DALLAS, Texas (KAMR/KCIT) — After a streaming-related lawsuit involving a number of Texas cities, including Amarillo, was moved to Dallas Federal Court, the 25 Texas cities involved in the case are asking that it be moved back to the jurisdiction of the state court.
According to previous reports by MyHighPlains.com, the legal team representing the 25 Texas cities filed a lawsuit against Netflix, Disney and Hulu in August, alleging that the platforms did not pay the cities’ municipal franchise fees laid out in the Texas Public Utility Regulatory Act.
Under the act, which is shortened to PURA, the lawsuit alleges that streaming services are required to pay these municipalities a franchise fee if the programming is delivered over “wireline facilities located at least in part the public right of way,” which entities say include utility poles over streets, along sidewalks or beneath roads, according to previous reports.
In late September, the attorneys representing the three defendants in the case filed a notice of removal to move the case to the United States District Court for the Northern District of Texas Dallas Division. With this move, the cities filed a memorandum on Sept. 30 in support of a motion to remand the case back to Texas State Court, where the lawsuit initially started.
According to the documents, filed in Dallas Federal Court, officials said five similar cases in Georgia, Illinois, Indiana, Louisiana and Missouri were remanded back to state court after the streaming service defendants initially removed the case to federal court. Officials said in the documents this was based on the common law abstention doctrine of comity.
According to the Legal Information Institute at Cornell Law School, comity surrounds the enforcement of judgments between states. The website states that comity is 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 plaintiffs’ legal team is claiming that the defendants’ case for federal jurisdiction on this case is weak, with the Supreme Court ruling that “disputes concerning jurisdictions collecting revenue belong in state court under the comity abstention doctrine.” Officials said the Supreme Court has “consistently reaffirmed” this doctrine since at least 1870.
“Just as the cases in the five jurisdictions mentioned above will turn on the reach of their respective state law franchise fee statutes, this action will turn on an interpretation of PURA,” the documents read. “Plaintiffs allege that state law requires Defendants to pay these fees, and Defendants will argue it does not. The dispute squarely implicates Texas’s state and local fiscal operations. The local nature of this dispute is an inescapable obstacle to removal, and the case should be remanded.”
Officials went on to say that the central question in the case is the interpretation of the state’s statute “squarely in the realm of local government finance,” stressing that no state trial or appellate court has weighed in on PURA’s applicability streaming services.
“This case is about the proper interpretation of a Texas state statute impacting fiscal obligations owed by Defendants to Plaintiff-Texas municipalities should be decided by Texas’s state courts,” the documents read. “…In this case, where there is no existing state court guidance, and considering the required sensitivity this Court must show to federal-state relations, Texas state courts should be given the opportunity to construe their own statutes. 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.”
According to court documents filed earlier this month, the judge granted a motion in this case filed by Disney, Hulu and Netflix for an extension for the entities to file a response against the plaintiffs’ motion to remand the case to state court. The deadline set by the judge is now Monday.
This is a developing story. MyHighPlains.com will update this article as new information becomes available.
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