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`Todd M. Schneider (SBN 158253)
`SCHNEIDER WALLACE COTTRELL
`KONECKY, LLP
`2000 Powell Street, Suite 1400
`Emeryville, California 94608
`Tel: 415-421-7100
`tschneider@schneiderwallace.com
`
`Jennie Lee Anderson (SBN 203586)
`ANDRUS ANDERSON LLP
`155 Montgomery Street, Suite 900
`San Francisco, California 94104
`Tel: 415-986-1400
`jennie@andrusanderson.com
`
`Attorneys for Plaintiff
`[additional counsel on signature block]
`
`
`
`SUPERIOR COURT FOR THE STATE OF CALIFORNIA
`
`
`
`COUNTY OF LOS ANGELES
`
`
`
`CITY OF LANCASTER, CALIFORNIA,
`individually and on behalf of all others
`similarly situated,
`
`
`Plaintiff,
`
`
`v.
`
`
`NETFLIX, INC. and HULU, LLC,
`
`
`Defendants.
`
`Case No. 21STCV01881
`
`
`PLAINTIFF CITY OF LANCASTER,
`CALIFORNIA’S MEMORANDUM OF
`POINTS AND AUTHORITIES IN
`OPPOSITION TO DEFENDANT
`NETFLIX, INC.’S DEMURRER TO
`AMENDED COMPLAINT
`
`Hearing Date: April 6, 2022
`Time: 10:00 a.m.
`Department: 9
`Judge: Hon. Yvette M. Palazuelos
`
`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`
`
`Electronically FILED by Superior Court of California, County of Los Angeles on 02/28/2022 04:08 PM Sherri R. Carter, Executive Officer/Clerk of Court, by K. Martinez, Deputy Clerk
`
`

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`I.
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`TABLE OF CONTENTS
`INTRODUCTION ................................................................................................................... 1
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`II. PROCEDURAL BACKGROUND ......................................................................................... 2
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`III. FACTUAL BACKGROUND ................................................................................................. 3
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`A.
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`DIVCA applies to Netflix’s video service. ................................................................... 3
`
`B.
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`Netflix’s programming is generally considered comparable to programming provided
`by broadcast television stations. ................................................................................... 3
`
`C.
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`Netflix provides its programming through facilities in public rights-of-way. .............. 4
`
`A.
`
`This action does not violate the California Constitution. ............................................. 5
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`B.
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`This action does not violate the United States Constitution ......................................... 5
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`1. This action is not an improper prior restraint.......................................................... 5
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`2. This action does not discriminate among speakers. ................................................ 7
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`4. This action would not improperly compel speech. ................................................. 9
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`C.
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`Plaintiffs’ claims are not preempted by federal law. .................................................... 9
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`D.
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`The Internet Tax Freedom Act does not bar Plaintiff’s claims. .................................. 12
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`1. The franchise fee is not a tax. ............................................................................... 12
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`2. The franchise fee does not discriminate against “electronic commerce.” ............ 13
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`E.
