have declared that Disney “deserves” this because of the substance of the company’s statements.

Disney further states that it never sought a fight with the Florida government, and attempt to de-escalate for nearly a year, attempting a productive dialogue with DeSantis, all to no avail. Against that backdrop of uncertainty, Disney and RCID gave public notice that the parties would enter into contracts to secure future development for Walt Disney World. The company alleges that those contracts implemented a comprehensive plan for RCID that DeSantis had found compliant with Florida law only months earlier.

Disney characterized the developer agreement as standard and unsurprising, consistent with other land use agreements between developers and local regulars. The company contends that, “contrary to misunderstandings and mischaracterizations,” they do not undermine the CFTOD’s ability to govern and exercise its authority.

Disney argues that it is a clear violation of the company’s rights for the CFTOD board to declare its own legally binding contracts void and unenforceable, and as such, Disney seeks relief to carry out its long-held business plans.

The company further contends that it is “forced to defend itself against a State weaponizing its power to inflict political punishment” as a “clear violation of Disney’s federal constitutional rights” under the Contracts Clause, Takings Clause, Due Process Clause, and the First Amendment.”

“Disney finds itself in this regrettable position because it expressed a viewpoint the Governor and his allies did not like. Disney wishes that things could have been resolved a different way. But Disney also knows that it is fortunate to have the resources to take a stand against the State’s retaliation—a stand smaller businesses and individuals might not be able to take when the State comes after them for expressing their own views. In America, the government cannot punish you for speaking your mind.”

Deeper in the lawsuit, the company cites dozens of examples of Governor DeSantis voluntarily admitting that he was retaliating against Disney for expressing disfavored viewpoints. It cites his campaign emails soliciting donations, public interviews and speeches, social media posts, and even DeSantis’s recent memoir.

There are countless examples of this–they form the bulk of the 77-page complaint. Even as someone who has been following this saga closely and heard the heated rhetoric, some of the statements made by DeSantis and his allies are absurdly inflammatory and downright unsettling. Stuff I’d expect to hear from Jonah Ryan, not real politicians.

Ultimately, Disney seeks that the court declare that the Legislative Declaration (from the April 26, 2023 meeting of the CFTOD) is unlawful and unenforceable because it abrogates Disney’s rights in violation of the Contracts Clause, Takings Clause, Due Process Clause, and because it was enacted in retaliation for Disney’s speech in violation of the First Amendment.

Disney further seeks that the court declare that the Development Agreement (etc.) remain in effect and enforceable, that Florida Senate Bill 4C and House Bill 9B are unlawful and unenforceable because they were enacted in retaliation for Disney’s political speech in violation of the First Amendment, and that the Defendants be enjoined from enforcing the aforementioned bills and Legislative Declaration.

In a nutshell, Walt Disney World is seeking to undo the renaming of the Reedy Creek Improvement District into the Central Florida Tourism Oversight Development District, which would by extension result in the replacement of the DeSantis appointees on that board.

Additionally or alternatively, Disney is seeking to preserve the Development Agreement (etc.) from February 8, and to prevent Florida from taking further action to supersede those contracts or otherwise punish the company.

Florida Governor Ron DeSantis’s Communications Director Taryn Fenske released the following statement in response to Walt Disney World’s lawsuit: “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 statement concludes. It’s safe to assume that this will not be the final word from DeSantis and friends, so we’ll update accordingly once the governor himself says something. (See below.)

DeSantis offered his reaction to the lawsuit during a news conference in Jerusalem as part of an “international trade mission” that has taken him to Japan and Israel thus far. “Giving companies their own government, that’s not what a free market is all about, last I checked. In fact, they’re upset because they’re having to live by the same rules as everyone else; they don’t want to pay the same taxes as everyone else; they want to be able to control things without proper oversight, whereas every other Floridian has to have this type of oversight–all Florida businesses. So it’s a little bit much to be complaining about this.”

I don’t think the suit has merit. I think it’s political. I think they filed in Tallahassee for a reason, because they’re trying to generate some district court decision, but we’re very confident on the law. The days of putting one company on a pedestal with no accountability are over in the state of Florida.”

(Desantis’s remark about filing in Tallahassee for a reason is a reference to the complaint being filed in the Northern District of Florida, where the case has been assigned to Chief U.S. District Judge Mark E. Walker. This draw sets the company up for success, as Walker has extensive experience with First Amendment cases and his recent rulings suggest a high likelihood of success for Disney assuming they overcome any potential issues with standing.)

Other politicians have also spoken out. Most interesting are those from DeSantis’s own party. An interesting piece in the Wall Street Journal shared that some Republicans are saying privately that the governor’s approach looks increasingly like a personal vendetta and heavy-handed government intervention into the affairs of one of the state’s largest employers. The paper also pointed out that DeSantis has seen erosion in support among GOP state lawmakers as result, with several allies from Florida’s congress publicly endorsing former President Trump.

