Judge to hear arguments in lawsuit between Disney and DeSantis over special districting feud

Judge Margaret Schreiber will face a tangle of legal issues as she considers Disney’s request to dismiss — or at least put on hold — the lawsuit

click to enlarge Judge to hear arguments in lawsuit between Disney and DeSantis over special districting feud
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An Orange County circuit judge this week will hear arguments on a request by Walt Disney Parks and Resorts to toss out a lawsuit filed by a revamped special district amid a feud between Gov. Ron DeSantis and the entertainment giant.

Judge Margaret Schreiber will face a tangle of legal issues Friday as she considers Disney’s request to dismiss — or at least put on hold — a lawsuit filed in May by the Central Florida Tourism Oversight District.

DeSantis in February signed a law that established the Central Florida Tourism Oversight District as a successor to the Reedy Creek Improvement District, which Disney had essentially controlled for decades. DeSantis also appointed board members for the revamped district.

In the lawsuit, the Central Florida Tourism Oversight District is seeking a ruling that development agreements reached by Disney and the former Reedy Creek board are “null and void.” The agreements were approved shortly before the switch to the Central Florida Tourism Oversight board.

But the tangle of issues also involves a federal lawsuit that Disney filed this spring contending that state officials and the revamped district violated its constitutional rights and a measure that the Legislature passed in May to effectively nullify the development agreements between Disney and the former Reedy Creek board.

Disney argues the Orange County case is moot because the law (SB 1604) passed in May would eliminate the development agreements at the heart of the case.

“Dismissal is required here. This is an action (lawsuit) by a state board (the Central Florida Tourism Oversight board) raising questions about the validity of contracts that are already void and unenforceable by unequivocal legislative fiat,” Disney lawyers wrote in a May 16 motion. “There is no order this court can issue that will affect that result.”
But Central Florida Tourism Oversight District lawyers scoffed at the argument, at least in part because Disney is challenging the constitutionality of the May law in federal court. The district’s lawyers wrote in a June 20 document that Disney’s motion to dismiss the Orange County case is “classic imagineering, inviting the court (Schreiber) to make believe that reality is whatever Disney dreams up.”

“Disney first tells this (Orange County) court that Senate Bill 1604 is a valid law that moots the district’s claims,” the district’s attorneys wrote. “But to make this argument, Disney must hope that this court will ignore Disney’s claim in federal court that SB 1604 is unconstitutional.”

As an alternative, Disney suggested in its motion that Schreiber could stay the Orange County case until the federal lawsuit is resolved. But the Central Florida Tourism Oversight District lawyers also object to that possibility.

The legal wrangling comes more than a year after DeSantis and Disney began clashing because company officials opposed a 2022 law that restricted instruction about sexual orientation and gender identity in schools.

After the clash started, the Republican-controlled Legislature and DeSantis passed a measure that would have dissolved the Reedy Creek district. But in February, they stopped short of dissolution and decided to replace the Reedy Creek board.

The Reedy Creek district, which the state created in the 1960s, had many powers usually reserved for cities and counties. The agreements reached between Disney and the former Reedy Creek board before the shift to the new Central Florida Tourism Oversight District board involved long-term development issues within the district.

In the federal lawsuit, initially filed April 26 and revised in May after the Legislature and DeSantis approved SB 1604, Disney alleges a series of constitutional violations. For example, it contends the state and the Central Florida Tourism Oversight District have violated contract rights by trying to nullify the development agreements.

The DeSantis administration and the district have filed motions asking U.S. District Judge Allen Winsor to dismiss the case. A hearing had not been scheduled as of Monday morning, according to a court docket.

Documents filed in the Orange County case make clear hostility in the high-profile disputes.

“In an effort to stymie Florida's elected representatives, Disney covertly cobbled together a series of eleventh-hour deals with its soon-to-be-replaced puppet government,” Central Florida Tourism Oversight District lawyers wrote in the lawsuit, referring to the agreements between Disney and the former Reedy Creek board. “Disney hoped to tie the hands of the new, independent board and to preserve Disney's special status as its own government in the district for at least the next 30 years.”
But in the motion to dismiss the case, Disney said DeSantis “initiated a hostile campaign of retaliation expressly targeting Disney for its protected speech” after the company opposed the 2022 law about gender identity and sexual orientation.

“Just over a year ago, Disney expressed a political view that Gov. DeSantis did not like,” the motion said. “In response, the governor unleashed a campaign of retaliation, weaponizing the power of government to punish Disney for its protected speech. Faced with a newly hostile state administration, Disney aimed to protect its planned investments in Central Florida — including thousands of new jobs and billions of dollars in capital over the next decade — by executing two development contracts with the local government body that had managed the special district where Disney has been located for more than 50 years.”

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