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`Reference to the PUC under the primary jurisdiction doctrine is improper. .............. 14
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`V. CONCLUSION ..................................................................................................................... 15
`
`
`
`
`
`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`i
`
`

`

`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`729, Inc. v. Kenton Cty. Fiscal Ct., 515 F.3d 485 (6th Cir. 2008) .................................................. 6
`
`Arkansas Writers Project v. Ragland, 481 U.S. 221 (1986) ........................................................... 7
`
`Century Fed., Inc. v. City of Palo Alto, 710 F. Supp. 1559 (N.D. Cal. 1988) ................................ 6
`
`Cipollone v. Liggett Grp., 505 U.S. 504 (1992) ............................................................................. 9
`
`Citizens United v. FEC, 558 U.S. 310 (2010) ................................................................................. 6
`
`City of Dallas v. FCC, 118 F.3d 393 (5th Cir. 1997) ................................................................... 12
`
`City of Dallas v. FCC, 165 F.3d 341 (5th Cir. 1999). .................................................................. 10
`
`City of Eugene v. Comcast, 375 P.3d 446 (Or. 2016) ............................................................. 11, 12
`
`Comcast of California II, L.L.C. v. City of San Jose, 286 F. Supp. 2d 1241 (N.D. Cal. 2003) ...... 6
`
`Comcast of California, Inc. v. City of Walnut Creek, 371 F. Supp. 2d 1147 (N.D. Cal. 2005)...... 6
`
`Community Communications Corp. v. City of Boulder, 660 F.2d 1370 (10th Cir. 1981) .............. 6
`
`Concentric Network Corp. v. Com., 897 A.2d 6 (Pa. Commw. Ct. 2006) ................................... 13
`
`Cundiff v. GTE Cal. Inc., 101 Cal. App. 4th 1395 (2002) ............................................................ 14
`
`Edelstein v. Cty. & Cnty. of San Francisco, 29 Cal.4th 164 (2002) ............................................... 9
`
`Elder v. Pac. Bell Tel. Co., 205 Cal. App. 4th 841 (2012) ........................................................... 14
`
`Erie Telecommunications, Inc. v. City of Erie, 659 F. Supp. 580 (W.D. Pa. 1987) ....................... 6
`
`Farmers Ins. Exch. v. Super. Ct., 2 Cal. 4th 377 (1992) ............................................................... 14
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`21
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`Gartner, Inc. v. Dep’t of Revenue, 455 P.3d 1179 (Wash. 2020) ........................................... 11, 13
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`
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`Gentile v. State Bar of Nev., 501 U.S. 1030 (1991) ........................................................................ 7
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`Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) .............................................................. 8
`
`Kovacs v. Cooper, 336 U.S. 77 (1949) ........................................................................................... 6
`
`Lauder, Inc. v. City of Houston, Texas, 751 F. Supp. 2d 920 (S.D. Tex. 2010) ............................. 6
`
`Leathers v. Medlock, 499 U.S. 439 (1991) ..................................................................................... 7
`
`Lehman v. City of Shaker Heights, 418 U.S. 298 (1974) ................................................................ 6
`
`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`ii
`
`

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`Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) ................................................................................ 9
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`Members of the City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789 (1984) ....... 6
`
`Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981) ......................................................... 6
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`Montgomery Cnty., Md. v. FCC, 863 F.3d 485 (6th Cir. 2017).................................................... 10
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`Murdock v. Pennsylvania, 319 U.S. 105 (1943) ............................................................................. 6
`
`NAACP v. Button, 371 U.S. 415 (1963) .......................................................................................... 7
`
`Nat’l Endowment for the Arts v. Finley, 524 U.S. 569 (1998) ................................................... 7, 8
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`Nat’l Inst. of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) ................................... 7
`
`Nat’l Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U.S. 582 (1995) ................... 11
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`Omega Satellite Products v. City of Indianapolis, 694 F.2d 119 (7th Cir. 1982)........................... 6
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`Pacific Bell Telephone Co. v. City of Walnut Creek, 428 F. Supp. 2d 1037 (N.D. Cal. 2006) ...... 6
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`Pacific West Cable Co. v. City of Sacramento, Cal., 798 F.2d 353 (9th Cir. 1986) ....................... 6
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`Performance Marketing Ass’n v. Hamer, 998 N.E. 2d 54 (Ill. 2013) ........................................... 13
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`Perry Educ. Ass’n v. Perry Local Educators’ Ass’n, 460 U.S. 37 (1983) ...................................... 7
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`Preferred Commc’ns, Inc. v. City of Los Angeles, 754 F.2d 1396 (9th Cir. 1985) ......................... 6
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`Qwest Comm’ns Corp. v. City of Berkeley, 146 F. Supp. 2d 1081 (N.D. Cal. 2001) ................... 12
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`Reed v. Town of Gilbert, 576 U.S. 155 (2015) ............................................................................... 7
`
`RTM Media, L.L.C. v. City of Houston, 584 F.3d 220 (5th Cir. 2009) ........................................... 6
`
`Sacramento Metro. Cable Television Commc’n v. Comcast Cable Commc’ns Mgmt., LLC, 507 F.
