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Disney Sues DeSantis Over Control of Its Florida Resort Disney Sues DeSantis Over Control of Its Florida Resort
(about 3 hours later)
The fight between Gov. Ron DeSantis of Florida and the Walt Disney Company is headed to court. Last year, under pressure from its employees, Disney criticized a Florida education law prohibiting classroom discussion of sexual orientation and gender identity for young students. Almost instantly, Gov. Ron DeSantis of Florida started calling the company “Woke Disney” and vowing to show it who was boss.
On Wednesday, a board appointed by Mr. DeSantis to oversee government services at Disney World voted to nullify two agreements that gave Disney vast control over expansion at the 25,000-acre resort complex. Within minutes, Disney sued Mr. DeSantis, the five-member board and other state officials in federal court, claiming “a targeted campaign of government retaliation.” “If Disney wants to pick a fight, they chose the wrong guy,” Mr. DeSantis wrote in a fund-raising email at the time.
Last year, under pressure from its employees, Disney criticized a Florida education law labeled “Don’t Say Gay” by opponents and halted political donations in the state — and landed in the cross hairs of Mr. DeSantis, who put a plan in motion to revoke Disney World’s self-governing privileges. Disney’s lawsuit accused Mr. DeSantis of a “relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint.” The campaign, the complaint added, “now threatens Disney’s business operations, jeopardizes its economic future in the region and violates its constitutional rights.” Since then, Florida legislators, at the urging of Mr. DeSantis, have targeted Disney — the state’s largest taxpayer — with a variety of hostile measures. In February, they ended Disney’s long-held ability to self-govern its 25,000-acre resort as if it were a county. Last week, Mr. DeSantis announced plans to subject Disney to new ride inspection regulations.
A spokeswoman for Mr. DeSantis had no immediate comment. Disney has quietly maneuvered to protect itself, enraging the governor and his allies. On Wednesday, however, the company decided enough was enough: Disney filed a First Amendment lawsuit against Mr. DeSantis and a five-member board that oversees government services at Disney World in federal court, claiming “a targeted campaign of government retaliation.”
At the center of the fight between Mr. DeSantis and Disney is a special tax district that encompasses Disney World, which employs 75,000 people and attracts 50 million visitors annually. The district, created in 1967 southwest of Orlando, effectively turned the property into its own county, giving Disney unusual control over fire protection, policing, waste management, energy generation, road maintenance, bond issuance and development planning. “In America, the government cannot punish you for speaking your mind,” Disney said in its complaint, which was filed in U.S. District Court for the Northern District of Florida. Disney had criticized the Parental Rights in Education law, which opponents labeled “Don’t Say Gay” and which prohibits classroom discussion of sexual orientation and gender identity for students through the third grade. The DeSantis administration recently expanded the ban through grade 12.
In February, lawmakers decided to allow the governor to appoint an oversight board for the district in an attempt to curtail the company’s autonomy. The state previously allowed Disney, Florida’s largest taxpayer, to select the board members. The lawsuit accused Mr. DeSantis of a “relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint.” The campaign, the complaint added, “now threatens Disney’s business operations, jeopardizes its economic future in the region and violates its constitutional rights.”
Before the new board was in place, however, Disney pushed through the agreements in early February — in public meetings advertised in The Orlando Sentinel. One of the agreements gives Disney the ability to build 14,000 additional hotel rooms, a fifth theme park and three smaller parks. The other restricts the use of abutting land; no strip clubs, for instance. Taryn Fenske, a spokeswoman for Mr. DeSantis, called the lawsuit “yet another unfortunate example of their hope to undermine the will of the Florida voters and operate outside the bounds of the law.” She added, “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.”
When the DeSantis appointees reported for duty last month, they were outraged to discover that the previous, Disney-controlled board had approved the development agreement and restrictive covenants, limiting the new board’s power for decades to come. Just a short time ago, it would have been unthinkable for Disney and Florida to be such bitter adversaries. Since 1967, when the state’s Republican leaders gave Disney the right to self-govern property as an incentive to build a theme park, the company and Florida governors have, for the most part, gotten along splendidly. Disney has always doled out hefty political contributions. But its real influence came in the form of jobs and economic impact: Disney World is the nation’s largest single-site employer — roughly 75,000 employees work there — and attracts 50 million guests annually, powering Florida’s all-important tourism economy.
Mr. DeSantis — a leading Republican presidential contender although he has not officially declared that he is running — also reacted with fury. He suggested a variety of potential punitive actions against Disney, including reappraising the value of the resort for property tax levies and developing land near the entrances to the resort. “Maybe create a state park, maybe try to do more amusement parks — someone even said, like, maybe you need another state prison,” he said at an April 17 news conference. Disney paid and collected a total of $1.2 billion in state and local taxes in 2022, according to company disclosures. The company recently said it has earmarked $17 billion for expansion spending at the resort over the next decade, growth that would create an additional 13,000 jobs at the company.
He also said that an effort was underway to give the state new authority over ride safety inspections at Disney World, as well as its 15-mile monorail transportation system, which carries an estimated 150,000 passengers a day. The conflict between Mr. DeSantis and Disney has become a national spectacle, in part because he is a leading Republican presidential contender (although he has not officially declared a bid). He has drawn criticism from potential presidential rivals for his relentlessness against Disney. “This is all so unnecessary, a political STUNT,” former President Donald J. Trump wrote last week on Truth Social, his social media site.
