Disney Argues New Florida Law Nullifies DeSantis-Backed Suit

Florida legislation that was designed to hamstring Disney could end up helping the company, at least in relation to a lawsuit in state court over development at Walt Disney World near Orlando.

Gov. Ron DeSantis and Disney have been sparring for more than a year over a special tax district that encompasses Disney World. The fight started when the company criticized a Florida education law labeled by opponents as “Don’t Say Gay” — angering Mr. DeSantis.

His punitive actions since then, and Disney’s efforts to protect itself, have resulted in a federal lawsuit, which Disney filed on April 26, that accused Mr. DeSantis and his allies of engaging in a “targeted campaign of government retaliation.”

The tax district — newly controlled by Mr. DeSantis — responded by suing Disney in state court. Filed on May 1, the district’s lawsuit seeks to nullify contracts with Disney that lock in development plans for the resort. A few days later, the Florida Legislature, at the request of Mr. DeSantis, passed a bill that prohibited the district from complying with the contracts. Mr. DeSantis signed it into law on May 5.

On Tuesday, Disney filed a motion to dismiss the state court case. As a matter of legal maneuvering, the filing was routine: Disney wants to shut down the state case and focus on the federal one.

But the company’s argument about why the district’s case should be tossed was less expected: Mr. DeSantis and his allies in the Legislature rendered the lawsuit moot with their subsequent actions, the filing said. By prohibiting the district from complying with the contracts, Mr. DeSantis and the Legislature made “any order this court could issue — in either party’s favor — legally irrelevant.”

“In short, any declaration about the contracts’ enforceability, voidness or validity — either way — would be an advisory opinion with no real-world consequence,” Disney added in the filing. “Trial courts in Florida are forbidden from issuing advisory opinions.” The company cited more than 40 court rulings in support of its argument.

Alexei Woltornist, a spokesman for the tax district, said in an email that Disney’s motion was “entirely predictable and an acknowledgment they know they will lose this case.” A spokesman for Mr. DeSantis had no immediate comment.

If the state judge allows the case to proceed, Disney’s filing went on to say, the matter should be put on hold while the federal lawsuit plays out. Disney noted that Florida law recognized “a robust ‘principle of priority,’ under which state proceedings should be stayed pending an earlier-filed federal court proceeding.”

Disney’s filing noted that, in addition to being filed first, the federal lawsuit challenges the constitutionality of the new law prohibiting the district from complying with the development contracts. Resolution of the federal action would “materially affect the viability” of claims in the state action, the filing said.

At the center of the fight between Mr. DeSantis and Disney is the 56-year-old special tax district. The district effectively turned the property into its own county, giving Disney unusual control over fire protection, policing, waste management, energy generation, road maintenance, bond issuance and development planning.

Florida has hundreds of similar districts. One covers The Villages, a colossal senior-living community northwest of Orlando. Another covers Daytona International Speedway and the surrounding area.

In February, lawmakers decided to allow the governor to appoint an oversight board for the Disney district in an attempt to curtail the company’s autonomy. When the appointees reported for duty, however, they discovered that the previous, Disney-controlled board had approved development contracts that limit the new board’s power for decades to come.

Disney paid and collected a total of $1.2 billion in state and local taxes in 2022, according to company disclosures. Earlier this year, Disney said it had earmarked $17 billion for expansion spending at the resort over the next decade, growth that would create an additional 13,000 jobs at the company. Last week, Disney said it was “evaluating where it makes the most sense to direct future investments” for theme park construction, a clear reference to the standoff in Florida.