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Disney sues state over 'retaliation'

Photo by Brian McGowan on Unsplash

By Jim Turner

News Service of Florida

April 26, 2023

TALLAHASSEE --- Mostly silent on the issue for the past year, Walt Disney Parks and Resorts on Wednesday filed a federal lawsuit arguing its First Amendment rights were violated and business harmed by a “relentless campaign” of retribution orchestrated by Gov. Ron DeSantis and other officials.

The 77-page lawsuit, filed in federal court in Tallahassee, pointed to retaliation for the entertainment giant’s opposition to a controversial 2022 law that restricts instruction about sexual orientation and gender identity in schools. It said the retaliation threatens the company’s “business operations, jeopardizes its economic future in the region and violates its constitutional rights.”

DeSantis’ office quickly criticized the lawsuit, which came after a series of changes that included replacing the Reedy Creek Improvement District board. Disney had effectively controlled the district, which gave it power over issues such as land use, fire protection and sewer services that are typically handled by local governments.

“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,” DeSantis spokeswoman Taryn Fenske said in a statement. “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 lawsuit also names as defendants acting Department of Economic Opportunity Secretary Meredith Ivey, members of the Central Florida Tourism Oversight District Board and district Administrator John Classe.

Lawmakers in February approved a measure that renamed the Reedy Creek Improvement District as the Central Florida Tourism Oversight District and gave DeSantis power to appoint the district’s board. The Legislature and the new board have acted to nullify development agreements involving Disney that were approved by the former Reedy Creek board.

Senate President Kathleen Passidomo, R-Naples, said legislation (SB 1604) allowing the new district board to review and reverse changes by the previous district board “makes sense.”

But Sen. Linda Stewart, D-Orlando, said the state actions against Disney have been retribution.

“Every time I come here, there is a new amendment that is added that retaliates against Disney,” Stewart said. “I think, finally, they have figured that out. They have no other option. They are out of options. They can’t be nice.”

Sen. Geraldine Thompson, D-Windermere, said DeSantis has shown that he isn’t willing to “de-escalate.”

“In fact, he has escalated at every opportunity,” Thompson said. “That is why I think the courts are going to have to be the venue where there is some kind of resolution.”

In the lawsuit, Disney contends it was left with no choice against “a relentless campaign to weaponize government power.”

“Disney finds itself in this regrettable position because it expressed a viewpoint the governor and his allies did not like,” the lawsuit said. “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.”

In addition to arguing that the state has violated the company’s First Amendment rights, the lawsuit alleges a violation of a constitutional prohibition on altering contracts, an unconstitutional taking of property without proper compensation and violation of due-process rights.

“The company sought to de-escalate the matter for nearly a year, trying several times to spark a productive dialogue with the DeSantis administration. To no avail,” the lawsuit said.

After Disney opposed the 2022 law, DeSantis and Republican lawmakers initially moved to dissolve the Reedy Creek district, which was created in the 1960s.

Lawmakers in February backed away from dissolving the district but changed the name and gave DeSantis control.

After new board members were seated, they realized the former Reedy Creek board during publicly advertised meetings had turned over most of its powers to Disney through agreements.

In one of the few public comments on the fight, Disney CEO Bob Iger during an April 3 shareholders’ meeting criticized DeSantis’ actions as “anti-business and anti-Florida.”

The lawsuit characterized the agreements with the former Reedy Creek board as similar to other contracts between developers and special districts to fix long-term development rights and obligations.

“Contrary to misunderstandings and mischaracterizations by some government leaders,” the lawsuit said, “they do not undermine the newly constituted Central Florida Tourism Oversight District board’s ability to govern and exercise authority, including by imposing taxes, exercising the power of eminent domain, approving or disapproving building permit applications (including for the projects carried out pursuant to the development agreement), building roads, providing emergency services, or issuing bonds.”

“Moreover, nothing about these contracts was a surprise: They were discussed and approved after open, noticed public forums in compliance with Florida law,” the lawsuit added.

Long one of the largest private employers in Florida, Disney plans to invest more than $17 billion in Walt Disney World over the next decade, creating 13,000 jobs, according to the lawsuit.

The Florida Senate was poised Wednesday to vote on a measure (SB 1604) that would override the agreements. Similar legislation (HB 439) awaits an appearance on the House floor.

Under the proposal, special districts would be prohibited from complying with development agreements executed three months or less before new laws take effect that change how district board members are selected.

The amendment also would give new boards four months to review any development agreements and decide if they should be re-adopted.

A Senate committee on Tuesday approved a change to a separate bill (SB 1250) that would apply Department of Transportation safety standards to monorail lines that connect Walt Disney World resorts and parks.

— News Service Assignment Manager Tom Urban contributed to this report.

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