Did Disney Deliberately Throw their Suit Against Ron DeSantis… and Why?
Disney could have won their lawsuit against Ron DeSantis. Why did they choose not to?
Let’s get this out of the way: if you are a major, public-facing, corporation, the last thing you want is to be at war with the government that runs the state you’re in. No good can come of it and, at best, if the injury is really severe, you can maybe staunch some of the bleeding, but that’s about it. Winning is not in the cards in this, now, multi-year conflict between the Walt Disney Company and the Governor of Florida, Ron DeSantis. For either side.
What started as a fairly routine corporate PR expression of distaste about a prejudicial law that will harm the company’s employees, turned into a platform for a blatantly unfit presidential candidate, Ron DeSantis. Disney seemed content to downplay the conflict with the Governor as best they could until he replaced the board of the special tax district in which Walt Disney World resides, the Reedy Creek Improvement District, with right-wing zealots — including a co-author of the law in question.
Disney took their lumps and tried to appease the increasingly radical head of Florida, until they didn’t.
Just before the district-formerly-known-as-Reedy-Creek’s takeover, Disney put a poison pill contract in place that would give the Mouse rights over most major development and construction in the Walt Disney World area. They did it in a public meeting, with advance notice, that was packed with more reporters than usual due to the newsworthy controversy happening. They must’ve expected someone to notice.
No one did.
It was only after the new board officers took their seats that it became apparent that Disney had rendered their authority, at least as far as it could hurt the Magic Kingdom, impotent. As unlikely as it seemed that Bob Iger and company would’ve gotten away with it, it is even more unlikely that they EXPECTED to get away with it.
I’m dwelling on this for a reason. Not expecting this move to be successful may be the only way to explain what Disney did soon after.
Once the new board was seated and the poison pill was exposed to them, they refused to swallow it. They immediately tried to nullify the contract through several means; even attempting, at one point, to pass state legislation that would make all contracts signed within several months of a board change in any special tax district voidable. (Imagine the field day a district could have signing contracts with vendors and nullifying them at will just by changing their board makeup.)
It was at this point that Disney had seemingly had enough and filed suit against Ron DeSantis and the five members of the newly christened “Central Florida Tourism Oversight District.” The suit has five complaints, most of which are directed specifically at the CFTOD’s attempt to nullify a legal contract between Disney and the district.
(It is important to remember here that Ron DeSantis chose not to simply dissolve Reedy Creek because the financial repercussions would’ve been devastating to Florida. If he had dissolved it, no legal challenge would’ve been possible. States can pretty much do that at will.)
Now there is a lot of legal opinion on the potency of each of these complaints, but, for the most part, this list reflects what lawyers in the field have agreed would go from most likely to succeed to least.
#1. Article I, Section 10, Clause 1 of the United States Constitution, known as the “Contract Clause” says that states cannot screw with legitimate business contracts. The clause is critical to insuring that business is not crippled by political whims. This complaint was a slam dunk for Disney.
#2. The “Takings Clause” of the Fifth Amendment. This says that the government cannot take from someone their private property without compensating them fairly for it. The clause has been widely interpreted to include a lot of things as “property” including intangibly valued aspects of one’s stuff. The development contract signed just before the new board took over has clear value and the nullification of it without recompense is a violation of this piece of the Constitution.
This complaint is also such a slam dunk that many attorneys put it as #1.
#3. The “Due Process” clause of the Fourteenth Amendment. In this context it means, “If you are going to take my stuff, you’d better be able to prove there’s a good reason for it!” DeSantis is invalidating the development and construction contract without even TRYING to make an argument that it’s good for Florida. This was also a pretty good bet for Disney according to lawyers.
Now to the final two which we can lump together.
#4 and #5. These are both First Amendment “Freedom of Speech” violations: one is about being punished by the removal of the Reedy Creek board and the other about the nullification of the poison pill development contract. Both, Disney claims convincingly, are punishment for speaking out against the bigoted “Don’t Say Gay” law.
Obviously these two have garnered the most attention in the press and from the public, but hey are much trickier stunts to perform for a number of legal reasons.
First, free speech cases are hard to win because you have to prove direct cause and effect between the speech and the consequence. This piece, though, Disney has proven easily as the records of DeSantis’ spelling out that this is exactly what he’s doing are expansive: his speeches, his recent book, his aids talking to the press about it. It gets a lot tougher after this, however.
Disney has to show that the persecution of their speech by the State of Florida has caused damage. That’s a problem. Proving that one district board’s decisions are that much more damaging than the previous one’s, and that it specifically is trying to damage one single organization as a reaction to its “woke” speech, is a pretty fine needle to thread.
Finally, there is some precedence that says that you can’t claim that a law is punishing you if that law is in fact legal and constitutional. (Spoiler alert: this is exactly where Disney’s case fell apart.)
I tell you all this so that you understand why Disney’s subsequent move seems so bizarre and self-defeating.
After some bluster in the press and a counter-suit by the CFTOD, Disney dropped the first three complaints.
Let me say that another way, Disney dropped the three complaints that most legal opinions suggested they would win in favor of the two, now consolidated to one, that they were told they would likely lose.
And they lost. The First Amendment arguments simply didn’t convince the Judge. Disney said that they will appeal, but the success rate for this sort of appeal is very low and their lawyers certainly will know that.
What is going on?
Maybe if we look back to the beginning of this we might find a clue. If they didn’t expect the poison pill provision to be successful, what did they expect? Perhaps they were trying to goad DeSantis and his legislature into doing something more odious: trying to stop appropriately entered, voted on and passed legislation from the board BEFORE the takeover. Perhaps they were trying to get the Governor to do something REALLY illegal and could thus get a quick injunction and judgement.
Disney must’ve been shocked that they got the poison pill contract passed with no scrutiny from the state at all — not that the state could’ve stopped it, but they must’ve expected blowback much earlier than they got it.
What did they want to happen? And why did they throw the case they had away? Were they hoping that this would’ve ended much earlier and wanted out of the conflict? They certainly could’ve just dropped the case if that were the situation; though that might’ve made it very difficult to go back to the well if they decided to bring legal action against the Governor again later.
Did Disney expect to take a big swing with the development contract and get DeSantis to overreact and, once he didn’t, found themselves locked in a protracted struggle that they wanted out of?
Did they think they were just going to get away with the development contract deal without having to go to court? That would’ve been supremely naive.
Are their lawyers so bad that they cockily misguided the company to believe that they were going to find Ron DeSantis guilty of violating the United States Constitution while he was running for President of said United States? Bold, but foolish.
Maybe a smarter strategy will reveal itself in the coming months, but for right now, Disney seems like a company who was trying to lose.
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