The City of Reno last year filed a lawsuit against Hulu and Netflix. It claimed the streaming video companies owed the city money under a 2007 Nevada law.
“Defendants operate and provide their video service to Defendants’ subscribers through wireline facilities located at least in part in the public right-of way,” city attorneys argued as part of a class action suit. “As video service providers, Defendants were required to apply for and obtain a certificate of authority from the Secretary of State of Nevada for the areas in which they sought to provide video service before providing that service in those areas.
“Defendants failed to apply for, and therefore never received, certificates of authority from the Nevada Secretary of State and therefore have been and continue to provide video service throughout Nevada without legal authorization, and in contravention of Nevada law.”
The failure to do so, the city alleged, meant the city was not getting 5% of gross revenues for a franchise fee.
Not so fast, federal Judge Miranda Du said.
“If the Nevada Legislature intended for there to be such a right, the Court agrees with Hulu that the Legislature would have done so,” she wrote.
Du further said the City of Reno does not have a right to enforce the alleged franchise fee.
“The Court finds for the reasons stated herein and in recognizing the public policy reasons for uniformity, the Nevada Legislature intended the State via the Office of the Attorney General to enforce actions, remedies, and penalties for violation of the provisions of the chapter,” she wrote.
She dismissed the city’s case. City Attorney Karl Hall, however, wants the Reno City Council to approve an appeal. The Reno City Council is scheduled to hear the item at Wednesday’s meeting.
The city filed the suit “on behalf of other Nevada cities and counties [seeking] to require Defendants to abide by Nevada law and pay what they owe to these cities and counties.”
The city hired local law firm Shook & Stone for the case. The firm was joined by others around the country and incurred their own expenses in the case, according to a contract on the city’s website.