Disney Loses Bid to Throw Out State Lawsuit Over Theme Park District

Disney lost a bid on Friday to throw out a state court lawsuit that seeks to assert state control over future development of its Orlando theme parks.

The ruling is the latest twist in the struggle between Disney and Florida Gov. Ron DeSantis over governance of the 40-square-mile area around Disney World.

Disney has filed a separate lawsuit in federal court, arguing that DeSantis illegally seized control over the Reedy Creek Improvement District in retaliation for the company’s support for gay rights.

DeSantis and the state Legislature dissolved the district, which Disney controlled for 55 years, and established a new entity, the Central Florida Tourism Oversight District, whose board is selected by DeSantis.

That board filed a state court lawsuit in May, seeking to throw out two development agreements that gave Disney broad control over future development of its parks far into the future. The DeSantis-backed board argued that Disney had improperly struck the deal with the board of the dissolved entity, which it functionally controlled, effectively neutering the new board before it could take over.

Disney has sought to throw out the state lawsuit, arguing that it became moot when the state passed a new law that also purports to dissolve the development agreements.

But in her ruling on Friday, Judge Margaret H. Schreiber rejected Disney’s motion. She held that there is still a genuine dispute over whether the development agreements were valid before the state passed the law seeking to overturn them.

The judge also refused Disney’s request to stay the state court action until the resolution of the federal lawsuit.

The judge also expressed concern about the development agreements, which the Reedy Creek board approved just before it was dissolved.

“They contradict the Legislature’s policies toward the District and, if valid, would permit Disney to control all development rights and land use regulations in one of the most heavily visited areas in Central Florida,” the judge wrote. “These issues implicate matters of the State’s sovereignty and are of great interest to its economy and citizenry.”

Disney has 20 days to file an answer to the state lawsuit.

Disney angered DeSantis in 2022 when it opposed the Parental Rights in Education bill, known to its critics as “Don’t Say Gay.” The bill regulates classroom instruction on sexual orientation and gender identity, and gives parents the right to sue school districts over alleged violations.

DeSantis responded that the state would not take orders from a “woke” corporation, and called a special session of the Legislature to dissolve the Disney-controlled district.

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