Disney Finally Sues DeSantis. Who Will Win?
After nearly 15 months of squabbling, the lingering territorial fight between The Walt Disney Company and Florida Governor Ron DeSantis finally heads to court.
On Wednesday morning, the Central Florida Tourism Oversight District voted to nullify Disney’s previous Reedy Creek agreements.
Now we’ve got a ballgame.
Yes, Disney has sued DeSantis after a year of posturing from both sides. What just happened, and what does all this mean?
The Story So Far…
Last year, Disney’s worst mistake of the 21st century, then-CEO Bob Chapek, flip-flopped on a topic that mattered deeply to many Disney employees.
Chapek initially refused to take a stance on HB 1557, the so-called Don’t Say Gay bill, legislation that impacted thousands of cast members.
Once protests started, Chapek reversed course and strongly denounced the bill, thereby ignoring the advice of Isaac Perlmutter, one of Disney’s biggest shareholders.
DeSantis promised he would punish Disney for this decision. As he described in his book, the governor desired an attack nobody would see coming.
Ultimately, that attack proved to be the dissolution of the former Reedy Creek Improvement District.
Alas, legislators hadn’t read the fine print on that agreement. Dissolving Reedy Creek would have dumped $1 billion on taxpayers in the area…immediately.
So, Florida’s gerrymandered legislature went back to the drawing board after the 2022 election. They wrote new legislation to punish Disney.
While Florida couldn’t dissolve Reedy Creek, the state could create a new oversight board that would make decisions for Disney.
That modified amendment explains the current presence of the Central Florida Tourism Oversight District (CFTOD), a group selected by DeSantis.
The bizarre part is that nobody involved with the changes has hidden their agenda.
Instead, DeSantis, various legislators, and the CFTOD board have threatened and taunted Disney every step of the way.
That’s…unusual because lawmakers theoretically cannot craft legislation that targets any one group, at least not legally.
One of the benefits of living in a free country like the United States is that people and even corporations can think and feel however they want.
DeSantis specifically called out Disney for the company’s actions in defending cast members against incendiary legislation.
Nobody on either side disputes this fact, which is just…wow.
Did Mickey Mouse Break the Law?
At the end of February, Disney’s former Reedy Creek board underscored how clever the company is.
The former board utilized legal options to empower Disney with total control of this land under the King Charles III clause.
I’ve spoken with several legal experts about this matter, and they universally believe Disney honored the toughest parts of Florida’s Sunshine Law.
This legal requirement exists to ensure that no underhanded shenanigans take place behind closed doors.
Florida asks that the parties involved post at least two public notifications before proceeding with any changes that could impact residents.
Disney honored these requirements, which frustrated DeSantis and his team. The governor asked Florida’s attorney general to investigate.
Within two weeks, Florida determined that Disney hadn’t left a paper trail. In other words, Disney had done everything necessary to protect its legal interests.
I should add an asterisk to this statement, though. DeSantis and his team have taken an interesting approach in criticizing Disney.
Florida’s argument centers on Disney failing to send letters to residents regarding the final Reedy Creek board meeting.
“The Sunshine Law requires that 1) meetings of boards or commissions must be open to the public; 2) reasonable notice of such meetings must be given, and 3) minutes of the meeting must be taken.”
Did Disney need to send letters to the residents of Reedy Creek? Florida says yes, while Disney…hasn’t commented. That’s a potential sticking point here.
DeSantis and the legislature used this rationale to nullify Disney’s seemingly airtight legal agreement.
The Escalation and the Lawsuit
We cannot mention the Disney/DeSantis feud without acknowledging an obvious subplot.
DeSantis is likely running for President and could announce next week. He has positioned himself as the anti-Disney candidate.
The governor has tried to show strength in dealing with a company whose values he dislikes.
This struggle has garnered international headlines as people wonder about a person with such strong political aspirations battling it out with a cartoon mouse.
In fact, when Disney finally sued DeSantis, the governor was on a book tour in Israel wherein he seeks campaign contributions and new political allies.
As a politician, DeSantis isn’t in a position wherein he can back down in a fight against Mickey Mouse.
That’s problematic since the external perception is that DeSantis is losing and floundering badly.
Recently, Bob Iger suggested that he’d agree to meet with Florida’s Governor.
During an odd press conference, DeSantis countered by making several threats against Disney.
Then, Florida’s legislature made good on one of them by advancing a monorail oversight plan out of committee.
Please understand that this isn’t a law yet, and I’ve mostly viewed it as a negotiating tactic.
I say this because a known DeSantis ally, the person who sponsored the Don’t Say Gay bill, also proposed a DVC tax break law.
Why would Florida do that at a time when it’s embattled with Disney? I’d wager it was a public negotiation. The monorail’s the stick, while the tax break is the carrot.
On Wednesday morning, these subtle negotiations collapsed when the CFTOD nullified Disney’s agreements.
The board members hadn’t even reached their cars before Disney filed the lawsuit. And it’s a doozy!
DISNEY IS SUING EVERYBODY!!!
Let’s All Go to Court
The filing targets DeSantis, Florida’s Secretary of the Department of Economic Opportunity, all five CFTOD board members, and the current RCID administrator.
Yes, Disney is addressing all its enemies…in court. And yes, that’s where Disney is scariest.
I’ve spoken with a handful of attorneys already today, including one judge. They all expressed bemusement and confusion regarding Florida’s plan.
Again, nobody with whom I’ve spoken quite understands that proclamation since that’s exactly what Florida did with Reedy Creek in the first place.
Still, Disney’s plan here seems obvious. The company filed in federal court, thereby sidestepping the potential hazard of a DeSantis appointee overseeing the case.
In court cases, the original filing often targets numerous individuals before legal rulings remove them from the final lawsuit.
