Disney Argues New Florida Law Nullifies DeSantis-Backed Suit

Disney Argues New Florida Law Nullifies DeSantis-Backed Suit

Florida’s legislation aimed at handicapping Disney might ultimately help the company, at least in the context of a state court lawsuit over the development of Walt Disney World near Orlando.

Gov. Ron DeSantis and Disney have been at odds over a special tax district that includes Disney World for more than a year. The fight began when the company criticized a Florida education law that opponents called “don’t say gay” – which angered Mr. DeSantis.

His punitive actions since then, and Disney’s efforts to protect itself, have led to a federal lawsuit Disney filed on April 26 accusing Mr. DeSantis and his allies of engaging in a “targeted government retaliation campaign.”

The tax district — now controlled by Mr. DeSantis — responded by filing a lawsuit against Disney in state court. The district’s lawsuit, filed May 1, seeks to void contracts with Disney that set out development plans for the resort. A few days later, at Mr. DeSantis’ request, the Florida Legislature passed a bill barring the county from complying with the treaties. Mr. DeSantis put it into effect on May 5th.

On Tuesday, Disney filed a motion to dismiss the case in state court. The filing was routine for legal reasons: Disney plans to drop the state case and focus on the federal case.

But the company’s argument as to why the county’s case should be dismissed was less expected: Mr. DeSantis and his allies in the legislature contested the lawsuit with their subsequent actions, the filing states. By barring the county from complying with the contracts, Mr. DeSantis and the legislature rendered “any order that this court might make — in favor of either party — legally irrelevant.”

“In short, any declaration as to the enforceability, nullity or validity of the contracts — either way — would be an advisory opinion of no real consequence,” Disney added in the filing. “Florida courts are not allowed to issue expert opinions.” The company cited more than 40 court decisions to support its argument.

Alexei Woltornist, a spokesman for the tax district, said in an email that Disney’s request was “completely predictable and a confirmation that they know they are going to lose this case.” A spokesman for Mr. DeSantis initially did not comment.

If the state judge allows the case to proceed, the matter should be shelved while the federal lawsuit is heard, Disney’s complaint said. Disney noted that Florida law “recognizes a strong ‘priority principle’ that state proceedings should be stayed pending an earlier federal trial.”

Disney’s filing noted that in addition to being filed first, the federal lawsuit challenges the constitutionality of the new law that prohibits the county from honoring the development contracts. The resolution of the federal lawsuit would “materially impair the feasibility” of the claims in the state lawsuit, the filing states.

At the center of the battle between Mr. DeSantis and Disney is the 56-year-old Special Tax District. The borough effectively turned the property into a county of its own, giving Disney unusual control over fire safety, policing, waste management, power generation, road maintenance, bond issuance, and development planning.

Florida has hundreds of similar counties. One of them deals with The Villages, a huge retirement community northwest of Orlando. Another covers Daytona International Speedway and the surrounding area.

In February, lawmakers voted to allow the governor to appoint a Disney District oversight board to limit the company’s autonomy. However, when the appointees reported for duty, they found that the previous Disney-controlled board had approved development deals that limit the new board’s powers for decades to come.

According to the company, Disney paid and collected a total of $1.2 billion in state and local taxes in 2022. Earlier this year, Disney said it had earmarked $17 billion for the resort’s expansion over the next decade, growth that would create an additional 13,000 jobs at the company. Last week, Disney said it was reviewing “where it makes the most sense to make future investments in theme park construction,” a clear indication of the Florida standoff.