The legal battle between Florida Governor Ron DeSantis and The Walt Disney Company escalates. The Florida Attorney General is asking the court to dismiss Disney’s lawsuit, arguing that the federal court has no jurisdiction. Yahoo Finance reporters Alexis Keenan and Alexandra Canal join the Live show to explain the latest legal developments and what they mean for Disney customers and investors.
JULIE HYMAN: We have an update on the ongoing dispute between 2024 presidential candidate Ron DeSantis and Disney. Florida governor’s attorneys filed a motion Monday to dismiss the Walt Disney company’s lawsuit against him. Here with more, Alexandra Canal of Yahoo Finance and Alexis Keenan. So Alexis, let’s start with you. What is the argument of DeSantis’ lawyers?
ALEXIS KEENAN: So what the lawyers say — and this is the Florida Attorney General coming in here on his behalf and on behalf of other Florida officials, and it relates to Disney’s federal case that was filed months ago and says that Florida lawmakers as well as DeSantis more or less got together to pass these laws and signed a series of state bills that strip Disney of its right to control a roughly 25,000-acre parcel of land around Orlando that houses Walt Disney World and other related properties.
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Now, this motion specifically asks the court to dismiss this federal case filed in Florida federal district court in Tallahassee. They say this case has no place in federal court, not in federal courts at all. They say there is immunity for DeSantis and any of the other officials named in this lawsuit.
As for federal court jurisdiction, they’re arguing — DeSantis is saying here that the court has no jurisdiction over them, that the 11th amendment in the Constitution protects them from these kinds of lawsuits that come after — in a federal capacity that’s after a state and state officials. On the other hand, the immunity angle here, DeSantis and the others argue that they should be immune because of legislative immunity. Quite an interesting argument there. DeSanti isn’t necessarily a legislator, but he says he’s acting… when he signed this bill into law, he was acting in a legislative capacity.
Separately, however, the new board that now controls this piece of land on which Disney World sits also has a lawsuit against…against the special district. They sued Disney, saying the company shouldn’t be able to go ahead and continue to rule this country. So kind of dueling lawsuits here.
BRAD SMITH: And Allie, what is the impact of this on Disney?
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ALEXANDRA CHANNEL: I think the impact will be different depending on the perspective you look at it. From a consumer perspective, the parks are fully operational. You can go to Disney. I don’t think you would realize anything was going on. But from the company’s perspective, the concern is that if Disney wanted to create more parks, if they wanted to build a different type of infrastructure, they would need the approval of the Oversight Committee, whereas before they could make these changes and whatever they savages, pretty seamless. So that’s a concern from a Disney perspective.
Now, from the employee’s perspective, I think they’re glad that Bob Iger has consistently spoken out against DeSantis. He has defended the company’s actions. He basically said, okay, doesn’t the state of Florida want us to invest in the state of Florida? Disney has plans to invest $17 billion over the next 10 years to create 13,000 jobs. And you could say that was the downfall of Bob Chapek. That’s where this all started. He initially chose not to speak out on this issue, and that caused this ripple effect that eventually led to Bob Iger returning.
From an investor’s perspective, it doesn’t really seem to matter, does it? The stock is flat. Positive territory at the moment. We just got two buy ratings, echoing the buy ratings from Bank of America and Guggenheim this morning. So I think unless we see some fundamental impact on Disney’s bottom line, nothing is going to affect the stock price. But I do think that this — these are lawsuits that are going to take — it’s going to take a lot of time before we come to a conclusion on all of this.
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JULIE HYMAN: Right, it feels more like a kind of culture war than doing anything that will affect the company. But I think we’ll see. Thanks guys for keeping us up to date on this lawsuit. We’ll see how it turns out in the end. Alice and Alexis. You’re looking at Yahoo Finance.