`Supp. 3d 1226 (E.D. Cal. Dec. 18, 2020) ................................................................................... 5
`
`Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011) ........................................................................... 7
`
`Steele v. City of Bemidji, 257 F.3d 902 (8th Cir. 2001) .................................................................. 6
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`Taxpayers for Vincent, 466 U.S. 789 (1984) .................................................................................. 6
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`Telesat Cablevision, Inc. v. City of Riviera Beach, 773 F. Supp. 383 (S.D. Fla. 1991) ................. 6
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`Time Warner Entertainment Co., L.P. v. FCC, 93 F.3d 957 (D.C. Cir. 1996) ............................... 6
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`Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (1994) ................................................................... 7
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`United States Postal Service v. Council of Greenburgh Civic Ass’ns, 453 U.S. 114 (1981) ......... 6
`
`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`iii
`
`

`

`
`United States v. Armstrong, 517 U.S. 456 (1996) .......................................................................... 9
`
`Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489 (1982) .................... 8
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`Wayte v. United States, 470 U.S. 598 (1985) .................................................................................. 8
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`Wyeth v. Levine, 555 U.S. 555 (2009) ............................................................................................ 9
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`Statutes
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`Internet Tax Freedom Act, 47 U.S.C. § 151(note)............................................................ 11, 12, 13
`
`47 U.S.C. § 556(a) ......................................................................................................................... 9
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`Cal. Pub. Util. Code
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` § 441............................................................................................................................................... 5
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`§ 5810(b) ..................................................................................................................................... 2, 5
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`§ 5830 (s) ...................................................................................................................................... 13
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`§ 5830(r).................................................................................................................................. 1, 2, 3
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`§ 5830(s) ................................................................................................................................. 1, 2, 3
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`§ 5840(h) ....................................................................................................................................... 14
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`§ 5840(b) ....................................................................................................................................... 14
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`§ 5840(c) ......................................................................................................................................... 3
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`§ 5840(c), (k) .................................................................................................................................. 1
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`§ 5840(k) ......................................................................................................................................... 3
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`§ 5840(q)(1) .............................................................................................................................. 5, 12
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`§ 5860............................................................................................................................................ 14
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`§ 5860(a) ......................................................................................................................................... 1
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`§ 5860(i) ........................................................................................................................................ 14
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`§ 5870.............................................................................................................................................. 9
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`§ 5890(g) ....................................................................................................................................... 14
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`§ 5900(k) ....................................................................................................................................... 14
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`
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`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`iv
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`Other Authorities
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`In re Implementation of Section 621(a)(1) of the Cable Commc’ns Policy Act of 1984 as
`amended by the Cable Television Consumer Prot. & Competition Act of 1992, 22 FCC Rcd.
`5101 (2007) ............................................................................................................................... 10
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`In re Implementation of Section 621(a)(1) of the Cable Commc’ns Policy Act of 1984 as
`Amended by the Cable Television Consumer Prot. & Competition Act of 1992, 34 FCC Rcd.
`6844 (2019) ......................................................................................................................... 10, 11
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`Constitutional Provisions
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`Cal. Const. Art. XIII C § 1(e)(4) ..................................................................................................... 5
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`Cal. Const. Art. XIII C § 2(b), (d) .................................................................................................. 5
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`Unpublished Cases
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`City of Del. Mar v. Time Warner Cable Enters., Ltd. Liab. Co., 2017 WL 3705833, at *4 (S.D.
`Cal. Aug. 28, 2017) ..................................................................................................................... 5
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`City of Fishers, Ind. v. Netflix, Inc., No. 49D01-2008-PL-026436, at 21, 23 (Marion Cnty., Ind.
`Super. Ct. Jan. 18, 2022) ................................................................................................... 2, 5, 14
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`Comcast Corp. v Dep’t of Revenue, 22 OTR 442, 2017 WL 6055041 at *16 (Or. T.C. Nov. 30,
`2017) ......................................................................................................................................... 13
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`Vill. of Rosemont, Ill. v. Priceline.com Inc., 09 C 4438, 2011 WL 4913262, at *9 (N.D. Ill. Oct.
