In a major victory for Gov. Ron DeSantis of Florida, a federal judge on Wednesday dismissed a lawsuit filed by the Walt Disney Company alleging that Mr. DeSantis and his allies violated the First Amendment by taking over a special taxing district that includes the Walt Disney World.
Disney said it plans to appeal the decision.
Disney and Mr. DeSantis, who recently ended his presidential campaign, have been at odds for nearly two years over Disney World, the 25,000-acre theme park and resort complex south of Orlando. Angered by Disney’s criticism of a Florida education law that opponents called anti-gay — and seizing the opportunity to score political points with supporters — Mr. DeSantis took over the taxing district, appointing a new board and ending the long-standing the company’s ability to self-governe Disney World as if it were a county.
Before the buyout took effect, however, Disney signed contracts — quietly but in highly publicized meetings — to lock in about $17 billion worth of development plans over the next decade. An effort by Mr. DeSantis and his allies to void the contracts led to dueling lawsuits, with Disney suing Mr. DeSantis and the taxing district in federal court and the new appointees firing back in state court.
On Wednesday, Judge Allen Winsor of the US District Court for the Northern District of Florida in Tallahassee dismissed Disney’s case in its entirety. The lawsuit had accused Mr. DeSantis of “a relentless campaign to weaponize government power against Disney in retaliation for expressing a political view.” The campaign, the company added, “now threatens Disney’s business operations, jeopardizes its economic future in the region and violates its constitutional rights.”
But Judge Winsor found that the law giving Mr. DeSantis control of the special taxing district was written in a way that — on its face — did not allow Disney to claim retaliation, largely because Disney was not the only landowner affected. .
It is settled law that “when a statute is of constitutional personality, a plaintiff cannot raise a free speech challenge alleging that the legislators who passed it acted with a constitutionally impermissible purpose,” he wrote in his decision.
Judge Winsor, who was appointed by President Donald J. Trump in 2019, added that Disney “faces the greater evil” of the law but not all, saying, “There is no ‘narrow enough’ exception.”
His ruling aligned with arguments made at the December hearings by Mr. DeSantis’ lawyers: that it did not matter whether the governor’s action was retaliatory, only whether the subsequent state law stripping Disney of control was constitutional.
In a statement, Disney said: “This is an important case with serious implications for the rule of law, and it will not end here. If left unchallenged, this would set a dangerous precedent and give states permission to weaponize their official powers to punish the expression of political views with which they disagree.”
Mr. DeSantis and the tax district took victory laps.
“The Corporate Kingdom is over,” Jeremy Redfern, the governor’s spokesman, said in a statement. “The days of Disney controlling its government and being above the law are long gone.”
Martin Garcia, an ally of Mr. DeSantis who took over last year as chairman of the tax district, said in an email that he was “pleased” with the decision and promised to follow up with “appropriate changes” in the way government agencies at Disney U management of the world was done.
An attorney for the taxing district, Charles J. Cooper, added in a statement that “Disney may own the land in the district, but the government does not.”
As part of his 17-page ruling, Judge Winsor said Disney had also failed to show “any specific injury” from the new tax district board’s actions. The only injury, he said, was that Disney now has to operate “under a board he can’t control,” which wasn’t enough.
Although a significant setback for Disney, the decision is unlikely to have an immediate impact on the relationship between the company and the supervisory board. The state lawsuit remains active.
A state judge, Margaret Schreiber, denied Disney’s motion to dismiss the counterclaim. In November, however, he granted Disney’s request to push the next phase of the state case until March. Disney had accused the tax district of dragging its feet to comply with discovery requests.
Disney has since filed a related lawsuit in state court accusing the district of failing to comply with public records requests.
The taxing district, created in 1967, was a critical tool in the development of Disney World because it gave Disney unusual control over building permits, fire protection, policing, road maintenance and development planning. Today, Disney World includes four theme parks, two water parks, and 18 Disney-owned hotels with 267 swimming pools. The resort employs approximately 75,000 people and attracts approximately 50 million visitors annually.
The development plan completed by Disney before Mr. DeSantis and his allies took over the site — and at the center of the state court battle — includes the potential construction of 14,000 additional hotel rooms, a fifth major theme park and three smaller parks. The company has said it has earmarked more than $17 billion in spending to fuel growth at the resort over the next decade, an expansion that would create about 13,000 jobs at the company.
But Disney has threatened to scale back its Florida ambitions, depending on the outcome of its fight over the tax district.
Calling Mr. DeSantis “anti-business” for his campaign against the company, Disney last year pulled the plug on an office complex planned to be built in Orlando at a cost of about $1 billion. It would have added more than 2,000 Disney jobs to the area, with an average salary of $120,000, according to an estimate from the Florida Department of Economic Opportunity.
Mr. DeSantis has enjoyed campaigning and fundraising against what he calls “woke” corporations — most notably Disney — as well as targeting some books and the former top attorney in Tampa, Florida, whom he removed from office.
Disney had found hope for its own First Amendment case in a recent court decision involving Andrew H. Warren, the Tampa district attorney. This month, the US Court of Appeals for the 11th Circuit in Atlanta, which leans conservative, ruled in favor of Mr. Warren, who sued to get his job back, claiming First Amendment protection.
“The state cannot exercise its coercive power to censor so-called ‘woke’ speech with which it disagrees,” wrote Kevin C. Newsom, one of the appeals court judges.
