Disney sues DeSantis, alleging ‘government retaliation’ in Reedy Creek feud
Orlando Sentinel
LAKE BUENA VISTA — The Walt Disney Co. is suing Gov. Ron DeSantis and state officials in federal court, accusing them of engaging in a “targeted campaign of government retaliation” in the feud over the Reedy Creek Improvement District.
The entertainment giant filed the lawsuit on Wednesday as DeSantis’ hand-picked tourism oversight board declared Disney’s agreements seeking to retain control over development in Central Florida were null and void.
“A targeted campaign of government retaliation — orchestrated at every step by Gov. 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,” the suit filed in Tallahassee reads.
The tourism oversight board’s lawyers say the previous Disney-friendly Reedy Creek Improvement District board failed to follow procedural requirements and properly notify affected property owners of the development agreements.
But in the federal lawsuit, Disney’s lawyers say the agreements were lawfully approved, and DeSantis and his allies are “employing the machinery of the state in a coordinated campaign to damage Disney’s ability to do business in Florida” because it opposed what critics called the “don’t say gay” law.
“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,” the lawsuit states.
DeSantis’ office defended its position in a 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,” said Taryn Fenske, a DeSantis spokeswoman. “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.”
Disney filed the lawsuit against DeSantis, the Central Florida Tourism Oversight District’s Board of Supervisors and other state officials. The suit asks the court to block the oversight board’s actions voiding the development agreements and a state law putting DeSantis in charge of the Reedy Creek Improvement District, which oversees government services for Disney World.
It alleges the state violated Disney’s First Amendment rights and clauses dealing with contracts, due process and the taking of private property without just compensation.
Battle began a year ago
The clash between Disney and DeSantis started in March 2022 when the entertainment giant vowed to work to overturn legislation that limits classroom instruction on sexual orientation and gender identity in public schools. DeSantis responded by calling Disney a “woke” corporation and vowing to end what he considered to be “special privileges” the corporation enjoyed in Florida.
DeSantis’ oversight board outlined its position during a meeting Wednesday.
At issue are a development agreement and restrictive covenants approved on Feb. 8 by the Reedy Creek Improvement District’s Board of Supervisors ahead of the state takeover. State lawmakers voted to put DeSantis in charge of appointing the five members of Reedy Creek’s board, replacing an arrangement that essentially allowed Disney to hand-pick the board and self-govern its theme parks and resorts.
The pact preserved Disney’s control over growth and planning, according to an analysis by the new board’s lawyers. A separate declaration of restrictive covenants spelled out that Disney must review aesthetic changes to the district’s buildings, among other stipulations.
Although the Disney deals were publicly advertised and approved in public meetings, an investigation found no record of those notices being sent by mail as required by law to affected property owners, the new board’s lawyers said.
The board’s resolution includes accusations of other faults with Disney’s agreements, including self-dealing and one-sided contract terms. Lake Buena Vista and Bay Lake didn’t hold public hearings on the deals, even though they affected property inside their city limits, and the district didn’t post the entire text of the agreements on its website until the new board took over in March, according to the resolution.
The district also did not have the authority under Florida law to give up its governmental powers through restrictive covenants, the resolution alleges.
Central Florida Tourism Oversight District Board of Supervisors chairman Martin Garcia delivers remarks in support of a resolution to invalidate Disney’s final agreement with the previous board in Lake Buena Vista, Fla., Wednesday, April 26, 2023.
The new board members wanted to work with Disney’s leadership but were blindsided by the Disney deals that they only discovered after they took control of the district in March, Martin Garcia, chairman of the Central Florida Tourism Oversight District’s Board of Supervisors, said at Wednesday’s meeting.
“They did this at the 11th hour. ... They decided that a couple of weeks before this board takes action that they are going to tell the Florida Legislature and the governor and this board that they can’t act according to Florida state law,” Garcia said.
Told of the lawsuit after the meeting, Garcia said he had no comment.
Disney did not respond to a request for comment on the board’s actions, but its communications office sent out a copy of the lawsuit.
In the suit, Disney’s lawyers take issue with the tourism board’s characterization of the agreements, which they say are vital for a development plan that will put $17 billion and 13,000 new jobs into Central Florida’s economy over the next decade.
“[N]othing about these contracts was a surprise: They were discussed and approved after open, noticed public forums in compliance with Florida law,” Disney’s lawyers wrote. “And in the very same legislation that replaced the elected board governing Disney with board members picked by the Governor, the State Legislature reaffirmed the enforceability of all prior contracts, including those here.”
Disney also wanted to avoid fighting with Florida’s government but had no choice because of “a relentless campaign to weaponize government power,” the lawyers wrote.
DeSantis, widely seen as a 2024 GOP presidential contender, vowed to get the agreements voided, which he says runs contrary to his desire to end Disney’s control over the Reedy Creek district.
To bolster the state’s case, state legislators are moving to amend state law to stipulate that the development agreement can be voided by the new board.
‘This is huge’
The lawsuit drew swift reactions from politicians and Disney analysts.
Former South Carolina Gov. Nikki Haley, a GOP presidential contender, told Fox News she would welcome Disney’s “hundreds of thousands of jobs” and “billions of dollars” into her state.
Disney analyst Len Testa called Disney’s decision to sue DeSantis and the state a significant escalation over matters the corporation must think are vital to its business interests.
“This is huge,” he said. “This is not your typical dispute with the local taxing authority or the City Council of Anaheim. Suing a governor in federal court is unprecedented.”
Both sides have stocked up on legal firepower. 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.
Disney’s complaint was filed by the high-powered Los Angeles attorney Daniel Petrocelli, who defended former President Donald Trump in a class-action lawsuit filed against Trump University, among other high-profile clients. The litigator is also known for his work in a 1997 wrongful death civil suit against the former NFL star O. J. Simpson.
In other business, the oversight district is considering hiring Glen Gilzean, president and CEO of the Central Florida Urban League, as its new administrator, Garcia said. The present administrator, John Classe, would stay on as a special adviser.
“It’s still up in the air,” Gilzean said. “I’m really excited about the opportunity, and I’m looking forward to working with the board.”
Board members also adopted a resolution declaring that Disney and other businesses in the district cannot require customers to be vaccinated against COVID-19 or undergo COVID-19 testing as a condition of entry. State law already makes it illegal for businesses to require customers show immunization credentials known as vaccine passports.
Business owners worry
The ongoing feud between DeSantis and Disney has sparked concerns from some business owners at the Disney Springs entertainment complex. Several owners told the new board members on Wednesday they should consider how their decisions could affect their operations.
“The discussion of additional taxes and additional utilities has been very concerning for us,” said Stephen Lombardo III, CEO of Gibsons Restaurant Group and owner of The Boathouse at Disney Springs. “I want you to just please understand when you make these decisions it impacts far more than just Disney.”
DeSantis said the state may have to look at toll roads and hotel taxes as he escalated his battle with Disney.
The district may have to consider raising taxes to pay for legal work needed to undo Disney agreements, Garcia said.
“Disney picked the fight with this board,” he said. “We were not looking out for a fight.”
But one public speaker told the board they think the board’s actions are motivated by DeSantis’ presidential ambitions, rather than doing what’s best for Central Florida.
“We are the laughingstock,” said Debie McDonald, a resident of Celebration. “Let people do what they do. Don’t come in with your lawyers from Tallahassee and turn our world upside down.”
