Disney Defeats DeSantis
Gov. Ron DeSantis (R – Fla.) plays down his background, which includes a law degree from Harvard Law School. (He plays a redneck in real life!) Maybe that explains the governor and wanna be POTUS’s big-time fail on the matter of The Walt Disney Company and the Reedy Creek Improvement District.
Some history. By the mid-1960s, Disney owned land in Florida. More than 40 square miles in and around Orlando. Wanting control over its destiny, Disney got the Florida legislature to pass the Reedy Creek Improvement District. Disney got the control it required, along with a money machine. Florida took its cut, and Orlando – or, as an old friend calls it, (B)Orlando – grew. Jobs explain the growth, significantly, but the model makes living in Orlando inexpensive, as Disney shares revenue in exchange for control.
Stuff happens. Disney stepped up on LGBTQ issues generally. Directly, it challenged “Don’t Say Gay” in Florida. That prompted governmental annoyance in Florida. And, because Gov. DeSantis likes action, he tried to terminate the improvement district. When that effort failed, the legislature gave the district a new name and a new process for naming its directors. With the establishment of the Central Florida Tourism Oversight District and a board full of right Right-thinking Americans, Gov. DeSantis saw the future: Bright and Right.
Except … wait. What? The 53rd largest American company in the country didn’t say, Okey-Dokey, Guv, whatever you say! Nope. The Reedy Creek Improvement District adopted a Declaration of Restrictive Covenants. The rules – that’s what restrictive covenants amount to – tie the hands of any body that controls the improvement district, whatever name it happens to have. (Reportedly, the new board gets to address potholes and hedge trimming, and not much more.) If all of this seems very complicated, liken it to your own home; if it was built in the last 50 years, it likely sits on ground governed by Covenants, Conditions, and Restrictions aka CC&Rs. They tell you everything about what you can do with your property and lay out processes for administering the rules.
Here, adhering to its own rules and to Florida Open Meetings laws, the Reedy Creek Improvement District board changed the rules. It did so in plain sight, with nary a word from Florida’s most prominent Harvard Law School graduate, or any of his minions.
One more thing about the new rules. The board addressed perpetuities issues. The Rule Against Perpetuities limits the right to control property over time. Traditionally, the rule ended control 21 years after the end of the last life in being, mentioned in the document that provides for control.* Now, most states have lengthened the time to hundreds of years. Further, at least in Arizona, the Rule Against Perpetuities does not apply to use restrictions associated with real property.
So, Disney defeats DeSantis. The governor and his people scream like stuck pigs, demanding court action to remedy the wrong they believe Disney inflicted on them. Time will tell, but the people have an uphill battle here. Absent a totally unprincipled, We Don’t Like Disney – Who does? – ruling from the Florida Supreme Court, the Court will face the fact that Disney has a vested interest in the Declaration of Restrictive Covenants. A property right, which the Right values greatly.
Of course, an unprincipled, It Only Applies Here opinion might issue. (The U.S. Supreme Court, in a 2000 case arising from Florida, noted that “[o]ur consideration is limited to the present circumstances, for the problem of equal protection in election processes generally presents many complexities.”) But if the Court does right by the law, it seems doubtful that the Court will upset a core aspect of property law: Vested rights exist, absent a major change in the law. (In 1948 the U.S. Supreme Court invalidated covenants that precluded property sales to disfavored classes, e.g., Negroes and Jews. A major change!)
Gov. DeSantis will surely conjure up some punitive measures to put a hurt on Mickey, Minnie, Donald etc. Or not. Disney employs more Floridians than any other employer. Now, Disney can’t go anywhere, but messing with Disney won’t make Orlando residents happy.
Reportedly, Gov. DeSantis runs his state effectively. Strip away the crap he does to excite the base, and he might be a pretty good governor. But Florida gets the whole package, and it looks like he’s stepped in it hard and deep here.
*I have never had a hard time understanding the Rule Against Perpetuities. However, in Lucas v. Hamm, a 1960 California Supreme Court opinion, the Court held that a lawyer can be liable to estate beneficiaries for drafting errors, but not for those arising from misapprehending the Rules Against Perpetuities. Too complex, said the Court.