Disney Loses Attempt To Dismiss Florida Lawsuit Challenging Reedy Creek Covenants Giving Disney Perpetual Control
Florida can continue to seek a declaration that the restrictive covenants put in place by then Disney-controlled Board of the Reedy Creek Improvement District allowing Disney control in perpetuity were void ab initio, potentially mooting much or all of Disney’s federal lawsuit.
We’ve been following the federal court lawsuit brought by Disney challenging actions of the DeSantis administration and Florida legislature over restrictive covenants put in place by the then Disney-controlled Board of the Reedy Creek Improvement District seeking to tie the state’s hands and maintain Disney control in perpetuity.
The state responded by dissolving the Reedy Creek district and installing its own Board under the Central Florida Tourism
Oversight District (CFTOD). This chart explains the confusing procedural history:
Disney claimed the state’s actions violated Disney’s First Amendment and other rights, and were retaliation for Disney’s public positions opposing state legislation regarding LGBTQ instruction in elementary schools.
The last we checked in on that federal lawsuit was on June 4, 2023, Judge In Disney v. DeSantis Case Disqualifies Himself.
Since then, the state defendants and CFTOD defendants filed motions to dismiss, to which Disney responded yesterday. Among other things, the defendants argue that the federal court should await determination in a lawsuit brought in state court seeking to declare the restrictive covenant agreements void.
In the waning days of its corporate kingdom, Disney rushed through a series of collusive agreements between itself and its puppet RCID board. The agreements purported to bequeath to Disney much of the power that the State itself had given RCID. The newly appointed CFTOD Board announced that it would not comply with Disney’s contracts because they were void under Florida law For good measure, the State also enacted a law barring CFTOD from complying with the agreements in any event.
Its last-ditch power grab having been foiled under state law, Disney now turns to federal constitutional law to sue the Governor, the Secretary of the Florida Department of Economic Opportunity, the CFTOD Board, and CFTOD’s Administrator. Its claims are meritless for many reasons, not least of which is that a special district cannot bind the State to transfer a portion of its sovereign authority to a private entity.
We haven’t previously covered that state lawsuit brought by CFTOD seeking to declare the Reedy Creek Districts’ restrictive covenants void ab initio, meaning a declaration that they were void at the time made, rendering irrelevant what happened later:
The DeSantis board’s lawsuit was filed Monday afternoon in Orange County and claims the agreements with Disney “reek of a backroom deal.” The previous board members failed to give proper notice about the agreements, lacked the authority to make them, unlawfully delegated governmental authority to a private entity and the agreements are unenforceable under Florida law, according to the suit.
“We will seek justice in our own backyard,” Martin Garcia, chair of the Central Florida Tourism Oversight District, said at Monday morning’s special meeting approving the lawsuit.
The Complaint was filed, and Disney moved to dismiss or stay, which the District opposed.
Late yesterday the state court judge denied the motion to dismiss or to stay:
A state judge on Friday denied Disney’s request to throw out a lawsuit seeking to nullify a loophole the entertainment giant used to wrestle back authority over its sprawling central Florida theme park….
The Central Florida Tourism Oversight District state lawsuit against Disney argues that the company’s February agreement giving it back authority “reek[s] of a back room deal,” violated state law and is null and void.
Ninth Circuit Court Judge Margaret Schreiber’s ruling represents a win for the Central Florida Tourism Oversight District, the board backed by Gov. Ron DeSantis that sued Disney in May.
The state lawsuit, however, is separate from the federal suit brought by Disney in April asserting that DeSantis and his hand-picked board violated the company’s First Amendment rights and retaliated against the company for speaking out against Florida’s Parental Rights in Education law, better known as “Don’t Say Gay,” which bans teachers of young students from leading instructions on gender identity and sexual orientation.
“Today’s decision has no bearing on our lawsuit in federal court to vindicate Disney’s constitutional rights, and we are fully confident Disney will prevail in both the federal and state cases,” Disney said in a statement Friday after the ruling.
The Court Order recited the history of the Disney deal and the nature of Disney’s federal court lawsuit, which was important to the decision because the Disney lawsuit:
Days before the Florida Legislature passed HB 9B, reforming RCID and its governance structure (and changing its name to the District’s), RCID and Disney entered into two agreements that are the crux of this case: (1) the 30-year “Walt Disney World Chapter 163 Development Agreement” (the “Development Agreement”); and (2) the related “Declaration of Restrictive Covenants” (the “Restrictive Covenants”) (collectively, the “Agreements”). The District alleges that Disney controlled RCID; that Disney itself drafted the Agreements and caused them to be adopted; and that the Agreements would assure Disney’s control of future land use and development within the District, including the District’s own lands, consistent with Disney’s corporate plans for future expansion.