So, someone like the current RCID administrator, John Classe, a previous Disney appointee, gets listed for the time being but likely won’t be involved.
For the new board members of the CFTOD, this is a scary day. Disney just sued them, and now the board members must pay legal fees to defend themselves in court.
I wouldn’t want to be the person who made this tweet, which is a matter of legal record:
The arrogance of @disney continues… from ignoring parents and allowing radicals to sexualize our children, to now ignoring Florida taxpayers by sneaking in a last minute sweetheart development agreement, Disney has once again overplayed their hand in Florida.
We won’t stand for…
— Bridget Ziegler (@BridgetAZiegler) March 30, 2023
The Potential Ramifications
The CFTOD board mentioned that it would need to raise taxes to pay for legal fees. You can imagine how expensive it is to face a Disney lawsuit.
Currently, Disney pays the taxes for the former Reedy Creek land, but local residents appeared at the board meeting to express their concerns.
An executive at The BOATHOUSE argued, “The discussion of additional taxes and additional utilities has been very concerning for us…
I want you to just please understand (that) when you make these decisions, it impacts far more than just Disney.”
Reviewing, the CFTOD and governor of Florida have worked their way into a corner, legally speaking.
While Florida can defend itself in court, the CFTOD cannot, and the individual board members could feasibly spend most of their life savings on this case.
Obviously, they’ll hope that Disney drops them from the eventual lawsuit, but that’s the leverage the Mouse holds for now. The board members SHOULD be scared.
Legal fees rack up quickly, especially in a case like this one where the battle lines have been drawn for a while.
Florida’s unwillingness to hide its intent has made Disney’s case for the Mouse. Frankly, I’ve never covered any legal story like this in my life.
Still, Disney could lose. I realize that sounds crazy, but courts aren’t linear with their rulings. Every judge acts differently.
Fox’s recent settlement with Dominion reinforces this fact. Every step of the way, the case went against Fox a little bit more.
The news network started with an adversarial legal position, but it lost so many rulings and made a remarkable number of mistakes in court.
If Disney does the same, the former Reedy Creek could be lost. Moreover, a vengeful Florida government could strike back at Disney even more.
Will Disney Win This Lawsuit?
That’s the billion-dollar question, and I mean that literally.
As a reminder, there’s still a $1 billion loan in play with Reedy Creek.
On top of that, Disney has claimed the following:
“A targeted campaign of government retaliation—orchestrated at every step by Governor DeSantis as punishment for Disney’s protected speech—now threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”
Disney hired a legal powerhouse, Daniel M. Petrocelli of O’Melveny & Myers. He previously defended…Donald Trump in the Trump University lawsuit.
While Petrocelli is a Hollywood attorney by trade, this fact improves Disney’s optics that this feud with DeSantis isn’t actually about politics.
Petrocelli previously helped the family of Ronald Goldman win a $33.5 million civil suit against O.J. Simpson.
So, Petrocelli has been around for a while and has an established track record as a legal superstar.
Petrocelli and Disney claim the following:
“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.”
There’s a lot in play with this argument, but it follows what attorneys have suggested throughout the past six months.
Disney has always held an ace in the hole that it could sue over Florida’s violation of the company’s basic rights. Now, Disney has done that.
What Do the Lawyers Think, and What’s Disney’s Angle?
In speaking with several attorney friends, the kind who will tell it to me straight, I heard the following:
“I assume (Disney’s legal) grounds are mostly bulletproof. (The ruling) will come down to what damages are legally provable (for Disney) to recover.”
Conversely, Florida could argue that Disney is, if anything, in a better financial position without the Reedy Creek district.
If we assume that’s true, the corporation has no damages to recover.
I’m told that’s a long shot, though. In speaking with several attorney friends over the past few months, I couldn’t find anyone who liked Florida’s legal position here.
In fact, a friend of mine simply sent me a meme of one man named Disney mercilessly punching a defenseless person named DeSantis. And that person’s a judge!
Disney’s endgame here is simple. The company wants a legal nullification of various rulings Florida’s legislature and the CFTOD just created.
Disney seeks the "Legislative Declaration" (action that voided developer agreement) be declared unlawful, declare previous contracts remain in effect, and declare Senate 4C and House 9B unlawful because they were enacted in retaliation for Disney's speech protected by FA. pic.twitter.com/0v027C7JE5
— Scott Gustin (@ScottGustin) April 26, 2023
If Disney wins in this attempt, the legal system will codify the King Charles III clause, thereby giving Disney near-permanent control of the Reedy Creek land.
What Happens Next?
We can subdivide this discussion into two categories: What should happen and What probably will happen.
What SHOULD happen is that Disney and Florida work together to find some agreement that ends this nonsensical feud.
I’ve got an article coming soon that underscores how much Disney matters to the state of Florida. Disney posted something similar last week.
However, Disney won’t close shop in Florida and move somewhere else, no matter what North Carolina politicians may hope.
Florida and Disney are effectively married and must stay together for the kids. It’s in the best interest of both parties to squash this beef.
If Taylor Swift and Katy Perry can set aside their differences, so can Mickey Mouse and Ron DeSantis.
Sadly, that’s probably not what will happen despite the DVC tax break offer.
DeSantis instructed the CFTOD board to declare themselves the supreme authority over Reedy Creek and nullify Disney’s (apparently legal) deal.
Immediately afterward, Disney sued all parties involved…and the lawsuit came out within minutes of the CFTOD declaration.
We’re in a cold war now. DeSantis and his team will likely keep picking at Disney for headlines as the governor tries to run for President.
Meanwhile, Disney appears to have the law and public opinion squarely on its side.
If this were a fight, DeSantis would be talking tough, but everyone would think Disney is winning.
Once we get to court, everything could change, though.
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