DALLAS, Texas (KAMR/KCIT) — The streaming entities who are defendants in a lawsuit involving a number of Texas cities, including the city of Amarillo, are responding to the cities’ request for the lawsuit to move back to the state court from federal court.
According to previous reports by MyHIghPlains.com, more than 20 Texas cities have filed a lawsuit against Netflix, Disney and Hulu, alleging that the streaming entities did not pay required municipal franchise fees to the cities, the process of which is laid out 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 requesting the litigation to be remanded back to state court, arguing that the central question in the case is the interpretation of the state’s statute.
“Texas state courts should be given the opportunity to construe their own statutes,” the memorandum in support of a motion to remand stated. “Under the comity doctrine, the Court should decline to embroil itself in the fiscal affairs of Texas local governments and should remand the case to state court.”
In the response from companies, filed in late October in Dallas Federal Court, they said that the requirements to move this case to federal court have “easily been met.” Through this response, the companies claim that the cities unsuccessfully rely on past cases that “misapplied comity abstention to franchise fee collection claims.”
According to previous reports, the Legal Information Institute at Cornell Law School defines comity as a rule where courts should respect laws and judicial decisions of other jurisdictions. Because of this, the abstention doctrine says that federal courts should not rule on a state law before a state court has the chance to do so.
The companies also cite the case “City of New Boston v. Netflix, Inc.,” a case which they say is “substantially similar” to the current franchise fees-related lawsuit that was “fully and finally adjudicated on Sept. 30, 2021, and resolved in favor of (the) defendants.” Officials stressed that the cities waited a year after this case to file a “duplicative lawsuit in state court in contravention of the federal court’s ruling.”
“The basis of the court’s ruling in City of New Boston was that Texas cities like Plaintiffs here do not have a right of action under PURA against entities like Netflix, Hulu and Disney+ that are not holders of state-issued certificates of franchise authority,” the documents read, “because the ‘[Texas Public Ultimity Commission], through the attorney general, is the body to determine who should be a holder of such a certificate and to enforce compliant if a party improperly failed to file for a certificate.'”
The attorneys with the companies said in the documents that they believe the cities are “clearly forum shopping and attempting to skirt the well-reasoned ruling of this Court’s colleagues in the Eastern District of Texas.” They ultimately ask for the court to deny the motion to remand and request an oral argument on the cities’ motion.
As of Thursday, a formal request was filed from 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 resubmitted their opposition to a motion to 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 motion as of this story’s publication.