Florida judge dismisses Disney World breakup lawsuit

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TAMPA, Fla. (WFLA) — Florida’s first lawsuit against state lawmakers’ efforts to dissolve the Reedy Creek Improvement District, the physical home of Walt Disney World, has failed. A judge for the Southern District of Florida dismissed the case on May 10.

Since the initial passage of Senate Bill 4C, which dissolved Florida’s Special Independent Districts established prior to 1968, the year Florida ratified its state constitution, concerns about tax burdens and legality have abounded.

Of the Orange County tax collector predicting that property tax rates would increase by at least 15% to cover RCID’s bond debts to the Walt Disney Company itself, claiming the law could not be enacted due to the stipulations of the Reedy Creek Charter, the dissolution of Walt Disney World’s special government status has been the subject of tense disagreements over next steps.

Three Florida residents, living in Orange and Osceola counties, have sued Governor Ron DeSantis and other state officials over the legal effort, which they say “violates the federal constitutional rights of Florida taxpayers along with their clearly defined rights under the Florida Bill of Rights for Taxpayers,” in a lawsuit filed May 3.

Now, U.S. Chief District Judge Cecilia M. Altonaga has ordered the case closed, though it was not dismissed without prejudice.

Altonaga’s court ruling said the plaintiffs’ claims did not sufficiently show how they were harmed by legislation to dissolve Disney’s special status at Reedy Creek. The judge’s ruling also cited multiple “jurisdictional flaws” in the case.

“At least three jurisdictional flaws compel dismissal of the complaint,” Altonaga wrote in its ruling. At issue was the jurisdiction of the place where the lawsuit was filed. The plaintiffs, Michael Foronda, Edward Foronda and Vivian Gorsky, sued state officials over state law, but in federal court.

Altonaga said, “State officials are immune from legal action in federal court for claims arising under state law because ‘it is hard to think of a greater intrusion into state sovereignty only when a federal court instructs state officials on how to conform their conduct to state law,'”, meaning that plaintiffs would have had to prove that the conduct by state officials would violate both the U.S. Constitution and state law to seek damages or relief.

The judge also said that the plaintiffs’ failure to include a contract that SB 4C allegedly broke and therefore should correct Floridians, such as “contractual obligations” regarding Disney bond debt, the court lacked jurisdiction and the counts were rejected.

Disney said removing its tax status in Florida could violate the Reedy Creek Charter Agreement, which states that the State of Florida “will not limit or alter the district’s rights to own, acquire, construct , to rebuild, improve, maintain, operate or supply the Projects or to levy and collect taxes, assessments, rents, tariffs, royalties, tolls, tariffs and other charges provided in Reedy Creek law, and to comply with the terms of any agreement entered into with the holders of any bonds or other obligations of the District.

SB 4C, through its legislative method, creates changes in the operation of Reedy Creek through the dissolution of its statute.

Regarding the plaintiffs’ allegation that Disney’s First Amendment rights had been violated, the court found that because of their lack of a “close relationship” with the Walt Disney Company, they could not claim the right to sue as a third party, and could not prove that they were “injured in fact” by the alleged actions.

The judge wrote that at this stage of the proceedings, the burden of proof was on the plaintiffs, and that they did not meet the conditions to prove their standing or their cause, nor were they in able to prove “concrete harm resulting from Disney’s alleged violation of First Amendment rights.

Further, the plaintiffs failed to prove to the judge in their filings that they “have a close relationship with Disney” and did not show that “Disney faces hurdles in asserting its own rights at first amendment”.

Instead, Altonaga wrote that since the plaintiffs allege that Disney and the State of Florida will be in litigation “for a significant period of time”, they are unable to prove that Disney is unable to enforce its rights to the freedom of expression. Because SB 4C doesn’t take effect until July 1, the effort to file what the judge called a “pre-enforcement” challenge failed to meet the in-court standards needed to argue that the effort of dissolution harms them directly.

Put simply, Judge Altonaga did not find that the three plaintiffs suing the state or its officials over the recent legislation had proven their grounds for suing. Although closed, since the case was not dismissed with prejudice, it could be reopened at a later date, or in another jurisdiction.

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