Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
The Court of Appeals of Indiana affirmed and remanded a case in which four Indiana cities allege streaming services are subjected to requirements of the Indiana Video Service Franchises Act, ruling that Marion Superior Court has the authority to hear the case.
In August 2020, the cities of Indianapolis, Evansville, Valparaiso and Fishers filed a complaint alleging that streaming services Netflix, Inc., Disney DTC, LLC, Hulu, LLC, DIRECTV, LLC, Dish Network Corp., and Dish Network L.L.C. provide video service in Indiana.
The Indiana Video Service Franchises Act requires entities that provide video service in Indiana to obtain a franchise authorizing the construction of a video service system.
None of the streaming services in the complaint have obtained a franchise from the Indiana Utilities Regulatory Commission, meaning they haven’t paid fees to the four cities which are “units” under the VSF Act.
According to the complaint, the cities sought a declaration that the VSF Act applies to the streaming services and that they have violated the requirements, and accounting for the monies owed by the streaming services to the four cities, an order enjoining those streaming services from providing video services in Indiana until they obtain a franchise and pay the fees.
Also, the cities sought an order that the streaming services comply with the requirements of the VSF Act and pay any franchise fees, attorney fees and expenses associated with the action.
In December 2020, the streaming services filed a variety of motions to dismiss the four cities’ complaints. The motions to dismiss held two main arguments: whether the trial court lacks subject-matter jurisdiction, and the complaint fails to allege a claim upon which relief can be granted.
The Marion Superior Court denied all of the motions to dismiss in January 2022.
A month later, the streaming services filed a motion for certification for interlocutory appeal which was granted in June 2022. The appellate court accepted jurisdiction in August 2022.
However, on May 4, Gov. Eric Holcomb signed into law HEA 1454 which excluded streaming services from the definition of “video service.” Thus, the amendment to VSF is retroactive to July 1, 2006.
The first issue the COA addressed was whether the trial court lacked jurisdiction.
“No facts, as of yet, have been presented to the trial court, and, thus, there can be no dispute by the parties with respect to any facts. We therefore review the trial court’s decision to deny the motions to dismiss for lack of subject matter jurisdiction de novo,” Judge Peter Foley wrote.
The streaming services also questioned whether the trial court had subject matter jurisdiction.
The appellate court agreed with the trial court that “[t]here is no explicit procedural requirement in the VSF calling for the Plaintiffs to first seek a determination from the IURC on whether Defendants must apply for a franchise at all.”
“The four cities cannot be compelled to exhaust a remedy that does not exist,” Foley wrote. “We need not visit the streaming services’ arguments about whether the VSF Act creates a private right of action. The trial court correctly found that its jurisdiction derived from the (Indiana Declaratory Judgment Act).”
The appellate court found that the trial court properly exercised jurisdiction.
On whether the VSF Act applies to the streaming services, the case is remanded back to the Marion Superior Court to vacate the denial of the streaming services’ motions to dismiss.
Please enable JavaScript to view this content.