Governor’s Appointees Win In Court As Suit Against Company Cleared To Move Forward

Topline

A state judge delivered a win Friday to board members Florida Gov. Ron DeSantis (R) appointed to oversee Walt Disney World’s special district, multiple outlets reported, as the court ruled the board members’ lawsuit against Disney over a development agreement that hamstrings the board’s power can move forward in court—possibly undercutting Disney’s separate legal case against DeSantis and his allies in federal court.

Cinderella Castle at Walt Disney World’s Magic Kingdom Park in Lake Buena Vista, Florida.

GC Images

Key Facts

Board members appointed to oversee the Central Florida Tourism Oversight District (formerly known as the Reedy Creek Improvement District) countersued Disney in state court in May after the company filed a federal lawsuit against DeSantis and the board, which argues the Florida government illegally retaliated against Disney after the company opposed the state’s Parental Rights in Education law, known by critics as “Don’t Say Gay.”

After the state legislature passed a law that replaced the special district’s board with DeSantis appointees, the DeSantis board members discovered a last-minute development agreement and restrictive covenants between Disney and the previous board took away much of their power over the special district, and their lawsuit asks the state court to void those agreements.

Disney filed a motion to dismiss the lawsuit, arguing the state legislature made the case moot by enacting a separate law that’s also aimed at voiding Disney’s agreements, and said if the court doesn’t dismiss the case completely, it should at least pause the lawsuit until after Disney’s federal lawsuit is resolved.

The board disagreed, saying the lawsuit is still relevant and calling Disney’s motion to dismiss the lawsuit “classic Imagineering” that “invit[es] the Court to make believe that reality is whatever Disney dreams up.”

Orange County Circuit Judge Margaret H. Schreiber ruled Friday the case should move forward and isn’t moot, striking down Disney’s procedural arguments in the case and ruling that pausing the case until the federal lawsuit is resolved isn’t warranted.

What To Watch For

The board’s lawsuit will continue playing out in court and has not yet been resolved, but the fact it still remains active and the court wouldn’t dismiss it could present issues for Disney in federal court. The DeSantis appointees have argued to the federal court that that case should be paused until the state lawsuit is resolved, and said in a court filing that if the state court rules in its favor and voids the development agreement, “nearly all of Disney’s claims in the federal case will disappear.” Disney’s federal case is now being overseen by U.S. District Judge Allen Winsor, a Trump appointee who could be more sympathetic to DeSantis and the board members in the case. While the state court case only concerns the development agreement, Disney’s federal lawsuit asks the court to go further and essentially return the special district’s status to how it was before DeSantis allegedly enacted revenge on it. The lawsuit asks the federal court to strike down laws that gave DeSantis power to appoint the board and attacked the development agreement, which would revert the special district to being controlled by board members voted in by the district’s landowners—giving Disney significant influence once again.

What We Don’t Know

How the dispute between Disney and DeSantis will ultimately be resolved. First Amendment experts have suggested Disney has strong evidence showing DeSantis retaliated against the company for its speech in opposing the “Don’t Say Gay” law, given the federal lawsuit cites extensive quotes from the governor suggesting he was going after the company. Other legal experts cited by the Wall Street Journal suggested that actually proving that retaliation in court could be more difficult, however, and the company’s legal arguments against the Florida government’s efforts to void its development agreements present thorny legal issues that could be hard to resolve. Ultimately, the case could end up being decided by the Supreme Court, and legal experts note the legal dispute will likely have significant impacts on corporate speech more broadly.

Big Number

47.5%. That’s the share of Floridians who said they either “strongly” back DeSantis in his battle with Disney (35%) or lean toward his position (12.5%), according to a survey released in July by Florida Atlantic University, versus 43% who backed Disney (33% “strongly,” while 10% leaned toward the company’s position). Support for the two sides largely fell along partisan lines—with most Republicans backing the governor and most Democrats siding with Disney—while independents were almost evenly split, with 42.2% for DeSantis and 41.8% for Disney.

Key Background

The legal battle between DeSantis and his appointees and Disney marks the culmination of what had already been a year-long dispute between the state and entertainment giant. After Disney came out against the “Don’t Say Gay” law in March 2022—saying it “should never” have been enacted—DeSantis and the Florida legislature initially punished Disney by enacting legislation that dissolved Walt Disney World’s special district entirely, before ultimately backtracking and instead just overhauling the district by installing the governor’s appointees. Disney brought its lawsuit against DeSantis and the board in late April, minutes after the board voted to declare the development agreement “void and unenforceable,” with the countersuit being filed a few days later. Walt Disney World’s special district, which has been in place since before the resort opened in 1971, functions essentially like a municipal government, taking care of infrastructure like roads, waste removal, building permits, emergency services and other services. The development agreement at issue gives Disney broad control over the special district, through steps like allowing it to build projects without seeking approval from the district and sell development rights to other landowners. The restrictive covenant also gives the company power to veto the appearance of buildings the special district oversees as long as they’re on Disney’s property.