`14, 2011) ................................................................................................................................... 13
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`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`v
`
`

`

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`I.
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`INTRODUCTION
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`Plaintiff City of Lancaster, California seeks to compel Defendant Netflix, Inc. to comply
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`with the Digital Infrastructure and Video Competition Act of 2006, Pub. Util. Code § 5800, et seq.
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`(“DIVCA”). DIVCA requires video service providers who provide video programming “through
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`facilities located at least in part in public rights-of-way” to (a) obtain a franchise, and (b) pay a
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`franchise fee to local governments as rent for using the public rights-of-way.1 Netflix provides
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`video programming using facilities located in public rights-of-way in the City of Lancaster, but
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`does not have a franchise, and has never paid the franchise fee.
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`This Court sustained Netflix and co-defendant Hulu, LLC’s demurrers to the original
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`complaint, concluding that (i) DIVCA does not grant a private right of action against franchise-
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`less video service providers, (ii) the complaint did not establish that Defendants “use” public
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`rights-of-way, and (iii) the allegations did not establish that Defendants provide “video
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`programming.” The Amended Complaint cures these defects.
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`Netflix’s demurrer should be overruled. First, the Court should imply a right of action for
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`the City of Lancaster because the Public Utilities Commission (“PUC”) does not have authority to
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`bring this action. Second, the Amended Complaint adequately alleges Netflix’s “use” of public
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`rights-of-way in the provision of video service. Third, Netflix’s video programming is generally
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`considered comparable to broadcast television (by viewers, the television industry, and the FCC).
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`Fourth, DIVCA’s exclusion of video programming provided “provided as part of, and via, a
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`service that enables users to access content, information, electronic mail, or other services offered
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`over the public Internet,” § 5830(s), applies to “Internet access” providers (e.g., ISPs), not Netflix’s
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`video service. Fifth, Article XIII C of the California Constitution is inapplicable because the City
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`of Lancaster does not seek to impose, extend, or increase any tax. Sixth, there are no First
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`Amendment concerns here. DIVCA does not discriminate between speakers or content. Nor is
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`DIVCA unconstitutionally vague, its terms are clear. And Netflix fails to establish a selective
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`enforcement claim. Seventh, Plaintiff’s claims are not preempted. Application of DIVCA to
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`1 See Cal. Pub. Util. Code §§ 5830(r)–(t); 5840(c), (k); and 5860(a). Undesignated “§_” references
`herein are to the Public Utility Code.
`
`
`
`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`1
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`Netflix’s services is consistent, and does not conflict, with the Cable Communications Policy Act
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`of 1984. Eighth, the franchise fee does not violate the Internet Freedom Tax Act because it is not
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`a tax and does not discriminate against electronic commerce. And finally, this case should not be
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`referred to the PUC under the primary jurisdiction doctrine. The PUC lacks authority to decide
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`this case, which turns on a question of statutory interpretation. As another court recently concluded
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`in a similar case, Netflix’s arguments are unpersuasive. See generally City of Fishers, Ind. v.
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`Netflix, Inc., No. 49D01-2008-PL-026436, at 21, 23 (Marion Cnty., Ind. Super. Ct. Jan. 18, 2022)
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`(“City of Fishers”) (denying motion to dismiss in action against Netflix for failure to obtain
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`franchises and pay franchises fees in violation of Indiana’s Video Service Franchise Act), attached
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`10
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`as Exhibit 1 to the concurrently-filed Declaration of Jason H. Kim (“Kim Decl.”).
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`II.
