California's 2nd Appellate District Court upheld a lower court's dismissal of a Lancaster, California, suit seeking video service provider franchise fees from Netflix and Hulu (see 2112230003). In an opinion last week, a three-judge panel said the state's Digital Infrastructure and Video Competition Act lets local governments sue a franchise holder for unpaid franchise fees, but it doesn't authorize their seeking franchise fees from non-franchise holders. The state Public Utilities Commission and not Lancaster is responsible for enforcing issues related to the issuance of a video service franchise, the appellate court said. Deciding were Judges Luis Lavin, Lee Smalley Edmon and Anne Egerton, with Lavin writing the decision.
Neither the current definition of "video service" under Illinois state law nor the modified language taking effect in 2024 entitles East St. Louis to franchise fees from streaming services, the 7th U.S. Circuit Court of Appeals ruled Friday (docket 22-2905) in the city's appeal of dismissal of its suit against numerous streamers (see 2209230059). The 2024 language "makes pellucid what most readers of the older definition would have understood: content streamed over the Internet is outside the scope of this regulatory system," the three-judge panel said, upholding the dismissal by U.S. Magistrate Judge Mark Beatty. The panel also rejected the streamer defendant-appellees use the public right of way for communication, ruling if "phone calls over landline cables, electricity over wires, and gas routed through pipes are not trespasses on the City’s land -- and they are not -- neither are the electrons that carry movies and other videos." And it rejected city arguments about a municipal law barring resale of cable TV services, saying over-the-top streamers don't do that. Deciding were 7th Circuit Judges Frank Easterbrook, David Hamilton and Doris Pryor. Oral argument was in September (see 2309120039).
The 7th U.S. Circuit Court of Appeals has jurisdiction to review in a case on whether East St. Louis and other Illinois cities are entitled to franchise fees from streaming TV providers (case 22-2905), Netflix and other streamers said Tuesday. The appellees responded to a concern Judge Frank Easterbrook raised at oral argument earlier this month (see 2309120039). Easterbrook said there might not be diversity jurisdiction because Warner Media Direct is owned by AT&T Capital Services, which is based in Illinois where the complaint was first filed. The appellees conceded that’s the case and said they “withdraw any contention that diversity jurisdiction independently exists under Section 1332(a)” of the 2005 Class Action Fairness Act. They amended their jurisdictional statement to show how the court can act without needing to establish diversity jurisdiction. "The federal courts have subject-matter jurisdiction over this action under the" Fairness Act "because this putative class action involves minimally diverse parties, at least 100 class members, and an amount in controversy exceeding $5,000,000,” the streamers said. A local controversy exception in Section 1332(d)(4) "provides no basis to 'decline to exercise' jurisdiction for two independent reasons,” they said. No defendant is a citizen of the state where the action was first filed, under the meaning of Section 1332(d)(10), said the appellees: WarnerMedia Direct "is a citizen only of New York (its principal place of business) and Delaware (under whose laws it is organized)." Another reason the local controversy exception doesn't apply is that there have been many other class actions by different groups of cities asserting similar factual allegations against multiple defendants around the U.S., said the streamers: The 7th Circuit declined to apply the exception in a similar situation last year in Schutte v. Ciox Health.
Pikesville, Kentucky, is appealing to the 6th U.S. Circuit Court of Appeals the dismissal earlier this month of its lawsuit against Altice over cable service quality, it told the U.S. District Court for the Eastern District of Kentucky in a notice of appeal last week (docket 7:22-cv-00064). The city sued claiming quality of service by Suddenlink declined after Altice bought the cable ISP. In granting the defense's motion to dismiss, District Judge David Bunting said the city didn't provide concrete allegations of Suddenlink's failure to maintain the level of service required by its cable franchise agreement with the city. It said only Suddenlink signed the franchise agreement with Pikesville, and state law prohibits holding parent company Altice liable for breach of the franchise agreement.
The 8th U.S. Circuit Court of Appeals affirmed a lower court decision to grant summary judgment to Northern Valley Communications on Venture Communications Cooperative's claim the provider falsely reported information in its Form 477 and harmed Venture's ability to receive FCC Alternative Connect America Model (ACAM) support. The court rejected Venture's arguments, in a decision posted Thursday in case 22-2129, echoing the district court's ruling that "Venture’s claim of intent to injure is belied by Northern Valley helping Venture by filing a letter with the FCC clarifying that Northern Valley did not offer voice service" in the census blocks where both South Dakota providers provided service.
The 7th U.S. Circuit Court of Appeals set Sept. 12 oral argument in City of East St. Louis v. Netflix (case 22-2905), the court said in a text entry Thursday. The city seeks video franchise fees from the streamer. The hearing starts at 9:30 a.m. CDT in Chicago.
The 29 plaintiff Texas cities seeking to force Disney, Hulu and Netflix to pay franchise fees for the video programming they provide through wireline facilities in the public rights-of-way (see 2304120051) seek leave to add the Texas cities of Cedar Park and Farmers Branch as additional plaintiffs in a second amended complaint, said their unopposed motion Tuesday (docket DC-22-09128) in the 14th Judicial District Court in Dallas. Under the Texas government code, adding the two new plaintiffs required the approval of the Office of the Texas Attorney General, which gave its OK April 6, said the motion. The plaintiffs seek further leave for the second amended complaint to exceed the 25-page limit by 10 pages, “nine pages of which are signature block and one page of which is primarily the case caption,” it said.
A Jan. 9 trial is set in the lawsuit by 29 Texas cities to force Disney, Hulu and Netflix to pay video service franchise fees (see 2304120051), said a proposed scheduling order Monday (docket DC-22-09128) in the 14th Judicial District Court in Dallas. The proposed order calls for fact discovery to close by Sept. 27 and for expert discovery to be done by Nov. 22. The plaintiff cities allege the Texas Public Utility Regulatory Act requires anyone who seeks to provide video programming through wireline facilities located at least partly in the public right-of-way in Texas to obtain a franchise and pay the cities a franchise fee.
The 8th U.S. Circuit Court of Appeals backed a lower court decision to remand Creve Coeur, Missouri's lawsuit against DirecTV and Dish Network to state court. In a docket 21-3090 decision Thursday, the appellate court said defendant-appellant DirecTV's motion to move the case again to federal jurisdiction based on a state court's 2020 ruling, while "creative," is "without merit." It said that ruling tackled whether the Video Services Providers Act is fee or a tax, but it didn't raise new issues of removability and thus DirecTV has no basis for a second removal -- the case having been remanded from state court to federal court once before. Deciding were Judges James Loken, Duane Benton and Jonathan Kobes, with Loken penning the decision. Counsel for DirecTV didn't comment. The Missouri community is seeking fees from the DBS operators under the state VSPA.
The 3rd U.S. Circuit Court of Appeals should ask the New Jersey Supreme Court to clarify whether the state's municipalities have an implied private right of action to bring an action to claim unpaid franchise fees under the state's Cable TV Act (CTA), plaintiff-appellant New Jersey communities Longport and Irvington told the 3rd Circuit in a reply brief Wednesday (docket 22-2139). They are appealing a U.S. District Court's dismissal of their suit seeking franchise fees from Netflix and Hulu under CTA (see 2206170061). The plaintiffs said they aren't seeking a court rewrite of CTA or challenging the state Board of Public Utilities' regulatory authority but want recognition of the rights of municipalities to enforce a statute that is specifically for their benefit. They said the lower court didn't fully consider the narrow relief they seek or their unique position under the state's constitution. Counsel for the streaming service appellees didn't comment Thursday.