New Jersey Municipalities Latest to Take on Streaming Platforms Over Local Fees

According to a District of New Jersey lawsuit filed last Friday, the Borough of Longport and Township of Irvington have accused Netflix Inc. and Hulu LLC of violating New Jersey’s Cable Television Act (CTA). The plaintiffs assert that the defendants qualify as video programming and cable television service providers, bringing them within the ambit of the CTA and requiring that they pay New Jersey municipalities franchise fees 0equal to a percentage of their gross revenue.

The complaint explains that the defendants use broadband wireline facilities located at least partly in public rights-of-way. Their services, which offer New Jersey subscribers a host of television, movie, and other content, are available throughout the state.

The plaintiffs claim, on behalf of all New Jersey municipalities, that Netflix and Hulu are covered service providers and, in turn, must fulfil statutory obligations. In support of this contention, the municipalities assert that under the CTA, “video programming” is in part defined as “programming provided by, or generally considered comparable to programming provided by, a television broadcast station.” The New Jersey statute further describes “cable television service” as including “video programming, without regard to the technology used to deliver such video programming, including Internet protocol technology.”

The defendants are required to satisfy two obligations as covered entities, the plaintiffs contend. These include registering with and receiving approval from the New Jersey Board of Public Utilities and paying fees to municipalities based on a single digit percentage of their subscription fees. For their nonfeasance, the plaintiffs request class certification, declaratory relief, payment of the fees due with interest, and an award of their attorneys’ fees and litigation costs.

The lawsuit follows a bevy of others lodged against various streaming platforms in California, Illinois, and Indiana. The plaintiffs in one Indiana suit recently scored points at the Seventh Circuit after the panel upheld the district court’s decision to remand the case to state court citing comity principles.

The New Jersey plaintiffs are represented by Carella, Byrne, Cecchi, Olstein, Brody & Agnello P.C. and Kessler Topaz Meltzer & Check LLP.