Disney Faces New District in State Court

An entranceway to Walt Disney World in Orlando, Fla., on Feb. 8, 2023. As Florida Gov. Ron DeSantis continues his push to punish Walt Disney Co. by taking control of the board of Disney's special taxing district, the company announced today a restructuring. As a result, Disney expects to cut costs by $5.5 billion and lay off roughly 7,000 employees, or about 4 percent of its global workforce. Joe Raedle/Getty Images

Legal representatives of Disney Parks and its new oversight district finally met in court on Friday, July 14.

While Disney looks to serve as the plaintiff in a federal case, which has yet to secure a court date, it meets the Central Florida Tourism Oversight District (CFTOD) in the 9th Circuit Judicial Court as the defendant.

The issue: whether or not CFTOD had the authority to void a 30-year development agreement Disney Parks and Resorts U.S. Inc., made with its previous governing body, the Reedy Creek Improvement District (RCID).

CFOTD argued that a case to determine whether or not the agreements made by Disney with its now dissolved but hand-picked board of supervisors were valid is necessary.

A sign near an entranceway to Walt Disney World in Orlando, Fla., on May 22, 2023. Joe Raedle/Getty Images

Disney’s lawyers argued the case should be thrown out, arguing that their agreements were legitimate and followed the governing law.

The sitting judge made no ruling on the matter and asked each side to prepare and submit a proposed order as if she had ruled in either one’s favor.

Disney’s 30-Year Contracts: Void or Valid?

Citing one of Florida’s laws, SB 1604, Disney argued that every requirement of the law was followed to the letter.

The attorney cited a paragraph that acknowledges that any special district is “precluded from complying with the terms of any development agreement” that was executed within three months before a law changing the members of the governing body.

It also says that a district’s new governing body must review any development agreements that did not take effect or were executed until after this law was passed within four months of the members’ first taking office.

The 30-year Disney development agreement was signed by RCID’s board of supervisors on February 8.

HB-9B, the legislation that transformed RCID into CFTOD was passed on February 27.

This bill was signed into law by Governor Ron DeSantis and went into effect on May 5.

Mr. DeSantis’ hand-picked CFTOD board of supervisors held its first meeting on May 8.

Republican presidential candidate and Gov. Ron DeSantis (R-Fla.) speaks at the Faith and Freedom Road to Majority conference at Hilton in Washington on June 23, 2023. Madalina Vasiliu/The Epoch Times

The defense believes that it acted in accordance with this law and that the agreements were valid. It also stands by the opinion the agreements were already in effect before CFTOD took over and were, therefore, safe from review.

CFTOD, on the other hand, believes that the state court needs to hear this case, and it should be heard before the two parties go to federal court.

The plaintiff’s attorney argued that a controversy could only be defined as “moot” when it has already been sufficiently resolved that a judge’s decision has no actual effect. And that ruling the voiding of Disney’s 30-year development agreement as a moot point did not meet these requirements.

CFTOD stated in its written response to Disney’s motion to dismiss that those agreements proactively granted the company the rights to control development within the district as well as “commit the district to subsidize Disney’s growth at taxpayer expense” and allow Disney to censor the district’s speech.

The agreements were void from the beginning and never went into effect because they violated Florida law governing public notice and procedures for taxpayer approval and considering development agreements. 

Which Case Goes First?

Disney also argued that Disney served CFTOD’s board in Federal Court before CFTOD served it in state court. Disney’s attorney said that the federal and state cases involve “substantially the same issues.”

Based on that, he requested that the court should at least “stay” the case to honor the “principle of priority” and avoid duplications, inconsistent rulings, and what his side sees as unnecessary use of judicial recourses.

The Orange County Courthouse in Santa Ana, Calif., on Oct. 22, 2020. John Fredricks/The Epoch Times

CFTOD, on the other hand, believes that the state court needs to hear this case, and it should be heard before the two parties go to federal court. The federal case focuses, he said, focuses on federal issues and on CFTOD’s individual board members, while the district’s case in state court is much more straightforward and could affect the outcome of the federal case.

He said the state-level court should be the ones to decide if the district as one party was right and if Disney’s development agreements were void from the beginning or not.

The plaintiff’s attorney also argues that the state case should be heard first because its board members were not served properly.

Disney claims it served CFTOD’s board members on May 1.

CFTOD claims to have served Disney on May 12.