The City of New Boston, Texas, filed suit in Texarkana, Texas, federal court Tuesday against Netflix and Hulu.
The complaint seeks certification as a class action lawsuit on behalf of all Texas municipalities. According to the complaint, the streaming services should be paying 5% of their gross revenues in the city to the city. The city’s complaint states that both Netflix and Hulu failed to file an application with the Texas Public Utilities Commission for a state-issued certificate of franchise authority as mandated.
The suit asks for class action certification that would include all Texas municipalities where either Netflix or Hulu have provided service.
According to the complaint, Netflix and Hulu use “broadband wireline facilities located at least in part in public rights-of-way” and are subject to liability for the fees for using local infrastructure.
The case is assigned to U.S. District Judge Robert Schroeder III in the Texarkana Division of the Eastern District of Texas.
Netflix and Hulu have not yet filed responses to the city’s lawsuit.