The nullification vote by the board came after its general counsel, Daniel Langley, presented evidence of what he called “self-dealing” and “procedural unconscionability” by Disney in pushing through the agreements earlier this year. Mr. Langley and another board lawyer said Disney violated Florida law in multiple ways, including by failing to fully notify the public of the actions it took. Daniel M. Petrocelli, a high-powered Los Angeles litigator, filed the lawsuit in Tallahassee on Disney’s behalf. Mr. Petrocelli was the lawyer Mr. Trump turned to in 2016 when dealing with a class-action fraud case against the defunct Trump University.
“What they created is an absolute legal mess,” Martin Garcia, the board chairman, said of Disney during the meeting. Disney’s case was assigned to Mark E. Walker, chief judge for the Northern District of Florida. Judge Walker, known for stinging rulings and appointed by President Barack Obama, has experience with First Amendment cases. Last year, he handed a victory to University of Florida professors, saying they could not be barred from providing expert testimony in lawsuits against the state.
Disney’s lawsuit called the board’s action “patently retaliatory, patently anti-business and patently unconstitutional.” “Disney regrets that it has come to this,” the complaint said. “The company sought to de-escalate the matter for nearly a year, trying several times to spark a productive dialogue with the DeSantis administration. But having exhausted efforts to seek a resolution, the company is left with no choice.”
Daniel M. Petrocelli, a high-powered Los Angeles litigator, filed the complaints on Disney’s behalf in United States District Court in Tallahassee. Mr. Petrocelli was the lawyer who former President Donald J. Trump turned to in 2016 when dealing with a class-action fraud case against the defunct Trump University. Disney’s filed its complaint minutes after a board newly appointed by Mr. DeSantis to oversee government services at Disney World voted to nullify two agreements that gave Disney vast control over expansion at the resort complex. The appointees voided the agreements after the board’s general counsel, Daniel Langley, presented evidence of what he called “self-dealing” and “procedural unconscionability” by Disney in pushing them through earlier this year. Mr. Langley said Disney violated Florida law in multiple ways, including by failing to fully notify the public of the actions it took.
Robert A. Iger, Disney’s chief executive, has characterized Mr. DeSantis as “anti-business” and “anti-Florida” for his actions. Mr. Iger has also signaled that future investment in Disney World could be at risk if the governor continued to use Disney as a political punching bag; the company has earmarked more than $17 billion in spending at the resort over the next decade, growth that would create an estimated 13,000 jobs at the company. One of the agreements gives Disney the ability to build 14,000 additional hotel rooms, a fifth theme park and three smaller parks. The other restricts the use of abutting land; no strip clubs, for instance. (Disney World already has four theme parks, two water parks, 18 Disney-owned hotels, a shopping mall, and a 220-acre sports complex.)
Disney paid and collected a total of $1.2 billion in state and local taxes in 2022, according to company disclosures. Disney’s lawsuit called the board’s action “patently retaliatory, patently anti-business and patently unconstitutional.” Disney has repeatedly described the agreements as “appropriate” and struck in public meetings advertised in The Orlando Sentinel.
At the center of the fight between Mr. DeSantis and Disney is a special tax district that encompasses Disney World. The district effectively turned the property into its own county, giving Disney unusual control over fire protection, policing, waste management, energy generation, road maintenance, bond issuance and development planning.
Florida has hundreds of similar special tax districts. One covers The Villages, a colossal senior-living community northwest of Orlando. Another covers Daytona International Speedway and the surrounding area.
In February, lawmakers decided to allow the governor to appoint an oversight board for the Disney district in an attempt to curtail the company’s autonomy. When the appointees reported for duty, however, they discovered that the previous, Disney-controlled board had approved the development agreement and restrictive covenants, limiting the new board’s power for decades to come.
They were enraged, as was Mr. DeSantis. He responded by suggesting a variety of potential punitive actions against Disney, including reappraising the value of the resort for property tax levies, imposing tolls on roads that lead to Disney World and developing land near the entrances to the resort. “Maybe create a state park, maybe try to do more amusement parks — someone even said, like, maybe you need another state prison,” he said at an April 17 news conference.
He has also requested an investigation by Florida’s chief inspector general into Disney’s efforts to circumvent his authority.
Mr. DeSantis and his allies have repeatedly characterized their actions as simply putting Disney on “level playing ground” with other theme park operators in the state. But Universal Orlando, SeaWorld, Busch Gardens and Legoland do not have oversight boards controlled by the governor. Based on the governor’s comments, the state’s other large theme parks would not be subject to additional ride safety inspections — only Disney World.
Robert A. Iger, Disney’s chief executive, has called Mr. DeSantis “anti-business” and “anti-Florida” for his actions. Mr. Iger has also signaled that future investment in Disney World could be at risk if the governor continued to use Disney as a political punching bag.
“A company has a right to freedom of speech just like individuals do,” Mr. Iger said at Disney’s annual shareholder meeting this month. “The governor got very angry over the position Disney took and seems like he’s decided to retaliate against us, including the naming of a new board to oversee the property, in effect to seek to punish a company for its exercise of a constitutional right. And that just seems really wrong to me.”“A company has a right to freedom of speech just like individuals do,” Mr. Iger said at Disney’s annual shareholder meeting this month. “The governor got very angry over the position Disney took and seems like he’s decided to retaliate against us, including the naming of a new board to oversee the property, in effect to seek to punish a company for its exercise of a constitutional right. And that just seems really wrong to me.”