Shareholder Lawsuit: Judge Rules Disney Executives Acted Appropriately in Response to “Don’t Say Gay” Law

A ruling handed down by Judge Lori Will says that Disney executives were not negligent and did not act in bad faith when crafting the Company’s response to HB 1557 – the “Don’t Say Gay” bill.

In a lawsuit by longtime Disney stockholder and Kissimmee resident Kenneth Simeone, Simeone was seeking vast access to Disney’s books and records to try and prove that Disney directors and officers breached their fiduciary duties by opposing the “Don’t Say Gay” law. Disney ultimately provided redacted minutes from Board meetings showing that not only did they not act in a grossly negligent or bad faith manner, but that they held special meetings to discuss Disney’s response to the bill.

Judge Will said that the plaintiffs’ disagreement with Disney’s position on HB 1557 does not amount to wrongdoing by the Company.

Furthermore, Judge Will found that the lawsuit was “lawyer-driven” by the Thomas More Society – a conservative Roman Catholic public-interest law firm based in Chicago. Additional background reveals that the Thomas More Society has routinely engaged in culture war issues and even attempted to overturn the 2020 election.

Tangentially, Judge Will wrote that “Disney’s opposition to HB 1557 prompted Florida politicians to consider revoking Disney’s ability to self-govern its lands within the Reedy Creek Improvement District (RCID)”. Disney is currently involved in a federal lawsuit that is attempting to show exactly what Judge Will has offered in the opinion in the shareholder lawsuit. That is, the actions taken by Florida Governor Ron DeSantis and Florida lawmakers were retaliatory for Disney’s protected free speech under the First Amendment. Judge Will noted that DeSantis said that Disney “shouldn’t get involved” with HB 1557 because “it’s not going to work out well” for the company. Yesterday, DeSantis asked a federal judge to delay Disney’s First Amendment lawsuit until after the presidential election cycle.

Ultimately, Judge Will ruled that there was “no indication that the directors suffered from disabling conflicts” and that “far from suggesting wrongdoing, the evidence here indicates that the Board actively engaged in setting the tone for Disney’s response to HB 1557”. Judge Will said that “The Board did not abdicate its duties or allow management’s personal views to dictate Disney’s response to the legislation. Rather, it held the sort of deliberations that a board should undertake when the corporation’s voice is used on matters of social significance”.

Judge Will ruled in favor of Disney.

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