“Disney is really acting in a way that we’d expect most free-market actors would act. Companies always push back and find a way to respond to aggressive regulation,” Republican state Rep. Spencer Roach, told the WSJ. “I think the governor is right, but I’m not sure at this point that the public is with us, and I would urge the governor to be cautious as he goes on with this fight with Disney.”

This is notable because Roach was one of the earliest advocates of the Reedy Creek dissolution, helping to spearhead the legislation early-on. (He’s cited twice in Disney’s complaint!) So it’s particularly interesting to see he and other once-vocal critics of Disney go quiet or publicly distance themselves from the ongoing battle.

Less surprising is the reaction of others against whom DeSantis will potentially square off in the 2024 GOP presidential primary. Last week, Trump weighed in by saying that DeSantis “is being absolutely destroyed by Disney” and called the governor’s move a “political stunt.” He hasn’t commented on the latest development, but he’ll undoubtedly seize upon the lawsuit at some point.

Nikki Haley weighed in and said that her home state would “happily accept” if Disney wanted to move its hundreds of thousands of jobs to South Carolina and bring billions of dollars in revenue with them, noting that South Carolina is “not woke, but we’re not sanctimonious about it either.” She is just one of several 2024 candidates who have commented thus far.

It should go without saying, but Walt Disney World is not going to pack up and move to another state–this isn’t Theme Park Tycoon. Haley and other politicians don’t think they will, either. As with so much of this, it’s theatrics or political posturing. By all accounts, the company is playing the long game with an eye towards its long-term future in Florida.

Nevertheless, it’s interesting to see other Republicans distancing themselves from DeSantis on this issue, or smelling blood in the water. Our commentary on two different past posts (here and here) largely revolved around that angle of the battle, questioning whether DeSantis has overplayed his hand, or made a miscalculation in continuing to push this once Iger returned.

It’ll be interesting to see how this plays out from here. Now that the battle between Disney and DeSantis has escalated beyond the court of public opinion to an actual court, the eventual outcome should be more predictable as a matter of law. Even then, this probably isn’t as cut and dry as some analysts are making it out to be.

We’d also caution against premature conclusions about how the ‘political theater’ side of the standoff will continue. One thing that has been particularly telling throughout this saga is that DeSantis and his allies have not at all attempted to maintain a veneer of plausible deniability.

No matter where you stand on this debate, it’s patently obvious that taking away Reedy Creek was occurring in direct response to Chapek’s statements last spring about pending Florida legislation. But for Chapek voicing an opinion, no one on DeSantis’s side of the aisle would’ve introduced legislation to replace the Reedy Creek Improvement District.

Additionally, no matter what you think of him, DeSantis is an intelligent and savvy political operator. It’s not like he (repeatedly) misspoke and accidentally let the underlying motivation for all of this slip. The punishment was the point, and signaling the same to supporters–and other businesses–was purposeful and deliberate.

This story never would’ve dominated the national news if Florida simply dissolved or replaced Reedy Creek during legislature’s ordinary course of business, with the simple explanation that more government oversight was desired. It would’ve been boring and no one would’ve cared. Framing it as retaliation was necessary for campaigning, fundraising, and making television appearances.

There’s no reason to expect that Walt Disney World filing this lawsuit will change the calculus for DeSantis and friends. In all likelihood, they will only escalate further, not de-escalate or defer now that there’s an actual pending legal matter. Just as the punishment was the point, so too is the battle the point.

Even as Disney is using the statements of the governor and board members in support of its allegations, the aforementioned individuals do not have any legal incentive to quiet down and let this matter be resolved by the courts. Disney is suing DeSantis and the CFTOD board in their official capacities. They have nothing to lose, personally, by continuing to plead their case and make waves in public. The only thing that will change the approach is if continuing the fight with Disney polls poorly.

As we’ve said before, this is not about the law, passing meaningful legislation, the tough and thankless work of local governance, or doing what’s best for constituents. It’s simply self-serving political theater. When viewed through that prism, “winning” is more about the ongoing culture wars than it is as a matter of law. The goal isn’t to govern; it’s to grab headlines, dominate the news cycle, and score points with the base in the current era of politics as a team sport. Again, these are not serious people with sincere motivations.

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YOUR THOUGHTS

If you’ve read all or part of Walt Disney World’s lawsuit against Florida Governor Ron DeSantis & Friends, what’s your take on the allegations and support thereof? Any reaction to the latest season of the Reedy Creek Improvement District drama? Hope this escalating battle starts to de-escalate soon so we can focus again on the fun of the parks? Keep the comments civil, and avoid personal attacks or perpetuating pointless culture wars. Respectfully debating the change is totally fine, but don’t attack others or troll for controversy. That’s why Facebook was invented.