Disney Loses First Amendment Claim over Florida's Cancellation of Special Government District that Disney Controlled

From yesterday's decision by Judge Allen Winsor (N.D. Fla.) in Walt Disney Parks & Resorts U.S., Inc. v. DeSantis; I expect Disney will appeal (see also Adam Schulman's and Dilan Esper's analyses of this in April 2022, which proved prescient, and also my April 22 discussion of some alternative arguments):

In 1967, Florida's Legislature created the Reedy Creek Improvement District (RCID), a special improvement district in Central Florida. The district is perhaps best known as the home of Walt Disney World, which has operated there for decades. And as the district's largest landowner, Disney has effectively controlled the district's board, whose members were elected based on land ownership. That changed last year, after the Florida Legislature substantially amended the district's governing structure. Now, Florida's Governor selects the board members, subject to Senate confirmation. As a result, Disney no longer controls the special improvement district in which it operates. (That district is now called the Central Florida Tourism Oversight District, or CFTOD.)

This change—which works to Disney's significant detriment—came after Disney publicly criticized another Florida law, the Parental Rights in Education Act. In Disney's view, this timing was no coincidence. Disney alleges that the Florida Legislature changed the district's governing structure to punish it for its speech. The issue in this case is whether the Legislature's action constituted unlawful retaliation against Disney's speech in violation of the First Amendment….

"As a general matter, the First Amendment prohibits government officials from subjecting individuals to retaliatory actions after the fact for having engaged in protected speech." But it is settled law that "when a statute is facially constitutional, a plaintiff cannot bring a free-speech challenge by claiming that the lawmakers who passed it acted with a constitutionally impermissible purpose." The Eleventh Circuit has "held that many times." And this settled law forecloses Disney's claim.

In In re Hubbard (11th Cir. 2015), the Eleventh Circuit relied heavily on United States v. O'Brien (1968), a leading First Amendment precedent. The O'Brien plaintiff burned his Selective Service registration certificate to protest the Vietnam War.  Charged with violating a statute that prohibited knowingly destroying such certificates, he claimed the statute was unconstitutional because its purpose was to suppress free speech.  But the United States Supreme Court rejected his claim.  It noted the "hazardous" nature of inquiring into legislative motive, and it declined to void a statute "essentially on the ground that it is unwise legislation which Congress had the undoubted power to enact and which could be reenacted in its exact form if the same or another legislator made a 'wiser' speech about it." In other words, because Congress could have criminalized burning draft cards for a legitimate reason, the Court would not consider Congress's actual motivation. It would "not strike down an otherwise constitutional statute on the basis of an alleged illicit legislative motive."

The Eleventh Circuit applied that clear rule in Hubbard. After Alabama enacted a statute restricting payroll deductions for public-employee union dues, a public-employee union and others brought a First Amendment challenge. They contended the Legislature enacted the law to retaliate against the union plaintiff for its political speech. But on its face, the statute did "not implicate any constitutionally protected conduct," meaning it was facially constitutional. Plaintiffs' only basis for their claim was "the alleged retaliatory motive that Alabama's lawmakers had" in enacting the law. And that was "precisely the challenge that O'Brien, and [Eleventh Circuit] decisions following it, foreclose." More recently, in NetChoice, LLC v. Attorney General of Florida (11th Cir. 2022), the Eleventh Circuit reaffirmed the principle from O'Brien and Hubbard, explaining that "courts shouldn't look to a law's legislative history to find an illegitimate motivation for an otherwise constitutional statute."

A straightforward application of Hubbard resolves this case. As Disney appropriately acknowledges, the Legislature can determine the structure of Florida's special improvement districts. Disney does not argue that the First Amendment (or anything else) would preclude the Legislature from enacting the challenged laws without a retaliatory motivation. The laws here, as in Hubbard, do not facially "impinge on any constitutional rights." And as in Hubbard, the only basis for the claim here is that the Legislature had a retaliatory motive. So as in Hubbard, there is no "cognizable First Amendment claim." …

Disney argues that notwithstanding Hubbard, "courts frequently inquire into legislative motive to determine whether a facially constitutional statute was enacted for an impermissible purpose." But it relies on race and religion cases, as well as cases involving statutes designed to regulate speech. Those cases present different issues. See Hubbard ("Our discussion of the O'Brien rule is limited to the context before us: a free-speech retaliation challenge to an otherwise constitutional statute."). The fact that other types of claims allow evaluation of legislative purpose does not undermine Hubbard's application here. Cf. NetChoice (noting that although "in the free-exercise context, it was appropriate to look beyond 'the text of the laws at issue' to identify discriminatory animus against a minority religion[,] … NetChoice hasn't cited—and we're not aware of—any Supreme Court or Eleventh Circuit decision that relied on legislative history or statements by proponents to characterize as viewpoint-based a law challenged on free-speech grounds")….

Second, Disney contends that the challenged laws explicitly target it, making Hubbard inapplicable. The Hubbard principle does not apply when "a law is challenged as a bill of attainder." And although Disney does not challenge the laws as bills of attainder, it labels the laws "attainder-like" and seeks to squeeze into the exception.

