A Missouri township's efforts to collect fees from Netflix, Hulu, Dish, and DirecTV is headed to a St. Louis circuit court after a federal judge on Tuesday granted a remand motion from the City of Creve Coeur, Missouri.
Creve Coeur is attempting to enforce a local ordinance requiring video service providers fork over five percent of their gross revenues. These franchise fees have typically been applied on cable operators, but as Missourians have shifted their entertainment consumption habits, towns like Creve Coeur are eyeing subscription-based streamers to raise needed money for government services.
In 2018, Creve Coeur filed a class action on behalf of itself and other cities in Missouri with the allegation that Netflix and Hulu were shirking their fee obligations. Subsequently, Netflix and Hulu had the case removed to federal court.pointed to Missouri's passage in 2007 of the Video Services Providers Act"Netflix does not provide video programming," argued the streaming giant.
Netflix would surely prefer to appear in federal court to argue that local municipalities are unfairly attempting to impose fees on a global digital service. Unfortunately for the company, U.S. District Court Judge Ronnie White refuses to exercise jurisdiction under the Class Action Fairness Act despite at least 100 municipalities in Missouri with a stake in the outcome. Creve Coeur argued that the doctrine of comity required the federal court back off on state taxation of commercial activity.
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