New Reedy Creek Board Lawyers Up for Battle with Disney World
At their second meeting, Reedy Creek replacement board discussed its new business, including an agenda item for potential legal challenges aimed at Walt Disney World. This post covers moves they’ve made thus far to lawyer up for litigation, what Disney did that precipitated this, and our commentary about how it all might play out.
Let’s start with a quick recap of what’s happened since we last covered the Reedy Creek Improvement District (RCID) saga. State lawmakers passed a bill that renamed the Reedy Creek Improvement District, while maintaining the special district’s taxing benefits and most of its unique authorities (with some exceptions). The key change was that the Governor of Florida would appoint the district’s board.
Governor DeSantis thereafter signed the bill into law, and appointed members to the newly-dubbed Central Florida Tourism Oversight District (CFTOD). At a press conference, DeSantis announced his five appointees, all of whom are political donors or loyalists, while also proclaiming that there’s a “new sheriff in town” and promising “accountability” for Disney.
Among many other things, DeSantis claimed that the board members would ensure that Walt Disney World will be “what Walt envisioned,” and gave examples of limits his appointees could impose and how future Disney content could be shaped.
Since then, the Central Florida Tourism Oversight District held its first meeting. That mostly revolved around firefighting, COVID-19 policies, and various grievances during a public comments section. Somewhat like a scene in Parks & Rec, but sincere and wholly unentertaining. The actual substance of the meeting was largely uneventful, in equal parts because actual governance is uneventful and because the new board members were unsure of the mechanics for conducting new business.
Someone must’ve bought a copy of Robert’s Rules of Order since then, as the second meeting of the Central Florida Tourism Oversight District was far more eventful. The new Board of Supervisors agenda for their March 29, 2023 meeting contained a plan to obtain “Additional Special Legal Counsel” (Item 8.2 starting on page 61 of the Agenda).
That reveals that the new Board of Supervisors has engaged four different law firms for the following purposes:
Cooper & Kirk will represent the District regarding certain constitutional and contract matters and potential legal challenges for matters involving the District that occurred under the prior board of supervisors and that may involve the Walt Disney Parks and Resorts U.S., Inc. and its affiliates and subsidiary and related entities.
Lawson will represent the District regarding certain constitutional and contract matters and potential legal challenges for matters involving the District that occurred under the prior board of supervisors and that may involve the Walt Disney Parks and Resorts U.S., Inc. and its affiliates and subsidiary and related entities.
Nardella & Nardella will represent the District on those matters specifically assigned by the District and accepted by the firm. Waugh Grant PLLC will represent the District and provide litigation and dispute resolution counsel for the District for any matters designated by the District.
According to reporting from the Orlando Sentinel and WESH’s Bob Hazen, the new Board of Supervisors took issue with a 30-year development agreement made between the Reedy Creek Improvement District and the Walt Disney Company prior to the new Board of Supervisors taking over.
Those agreements consist of restrictive covenants, license agreement, and developer’s agreement that were discussed at a public hearing by RCID on February 8. (The relevant documents can be found here.)
Central Florida Tourism Oversight District asserts that this renders them powerless to offer any oversight over Walt Disney World’s tourist district in Central Florida, effectively undermining their very name! The CFTOD contends that clandestine covenants were made, tying the hands of future board members for decades, according to a legal presentation by CFTOD lawyers during the meeting.
The agreements approved by the prior Board of Supervisors contains language that allows the agreement to remain in effect in perpetuity (or “until twenty one (21) years after the death of the last survivor of the descendants of King Charles III, King of England”) without regard for future action by the new board.
Disney really covered their bases with the agreement, dictating general maintenance standards and including a section titled “Prohibition On Use Of Disney Name.” Among other things, this provides that RCID and its successors (that means CFTOD) cannot use the “Disney” name, nor can it use “any of the fanciful characters (such as Mickey Mouse), designs, symbols, representations, figures, drawings, ideas or other intellectual property owned, developed or created by” Disney in any manner whatsoever. So I guess a King Mickey Mouse meet & greet at the next CFTOD meeting is really out of the question!
Upon discovering these restrictions, the CFTOD’s new Board of Supervisors voted to bring in outside legal counsel to examine the agreement, with one lawyer in attendance presenting on behalf of CFTOD suggesting they should hire more law firms so CFTOD can challenge Disney on even footing, using firms with “deeper bench.”
