By Dawn Chmielewski and Tom Hals
LOS ANGELES/WILMINGTON, Delaware (Reuters) -A U.S. judge on Wednesday dismissed Walt Disney (NYSE:DIS) Co's lawsuit against Florida Governor Ron DeSantis and members of a state board for allegedly using the state to punish the company for voicing an opinion protected by free-speech rights.
Disney had sued in April 2023, arguing that Florida's government was retaliating after the company criticized state limits on classroom discussion of sexuality. DeSantis and other defendants had urged the case be dismissed, saying Disney could not sue them over constitutionally enacted state laws.
In his ruling, U.S. District Judge Allen Winsor in Tallahassee, Florida, said Disney lacked standing to sue the governor or the secretary of commerce.
Winsor, who was nominated by then-President Donald Trump in 2019, also knocked down Disney's free-speech claims.
He said that, while the First Amendment prohibits government officials from retaliating against protected speech, a plaintiff - in this case, Disney - cannot bring a free-speech challenge to an otherwise constitutional law based on the subjective motivations of the lawmakers who passed it.
A Disney spokesperson said: "This is an important case with serious implications for the rule of law, and it will not end here.
"If left unchallenged, this would set a dangerous precedent and give license to states to weaponize their official powers to punish the expression of political viewpoints they disagree with. We are determined to press forward with our case."
DeSantis' press secretary, Jeremy Redfern, applauded the ruling.
"The federal court’s decision made it clear that Governor DeSantis was correct: Disney is still just one of many corporations in the state, and they do not have a right to their own special government," Redfern said in statement. "In short - as long predicted, case dismissed."
The sentiment was echoed by Central Florida Tourism Oversight District board Chairman Martin Garcia, who said, "I'm delighted that this lawsuit, which was nothing more than a distraction, is now behind us."
The dispute began after Disney last year criticized the classroom ban on discussions of gender identity and sexual orientation, dubbed the "Don't say gay" law by opponents.
DeSantis began repeatedly attacking what he termed "woke Disney" in public appearances as he geared up for his campaign for the Republican presidential nomination, an effort he abandoned earlier this month.
State lawmakers stripped Disney of its control over the special development district that since 1967 had given the company virtual autonomy around its theme parks, including the Walt Disney World Resort.
The newly formed, DeSantis-appointed district, known as the Central Florida Tourism Oversight District board (CFTOD), then voided contracts that Disney had pushed through just before the prior board was replaced.
Disney responded by suing the governor and board members.
Judge Winsor rejected Disney's claim against DeSantis and the state's Secretary of Commerce. He found that the company failed to demonstrate that DeSantis has "actual control" over the board, and "struggled to articulate an injury" caused by the secretary.
He noted that since the supervisors have already been appointed, Disney would face the same situation it faces now if the court enjoined future appointments. "It would be operating under the control of the CFTOD board, over which it has no control."
The new board has separately asked a state judge to declare prior agreements, which were favorable to Disney and limited board action for decades, improper and void. That case is still pending.
Disney allegedly gave the previous board and its employees millions of dollars' worth of tickets, discounted hotel stays, and other benefits that were "akin to bribes of public officials," according to a report issued by the new board in early December.
Disney shares ended down 0.9% at $96.05 a share on Wednesday.