Last week, Orange County Superior Court Judge William Claster ruled that a 2018 Anaheim ballot measure requiring businesses that receive a city tax subsidy does not apply to the Disneyland Resort, pointing to how Measure L – which was written and placed on the ballot by the Coalition of Resort Labor Unions (CRLU) – defined a tax subsidy.

In his ruling, Judge Claster stated it was a simple question of whether the 1996 Resort bonds – which financed the construction of the Mikey & Friends parking structure – constituted a “City subsidy” as defined in the union-written Measure L.

Given the plain language of Measure L, Claster ruled the only way he could – against the CRLU.

The Resort unions coalition denounced Judge Claster’s adherence to the language they authored as “hyper-technical” and  vowed to appeal the ruling.

Backgrounder

In 2015, the Anaheim City Council adopted a policy to incentivize the construction of 4-Diamond hotels by offering provide an annual rebate to new luxury hotels equivalent to 70% of the Transient Occupancy Tax (TOT) generated by the hotel; this assistance would continue to 20 years.

Wincome Hospitality announced plans for two luxury properties under this policy (one, the Westin Anaheim Resort, opened several months ago), while Disney unveiled plans for a 700-room, 4-Diamond hotel under the policy.

Disney also announced an agreement with the city to invest $2 billion in the Resort; part of that agreement included a multi-decade extension of the existing de facto moratorium on imposing a gate or “entertainment” tax on the Disneyland Resort.

In spring of 2018, the CRLU – led by the militant UNITE-HERE Local 11 – qualified a ballot measure (Measure L) to impose dramatic hourly wage increases on any Anaheim Resort business receiving economic assistance from the City of Anaheim: $15 beginning January 1, 2019, with annual dollar increases through 2022.

The unions defined the triggering subsidies as follows:

A “City Subsidy” is any agreement with the city pursuant to which a person other than the city has a right to receive a rebate of transient occupancy tax, sales tax, entertainment tack, property tax or other taxes, presently or in the future, matured or unmatured.”

The language was clearly directed primarily at Disney – which responded (much to the surprise of the Resort unions) by canceling both the 4-Diamond hotel and the gate tax moratorium agreement (although the company kept its multi-billion investment commitment). That way, if Measure L passed, it would not apply to Disney.

While Measure L narrowly passed, the flummoxed Resort unions groused about being outmaneuvered by Disney. Their response? Try to get the courts to re-write Measure L to apply to the Disneyland Resort.

In December 2019, the CRLU launched a class-action lawsuit against Disney (and a company that operates two Starbucks in the park), ignoring the language of their own initiative and claiming Measure L does apply to Disney based on the convoluted theory that the 1996 bonds that funded the creation of the Anaheim Resort – including the Mickey and Friends parking structure – constitute tax rebates to Disney.

Judge Claster Rules Against Resort Union Doublespeak

The outcome of the suit was never really in doubt. The CRLU was in the position of arguing that the initiative it’s lawyers wrote didn’t really say what it said. If the Resort unions had intended to include the 1996 Resort bonds in a definition of a “city subsidy,” they would have done so.

Disney issued a statement applauding the ruling:

“We have always been committed to fair and equitable pay for our cast members, but have always agreed with the Anaheim City Attorney’s conclusion that Measure L does not apply to the Disneyland Resort. We are pleased the court has confirmed that position.”

“While we never want to see a dispute like this play out in court, we appreciate the judge’s determination,” said City of Anabheim spokesman Mike Lyster. “It validates what we already knew and have said – the city of Anaheim does not provide any rebate or subsidy to Disney.”

It’s worth noting that a few months before the CRLU lawsuit was filed, Disneyland cast member and UNITE-HERE Local 11 executive board membewr Glyndanna Shevlin spoke at the March 19, 2019 Anaheim City Council meeting abiout how Measure L had improved her life as a Disney cast member. Shevlin, who was the pubcli face of the Measure L campaign, told the councilmembers:

“Measure L was a very big thing for me. It made me have a living wage and I now have a home. The last three years prior – I was homeless. But now I have a good living wage.”

Of course, Shevlin is being disingenuous, since Measure L does not apply to the Disneyland Resort (as Judge Claster subsequently ruled).

The point is the Resort unions are making contradictory claims. On one hand, you have UNITE-HERE Local 11 leaders, members and their attorney claiming Disneyland must adhere to Measure L but is failing to do so.

On the other hand, you had a Local 11 leader, spokesperson for Measure L and Disneyland cast member claiming that she got an increase to a “living wage” and has a home because of Measure L.

So which is it? UNITE-HERE and the CRLU can’t have it both ways. They can’t have a Measure L spokesperson and Disneyland employee says Measure L raised her pay, and then turn around and sue saying Disneyland isn’t raising cast members by according to Measure L.

That kind of doublethink may fly with Resort union apologists, but clearly flopped in the courtroom of Judge Claster.