Ill. Federal Court Dismisses Right-of-Way Fee Suits Against Streaming Networks

According to a 28-page opinion authored by Magistrate Judge Mark A. Beatty, defendants Netflix, Disney, Apple, Hulu, Amazon, CBS, YouTube, CuriosityStream, Peacock TV, DirecTV, and Dish Network are off the hook in a class action brought by the City of East St. Louis, Ill. alleging state video registration and fee law violations. The court found that the state’s 2007-enacted Cable and Video Competition Law (CVCL) does not provide a private right of action, ending the city’s case for good barring appeal.

The decision follows a long procedural history for this case and a related one brought by fellow Illinois municipality the Village of Shiloh, which recently secured remand from the same judge in its case against the streaming platforms. After remand, however, the state court stayed the case pending resolution of East St. Louis’s suit, which was voluntarily filed in federal court.

The municipalities accused the defendants, who offer internet-based streaming to their customers, of “providing video service using the public rights-of-way without first obtaining authorization from the Illinois Commerce Commission and without paying the requisite fees to municipalities.” The instant suit’s complaint also stated causes of action for trespass, unjust enrichment, and violation of a state law titled “unlawful resale of cable service.”

Judge Beatty explained that though the defendants leveled a litany of arguments at the city in favor of dismissal, the private right of action issue was dispositive. As it was a question of first impression, the court stepped into the shoes of an Illinois state court in answering it, guided by state principles of statutory interpretation.

The opinion found no express right of action in the CVCL. “The statute did not contemplate suits such as the instant case to compel video service providers who are non-holders to apply for a state-wide authorization under the CVCL or to comply with the CVCL’s requirements,” Judge Beatty summarized.

Further, the court found no implied right of action. “It does not make sense that the legislature would leave enforcement decisions to the whims of any and all of the more than a thousand municipalities in the State of Illinois, as Plaintiff contends,” the court wrote.

As to the plaintiff’s trespass claims, the court said the law did not apply to instances where there was no physical intrusion. Judge Beatty sided with the defendants in finding that the Internet is “incapable of taking up any physical space that could conceivably interfere with Plaintiff’s exclusive possession of the public right-of-way.”

East St. Louis is represented by Chatham & Baricevic Law Firm, The Driscoll Firm LLC, Smouse & Mason LLC, and Milberg Coleman Bryson Phillips Grossman PLLC.

Amazon is represented by Gibson Dunn & Crutcher, Apple by Winston & Strawn and McDermott Will & Emery, DISH Networks by Berliner Corcoran & Rowe, Steptoe & Johnson LLP, and Armstrong Teasdale LLP.

Netflix is represented by Latham & Watkins and Armstrong Teasdale, Hulu and Disney by Bryan Cave Leighton Paisner LLP and Wilson Sonsini Goodrich & Rosati, and DIRECTV by Sandberg Phoenix & Von Gontard P.C. and Kilpatrick Townsend & Stockton LLP.

YouTube is represented by Perkins Coie, CuriosityStream by Arent Fox, and PeacockTV by Willkie Farr & Gallagher.