City of Ashdown sues Netflix and Hulu

Texarkana Federal Courthouse

The City of Ashdown, Arkansas, filed a lawsuit last month accusing Netflix and Hulu of failing to pay fees for use of internet infrastructure in Arkansas municipalities.

Ashdown joins a growing number of local governments suing the popular streaming services. The suit filed Dec. 23 in the Texarkana Division of the Western District of Arkansas on behalf of Ashdown seeks to include other Arkansas municipalities as plaintiffs as a class action in the suit against the streaming services where either Netflix, Hulu or both has provided video service.

A similar suit was filed in the Texarkana Division of the Eastern District of Texas last year on behalf of New Boston, Texas.

The complaint accuses the video streaming services of failing to file an application with the Arkansas Secretary of State for a state certificate of franchise authority or SICFA prior to providing video service. The suit alleges Netflix and Hulu are operating in violation of the Arkansas Video Service Act.

The complaint argues that services like Netflix and Hulu should be making franchise payments equal to 5% of gross revenues received unless a different agreement has been negotiated with the city or municipality.

The complaint asks the court to declare that Netflix and Hulu are in violation of the law and for a judgment compensating Arkansas municipalities for the unpaid revenue and interest they claim is owed in Arkansas. The complaint also asks for attorney fees and costs.

The suit was filed on behalf of the City of Ashdown by Texarkana attorney Chad Trammell of the Trammell Piazza law firm. Other firms involved in the case include DiCello Levitt Gutzler of Chicago, Nix Patterson of Austin, and Schneider Wallace Cottrell of Houston.

The case is assigned to U.S. District Judge Susan O. Hickey.

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