`v.
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`NETFLIX, INC., et al.,
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`Plaintiff,
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`Defendants.
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 1 of 9 Page ID #112
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF ILLINOIS
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`VILLAGE OF SHILOH,
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`Case No. 3:21-cv-00807-SMY
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`DEFENDANTS’ JOINT RESPONSE TO ORDER TO
`SHOW CAUSE REGARDING REMAND OF THIS ACTION
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`Defendants DISH Network Corporation, DISH Network L.L.C., Netflix, Inc., Hulu, LLC,
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`DIRECTV, LLC, and Disney DTC LLC (collectively, “Defendants”) submit this response to the
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`Court’s order to show cause why this case should not be remanded to the Circuit Court for the
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`Twentieth Judicial Circuit, St. Clair County, Illinois (“State Court”). Dkt. 34. Defendants
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`respectfully suggest that the case should not be remanded for two reasons. First, this case is a
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`copycat litigation derived from an earlier-filed case in this District styled City of East St. Louis v.
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`Netflix, Inc., et al., No. 3:21-cv-00561-MAB (the “East St. Louis Case”), which the plaintiff
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`directly filed in federal court. It asserts the same claims under the same statute on behalf of the
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`same putative class seeking the same relief against five of the same Defendants named in this
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`action (i.e., Netflix, Hulu, Disney, DISH, and DIRECTV). It thus triggers the duty to avoid
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`duplicative litigation.
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`Second, the Seventh Circuit’s decision in City of Fishers does not require remand under
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`these circumstances. The Seventh Circuit upheld the district court’s application of equitable
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`comity as set forth in Levin and did not speak to the outcome of this fact-intensive inquiry under
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 2 of 9 Page ID #113
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`the different circumstances of this case. The precedence of the East St. Louis Case make these
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`circumstances dramatically different. Among other things, City of Fishers did not implicate the
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`duty of federal courts to avoid duplicative litigation, either by staying or consolidating the second-
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`filed action. Moreover, the comity analysis in City of Fishers was driven primarily by the view
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`that remand would avoid the need for a federal court to rule on the state revenue-generating scheme
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`at issue. Not so here because plaintiff in the East St. Louis Case has already chosen to litigate in
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`federal court on behalf of itself and all other local government units in Illinois. Whatever
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`discretion comity may afford to remand this case is outweighed by the duty to avoid duplicative
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`litigation of actions, like these actions, that are properly before the federal court. Even City of
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`Fishers recognized that “abstention from the exercise of federal jurisdiction is the exception, not
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`the rule.” City of Fishers, Indiana v. DIRECTV, No. 20-3478, 2021 WL 3073368, at *2 (7th Cir.
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`July 21, 2021) (citation and quotation omitted).
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`Since the Court’s show cause order makes clear the Court is considering remand,
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`Defendants point out that this Court retains the flexibility to manage its docket and that this Court’s
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`discretion to do so is not abrogated by City of Fishers. As explained in more detail below,
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`Defendants respectfully request that this Court permit full briefing on the merits of remand in this
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`case or, alternatively, temporarily stay consideration of remand to allow the parties in the East St.
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`Louis Case a chance to address these issues.
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`I.
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`Background
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`The City of East St. Louis filed its complaint on June 9, 2021. See East St. Louis Case,
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`Dkt. 1. The complaint alleges that Defendants provide “video service in Illinois cities, villages,
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`incorporated towns, and counties” (id. ¶ 2) and that Defendants therefore must pay video service
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`provider fees allegedly due under the Illinois Cable and Video Competition Law of 2007 (the
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`“Act”). The complaint asserts these claims on behalf of a putative class of “[a]ll Illinois cities,
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 3 of 9 Page ID #114
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`villages, incorporated towns, and counties in which one or more of the Defendants provided video
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`service” (id. ¶ 59).
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`One week later, on June 16, 2021, the Village of Shiloh filed this copycat case in the State
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`Court, asserting the same claims on behalf of the same putative class. The allegations in this case
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`confirm that it substantially, if not completely, overlaps with the earlier-filed East St. Louis Case.
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`In both cases, the plaintiffs seek video service provider fees on behalf of themselves and local
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`government units in Illinois. Both complaints allege that those fees are required by the Act. And
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`both complaints allege that Defendants do not use the public internet, which is exempted from
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`video service provider fees. Also, all five Defendants in this case (Netflix, Hulu, Disney, DISH,
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`and DIRECTV) are named Defendants in the East St. Louis Case.
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`On July 15, 2021, Defendants timely removed this case. See Village of Shiloh v. Netflix,
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`Inc., et al., No. 3:21-cv-00807-SMY, Dkt. 1 (Jul. 15, 2021). Thereafter, on July 28, this Court
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`issued an order to show cause why this case should not be remanded in light of the Seventh
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`Circuit’s July 21 decision in City of Fishers, in which the Court of Appeals upheld a district court
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`order remanding the plaintiffs’ claims to Indiana state court on the basis of the discretionary
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`doctrine of comity.
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`II.
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`Argument
`A.
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`Remand is not required by the City of Fishers decision.
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`Because “[f]ederal courts have a virtually unflagging obligation to exercise the jurisdiction
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`given them,” comity-based abstention “is the exception, not the rule.” City of Fishers, 2021 WL
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`3073368, at *2. This is particularly true where, as here, no one has disputed that this Court has
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`subject matter jurisdiction pursuant to the Class Action Fairness Act (“CAFA”). See Notice of
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`Removal, Dkt. 1 ¶ 1. There are good reasons not to abstain here.
