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Florida taxpayers seeking to block the dissolution of Disney’s special self-governing tax district don’t have the right bring a lawsuit on behalf of the company for alleged violations of its free speech rights, a federal judge ruled.
In a blunt five-page order rejecting jurisdiction, U.S. District Judge Cecilia Altonaga found residents of a county adjacent to Disney World claiming they’ll be straddled with at least $1 billion in Disney’s bond debt if the state follows through with its plans don’t have standing to sue. “Plaintiffs’ theory of standing is that the elimination of the Reedy Creek Improvement District might result in financial harm to Plaintiffs by virtue of a tax increase that has not yet been enacted,” reads the order issued on Tuesday. “That indirect and highly speculative alleged injury cannot support federal jurisdiction. Senate Bill 4-C itself will not raise Plaintiffs’ taxes. Again — it is worth emphasizing — the bill does not apply to Plaintiffs at all.”
The lawsuit from residents of the nearby Osceola County against Gov. Ron DeSantis was widely expected after Florida lawmakers voted last month to strip Disney of its special privileges of self-governance in retaliation for its opposition to the Parental Rights in Education Law, which bars discussion of gender identity or sexual orientation in grades K-3. They argued dissolving Reedy Creek will likely lead to increased taxes for Central Floridians to pay off Disney’s bond debt, estimated to be between $1 billion and $2 billion.
Altonaga’s speedy dismissal order identifies numerous issues with the complaint, which the judge called a “shotgun pleading” and noted was filed in the wrong division of Florida federal court.
Among the problems with the lawsuit, Altonaga says, is that she doesn’t have the authority to oversee claims arising from alleged violations of Disney’s First Amendment rights. She notes that the taxpayers who brought the suit haven’t suffered any injuries as a result of alleged retaliation by Florida lawmakers.
“Even more critically, Plaintiffs have not plausibly alleged that Disney faces any hindrance in asserting its own First Amendment rights,” the order reads. “Far from it: Plaintiffs expressly allege that they ‘expect Disney and the State of Florida to litigate this matter for a significant period of time[.]’ That fact alone warrants dismissal.”
According to the order, the dissolution of Reedy Creek won’t directly harm Florida taxpayers since the “challenged 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.”
Under the new law, independent special districts created prior to 1968 and haven’t been renewed since will be eliminated in June 2023 unless a new agreement is reached. The lawsuit claims that Florida lawmakers enacted the statute in violation of the First and 14th Amendments and the contracts and supremacy clauses.
Altonaga also notes that she lacks the authority to rule on the lawsuit since it alleges state law claims, which typically cannot be brought in federal court against state officials. She writes, “It is difficult to think of a greater intrusion on state sovereignty than when a federal court instructs state officials on how to conform their conduct to state law.”
Although Florida taxpayers who brought the suit were given a chance to fix their claims, the deficiencies identified by the judge’s order may be tough to overcome.
DeSantis’ office has challenged arguments that the dissolution of Reedy Creek will lead to tax hikes.
“Perhaps this will put to rest the speculation from those who are hoping – with no basis in reality – that this will end in some sort of taxpayer or state burden that partisan critics can use against the governor,” a representative for DeSantis said in a statement. “In reality, this opportunity can, and should be utilized to generate more taxes from Disney, as the governor has said.”
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