Oh, this is going to be fun.
The City of Beaumont is suing Netflix, Hulu, and Disney for failure to pay franchise fees.
At Tuesday’s city council meeting, the city attorney was officially authorized to file the lawsuit.
The city alleges that the companies violated the 2005 Texas Video Service Providers Act, according to a public notice published last week.
“The city’s desired outcome in pursuing the litigation is to recover from the VSPs damages owed to the city for failure to pay franchise fees and obtain an order requiring the VSPs to pay the franchise fees going forward,” the public notice stated.
This is not a nationwide law, City Attorney Sharae Reed said. It is Texas specific, and to her knowledge, Netflix, Hulu and Disney are not paying the franchise fees to any cities in Texas.
“I’m not privileged to say what other cities are doing, but I am aware of some other cities who are in a class action lawsuit,” Reed said. “It’s each city filing their own individual lawsuits, and then we’re coming together.”
All three companies are expected to vigorously oppose the charge, so the city is hoping to employ highly-skilled lawyers on the case. Beaumont intends to work with three law firms on the lawsuit — McKool Smith, P.C., Ashcroft Sutton Reyes LLC, and Korein Tillery LLC.
Should the lawsuit prove successful for the city, recovered franchise fees will be used to pay for essential municipal services going forward.
I mean, I think the odds of this succeeding are pretty low. I Am Not A Lawyer, but I am a guy who has some insight into how this kind of lawsuit tends to play out in this state. If nothing else, the AG’s office tends to jump in front of a parade like this when it’s viable. But maybe I’m wrong, and maybe a bunch of other cities will look at this and think “we gotta get in on that”. Any real lawyers out there who want to tell me if I’m off base or not, please do so.