TV streaming giants
By a unanimous decision, a three-justice panel in Dallas declined to reconsider a previous ruling from the court that barred the 31 appealing cities from charging streaming services for using broadband facilities managed by the municipality. The suing cities included two of the state’s most populous: Houston and Dallas, as well as its capital, Austin.
“The law-of-the-case doctrine prevents us from reconsidering the issues in this case,” the Monday opinion said. Reaching the opposite conclusion “would be to undermine the purposes of the doctrine,” the justices said.
The decision cements a January 2024 ruling that streaming services aren’t required to pay the fees because, unlike cable providers, they don’t operate through what’s known as a franchise agreement. Each city sought 5% of the providers’ gross revenue from operations in their city.
Courts across the county have consistently ruled for streaming sites in franchise fee disputes. As of October 2024, nearly 20 state and federal courts had rejected substantially similar claims to those raised by the Texas municipalities, the platforms said in a joint brief.
The case returned to the Dallas court after the Texas Supreme Court declined to take it up, instead instructing the petitioning municipalities to first challenge a trial court’s dismissal order. The high court said that a mandamus petition that the cities had asked it to review had become moot.
The litigation took another turn prior to oral arguments last September after a new state law took effect expressly excluding the platforms from the fees. That change, the municipalities argued, goes to show the fees applied previously to the services. The platforms said it otherwise, that it clarified the original intent to exempt them.
The appeals court took the position that the new law didn’t change the old one. “We have no intervening change in the law to bar the application of the law-of-the-case doctrine,” the opinion said.
Hulu and Disney are represented by Lynn Pinker Hurst & Schwegmann LLP and Wilson Sonsini Goodrich & Rosati. Netflix is also represented by Carter Arnett.
The municipalities are represented by Butler Snow LLP, McKool Smith PC, Ashcroft Sutton Reyes, and Korein Tillery LLC.
The case is City of Dallas v. Disney DTC, LLC., Tex. App., 5th Dist., No. 05-24-00712-CV, 6/22/26.