Disney primarily relies on the Eleventh Circuit's earlier decision in Georgia Ass'n of Educators v. Gwinnett County School District (11th Cir. 1988), which allowed a First Amendment retaliation claim. But as Hubbard noted, the county's retaliatory action in Gwinnett County "explicitly single[d] out a specific group." The school board explicitly terminated automatic payroll deductions only for the "members of the Georgia Association of Educators … and its local affiliate, the Gwinnett County Association of Educators." "That fact made O'Brien inapplicable because the O'Brien rule applies only where the law at issue is 'constitutional on its face.'"

In other words, the Gwinnett County policy was not "constitutional on its face" because it explicitly singled out a discrete group. The law in Hubbard, on the other hand, was "constitutional on its face" because it did not. This was true even though the Hubbard plaintiffs claimed the law "was an unconstitutional act of governmental retaliation against [plaintiff] AEA for its past acts of political expression"—just as Disney claims that the laws here were an unconstitutional act of retaliation against it for its political expression. Thus, this case is like Hubbard and unlike Gwinnett County. See Hubbard ("The facts of [Gwinnett County] limit the holding of the decision to acts of governmental retaliation that explicitly single out a specific group.").

Disney also argues that even if the laws do not explicitly target it, they come close enough to warrant a Hubbard exception. But there is no "close enough" exception. A law either explicitly singles out a specific group or it does not, and the laws here do not. In arguing otherwise, Disney relies on Judge Posner's opinion in  Fraternal Order of Police Hobart Lodge No. 121 v. City of Hobart (7th Cir. 1988). But that case—in which a First Amendment retaliation claim failed because the challenged law did not single out anyone—only undermines Disney's position.

In Hobart, the mayor and city council had adopted an ordinance requiring city employees to work at least 40 hours weekly. The change made no difference to city employees who already worked regular hours, but "it made a big difference to Hobart's police." Police officers and their union sued, contending that the mayor and council adopted the ordinance in retaliation for the police's political opposition. Relying on the O'Brien principle, the court rejected the claim. It rejected an argument that the law "pinpointed" police, noting that "[n]o outside observer reading Hobart's 40-hour-a-week ordinance would suppose it directed against the police or any other definable group. It does not mention police …."  Here, similarly, no one reading the text of the challenged laws would suppose them directed against Disney. The laws do not mention Disney.

Disney is left to argue that we should go beyond the laws' text and see what they do in operation. The principal problem with this argument is that it ignores Hubbard's holding precluding retaliation claims against "facially constitutional" laws. But the secondary problem is that the laws' effects are not limited to Disney. The laws are directed at a special development district in which Disney operates. But as Disney acknowledges, it is not the district's only landowner, and other landowners within the district are affected by the same laws. As for SB 4-C (the earlier law), it applies to "any independent special district established by a special act prior to the date of ratification of the Florida Constitution," a category comprising Disney's district and at least several others.

It is true that the laws did not affect all districts, and it is true (at least accepting Disney's allegations) that Disney faces the brunt of the harm. But Disney offers no support for its argument that the court is to undertake line drawing to determine just how many others a law must cover to avoid "singling out" those they affect most. Here, it is enough to say—as in Hobart—that the law "challenged in this case is not pinpointed against a named individual or group; it is general in its wording and impact."

{Although Hobart applied the O'Brien rule to reject the First Amendment challenge, it also offered some practical considerations. Allowing such challenges would subject seemingly all legislation to invalidation by a federal court upon evidence that the legislation, though on its face concerned only with the most ordinary matters of governmental administration, had actually been intended to punish the legislators' political opponents, or reward the legislators' friends with largesse obtained by taxes on their enemies…. The expansion of judicial review of legislation would be breathtaking. Yet the enlargement of the marketplace of ideas would be slight—maybe nonexistent.} …

Third, Disney argues this case is unlike Hubbard and O'Brien because of the strength of the case—the clarity of the legislative purpose. Disney says that "[f]ar from seeking to ferret out some hidden or opaque retaliatory motive, Disney's retaliation claim rests on the clear, consistent, and proud declarations of the State leaders who urged enactment of SB 4C and HB 9B." But Disney cites no authority suggesting this is a meaningful distinction. To be sure, Hubbard points to evidentiary difficulties, discussing the likelihood of differing motives of the legislators. But the principle at issue "is founded not only on the difficulty of determining by forensic methods the motives of a collective body, but also on respect for the political process and on simple comity between departments of government." Regardless, nothing in Hubbard suggests it is inapplicable when there is significant—or even overwhelming—evidence of illicit motivation. It says instead that there is no cognizable claim. Period. "What we are saying is that, as a matter of law, the First Amendment does not support the kind of claim [plaintiff] makes here: a challenge to an otherwise constitutional statute based on the subjective motivations of the lawmakers who passed it."

At the end of the day, under the law of this Circuit, "courts shouldn't look to a law's legislative history to find an illegitimate motivation for an otherwise constitutional statute." NetChoice (citing Hubbard). Because that is what Disney seeks here, its claim fails as a matter of law….