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`PROCEDURAL BACKGROUND
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`In sustaining Defendants’ demurrers to the complaint, the Court concluded that: (1)
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`DIVCA does not expressly or impliedly provide Plaintiff a right of action against video service
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`providers that have not obtained a franchise (see Sept. 20, 2021 Rulings/Orders, at 3-8 (Kim Decl.,
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`Ex. 2, hereafter “Order”)); (2) the complaint did not allege that Defendants “use” the public rights-
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`of-way under § 5810(b) (id. at 8-14); and (3) the complaint did not allege that Defendants’ services
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`meet the definition of video programming in § 5830(r) (id. at 16-20). Plaintiff filed an amended
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`complaint on October 20, 2021, adding allegations regarding (1) Defendants’ video programming,
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`(see Hale Decl. in support of Netflix’s Dem. to Am. Compl., Ex. C (Redline), ¶¶ 11-21, 33-36);
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`(2) their use of public rights-of-way (id. ¶¶ 22-25, 27-29, 32-33); and (3) DIVCA’s Internet access
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`exemption, § 5830(s) (¶¶ 45-49).
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`In support of their respective demurrers, Netflix and Hulu advance overlapping arguments
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`* * *
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`regarding whether:
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`1) Lancaster has a right of action
`(Netflix Dem. §III.A, pp. 15-17; Hulu Dem. § III, pp. 8-9);
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`2) Defendants use the public rights-of-way
`(Netflix Dem. § III.B.1, pp. 17-19; Hulu Dem. § IV.A, pp. 9-11);
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`
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`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
`
`
`2
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`3) Defendants provide video programming
`(Netflix Dem. § III.B.2, pp. 19-21; Hulu Dem. § V, pp. 13-14); and
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`4) Defendants’ services are excluded from DIVCA
`(Netflix Dem. § III.B.3, pp. 21-23; Hulu Dem. § IV.B, pp. 11-13).
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`Plaintiff responds to these arguments in full in its concurrently-filed opposition to Hulu’s
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`demurrer, and adopts and incorporates those arguments, as if set forth herein.
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`III.
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`FACTUAL BACKGROUND
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`A.
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`DIVCA applies to Netflix’s video service.
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`DIVCA requires that “[a]ny person or corporation who seeks to provide video service in
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`this state for which a franchise has not already been issued . . . shall file an application for a state
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`franchise with the [PUC].” § 5840(c); see also § 5840(k) (“[i]t is unlawful to provide video service
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`without a state or locally issued franchise”).2 DIVCA defines “video service” as “video
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`programming services, cable service, or OVS service provided through facilities located at least in
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`part in public rights-of-way without regard to delivery technology, including Internet protocol or
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`other technology.” § 5830(s). In turn, “video programming” is “programming provided by, or
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`generally considered comparable to programming provided by, a television broadcast station[.]” §
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`5830(r). Under a plain reading of DIVCA, Netflix is a video service provider subject to DIVCA’s
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`franchise and franchise fee requirements: it provides video programming that is generally
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`considered comparable to programming provided by broadcast television stations, and it does so
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`through facilities located in public rights-of-way using Internet protocol technology. ¶¶ 11-33.3
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`B.
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`Netflix’s programming is generally considered comparable to programming
`provided by broadcast television stations.
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`Video programming consumers, the television industry, and the FCC agree that Netflix’s
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`video programming is comparable to programming provided by broadcast television stations.
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`Netflix successfully competes with traditional television services for audience’s attention and
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`entertainment dollars by offering its subscribers an array of television shows, movies, and
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`2 Unless otherwise noted, all emphasis and alterations to quotations herein are added, and all
`original alterations, quotations, and citations are omitted.
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`3 Undesignated “¶_” references herein are to the Amended Class Action Complaint, filed on
`October 20, 2021 (Kim Decl., Ex. 3, hereafter “Amended Complaint” ).
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`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
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`documentaries. ¶¶ 11, 28, 34-35. Some of Netflix’s programming is the exact same content—e.g.,
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`Seinfeld (NBC), Grey’s Anatomy (ABC), Criminal Minds (CBS), and Breaking Bad (AMC)—as
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`programming provided by television broadcast stations and cable services. ¶¶ 12, 14. Naturally,
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`Netflix refers to this programming as “television series” or “televisions shows.” ¶ 12. In addition,
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`Netflix offers original programming, which is also comparable to broadcast television
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`programming: (a) it is within traditional television genres and formats, such as hour-long dramas,
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`half-hour sitcoms, reality-based shows, and game/competition shows, ¶ 16; (b) Netflix follows
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`industry-standard production processes and draws from the same production companies and
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`creative professionals as programs distributed by broadcast television and cable, ¶ 17; and (c)
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`Netflix’s original programming competes for, and wins, television industry awards, including 112
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`Primetime Emmys from the Television Academy. ¶ 18. Thus, to both the viewer and the television
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`industry, Netflix video content is indistinguishable in format, genre, and quality as the video
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`content available through broadcast television and/or cable service. ¶ 19. And the FCC has
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`recognized that entities like Netflix (OVDs) “offer video content akin to the professional
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`programming traditionally offered by broadcast stations, or broadcast and cable networks[.]” ¶ 36.
