Monday, June 24

Federal Judge Dismisses Disney Lawsuit Against DeSantis

In a significant victory for Gov. Ron DeSantis of Florida, a federal judge on Wednesday threw out a lawsuit filed by the Walt Disney Company claiming that Mr. DeSantis and his allies violated the First Amendment by taking over a special tax district that encompasses Walt Disney World.

Disney said it planned to appeal the ruling.

Disney and Mr. DeSantis, who recently ended his campaign for president, have been at odds for nearly two years over Disney World, the 25,000-acre theme park and resort complex south of Orlando. Angered over Disney’s criticism of a Florida education law that opponents called anti-gay — and seizing on an opportunity to score political points with supporters — Mr. DeSantis took over the tax district, appointing a new board and ending the company’s long-held ability to self-govern Disney World as if it were a county.

Before the takeover took effect, however, Disney signed contracts — quietly, but in publicly advertised meetings — to lock in development plans worth some $17 billion over the next decade. An effort by Mr. DeSantis and his allies to void the contracts resulted in dueling lawsuits, with Disney suing Mr. DeSantis and the tax district in federal court and the new appointees returning fire in state court.

On Wednesday, Judge Allen Winsor of U.S. District Court for the Northern District of Florida in Tallahassee dismissed Disney’s case in its entirety. The lawsuit had accused Mr. DeSantis of a “relentless campaign to weaponize government power against Disney in retaliation for expressing a political viewpoint.” The campaign, the company had added, “now threatens Disney’s business operations, jeopardizes its economic future in the region and violates its constitutional rights.”

But Judge Winsor found that the law giving Mr. DeSantis control of the special tax district was written in a way that — on its face — did not allow Disney to claim retaliation, mostly because Disney was not the only landowner affected.

“It is settled law that ‘when a statute is facially constitutional, a plaintiff cannot bring a free-speech challenge by claiming that the lawmakers who passed it acted with a constitutionally impermissible purpose,’” he wrote in his ruling.

Judge Winsor, who was appointed by President Donald J. Trump in 2019, added that Disney “faces the brunt of the harm” from the law but not all of it, saying, “There is no ‘close enough’ exception.”

His ruling aligned with arguments made in December hearings by lawyers for Mr. DeSantis: that it didn’t matter if the governor’s action was retaliatory, only whether the subsequent state law stripping Disney of control was constitutional.

In a statement, Disney said: “This is an important case with serious implications for the rule of law, and it will not end here. If left unchallenged, this would set a dangerous precedent and give license to states to weaponize their official powers to punish the expression of political viewpoints they disagree with.”

Mr. DeSantis and the tax district took victory laps.

“The Corporate Kingdom is over,” Jeremy Redfern, a spokesman for the governor, said in a statement. “The days of Disney controlling its own government and being placed above the law are long gone.”

Martin Garcia, an ally of Mr. DeSantis who took over last year as chairman of the tax district, said in an email that he was “delighted” with the ruling and vowed to press on with “appropriate changes” to how government services at Disney World were managed.

A lawyer for the tax district, Charles J. Cooper, added in a statement that “Disney may own the land in the district, but it does not own the government.”

As part of his 17-page ruling, Judge Winsor said Disney had also failed to show “any specific injury” from actions by the new tax district board. The only injury, he said, was that Disney must now operate “under a board it cannot control,” which was not enough.

While a significant setback for Disney, the ruling is unlikely to have an immediate impact on the relationship between the company and the oversight board. The state lawsuit remains active.

A state judge, Margaret Schreiber, denied Disney’s motion to dismiss the countersuit. In November, however, she granted Disney’s request to push the next phase of the state case to March; Disney had accused the tax district of dragging its feet in complying with discovery requests.

Disney has since filed a related lawsuit in state court accusing the district of failing to comply with public records requests.

The tax district, created in 1967, was a crucial tool for developing Disney World because it gave Disney unusual control over building permits, fire protection, policing, road maintenance and development planning. Today, Disney World comprises four theme parks, two water parks and 18 Disney-owned hotels with 267 swimming pools. The resort employs roughly 75,000 people and attracts an estimated 50 million visitors annually.

The growth plan that Disney locked into place before Mr. DeSantis and his allies took over the district — and that lies at the center of the state court battle — involves the possible construction of 14,000 additional hotel rooms, a fifth major theme park and three small parks. The company has said it earmarked more than $17 billion in spending to fuel growth at the resort over the next decade, expansion that would create an estimated 13,000 jobs at the company.

But Disney has threatened to downsize its ambitions in Florida, depending on the outcome of its fight over the tax district.

Calling Mr. DeSantis “anti-business” for his campaign against the company, Disney last year pulled the plug on an office complex that was scheduled for construction in Orlando at a cost of roughly $1 billion. It would have added more than 2,000 Disney jobs in the region, with $120,000 as the average salary, according to an estimate from the Florida Department of Economic Opportunity.

Mr. DeSantis has relished campaigning and fund-raising against what he calls “woke” corporations — mainly Disney — as well as targeting certain books and the former top prosecutor in Tampa, Fla., whom he removed from office.

Disney had found hope for its own First Amendment case in a recent court ruling involving Andrew H. Warren, the Tampa prosecutor. This month, the U.S. Court of Appeals for the 11th Circuit in Atlanta, which tends to lean conservative, ruled in favor of Mr. Warren, who has been suing to get his job back, claiming First Amendment protections.

“The state can’t exercise its coercive power to censor so-called ‘woke’ speech with which it disagrees,” Kevin C. Newsom, one of the appeals court judges, wrote.