Untangling DeSantis-Disney legal dispute could take years

Tribune Content Agency

ORLANDO, Fla. — If they go to court, Disney and Gov. Ron DeSantis’ handpicked oversight board might be in for a multimillion-dollar legal slugfest that could last years.

On one side, the Reedy Creek Improvement District is hiring four law firms, including a politically connected conservative Washington, D.C., firm that counts U.S. Sens. Ted Cruz and Tom Cotton as alumni.

On the other, Disney is a nearly $180 billion corporation with a top lawyer who earned about $15.2 million in compensation in 2022, according to a recent financial filing.

Legal bills would pile up in a protracted court fight, and the district could draw on the tax dollars Disney pays to Reedy Creek to compensate its lawyers, said Jacob Schumer, a Central Florida local government tax attorney.

“Reedy Creek is going to be spending Disney’s own money fighting Disney,” Schumer said. “If they go all the way with all the agreements, it will certainly cross seven figures, eight figures.”

As the largest landowner, Disney is the primary taxpayer in the district, which is being renamed the Central Florida Tourism Oversight District.

At issue is a 30-year development agreement and restrictive covenants quietly approved by the previous board, which was controlled by Disney. Approval was given on Feb. 8, just as state lawmakers prepared to approve a plan to have the state take over the district and put DeSantis in charge of picking the board members.

Those agreements granted Disney maximum development rights and put other restrictions on new board members, according to a review by the new board’s lawyers.

DeSantis named his board members on Feb. 27, and they discovered the previous board’s agreements tying their hands.

Disney issued a statement that all its agreements with the district were “appropriate” and done in open, public meetings. DeSantis’ office replied that its initial review found that the agreements “have significant legal infirmities that would render the contracts void as a matter of law.”

The new board could be in a challenging spot when it comes to undoing the development agreement because it appears to have been legally approved in accordance with Florida law and cannot be unilaterally rescinded or modified, Schumer said.

The district’s lawyers would need to have the agreement declared invalid because of a procedural misstep or technical reason, he said.

“Governments can’t pass laws that change their contractual obligations and impairs a contract,” Schumer said. “I would say the development agreement on its face seems quite valid.”

State law does give local governments some latitude to enact measures “essential to the public health, safety, or welfare” after a development agreement is approved.

The board may have more success in getting a “declaration of restrictive covenants” tossed that is based on contract law rather than Florida statutes, he said.

That document restricts the district from using the Disney name without written permission or its “fanciful characters such as Mickey Mouse.” Aesthetic changes to the district’s buildings would need to be reviewed by Disney, among other restrictions.

That declaration is meant to stand in perpetuity, but it also includes a legal backstop that generated social media attention because of its reference to a royal monarch.

If the agreement violates rules that a contract cannot stand long after the deaths of everyone alive, it remains in effect until “21 years after the death of the last survivor of descendants of King Charles III, king of England living as of the date of this declaration.”

The oversight board is turning to Cooper & Kirk to bolster its legal firepower. DeSantis’ friend and former roommate in Naval Justice Training school, Adam Laxalt, is listed as a partner in the influential Washington firm.

For the Disney work, Cooper & Kirk’s lawyers will bill $795 an hour, according to its proposal letter. Board Chairman Martin Garcia said the board needed lawyers with experience appearing before the U.S. Supreme Court, suggesting a legal fight could go all the way to the nation’s highest court.

Cooper & Kirk came with a recommendation from the governor’s office for the legal work it’s done for Florida, Garcia said at a meeting on Wednesday.

“If you go to the trial bar nationally and say, ‘Give me the list of the top 10 trial, constitutional contract law firms.’ Cooper & Kirk will come up on every list,” Garcia said.

Florida has authorized more than $5 million in legal contracts with Cooper & Kirk during DeSantis’ tenure as governor, according to an Orlando Sentinel review of state records.

DeSantis’ administration has turned to the Cooper & Kirk law firm to defend a controversial social media law, a ban on cruise ship COVID-19 “vaccine passport” requirements, and a restriction on felons seeking to vote, according to legal contracts.

The board also approved bringing on Lawson Huck Gonzalez, a law firm that was launched earlier this year. One of its founders is Alan Lawson, a retired Florida Supreme Court justice.

The board approved two local firms as well — Nardella & Nardella and Waugh Grant.

Board member Brian Aungst Jr. said he hopes to settle the dispute with Disney but wanted the district to be prepared for litigation.

“We’re not taking an adversarial position to Disney,” he said. “We are defending ourselves, and we’re defending the people and we’re going to be prepared for what the next steps are. My hope is that those next steps are collaborative.”

Disney, though, has not signaled it is open to rewriting the agreements.

The long-term development agreement could be important for Disney because it wants continuity, flexibility and certainty for a business it intends to run for generations, said Bill Brewer, a professional engineer who directed design and development programs for what became the city of Weston in South Florida.

“Whether you love Mickey Mouse or hate Mickey Mouse, I can understand it from a business decision,” Brewer said. “All the politics aside, Disney’s motivations may not be entirely nefarious. It may just be a self-preservation motivation, so it has the flexibility to continue to do innovative things.”