“We’re going to have to deal with it and correct it,” board member Brian Aungst Jr. said. “It’s a subversion of the will of the voters and the Legislature and the governor. It completely circumvents the authority of this board to govern.”
Board member Ron Peri added: “This essentially makes Disney the government. This board loses, for practical purposes, the majority of its ability to do anything beyond maintaining the roads and maintaining basic infrastructure.”
CFTOD board chair Martin Garcia argued that because of how rich and powerful Disney is, the Board of Supervisors may have to take an “adversarial position” against the company. Garcia further suggested that they might have to go all the way to United States Supreme Court in “protracted litigation” against the Walt Disney Company.
After the meeting was over, Disney released the following statement: “All agreements signed between Disney and the district were appropriate and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law.”
In terms of commentary, I don’t really know what to say. Throughout the Reedy Creek battle, every effort to predict specific outcomes based on legal analysis has proven futile. In our most recent article that touched upon the RCID takeover, I conceded that this was not how I expected the saga to play out.
With that said, there’s one way I’ve been right on the money all along: that this is not about the law, passing meaningful legislation, or the tough and thankless work of local governance. It’s about political theater; scoring a “win” in today’s era of ‘politics as team sports’ and the ongoing culture wars. The goal isn’t to govern; it’s to grab headlines and dominate the news cycle.
Serious analysis isn’t appropriate here because these aren’t serious people with sincere motivations. That’s likely why Disney opted against fighting this previously and instead put out deferential and conciliatory statements. The company’s calculus was that it’s not as easy to “fight” a one-sided culture war. The satisfaction was in the struggle.
For Disney, it was a matter of choosing the least-bad option and hoping they picked wisely, both in the short and long-term. As we pointed out previously, Disney would be correct assuming that it was dealing with rational actors. The interests of the Central Florida Tourism Oversight District and Walt Disney World would be aligned, as both would want to promote tourism and grow the local economy. However, that’s a fairly bold assumption in the actual current environment.
It’s difficult to say what’s happening here. Did Walt Disney World and Reedy Creek Improvement District execute agreements they otherwise wouldn’t have as an “insurance policy” to give them certainty during an uncertain time? Probably.
Were these agreements “unlawful,” “unusual,” or “suspect” as the new Board of Supervisors claims? Those words are not even remotely synonymous. Not a lot of precedent exists for a corporation to have its own special district that allows said company to act as its own government, so technically, anything that district does is “unusual.” That doesn’t make it unlawful or suspect, especially if those moves are made with transparency and in compliance with Florida law.
Moreover, I wouldn’t trust the assertions of board members who, as recently as this month, did not know how to accomplish the most basic component of the job that they were appointed to do. These individuals not knowing about the existence of an agreement does not make it unlawful, unusual, or suspect. I’ve never visited Massachusetts, but that doesn’t mean it doesn’t exist.
Based on the public record, the agreement between RCID and Disney was made out in the open, following proper notice and hearing requirements. It’s openly available for viewing online. Current CFTOD board members could’ve attended that meeting if they so desired, just as I could board a flight to Boston or wherever.
It’s also entirely possible that the new Board of Supervisors doesn’t believe what they’re saying, and that this is more grandstanding. They needed to find a way to remain relevant and in the spotlight, and not burdened by the unpleasantness of local governance or administrative law. (Ew.) Since Walt Disney World wasn’t helping them out by sticking with the fight, they found a new and exciting way to revitalize it. Beats doing actual work!
In fairness, it also doesn’t mean that the new Board of Supervisors is wrong. It’s entirely possible that these agreements are all of the things that the new-look CFTOD claims. Maybe Walt Disney World wanted to cease the public fight, but give themselves an insurance policy. That could be precisely why the company has released the conciliatory statements–because they knew it didn’t really matter and the new board would have its hands tied.
Perhaps the Walt Disney Company is playing 4D chess, and their calculus is that this new board challenging agreements in court is the better course of action than Disney suing the state. This route definitely does seem more boring and dull, and less likely to garner headlines and captivate the attention of more mainstream audiences. The thing is, we don’t know and won’t know until this is dragged out for more months and/or years, or until the parties tire of it and move on.
