Simeone v. Walt Disney Co.

Florida House Bill 1557 (HB 1557) limited instruction regarding sexual orientation and gender identity in Florida classrooms. The Walt Disney Company (Disney) (defendant), one of Florida’s largest employers, declined to take any public position on the bill. Disney’s employees and affiliates heavily criticized that decision. At Disney’s annual stockholder meeting, CEO Robert Chapek acknowledged the discontent and stated that Disney would oppose the bill and similar legislation. On March 28, the same day Florida’s governor signed HB 1557 into law, Disney issued a public statement opposing the bill. Florida’s legislature responded by dissolving a special tax district that encompassed the Walt Disney World Resort, increasing Disney’s tax liability and reducing its self-governance of the area. Disney’s stock price dropped significantly. A lawyer at a public-interest law firm solicited longtime Disney shareholder Kenneth Simeone (plaintiff) to serve Disney, a Delaware corporation, with a demand to inspect corporate books and records under Delaware Code Title 8, § 220. The demand expressed concern that Disney’s directors and officers might have breached their fiduciary duties to the corporation and its shareholders by opposing HB 1557 without regard for potential consequences. To investigate potential wrongdoing and mismanagement, the demand sought, among other things, minutes from board meetings and emails between the Disney directors discussing relevant events over a three-year period. Disney stated that the demand was invalid because it lacked a proper purpose. Nevertheless, Disney provided certain redacted policies and board minutes to Simeone. Simeone then sued Disney under § 220 to compel an inspection of books and records. As events unfolded, it became clear that Simeone had little involvement in making the original demand or filing the suit. Instead, the soliciting lawyer made the filings, and her firm advanced all costs. The Delaware Court of Chancery considered whether to grant the inspection petition.