October 16, 2023

On October 13, the U.S. Court of Appeals for the Seventh Circuit affirmed dismissal with prejudice of a putative class action brought by the City of East St. Louis, Illinois, against Willkie client Peacock TV, LLC, and other streaming video services. 

The city sought to impose revenue-based franchise fees on the streaming services for their alleged use of municipal public rights-of-way in Illinois. The panel decision was authored by Judge Easterbrook. After favorably resolving a jurisdictional issue under the Class Action Fairness Act, the panel took the somewhat unusual step of affirming based on grounds not reached below. The district court had ruled that the cities lacked a private right of action under the relevant state statute. Judge Easterbrook found it better to affirm based on the strength of the defendants’ merits-based argument that their services are expressly exempted from having to pay franchise fees under an exception in the state statute for video programming “offered over the public Internet.” In Judge Easterbrook’s words, this exception makes clear “[that] content streamed over the Internet is outside the scope of this regulatory system.”  

The Willkie team included partners David Murray and Matt Basil and associates Matthew Johnson and Cassandra Vangellow.