CLAYTON – Creve Coeur, losing 0.04 percent of its budget due to the slow decline of cable television, seeks a court order taxing Netflix and Hulu statewide.
The city alleges in St. Louis County circuit court that Missouri law authorizing cable taxes also authorizes taxes on streaming services. The city proposes to represent at least 40 municipalities on its claim that Netflix and Hulu deprive them of much needed revenue.
Motions to dismiss remain pending before Circuit Judge Ellen Ribaudo.
In the fiscal year ending June 30, 2018, Creve Coeur’s cable customers paid $325,539 in fees.
In the fiscal year ending June 30, 2019, cable customers paid $321,040, a drop of 1.4 percent from the previous year.
The current city budget projected $314,203 for the fiscal year ending June 30, a drop of 2.1 percent from the previous year.
The city spends about $15 million a year from its general fund, so cable fees provided about two percent of that.
On July 19, 2018, lawyers from Stephen Tillery’s firm in St. Louis filed a petition for declaratory judgment in Creve Coeur’s favor.
Netflix and Hulu removed the suit to U.S. district court, asserting jurisdiction under the Class Action Fairness Act of 2005.
Netflix counsel Robert Berry of Chesterfield and Hulu counsel Darci Madden of St. Louis moved to dismiss the suit for failure to state a claim.
Madden wrote that Missouri authorized municipalities to impose fees on video service providers, subject to two limits – fees couldn’t be applied to internet content providers and municipalities could only collect fees from providers that obtained authorization from Missouri’s public service commission.
She wrote that the commission hasn’t required Hulu to obtain authorization nor has it provided authorization.
Berry wrote that a Kentucky judge, the first to rule on the issue, found streaming and cable couldn’t be more different.
In October 2018, Creve Coeur counsel Garrett Broshuis moved to remand the suit to St. Louis County.
“For nearly 150 years, the Supreme Court has repeatedly and consistently held that disputes concerning local jurisdictions collecting revenue belong in state court,” Broshuis wrote.
District Judge Ronnie White granted the motion in August 2019, without comment.
Netflix and Hulu petitioned the Eighth Circuit appellate court in St. Louis for review but didn’t get it.
Creve Coeur counsel John Hoffman amended the petition last November, and defendants moved to dismiss it.
Circuit Judge Joseph Dueker heard argument this Feb. 13.
On March 23, he recused himself on his own motion.
The clerk assigned Ribaudo, who received further briefs on the motions to dismiss.
As of Sept. 15, she planned no proceedings.