Tentative Thoughts on the Florida Repeal of Disney's Special Government District

The Florida Legislature has voted to repeal a statute that created a special government district (the Reedy Creek Improvement District) that it had set up in 1967 for Disney, and the Governor is apparently set to sign it. To quote the New York Times (Brooks Barnes),

[The district] was put together in 1967 and essentially allows the megaresort, which employs roughly 80,000 people, to function as its own municipal government…. [The district] gives the company considerable control over the planning and permitting process for construction on its 25,000-acre property, including road building. Reedy Creek also levies taxes on Disney to pay for the resort's own fire and medical response battalions, among other services. Disney World even generates some of its own electricity through Reedy Creek.

The reason for the repeal appears to be Disney's prominent opposition to the Florida law that restricts "classroom instruction by school personnel or third parties on sexual orientation or gender identity … in kindergarten through grade 3 or in a manner that is not age appropriate or developmentally appropriate for students in accordance with state standards." Is it constitutional for Florida to do this?

[1.] First, the case against: Government decisions that retaliate against people or organizations based on their speech are often unconstitutional. Board of Comm'rs v. Umbehr (1996), for instance, held that the government generally can't deny contracts to a contractor because of the contractor's First Amendment activities. And some appellate decisions have held that withdrawal of legal advertising from a newspaper because the government doesn't like the newspaper's editorial positions violates the First Amendment.

Likewise, the government can't generally fire employees because of their speech or political activity, at least unless the disruption caused by the employee's actions outweighs the employee's free speech rights (whatever exactly that means). Pickering v. Bd. of Ed. (1968). And the government can't strip people of tax exemptions or other benefits based on their speech or political activity. Speiser v. Randall (1958).

[2.] But here's a twist: What Florida is planning to withdraw from Disney is essentially a form of government power that Disney had been specially granted—Disney's ability to effectively run this special district (as I understand it does), with the legal authority this entails under state law. And if we follow the employment analogy, officials exercising political power are generally not protected from retaliation by other political figures, at least when the retaliation consists of benefits conferred by the other political figures in the first place.

If, for instance, a committee chairman switches parties (or otherwise offends party leadership with his political positions), he could be stripped of the powers that his colleagues have given him, even if a low-level government employee can't be. Likewise if a state cabinet member who has been chosen by a governor is removed from office by the governor (assuming state law allows such removals) based on the cabinet member's political speech. I take it that when a city council appoints a mayor or a city manager, it can (if state law so allows) remove that official as well, including based on the official's speech or other political activity.

To be sure, Disney isn't exactly a political official. (I agree that corporations have First Amendment rights, but that doesn't mean they can be elected to office.) But the Legislature had in effect given it a particular form of political power, which it now seeks to withdraw. That strikes me as a potentially relevant analogy.

[3.] There's also a broader question, which isn't limited to grants and withdrawals of political power. Umbehr and similar precedents involved the sorts of contracts (there, for trash disposal) that pretty any much company could bid for, and that the government would give to someone else if it denied the contracts to the challenger; likewise for the typical government employment situation. Other benefits, like various kinds of tax exemptions, are likewise generally available to a wide range of people.

What makes this case unusual is that this is an extraordinary status that Disney got because it was Disney, and withdrawing that status would simply put Disney in the same position as other companies in that geographical area, and the bulk of other companies in Florida. (There are other special districts in Florida, but my sense is that few of them were set up precisely to be controlled by a particular commercial enterprise.) Even apart from the political nature of the district, might the Legislature have the power to take away such extraordinary benefits, even based on the beneficiary corporation's speech?

To give an analogy, various state laws give special treatment to the NRA, e.g., providing that shooting range standards "shall be no more stringent than national rifle association standards." (Ohio) or that county ranges be set up in part for "encouraging marksmanship by permitting National Rifle Association sanctioned or approved pistol matches to be held at such range" (Minnesota). Some of these laws were passed when the NRA was less politically active than it has been recently. Others might have been passed when the party in control of the legislature liked NRA's politics.

Say that the state legislature decides that it doesn't like the NRA any more, because of the NRA's position on gun control laws, and decides to just eliminate this special treatment. I'm inclined to say that the legislature could do so.

One other analogy might be Ysursa v. Pocatello Educ. Ass'n (2009). There, government employees had been able to authorize payroll deductions not just for general union dues but also for union political activities. In 2003, the Idaho Legislature banned deductions for union political activities (employees could still pay the union directly, but not through the deductions, which were quite valuable to the union).

Presumably this was motivated in part by legislative disagreement with unions' political positions (though the Court didn't discuss the motivation in detail, and it did note in a footnote that the parties hadn't "raised any issue of viewpoint discrimination")—after all, if the majority of the legislature liked the unions' positions, it seems unlikely that they would have enacted a law that would have thus limited union power. But the Court upheld the change: "Idaho does not suppress political speech but simply declines to promote it through public employer checkoffs for political activities." Likewise, now that Disney has increased its political role in Florida politics, it may be that the Florida Legislature may conclude that it doesn't want to give Disney special benefits that other entities don't get.

But none of these analogies, of course, are squarely on point; and I know of no other precedents that dispose of the matter. So for now I just wanted to lay out the possible approaches; I'd love to hear if there are other important cases or arguments that I've missed here.