Federal judge dismisses lawsuit over Disney’s Reedy Creek Improvement District

A federal judge has dismissed a lawsuit challenging a new Florida law designed to abolish independent special districts, including the Reedy Creek Improvement District that has given Walt Disney Company special governing status for 55 years.

The lawsuit was filed last week on behalf of three Orange and Osceola County residents by Miami lawyer William Sanchez, who’s running for U.S. Senate as a Democrat. The plaintiffs argue dissolving Reedy Creek violates the 1992 Taxpayer’s Bill of Rights Act, represents a breach of contract with Reedy Creek bondholders, and violates Disney’s First Amendment rights.

The lawsuit names Gov. Ron DeSantis, Secretary of State Laurel Lee and executive director of the Florida Department of Revenue Jim Zingale as defendants. The plaintiffs are Michael and Edward Foronda of Kissimmee, and Vivian Gorsky of Orange County.

U.S. District Court Judge Cecilia Altonaga dismissed the lawsuit for several reasons, including lack of standing and the fact that the law doesn’t go into effect until next year.

The lawsuit was filed in federal court, which Altonaga said “doesn’t have standing over state issues.” Likewise, the plaintiffs don’t have standing, she ruled.

The three plaintiffs named in the lawsuit, she said, “do not plausibly allege they have suffered any concrete injury as a result of the alleged violation of Disney’s First Amendment rights, and nothing in the complaint shows plaintiffs have a close relationship with Disney.”

Referring to Foronda and Gorsky, she said, “The new law does not apply to them, they do not allege direct harm as a result of the challenged law, and they do not plausibly allege any credible threat of direct harm in the future.”

The plaintiffs argue they do have standing because the dissolution of the district “might result in financial harm” to them due to reports that residents would face $1 billion in tax increases. But the law not having “yet been enacted and that indirect and highly speculative alleged injury cannot support federal jurisdiction,” Altonaga said.

Sanchez said he would refile the case by May 16. In a written statement, he said, “This is just the beginning of the battle, as we are attempting to achieve justice for Florida taxpayers.”

While several news reports have indicated that Disney losing its special governing status would result in taxpayers being on the hook for its estimated $1 billion in outstanding debt and other obligations, the governor’s office said that’s not the case.

The new law designed to abolish independent special districts isn’t meant to create any tax increases for Florida residents, the governor’s office said when he signed the bill into law. In the near future, the legislature will propose “additional legislation to authorize additional special districts in a manner that ensures transparency and an even playing field under the law,” the governor’s office said in a news release.

At issue is the legislature dissolving certain independent special districts established before the ratification of the Florida Constitution in 1968, including the Reedy Creek Development District, which was created by the 1967 Reedy Creek Improvement Act. It enabled the Walt Disney Company to operate as an independent governing entity like a county without being governed by a county. The law gave Disney control over police and fire services, electricity, water, construction zoning and other operations within 25,000 acres located in Orange and Osceola counties.

Last month, DeSantis called a special legislative session to strip Disney of its special governing status. Both chambers of the legislature passed legislation, which DeSantis signed, stripping six districts of their status by next year.

DeSantis called the special session after Disney publicly opposed and called for the repeal of the Parental Rights in Education law, which bans Florida schools and teachers from discussing "sexual orientation" or "gender identity" with students in kindergarten through third grade.

Numerous media outlets and opponents of the Parental Rights in Education law claim it’s “anti-gay,” or uses the phrase, “Don’t say gay,” arguing it’s anti-LGBTQ. A review of the seven-page bill by The Center Square revealed no such language exists, including no mention of the word “gay.”

At a news conference March 31, DeSantis said repealing the 1967 law wasn’t solely about Disney’s opposition to the parental rights law.