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`C.
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`Netflix provides its programming through facilities in public rights-of-way.
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`Netflix uses wireline high-speed Internet lines that run on, over, or under public rights-of-
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`way to deliver video programming to subscribers. ¶¶ 22-23, 25. Netflix uses infrastructure in the
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`public rights-of-way in at least two ways: (1) it uses wireline Internet to transmit programming
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`from central content servers to servers located in California to improve the quality and speed of its
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`content delivery, ¶ 24; and (2) when subscribers want to watch a Netflix program, they send a
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`request to their ISP, which forwards the request to Netflix’s dedicated servers; this response is
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`relayed back to the subscriber’s device, and Netflix delivers the video programming via Internet
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`protocol technology through wireline facilities located in public rights-of-way. ¶¶ 25-27.
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`Netflix also uses a closed and proprietary content delivery network called Open Connect
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`to provide video content to subscribers in California. ¶¶ 29-30. Netflix has end-to-end control of
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`the entire Open Connect system, ¶ 31, and contracts with ISPs to locate Open Connect appliances
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`on ISPs’ property, ¶ 32. When a Netflix subscriber wants to view Netflix programming, the
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`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
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`subscriber’s Internet service provider connects the subscriber to the closest Netflix Open Connect
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`server. ¶ 30. Accordingly, most subscribers receive Netflix’s video programming from servers
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`inside of, or directly connected to, the subscriber’s ISP’s network within their local region. ¶ 31.
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`IV. ARGUMENT4
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`A.
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`This action does not violate the California Constitution.
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`Article XIII C of the California Constitution does not prohibit this action because Plaintiff
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`does not seek to impose, extend, or increase any tax. Cal. Const. Art. XIII C § 2(b), (d). Rather,
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`Plaintiff seeks Defendants’ compliance with DIVCA as enacted by the Legislature. Article XIII C
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`is inapplicable when (as here) local entities seek payment of a fee imposed by DIVCA, because
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`the “local entities are not using their own authority to impose these fees.” See City of Del. Mar v.
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`Time Warner Cable Enters., Ltd. Liab. Co., 2017 WL 3705833, at *4 (S.D. Cal. Aug. 28, 2017)
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`(“Prop 26 does not require voter approval before a local government enacts an ordinance requiring
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`a [fee] . . . as authorized under DIVCA.”). Moreover, DIVCA’s franchise fee falls within Article
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`XIII C’s exclusion from the definition of taxes of “charges imposed for . . . use of local government
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`property, or the purchase, rental, or lease of local government property.” Cal. Const. Art. XIII C
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`§ 1(e)(4); see § 5810(b) (“video service provider shall pay as rent a franchise fee to the local entity
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`in whose jurisdiction service is being provided for the continued use of streets, public facilities,
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`and other rights-of-way of the local entity in order to provide service”); § 5840(q)(1) (“franchise
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`fee payable as rent”).5
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`B.
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`This action does not violate the United States Constitution.6
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`1.
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`This action is not an improper prior restraint.
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`The “First Amendment does not guarantee access to property simply because it is owned
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`4 Plaintiff’s responses to Netflix’s demurrer argument § III.A (pp. 15-17) and § III.B (pp. 17-23)
`are made in Plaintiff’s memorandum in opposition to Hulu’s demurrer. See part II, supra.
