Disney sues Florida over autonomy

The Walt Disney Company filed suit yesterday against the State of Florida. Gov. Ron DeSantis (R-Fla.) reasserted State authority over the lands on which Walt Disney World stands. So the company filed a lawsuit alleging retaliation and abridgment of freedom of speech. But in fact the company might not have a legal leg to stand on.

The saga of the Reedy Creek Improvement District

Recall that Walt Disney, the founder, negotiated the carving-out of what became the Reedy Creek Improvement District. Walt Disney had a dream – for what would have been the first-ever “Agenda 21 City” before anyone would coin that term. He named it Experimental Prototypical Community Of Tomorrow – EPCOT. In it, residents would own nothing, but all would have jobs. EPCOT would govern itself directly, and instead of answering to Orange and Osceola Counties, it would answer to the Reedy Creek Improvement District.

Walt Disney died, and the dream of a “sustainable city” died with him. But the Reedy Creek Improvement District did not die; Governor Charles Kirk would sign it into law. Thereafter the company build three monster theme parks:

• The Magic Kingdom (a mirror of Disneyland in Anaheim, Calif.),
• Disney-MGM Studios, and:
• EPCOT Center – not a city at all, but like a continuing World’s Fair. It featured a World Showcase of national pavilions, and a Futureworld of pavilions showcasing technological projections in communications, marine biology, agriculture, energy, and medicine.

Disney World also featured three themed hotels and a “residential hotel” known as Disney Village.

Reedy Creek Improvement District had nominal charge of emergency first-response services, including fire and police departments. But in fact, the Reedy Creek Police Department was Walt Disney Company security. Likewise, the Reedy Creek Fire Department was the park complex’ private fire brigade. Everyone know this – and everyone kept his mouth shut so as “not to rock the boat.”

Gov. DeSantis finds an issue

In 2022, Gov. Ron DeSantis (R-Fla.) needed a signature issue to build conservative credentials for an eventual Presidential campaign. (Aside: yesterday Florida’s Senate took a concrete step toward amending Florida’s Resign to Run Law to exempt Presidential candidates.) He found it in the campaigns by the LGBTQIA+ “community” to recruit small children into their movement, through school curricula. So in March 2022, he signed the Parental Rights in Education Act – an anti-grooming bill. Disney chose to protest this bill, though technically the bill did not affect any of the company’s entertainments. DeSantis’ next rejoinder was to sign legislation revoking the Reedy Creek Improvement District.

At first he planned to revert all lands back to their original counties of Orange and Osceola. That would lead to a state of affairs that does have a precedent: Carowinds, a Cedar Fair theme park that has the North-South Carolina border running through it. Compared to that, a county line running through the park complex wouldn’t create too many complications. But taxpayers in Orange and Osceola Counties had visions of having to pay all of Reedy Creek’s general obligation bonds.

Accordingly, DeSantis backtracked – but replaced the Reedy Creek Improvement District with a new Central Florida Tourism Oversight District. This new District would perform the same functions, but it would function as a direct arm of State government.

Disney pulls a fast one

So then the Disney Company prevailed upon the outgoing Reedy Creek Improvement District Board – the members of which the company hand-picked – to sign away full development autonomy to Disney in perpetuity. To cover itself against a charge of violating the “Rule Against Perpetuities,” the Board “declared” as follows:

[T]his Declaration shall continue in effect until twenty one (21) years after the death of the last survivor of the descendants of King Charles III, King of England[,] living as of the date of this Declaration.

His Majesty King Charles Philip Arthur George Mountbatten-Windsor will take his crown next month.

The incoming CFTOD Board discovered the ruse and reported it to DeSantis, who reacted in sheer fury. (Or so it would appear; whether he is sincere or not, Reedy Creek made itself his perfect target.) DeSantis ordered an immediate criminal investigation. To Florida’s Chief Inspector General, DeSantis wrote:

These collusive and self-dealing arrangements aim to nullify the recently passed legislation, undercut Florida’s legislative process and defy the will of Floridians.

Shortly thereafter, CEO Bob Iger held an “Earnings Call.” And in it he made this clear admission:

The company took a position on pending Florida legislation. And while the company [might] have not handled position it took very well, the company has a right to freedom of speech just [as] individuals do.

… The Governor got very angry with the position Disney took, and [then] decided to retaliate against us, including the naming of a new board to oversee the property and the business. In effect [he sought] to punish a company for the exercise of a Constitutional right.

The Governor strikes back

When he said that, Bob Iger admitted that Reedy Creek was a glove, and Disney the hand inside the glove. Gov. DeSantis could not fail to notice. Yesterday the new CFTOD board voted to rescind all agreements the old board had made with Disney. Within minutes, Disney Parks and Resorts sued the State in the U.S. District Court for the Northern District of Florida.

Reportage on the lawsuit comes from CNN Politics and Fox Business. The company named Gov. DeSantis, the CFTOD Board, and Florida Department of Economic Opportunity acting secretary Meredith Ivey. They seek injunctive relief to re-validate the old Reedy Creek board’s Declaration. The company alleges “a targeted campaign of government retaliation – orchestrated at every step by Governor DeSantis as punishment for Disney’s protected speech.” This retaliation “now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”

Disney goes further:

Disney finds itself in this regrettable position because it expressed a viewpoint the Governor and his allies did not like. 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.

The issue with Disney is not its speech

But the issue has nothing to do with the anti-grooming bill or the company’s opposition to it. Rather, the issue is whether Reedy Creek was ever a public entity, separate and apart from Disney, or not. And if not, then Disney is guilty of fraud.

Disney picked the fight with this board. We were not looking out for a fight. Bottom line, what our lawyers have told us, is factually and legally what they created is an absolute legal mess. It will not work. Martin Garcia, chair of the Central Florida Tourism Oversight District.

The company can only point to some admittedly inflammatory rhetoric from DeSantis. He suggested earlier this month that perhaps Florida should:

• Lay and collect taxes on the hotels within the park complex,
• Levy and collect tolls on the roads in and out of the park, and
• Develop the lands surrounding the parks in ways the company might not like.

He even suggested building a State prison next to the park. But even Governor DeSantis cannot mean that seriously, as such a location would violate every concept of prison security.

The Governor’s communications director shot back:

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. 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.

But is DeSantis sincere?

The most puzzling aspect of this case is: DeSantis should be able to invalidate even this lawsuit with few words. Reedy Creek has issued general obligation bonds, on the assumption that it is a public entity. If instead it has been the glove covering Disney the hand, then those bonds are fraudulent. The Attorney General and Solicitor General could file to invalidate the bonds and make them due and payable immediately.

In fact, Disney found cause to assure bondholders about whether they would see their money back. Nevertheless, Yahoo! News insists that the dissolution of Reedy Creek would make the bonds payable by Florida taxpayers. Influencers who are familiar with “special district” bonds like these, flatly disagree. They do, however, admit that if DeSantis took that route, the game would play out in the Florida and United States Supreme Courts.

Laura Loomer, for one, does not find him sincere at all.

Time will now tell.