Disney Files Scathing Memos in Fed Lawsuit Blasting DeSantis’ ‘Farcical’ Excuses for ‘Unconstitutional Restructuring’ of Tax District

Attorneys for the Walt Disney Company have filed a pair of legal memoranda opposing the motions to dismiss the complaint it filed against Florida Gov. Ron DeSantis (R) and the governor’s appointees to the board overseeing the special taxing district on Disney property, issuing a scathing condemnation of DeSantis’ “farcical” defenses of the scheme he conducted to punish the entertainment company for criticizing legislation he signed.

The two motions to dismiss Disney’s Second Amended Complaint were filed by DeSantis and Meredith Ivey as Acting Secretary of the Florida Department of Economic Opportunity; and by the members of the “Central Florida Tourism Oversight District” (CFTOD), the renamed board who were all appointed by the governor.

Disney has responded to each of the motions in detail, thoroughly describing admissions from DeSantis’ own book and public statements about how he planned to target the company after it spoke out in opposition to the Parental Rights in Education bill (dubbed “Don’t Say Gay” bill by many of its critics) after it passed.

At DeSantis’ urging, the GOP-controlled Florida legislature rushed ahead with an ill-conceived bill that would have repealed outright the Reedy Creek Improvement District (RCID), the special taxing district for Disney’s property that stretches across Orange and Osceola County.

The Florida Constitution requires local governments to tax all taxpayers at the same millage rate unless a taxpayer or multiple taxpayers agree to the creation of one of several types of special districts authorized by the Florida Statutes to impose an additional tax for a specified purpose. Currently, there are over 1,800 special taxing districts like Disney’s in Florida, plus numerous other “community development districts,” the legal entity for special taxing districts solely within a municipality, and so on.

As I’ve pointed out repeatedly over the past year-plus that this charade has dragged on, RCID is not a tax break for Disney, but an extra tax in addition to the taxes it pays to both counties, a roughly $160 million annual tax which the company willingly pays in order to maintain a higher level of services, infrastructure, etc. than the counties could provide, then or now.

RCID was viewed by the governments of both Orange and Osceola as essential for properly managing the Disney property, both at the time it was created in 1967 and in the current day, and was not a structure that either county wanted to unravel. The Florida Legislature’s own analysis in 2004 came to a similar conclusion.

There are some weedy legal issues within the Florida Statutes regarding prohibitions on repealing special taxing districts without the consent of the landowners (which Disney absolutely did not give here) as well as a pile of First Amendment issues, as numerous legal experts and returning Disney CEO Bob Iger have pointed out. Even if the repeal of RCID were legal under Florida law (which it is not), the government cannot take an otherwise legal action against a taxpayer as retaliation against the exercise of that taxpayer’s free speech rights.

It was neither common sense nor respect for constitutional rights that caused DeSantis to back off his Cinderella Castle coup attempt, but the unyielding existence of RCID’s municipal bond debt — more than $1 billion — a debt that would become the debt of the county taxpayers if RCID was dissolved. Orange County Tax Collector Scott Randolph estimated that this would raise taxes in his county between $2,200 and $2,800 per household of four.

The scrambling to save face for the governor led to a new bill that kept the main structure of RCID intact and took control of the board away from Disney and granted that appointment power to the governor.

This is a complete contravention of how special taxing districts have operated for decades under Florida law; since they are created with the consent of the landowners to pay extra taxes for a specified purpose, the landowners are the ones who vote to appoint the board members of the districts.

In fact, Disney’s competitor Universal Studios just received approval earlier this month for a community development district to provide funding support for a planned expansion of rail lines between the Orlando International Airport and Universal’s property — and the board members are all Universal employees. This is how RCID operated for over fifty years, with the designated voting members being the Walt Disney Company itself and selected land trustees who were current or former Disney employees.

Unsurprisingly, Disney argues in these motions that RCID has provided “enormous public benefits” not just for the company, but to the park guests and the people of Florida by transforming the area into a “thriving tourism hub,” but DeSantis’ actions have caused Disney “concrete injuries” and “serious harms” that are “ongoing.”

Those harms include threatening to seize Disney’s land to build a prison or competing theme park, impose additional regulations on Disney’s monorail transportation system that are not imposed on other parks, actually enacting an unneeded (Disney has always maintained its property far above any government-imposed building code) code enforcement system that included fines subject to foreclosure (another way DeSantis’ puppet board could seize Disney’s land), taking away long-established benefits for firefighters at Disney, and moving to defund an $8 million annual budget for police protection on Disney property — yes, DeSantis’ hand-picked CFTOD board literally wants to defund the police.

These injuries to Disney, the lawyers argued, “arise from a scheme that the Governor, by his own account, intentionally orchestrated in secret to ensure no public input or even awareness as it was developed and implemented.” As was reported at the time the original RCID repeal bill passed, the Republican legislators rushed them through with nearly no debate and the sponsors of the bill in both the Florida House and Senate admitted they had not bothered to contact anyone at Disney, RCID, or Orange or Osceola County governments.

The First Amendment retaliation claims are clear, Disney states, noting how the laws targeting RCID were enacted “to punish Disney’s speech and exert continuing control over its political comments and programming” with a bill that “eliminated Disney’s voting rights in the governing body that regulates the use of its property, replacing the landowner- elected body with a Governor-appointed ‘state receivership’ board explicitly charged with using its land-use powers to control Disney’s speech.”

The motions take direct aim at DeSantis’ attempted defense that Disney was not injured because he was simply taking away an unfair “special privilege” that only Disney was getting, noting that these arguments were an “outright falsehood” and what DeSantis had done was an “unconstitutional restructuring” of RCID:

In repeated public comments, the Governor declared that the laws do not injure Disney because they simply make the company subject to the same regulatory structure applicable to all other Florida businesses, thereby creating a “level playing field.” That contention is an outright falsehood. In fact, a special district was established just this month to regulate the land encompassing Universal’s new Epic Universe theme park in Orange County—with its inaugural board of supervisors comprising only Universal employees. See Ariel Zilber, Universal Studios Gets Special Tax District After DeSantis Took It Away From Disney, N.Y. POST (Oct. 13, 2023, 2:59 P.M.), https://nypost.com/2023/10/13/ universal-studios-gets-special-tax-district-after-desantis-stripped-disney/. Further, most businesses and other property owners in Florida are regulated by elected, politically-accountable municipal bodies. Few Florida businesses are subject, as Disney now is, to governance by a special district with a Governor-controlled board that closely regulates the use of private property with no accountability to local property owners and taxpayers.

Read the motions below:

PLAINTIFF’S OPPOSITION TO S… by Sarah Rumpf

PLAINTIFF’S OPPOSITION TO C… by Sarah Rumpf

This is a breaking news story and has been updated.