The Restrictive Covenants contain a forum selection clause that expressly provides that any action seeking “any declaration with respect to any rights, remedies, or responsibilities” shall be submitted “exclusively” to the Circuit Court for Orange County, Florida or, failing that, “any other Court sitting in Orange County, Florida.” See Restrictive Covenants at p. 8, § 8.10.
At its public meetings on April 19 and April 26, 2023, the District considered the Agreements and the circumstances surrounding their adoption and concluded that they were void from inception, or void ab initio, for a number of legal reasons outlined in legislative findings that the Board adopted on April 26, 2023….
In its federal suit, Disney takes the position that the Agreements were valid at inception — demonstrating a bona fide dispute between the parties as to that legal issue….
Disney does not, however, (i) seek a declaration that the Agreements were valid at their inception or (ii) allege that the Agreements are void ab initio…. Disney seeks that declaration based solely upon allegations that the challenged laws violate provisions of the federal Constitution in various ways. Disney does not allege any state law claims in the federal lawsuit.
The Court went on to find that because the issue in the state case differed from the issue in the federal case, there was no need to decide which case took priority as first filed.
In the instant state court action, the District seeks a binding declaration that the Agreements were void ab initio when adopted on February 8, 2023, irrespective of the passage of SB 1604. The District seeks a ruling on the validity of the Agreements, regardless of the ability of Disney to currently enforce the Agreements.
The Court denied that the dispute was “moot” or that a stay was required in light of the different claims in the state and federal cases:
The federal court thus lacks “concurrent jurisdiction” over the District’s state court claims, so it would be an abuse of discretion for this Court to grant a stay….
This court need not address the principle of priority issue where it has determined the federal court lacks concurrent jurisdiction over the District’s state law claims….
In federal court, Disney’s five-count complaint contends that various public officials violated several provisions of the United States Constitution. Four of Disney’s counts depend upon the Agreements being valid, but Disney has pleaded no cause of action for the federal court to declare them so. Rather, Disney’s complaint assumes and asks the federal court
to accept that the Agreements are valid. In contrast, in this state court action, the District claims that the Agreements are invalid from their inception as a matter of Florida law….
In an ironic twist, the Court noted that the underlying restrictive covenants had a forum selection clause requiring any litigation in Orange County, Florida. Since Disney sought to enforce those covenants, it couldn’t deprive the District home-venue:
…. delaying the resolution of this case pending the federal litigation would deny to the District its home-venue privilege. See Carlile v. Game & Fresh Water Fish Comm’n, 354 So. 2d 362, 363-64 (Fla. 1977). Ironically, such a ruling would allow Disney to escape the plain terms of the forum selection clause contained in one of the Agreements that Disney contends is valid under Florida law.
This was only denial of a motion to dismiss, not a ruling on the merits. But even allowing the lawsuit to proceed is an initial win for Florida. If the state wins the state court lawsuit on the merits, it would mean that much or all of Disney’s federal lawsuit goes away.
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Comments
You can tell how this lawsuit is going for Disney by the fact that NOBODY on the left is talking about it after their initial LUL DISNEY JUST OWNED THE CONS LULULLULUL
The minute after that the story ceased to exist.
It’s one of the tells that liberals know how bad something is. They simply cease acknowledging it exists.
Do you stand by Trump embracing Disney’s side in this?
I do not. I’ll still vote for him next year.
Then issues are irrelevant to you princes are your thing.
Soooo…. Unless you agree with 100% with every single thing a politician does and says… and let’s be clear, according to you that means…. Every…SINGLE…THING… supporting them means “princes are your thing”…. Gawd it must suck being you 😂😂you absolute ➡️🤡
Given what your big guy has been getting up to I’d sit down and keep my mouth shut if I was you Danny 😂😂😂
Once I saw the image of the “princesses” in the men’s room, I knew Disney was kaput.
Awaiting the new “trans Mickey Mouse…”
I mean Disney is losing money hand over fist right now.
Aside from all their woke ‘inclusive’ disasters at the box office, their park attendance is the lowest its been in a long time, while Universal is packed to the gills.
It’s no longer ‘the happiest place on earth’, now it’s ‘the most diverse place on earth and if you don’t like bearded men in a dress greeting you than you’re a bigot’.
It took Disney decades to recover their reputation last time, and that was when they had just had bad standards and weren’t actively pissing off most of the country.
Losing money hand over fist? Um, no, the problem is that they’re not making enough money. In 2022, Disney made $3.5 billion (rounded) from continuing operations. Operating cash flow was $6 billion. In their most recent quarter, they made $1.5 billion, and operating cash flow was $2.3 billion.
