Score another win for Ron DeSantis in the long-running saga of his controversial fight with Disney: The federal district judge overseeing the company’s remaining First Amendment lawsuit has thrown the case out.
The company pursued two sets of legal claims after the Florida legislature stripped Disney of control of the Reedy Creek Improvement District, the special district that effectively gave Disney governing power over the territory that includes its theme parks, and transferred that power to a new government entity, the Central Florida Tourism Oversight District (CFTOD). Disney argued that the termination of Reedy Creek was an act of retaliation in violation of the First Amendment. It also argued that the CFTOD subsequently violated state law and the federal contracts and takings clauses by abrogating long-term contracts that Disney rushed through at the last minute with Reedy Creek. Those midnight contracts aimed to lock in the status quo and handcuff the CFTOD. At the time, there was much gloating from Donald Trump and other DeSantis critics to the effect that DeSantis, the Florida legislature, and the CFTOD had been out-lawyered by clever Disney attorneys and that DeSantis was doomed to lose in court.
Well, you never know what will happen in a lawsuit until it’s over, but DeSantis always had a much stronger position than the critics were willing to admit. The company had hoped to have all of its claims heard by a sympathetic federal judge, but in June, he recused from the case. In September, the company dropped all but the First Amendment claim from its federal lawsuit and settled for pursuing them as counterclaims in a state case filed by CFTOD seeking to declare the midnight contracts void. The state court had ruled in July against a Disney effort to get the state case dismissed or stayed on the theory that the federal suit was filed first and had priority. So Disney has been stuck in state court on the midnight-contracts issues. The CFTOD argued in that case that Disney had actually failed to comply with a battery of Florida rules in rushing the contracts through (such as failing to comply with the strictly enforced notice requirements under the state’s Sunshine Laws), and there is a solid basis in Florida law for its arguments. In August, the CFTOD moved for summary judgment in its favor on some of its more purely legal arguments for voiding the midnight contracts, although Disney insists that it needs more time to conduct discovery — not the most confident position for a company that had supposedly figured out all the legal angles already. In October, the CFTOD moved to dismiss all of Disney’s remaining claims from the state case. Disney has yet to respond to that motion.
What Disney really wanted, though, was not to protect the midnight contracts but to restore Reedy Creek. The only avenue for that was its First Amendment challenge to the legislature’s action ending it, on the theory that it was retaliation for Disney’s political stands against DeSantis and the legislature on the law banning sex and gender education for young children in public schools. Unfortunately for the company, however, the Supreme Court ruled in United States v. O’Brien, (1968), a case challenging a federal law banning the destruction of draft cards (allegedly in retaliation for Vietnam War protesters burning them), that courts should not look behind a facially valid law passed by Congress to speculate about what might have motivated it. Moreover, the Eleventh Circuit in Ala. Educ. Ass’n v. Bentley (In re Hubbard), (11th Cir 2015), read O’Brien in a case involving a challenge to an Alabama statute to conclude 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.” The Eleventh Circuit applied the same rule in its 2022 NetChoice decision on Florida’s social-media law. Nobody disputes that the legislature has the general power to create, eliminate, and restructure special districts. Disney’s First Amendment claim would thus be doomed from the outset unless it could get around binding circuit precedent.
It didn’t. The company argued that Hubbard and a prior case, Georgia Ass’n of Educators v. Gwinnett County School District, (11th Cir. 1988), had created a narrow exception for challenges to laws that “explicitly single out a specific group.” This is an extension of the same principle under which legislatures are barred from bills of attainder that target particular people. In Gwinnett, a Georgia school board explicitly terminated automatic payroll deductions only for the “members of the Georgia Association of Educators . . . and its local affiliate, the Gwinnett County Association of Educators” — a specific teachers’ union. That overcame the exception because the text of the law itself allowed proof of retaliatory motive without inquiring into what particular lawmakers said or believed.
That wasn’t the case here. Sure, everybody on the planet understood that the DeSantis–Disney dustup was the backdrop and moving force for what the legislature did. But not only did the law repealing the Reedy Creek special district not mention Disney, it wasn’t written to affect only Disney, because it also affected a handful of other districts, and because Disney is not actually the only landowner in Reedy Creek. The law creating the CFTOD was specific to Reedy Creek, but Disney challenged it only to the extent that it wanted the original dissolution of Reedy Creek struck down. As the district court concluded:
Disney is left to argue that we should go beyond the laws’ text and see what they do in operation. The principal problem with this argument is that it ignores Hubbard’s holding precluding retaliation claims against “facially constitutional” laws. But the secondary problem is that the laws’ effects are not limited to Disney. The laws are directed at a special development district in which Disney operates. But as Disney acknowledges, it is not the district’s only landowner, and other landowners within the district are affected by the same laws. . . . It is true that the laws did not affect all districts, and it is true (at least accepting Disney’s allegations) that Disney faces the brunt of the harm. But Disney offers no support for its argument that the court is to undertake line drawing to determine just how many others a law must cover to avoid “singling out” those they affect most.
It’s always possible that the Eleventh Circuit will see things differently, and of course, whether DeSantis was legally in the right is not the only question for critics of abolishing Reedy Creek. But those who claimed that DeSantis and the Florida legislature blundered into legal losses have some egg on their faces today. They moved carefully to work within the governing law, and a federal judge agreed that they had the power to do so.