`5 Sacramento Metro. Cable Television Commc’n v. Comcast Cable Commc’ns Mgmt., LLC,
`(Netflix Dem. at 23), makes no mention of the California Constitution, and supports Plaintiff’s
`position that the PUC’s “User Fee” found in Pub. Util. Code § 441 is distinct from DIVCA’s
`“franchise” fee. 507 F. Supp. 3d 1226, 1234-35 (E.D. Cal. Dec. 18, 2020); see Pl.’s Opp’n to
`Hulu’s Dem. to Am. Compl., at part IV.A, pp. 5-6 (discussing § 444).
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`6 See City of Fishers, Ex. 1, at 30-35 (rejecting same constitutional arguments made here).
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`Plaintiff’s Opposition to Netflix’s Demurrer to Amended Complaint
`Case No. 21STCV01881
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`or controlled by the government.” United States Postal Service v. Council of Greenburgh Civic
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`Ass’ns, 453 U.S. 114, 129 (1981). Near all public property “could be used to communicate—
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`bumper stickers may be placed on official automobiles”—and yet speakers “could not seriously
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`claim” a free speech right, in light of “the government’s relationship to things under its dominion
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`and control.” Members of the City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789,
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`814 n. 31 (1984). Thus, courts consistently affirm (over free speech objections) municipal
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`authority to regulate use of public rights-of-way for video distribution,7 and reject First
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`Amendment challenges to assessments similar to DIVCA’s.8 In the context of public property,
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`courts uphold restrictions far more severe than DIVCA’s franchise fee.9 Netflix’s argument cannot
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`be squared with this precedent,10 and is based on unfounded factual assertions that cannot be
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`7 E.g., Time Warner Entm’t Co., L.P. v. FCC, 93 F.3d 957, 971-73 (D.C. Cir. 1996); Pac. W. Cable
`Co. v. City of Sacramento, 798 F.2d 353, 355 (9th Cir. 1986); Omega Sat. Prods. v. City of
`Indianapolis, 694 F.2d 119, 127 (7th Cir. 1982); Cmty. Commc’ns Corp. v. City of Boulder, 660
`F.2d 1370, 1379 (10th Cir. 1981), cert. dismissed, 456 U.S. 1001 (1982); Comcast of Cal., Inc. v.
`City of Walnut Creek, 371 F. Supp. 2d 1147, 1157–58 (N.D. Cal. 2005); Comcast of Cal. II, L.L.C.
`v. City of San Jose, 286 F. Supp. 2d 1241, 1250–52 (N.D. Cal. 2003).
`8 See Pac. Bell Tel. Co. v. City of Walnut Creek, 428 F. Supp. 2d 1037, 1052 (N.D. Cal. 2006)
`(rejecting challenge to franchise agreement containing 5% fee; “numerous courts have upheld the
`terms of various cable franchise agreements as valid under the First Amendment”); Telesat
`Cablevision, Inc. v. City of Riviera Beach, 773 F. Supp. 383, 407 (S.D. Fla. 1991) (“Governments
`regularly charge fees for the use of their property, including the use of such property for speech.”);
`Erie Telecommc’ns, Inc. v. City of Erie, 659 F. Supp. 580, 597 (W.D. Pa. 1987) (“the City is
`empowered to charge franchise fees for the commercial use of the public rights-of-way,” even if
`it does not impose fees on other users), aff’d as amended, 853 F.2d 1084 (3d Cir. 1988).
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`9 See, e.g., Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 502 (1981) (plurality opinion);
`Taxpayers for Vincent, 466 U.S. 789 (1984); Lehman v. City of Shaker Heights, 418 U.S. 298
`(1974); Kovacs v. Cooper, 336 U.S. 77 (1949); RTM Media, L.L.C. v. City of Houston, 584 F.3d
`220, 226-27 (5th Cir. 2009); Lauder, Inc. v. City of Houston, Texas, 751 F. Supp. 2d 920 (S.D.
`Tex. 2010), aff’d, 670 F.3d 664 (5th Cir. 2012) (mem.).
`10 Given the clear weight of authority, Century Fed., Inc. v. City of Palo Alto, 710 F. Supp. 1559
`(N.D.