Read their financials before you make a fool out of yourself. This is not an endorsement of Disney, but rather a matter of presenting facts to a stupid, lazy, overheated zealot.
hope you understand how petty your comment comes across……
It may be technically correct but it comes across as silly as arguing if water is wet or not.
The lying zealot wrote that they are “losing money hand over fist.” Making billi0ns is a “technicality?” I don’t think so. LOL
If your outgo exceeds your income you are losing money. The magnitudes of the numbers are irrelevant.
Take your own advice, fool, I can apparently read financials better than you.
Their park attendance is down massively. That’s a fact.
The only reason they’ve kept revenues somewhat even is they have significantly increased prices – which further drives their attendance down. Again, fact.
And of course the kicker fact is that Disney is contractually obligated to pay Comcast a huge amount of money for their share of Hulu by the end of 2024 – exactly how much is based on the value of Hulu at that time, which will be determined by a lot of lawyers, but the absolute lowball estimate is ~10 billion. Highball estimate could be $30 billion Disney doesn’t have even that lowball estimate – as you yourself just pointed out. None of that is secret or speculation, it’s all publicly available information.
In the last couple years Disney has LOST over a billion dollars at the box office. Not made less profit, actually LOST that money because their woke disasters couldn’t even make enough net revenue to equal their overinflated production budgets + marketing. Heck, forget net revenue, Indiana Jones just barely even covered its admitted production budget with GROSS revenue at the worldwide box office!!!!
Disney is desperate for cash, that’s why Iger is busy declaring huge chunks of their business ‘non-core’ and trying to sell them off to anybody interested.
But then again, those are facts, why would I present them to a stupid, lazy, overheated zealot like you.
They’re not losing money, lying zealot, They’re making money. Not as much as they ought to be making, but why do you need to lie?
By any metric, spending more than you make is ‘losing money’.
That Disney, up until recently, a financial powerhouse, one could fairly characterize that as ‘hand over fist’.
So you earn $65,000 a year. You buy a $300,000 house with a mortgage. You spent more money than you made. You are “losing money?” No, you’re still making money. Look, I’m not the Disney p.r. guy; very far from it. But when someone comes here and claims that they’re “losing money hand over fist,” someone ought to call a liar out for his lie.
Disney has made a lot of major errors. No question about it. I pretty much agree with all of the criticisms of the company that I’ve read. But when some nutcase comes along and claims that they’re losing money, and then tries to throw squid ink into the water to disguise that lie, I call bullshit.
I just saw their stock Friday morning and it is not doing well. It is down almost 20% for the year and they are selling assets. Read the stock report before you comment.
I’m not commenting on the stock price. A liar here claimed that Disney is “losing money hand over fist.” I replied that they’re making money, just not enough. This little go-round only serves to demonstrate that wingnut zealots are really no different than leftist zealots when it comes to facts and lying about facts.
Disney is shedding streaming subscribers, traffic is down at its theme parks and it’s last several studio releases have lost an estimated $900 Million. Not looking good which is why analysts are putting it’s stock either on hold or reduce status.
In the most recent quarter ended in April, Disney made $1.271 billion. Operating cash flow was $2.262 billion. Their income from “parks, experiences, and products” was up 23% year over year. That’s from their financials, which you and others here are too lazy to read, and too dishonest to recognize.
I am no fan of Disney, for a variety of reasons. But the numbers are what they are. Let’s see what they show for 3Q23, which will be reported on August 12. You and others will surely lie about those numbers too, but I won’t.
They’ve been a crappy business for decades – abusing employees and vendors.
And I eagerly await Trump declaring the new trans mascot Manny Mouse.
Ronnie is sinking faster than the titanic so I expect many more posts to pump him up a bit
Yet President Trump has been harassed for 7 years and may be the most innocent to ever hold office of any kind
His entire , well almost, Administration is being harassed, lawyers threatened who try to defend him… yet…..
Crickets
God the center will not hold
Other than humping filthy whores, Trump is tops in my book. And the part about his whorin’ becoming public knowledge and humiliating Mrs. Trump? Lets pretend it never happened.
Glad to see as DeSantis won this big victory you stand by Disney.
Where did you learn to speak hyperbole? I don’t think I have ever heard anyone speak it as well as you.
Disney failed to meet its burden. The shenanigans continue. Who knows how it will end on the merits. Does it help or hurt DeSantis? Who know that either. Snow White will have greater unpact among the masses. How did they leave her name on the bill? What an oversight.