Honestly, even as someone who enjoys the Walt Disney Company’s inner-workings, palace intrigue and political machinations, I’m exhausted by all of this. Some of the verbiage in the Developer’s Agreement from February 8 is mildly humorous, but I know that amusement will quickly give way to more unpleasantness. Even as I wasn’t wild about the overall outcome of the Reedy Creek replacement, I was more than ready to put this whole saga in the rearview mirror, hoping that CFTOD just go about its mundane day-to-day business. The characters are one-dimensional and cliche, and the writing in this season has gotten tedious and lazy. If I want dumb drama masquerading as something more, I’ll just watch Succession.
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YOUR THOUGHTS
What is your reaction to the latest season of the Reedy Creek Improvement District drama? 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.
The good news is all this legal stuff gives me a great excuse to send these articles to my retired attorney father, thus peaking his interest and enabling me to play the long game of getting him to come with me to WDW. >D He’d LOVE the steam train tour; he just doesn’t know it yet!
I stand with WDW over our tyranical governor. Period.
This news brought a smile to my face! Talk about ineptitude on the part of DeSantis and company. I’m not necessarily surprised, but it’s sad the amount of time, resources, and corruption that this fiasco has and will cost all parties,
I think it’s absolutely hilarious. Disney has every right to protect its business and business interests. Bravo Disney.
When I was a kid I hated playing dodge ball (if you loved it, I have concerns). However, I learned early on the more fearful and cowering I seemed, the more likely I became a target and would inevitably be hit. Therefore, I would stand right up at the line between the opposing sides, in a corner and act like a spectator. Not one time was I hit. In fact, if my team was good I walked off as a spectator and if not and loss was a sure thing, I reached out and hit a ball to get myself out. I believe this is Disney’s way. They’re choosing to not engage, but unlike me maybe their saving their energy for an actual battle worth the fight.
“ Serious analysis isn’t appropriate here because these aren’t serious people with sincere motivations.”
Spot on.
That was my favorite line too!
there’s a “new sheriff in town”… wow, our governor is so cringe.
Yeah, his name is Barney Fife!
Definitely cheering for the mouse on this. Disney has become such a safe haven from the crazy stuff happening in the state.
I’m a librarian. We are a two mom family. I never once thought I had a highly political job title. Here we are. We are annual pass holders and we go to escape the reality for a little while.
I just want to give kids books with diverse characters. When did I become the bad guy?
Thank you for all the work that you do as a librarian – you have the support and appreciation of so many of us!
Sincerely,
– a public school teacher
I find this hilarious. State and local government does this to people all of the time. That the government got outgoverned is intensely amusing.
If I was part of the old planning commission I’d be building a library with all the banned books and with the Statue of David and Mickey at the entrance just inside the district lines.
Best idea I have heard yet!
FL dumba**ery at its finest. How could DeSantis not have sent a representative to the board meetings from the moment he made his announcement last year, or even before? All I see are $1000 dollar bills on fire. I read one of the firms charges $800 an hour. What a horrendous waste but, as usual, no one will be held accountable for it.
They definitely blindsided DeSantis and his political cronies. It just goes to show that you don’t mess with the mouse. Because of their single minded drive to punish Disney for having the audacity to stand up to them they didn’t see what was being done out in the open right under their noses. It was an ultimate FU to the DeSantis administration for what on my opinion is an abuse of power for picking this fight with Disney. Apparently according to what I read in other articles, Disney’s side is pretty much ironclad. Disney’s legal team really did their homework when it came to this plan. To quote Hannibal from the A-Team, “I just love it when a plan comes together”
I’m relieved to hear about the restrictive covenants. I haven’t read them but they seem designed to prevent a board of unelected and uninformed bureaucrats from dictating the day-to-day operations of a complex private corporation. I don’t know how this plays out in the courts ultimately, but I take comfort in knowing that the U.S. Constitution and the Supreme Court, as in institution, is highly protective of private property rights against government incursion. You can’t find anyone who agrees with every decision Disney has made, but it’s not like they are running sweat shops or dumping crude oil into the rivers in Central Florida. They are already subject to state and federal oversight and I don’t know see any use for another layer of red tape that is just going to drive the price of tickets to insanely higher levels. If all those legal fees get passed on to Disney, it won’t be Disney’s shareholders paying the bill. It will be the customers.
