Legal representatives of Disney Parks and its new oversight district appeared in the 9th Circuit Judicial Court on Friday, July 14. The court proceeding involved Disney serving as the plaintiff in a federal case that has not yet secured a court date, while the Central Florida Tourism Oversight District (CFTOD) acted as the defendant. The central issue at hand was whether CFTOD had the authority to invalidate a 30-year development agreement made by Disney Parks and Resorts U.S. Inc. with its previous governing body, the Reedy Creek Improvement District (RCID).
CFTOD argued that it was necessary to determine the validity of the agreements made by Disney with its dissolved board of supervisors. Disney’s lawyers, on the other hand, contended that their agreements were legitimate and followed the governing law. The sitting judge refrained from making a ruling and requested that each side prepare and submit a proposed order as if she had ruled in favor of one or the other.
Disney’s argument was grounded in the citation of Florida’s SB 1604 law, which the attorney claimed had been faithfully adhered to in every respect. Specifically, the attorney referenced a paragraph in the law that stated any special district is unable to comply with the terms of a development agreement executed within three months prior to a law changing the members of the governing body. The law also mandated that a district’s new governing body must review any development agreements that took effect or were executed after the law had been passed within four months of the members’ assumption of office.
The 30-year Disney development agreement had been signed by RCID’s board of supervisors on February 8, while HB-9B, the legislation that transformed RCID into CFTOD, was passed on February 27 and took effect on May 5. CFTOD’s hand-picked board of supervisors convened for their first meeting on May 8. The defense claimed that all actions had been taken in accordance with the law, and as such, the agreements were valid. They also argued that the agreements had come into effect before CFTOD assumed control, rendering them exempt from review.
CFTOD, however, posited that the state court should hear the case before it proceeds to federal court. They argued that the agreements had granted Disney excessive control over development within the district, including committing taxpayer funds to subsidize Disney’s growth and allowing Disney to censor district speech. CFTOD contended that the agreements were void from the beginning due to violations of Florida’s laws regarding public notice, procedures for taxpayer approval, and the consideration of development agreements.
Disney also contended that it had served CFTOD’s board in Federal Court before CFTOD served them in state court. Their attorney argued that both the federal and state cases involve substantially similar issues. Therefore, they requested that the court at least stay the case to respect the principle of priority and avoid duplication, inconsistent rulings, and unnecessary use of judicial resources.
CFTOD maintained that the state court should hear the case first, as it primarily focuses on state-level issues and the individual board members of CFTOD, while the federal case touches on federal issues. They believed that the outcome of the state court case could significantly impact the federal case. They also argued that the state court, as one party, should decide whether Disney’s development agreements were void from the outset or not.
The plaintiff’s attorney further contended that the state case should take precedence because CFTOD’s board members were not properly served. Disney alleged that they served CFTOD’s board members on May 1, while CFTOD claimed to have served Disney on May 12. The proper service of documents would determine the timeline and progression of the case.
In conclusion, the legal representatives of Disney Parks and CFTOD engaged in a court battle to determine the validity of Disney’s 30-year development agreement with RCID. The court proceedings addressed the interpretation and adherence to Florida’s laws and the timing of various legislative and administrative actions. Both sides presented their arguments, but the judge made no ruling, urging them to submit proposed orders. The next steps will determine whether the case proceeds to federal court or if it will be adjudicated at the state level.
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