Meanwhile, “According to a survey conducted between July 17 and July 26 by Ohio Northern University, DeSantis finds himself in third place.”
https://floridapolitics.com/archives/625718-poll-ron-desantis-drops-to-3rd-place-in-ohio-gop-primary/
In Florida, he receives no pushback when he wants to do something. It’s not as if he must operate in a climate of resistance where people are seditious. His performance in the campaign thus far shows that success at administration is not so easy outside the friendly confines, and perhaps illusory. To date, it has shown a side of DeSantis that does not thrill the public. That is the reality, like it or not.
Trump did not operate in an environment of any more resistance than Ron DeSantis.
Ron DeSantis’ secret is he worked WITH members of his party, EXPANDED his parties base of support and worked to HEL the people under him.
He did not for example endorse Stacey Abrams (oh sorry I meant insult Brian Kemp, slander him constantly then insult him and say but vote for him anyway after saying in some ways Stacey Abrams would be an improvement).
He did not inherit a docile party, he fought internal battles within Florida on issues ranging from regulating big tech where some within the Florida Republican Party compared him to Castro to when he fought his own party on redistricting.
You are free to keep supporting Disney though as you did here.
Fantasyland. You’re a demagogue.
Name one demogogic part. The part about Trump getting the legislation he asked for? Or the part about Ron DeSantis overcoming resistance in his own party?
What part of that was demagogic you moronic asshole?
Don’t need to stoop to your level. Pathetic the way you communicate with others.
Fantasyland: “Trump did not operate in an environment of any more resistance than Ron DeSantis.”
Demagogue: “You are free to keep supporting Disney though as you did here.”
1. Feel free to keep supporting Disney alongside Trump. Trump backed Disney in this conflict and he is your man.
2. No it is not fantasy that Ron DeSantis faced as much opposition within the GOP as Trump. The difference is instead of blowing himself up he worked within the GOP to increase his statewide support, worked to increase his majorities, and worked to increase his base of support in Florida.
Trump ran his twitter account into losing the 2018 midterms in a landslide.
He lost on Obamacare, I don’t give a dam about that.
He won on taxes
He won on military spending hikes
He won on jail break despite the fact that it was against all of his campaign promises, that the GOP had campaigned against jail break, and that every GOP senator including moderates like Susan Collins had always been tough law and order politicians.
But whatever revisionist history floats your boat. It is right up there with your inability to accept that Mitt Romney won the White Working Class vote in 2012 (because continuity of course blows up your narrative).
“As you did here.” Demagogue. Others notice. Why are they calling you out? Maybe because you act like a child that pretends to know it all and is incapable of conversing without showing a disgusting side. Carry on!
Demagogue: “I don’t like what you said and have no effective rebuttal.”
DeSantis is almost the exact opposite of Trump in personality but he has the ability to work with the people that the citizens elected to Congress. Trump has no ability to work with elected members of Congress but can wow an SRO rally like no other. Do we want a showman who gets nothing done or a dull man who will leave office with all of the things we want to be done permanently?
They thought Disney World was like the Vatican, it’s own sovereign state
Because that’s how they were operating. They conned the state of Florida by claiming they were going to build an actual city (Epcot), but then never did it, but kept all the privileges and tax carveouts of being a city. They just stuck a handful of trailers in the area and filled them with Disney minions to keep up the fiction that Reedy Creek was a legally separate entity.
DeSantis and Florida finally said, ‘we’re no longer pretending that this is legitimate. You ARE NOT a city, Reedy Creek is 100% operated by Disney, and as a company you don’t deserve these insane benefits.’
I’d go less with a con and more with a dream that really didn’t pan out, since Disney did make an attempt at it that failed really quick and promptly made the best of the situation with a fallback plan that was most probably crafted during the process. Disney did a lot of that: if A doesn’t work, we have B, or could go with C… Like the Tiki Room was first going to be a restaurant with live birds, then with mechanical birds, then to a straight attraction. The Reedy Creek district was a plum deal, negotiated back when that whole section of Florida was swamps and trees. Now that it’s far more built-up, reconstituting the district was needed anyway. In my opinion, the Disney CEO is making a major mistake by fighting this out in the courts and making underhanded (and illegal) actions instead of quietly talking their disputes out with the current board.
Taking on the powerful special interests is good. Taking them on and winning is better. There isn’t a more powerful special interest in FL than Disney, which is why Disney was shocked that they got pushback when meddling in the trans debate and Parents rights debate in FL.
DeSantis also backs our fight with Budd. Having someone who actually is against special interests that oppose us is important.
Disney, like many here, thought DeSantis was a RINO who coveted money over honor. They found out that was a fairy tale.
Anyone cheering for Disney in this fight is cheering for corruption plain and simple. Disney attempted to set themselves up above all state laws and regulations and set their own tax rates in perpetuity. At least it has revealed how much you leftists actually love big corporations and big government stepping on the necks of the common guy and being held to no laws and no standards.