I am i my 50s and have been a Disney fan since I was a child. 2 trips to Disneyland, 3 to WDW, etc.
.I also love Florida, have dreamed of moving there for a decade and probably will i 5 years.
I really have no dog in this fight…or maybe both dogs are mine. But my understanding, simple though it may be, is that Florida is carved up into administrative districts and Disney got a special deal with extra freedom when they brought in WDW to help the place thrive.
Well…to judge by the price history, it has. And now Florida has basically rescinded their “special” status. If so…doesn’t that mean they just treat Reedy Creek like the rest of the districts?
To a legal nonprofessional the broad outlines of this situation seems very clear. But I admit the software developer in me is intrigued by what special situations still obtain (besides the obvious political BS on all sides) that are throwing wrenches in the works.
If they just dissolved the district, taxpayers in Osceola and Orange counties would be on the hook for all of Walt Disney World’s infrastructure costs. Also they would have to take on around $1 billion of debt incurred by the district which wouldn’t go back to Disney but would become the responsibility of the counties.
The most alarming aspect, and frankly one I’m surprised more people are not up in arms about, is the precedent DeSantis is setting with openly retaliatory legislation. A core principal in the US is the ability to freely and openly debate and express concern and critical viewpoints on government policies without fear of retribution. Companies actively lobby for and against legislation every day…the idea that being critical of the government will result in direct retaliation is frightening.
It’s plainly unconstitutional. That said, you and I generally don’t get to file a lawsuit to protect a mega-corporation’s constitutional rights from being infringed. Disney has decided (for now) not to fight this openly in court, instead appearing to hope that cooler heads will prevail. However, I’d bet that if this new board does sue to invalidate purportedly legal agreements made between Disney and the previous board of the RCID, that Disney will at that point have a “damn the torpedoes” moment and file suit challenging the constitutionality of the legislation and the formation of the new CFTOD under the First Amendment. I don’t know what the timeline for filing those claims would be or if there’s a statute of limitations (I’m not a constitutional lawyer), but I’m sure that Disney’s lawyers know precisely when and what they need to do if this new district turns out to be as adversarial as it appears they want to be.
Very nuch agreed.
Seconded.
I think the reason that Disney was so quiet or silent during this process was to not “poke the tiger” or instigate Desantis in hopes that his temper tantrum would subside even with replacing the CEO of the company that started it. When that didn’t work and the power hungry governor proceeded then they protected their business, properties, trademarks and etc… Desantis even started talking about changing Disney content. I can’t imagine any court ruling against Disney in this case not only because it was completely legal (they have legal council too and have operated very successfully up til now) but because what the state did was probably unconstitutional. I hope they “damn the torpedoes” and fight the state with every constitutional right available to them.
Yes. This.
It’s interesting that Disney will be paying the lawyers who will be working both for and against them since the districts money is from the taxpayers in the district and Disney is the biggest taxpayer. Also, I’m surprised this didn’t come out before because there has been a lot of media at the board meetings since late last year and I’m surprised DeSantis didn’t have someone going to the meetings since this started last year to look over everything with a fine tooth comb.
As a relatively recent Law School graduate (2014), and a licensed but not practicing Attorney, I find it just incredibly amusing that the Rule Against Perpetuity was used by Disney. When the subject was covered in Real Property I class, I recall sitting there going “Really??, this is a thing??” Then I read something like this and it just makes me chuckle to realize that the professor wasn’t just prattling on about some weird, ancient, Common Law from the 17th Century that has no relevance to the current time.
I get that it’s required due to rules against perpetuities, but I’m a fan of the bit “21 years after the death of the last survivor of the descendants of King Charles III, king of England.” If Lilibet has the longevity of her namesake, it’ll be a while before that portion would take effect.
Great day for property law professors!
Those of us who know about the beginnings of WDW and have read all of the books knew about the perpetuity clause. At least I did. I’ve been biding my time to see how it would play out in this circumstance and I must say, so far it’s been unexpectedly entertaining. Disney has been really quiet when one would have expected complaints. Smart move.
On DeSantis’ part, it has been political grandstanding all the way. Legally, I don’t think he has a leg to stand on. None of this has anything to do with being ‘woke’ (whatever that really means). This is about revenge and a gross misuse of power on the part of the governor. The upside is, DeSantis won’t always be governor, but Disney will always be Disney.