Tyler, Nacogdoches among 25 Texas cities suing Netflix, Hulu, Disney streaming services

TYLER, Texas (KLTV) - A group of 25 cities has filed a lawsuit accusing Disney DTC LLC, Hulu, LLC, and Netflix Inc. of failing to pay municipal franchise fees. They say the unpaid fees go as far back as 2007. Two of those cities are Tyler and Nacogdoches.

The suit alleges that the streaming services have not paid annual franchise fees which are required by the Texas Public Utility Regulatory Act and which are used to fund basic city services including police, fire protection, libraries and road repairs.

Steven Kirkland, City Attorney of the City of Nacogdoches, said, “If streaming companies refuse to pay these fees, the city has to cut services or seek alternate sources of revenue. We have an obligation to our residents to ensure that these companies comply with state law and pay what is owed to the city.”

The cities involved are Abilene, Allen, Amarillo, Arlington, Austin, Beaumont, Carrollton, Dallas, Denton, Frisco, Fort Worth, Garland, Grand Prairie, Houston, Irving, Lewisville, McKinney, Mesquite, Nacogdoches, Pearland, Plano, Rowlett, Sugar Land, Tyler and Waco.

“Disney, Hulu and Netflix have long withheld statutorily required payments to cities throughout Texas, depriving them of fees that help fund essential city services,” said McKool Smith principal Steven Wolens, who along with co-counsel represents the Texas cities in this lawsuit. “This case was filed on behalf of our municipal clients to ensure future compliance with PURA and recoup significant fees owed by some of the nation’s largest streaming services.”

Additional cities are expected to join the lawsuit.