Officials Argue Positions on Detention of Streaming Lawsuits in Texas | KLBK | KAMC

Officials Argue Positions on Detention of Streaming Lawsuits in Texas |  KLBK |  KAMC

DALLAS, Texas (KAMR/KCIT) — The power utilities that are defendants in a lawsuit involving a number of Texas cities, including the city of Amarillo, are responding to the cities’ request that the lawsuit be moved back to state court from federal court.

According to previous reports from, more than 20 Texas cities have filed lawsuits against Netflix, Disney and Hulu, alleging that the streaming entities failed to pay required municipal franchise fees to the cities, the process outlined in the Texas Public Utility Regulatory Act, or PURA .

The attorneys representing the companies filed a notice of removal, moving the case to the United States District Court for the Northern District of Texas Dallas Division. According to previous reports, the attorneys representing the cities are asking that the lawsuit be sent back to state court, arguing that the central issue in the case is the interpretation of state statutes.

“Texas state courts should be given the opportunity to interpret their own laws,” the brief in support of a motion to remand states. “Under the comity doctrine, the Court should decline to involve itself in the tax matters of Texas local governments and should remand the case to state court.”

In the companies’ response, filed in late October in Dallas Federal Court, they said the requirements to move this case to federal court “are easily met.” Through this response, the companies claim that the cities are relying unsuccessfully on previous cases that “abused comity abstention on claims for the collection of franchise fees.”

According to previous reports, the Legal Information Institute at Cornell Law School defines comity as a rule by which courts should respect the laws and judicial decisions of other jurisdictions. Because of this, the doctrine of abstention states that federal courts should not rule on a state law until a state court has the chance to do so.

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The companies also cite the case “City of New Boston v. Netflix, Inc.,” a case they say is “substantially similar” to the current franchise fee lawsuit that was “fully and finally disposed of on September 30, 2021, and resolved in favor of (the) defendants.” Officials stressed that the cities waited a year after that case by filing a “duplicative action in state court in violation of the federal court’s order.”

“The basis for the court’s ruling i The City of New Boston was that Texas cities like the plaintiffs here do not have standing under PURA against entities such as Netflix, Hulu and Disney+ that are not holders of state-issued certificates of franchise authority,” the documents state, “because[Texas Public Ultimity Commission]through the Attorney General, is the body to determine who shall be the holder of such a certificate and to enforce compliance if a party erroneously failed to apply for a certificate.'”

Attorneys for the companies said in the filings that they believe the cities are “clearly forum shopping and attempting to circumvent the well-reasoned ruling of this court’s colleagues in the Eastern District of Texas.” They finally ask that the court deny the motion on remand and request an oral argument on the cities’ motion.

As of Thursday, a formal request was filed by the cities to remand the case to state court, since the previous document filed was a memorandum in support of a motion to remand. The companies once again raised their opposition to a motion for remand. The motion has since been referred to United States Magistrate Judge David L. Horan for a hearing. No decision has been made on the move since this story was published.

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