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`3
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 4 of 9 Page ID #115
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`First, even City of Fishers acknowledges that comity-based remand is discretionary, not
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`mandatory. The Seventh Circuit merely held that the district court in that case did not abuse its
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`discretion in evaluating “the Levin confluence of [comity] factors” to decline jurisdiction. City of
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`Fishers, 2021 WL 3073368, at *7. Nowhere does the decision state that the discretionary doctrine
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`of comity deprives this Court of subject matter jurisdiction that has been properly asserted under
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`CAFA. So, it continues to be important to consider comity on a case-by-case basis.
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`Second, the evaluation of the Levin factors in this case does not favor remand because, in
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`contrast with the City of Fishers case, this case involves potential remand of a second-filed,
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`duplicative litigation. As explained above, this case was filed a week after the East St. Louis Case
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`was filed in this District, and it duplicates the same claims, against the same defendants, on behalf
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`of the same class. Because the East St. Louis plaintiff already chose a federal forum for this
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`putative class action, the City of Fishers’ analysis of the Levin factors is inapposite:
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` Factor 1—Which party invokes federal court review: it was the East St. Louis
`plaintiff that first sought federal court intervention on behalf of itself and the
`putative class.
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` Factor 2—Intent of the removing parties: Defendants did not invoke federal court
`jurisdiction in this case to improve their competitive position, but rather to avoid
`duplicative litigation.
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` Factor 3—Whether the state court is better positioned: the federal court is equally
`capable of deciding matters of state law when, as here, it has been asked to do so
`by a local government plaintiff.
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`See City of Fishers, 2021 WL 3073368, at *4 (applying Levin factors). Even Levin recognized
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`that “[i]f the State voluntarily chooses to submit to a federal forum, principles of comity do not
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`demand that the federal court force the case back into the State’s own system.” 560 U.S. at 432
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`(citation and quotation omitted).
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`Third, remand of this case would guarantee duplicative litigation in state and federal court,
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`which is contrary to the federal court’s duty to avoid duplicative litigation. Under the first-to-file
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 5 of 9 Page ID #116
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`rule, courts have a “duty … to avoid duplicative litigation in more than one federal court.” Ozinga
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`v. U.S. Dep’t of Health & Hum. Servs., No. 13-cv-3292, 2013 WL 12212731, at *1 (N.D. Ill. Aug.
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`14, 2013) (citation and quotation omitted); see also Trippe Mfg. Co. v. American Power
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`Conversion Corp., 46 F.3d 624, 629 (7th Cir. 1995). If deferring to the first-filed case is consistent
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`with “considerations of judicial and litigant economy, and the just and effective disposition of
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`disputes,” courts should so defer. MLR, LLC v. U.S. Robotics Corp., No. 02-cv-2898, 2003 WL
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`685504, at *1 (N.D. Ill. Feb. 26, 2003). Here, there is no doubt that this case is duplicative of the
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`East St. Louis Case because it involves the same “claims, parties, and available relief.” Id. (citation
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`and quotation omitted); see also Nicholson v. Nationstar Mortg. LLC of Delaware, No. 17-CV-
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`1373, 2018 WL 3344408 (N.D. Ill. July 6, 2018) (citing Humphrey v. United Healthcare Servs.,
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`Inc., No. 14-cv-1157, 2014 WL 3511498, at *2 (N.D. Ill. July 16, 2014)) (applying first-to-file
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`rule where second-filed case substantially overlapped with first case).
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`This case is analogous to Guill v. Alliance Resources Partners, No. 16-cv-0424, 2017 WL
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`1132613 (S.D. Ill. Mar. 27, 2017). In Guill, this Court transferred a second-filed class action to
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`Chief Judge Rosenstengel who was handling a similar, earlier case. See id. Dkt. 4 (April 15, 2016,
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`order reassigning case) (citing Smith v. Check-n-Go of Illinois, 200 F.3d 511, 513 n.1 (7th Cir.
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`1999)). Chief Judge Rosenstengel subsequently decided to stay the second case in favor of the
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`first due to the “substantial similarities.” Guill, 2017 WL 1132613, at *3. Similarly here,
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`Magistrate Judge Beatty is presiding over the earlier-filed East St. Louis Case and is well-
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`positioned to evaluate the second-filed case.
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`Fourth, the comity factors do not outweigh the concern for avoiding duplicative litigation.
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`See Firth v. Chupp, No. 09-cv-512, 2010 WL 5439759, at *3 (N.D. Ill. Dec. 27, 2010) (noting that
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`the efficiencies of consolidation can outweigh comity). Defendants recognize that “little attention”
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`5
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 6 of 9 Page ID #117
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`has been devoted to the comity-based abstention at issue here (see City of Fishers, 2021 WL
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`3073368, at *3), but an analogy can be drawn to the situation in which federal courts are asked to
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`exercise supplemental jurisdiction over state-law claims. For example, in Brooks v. HSHS Medical
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`Group, at the time of removal, the federal court had subject matter jurisdiction over both cases that
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`were ultimately consolidated. No. 18-cv-1097, 2019 WL 2139993, at *3 (S.D. Ill. May 16, 2019).
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`Subsequently, the federal claims from one case were voluntarily dismissed, but the court found
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`that the interest in efficient resolution of the remaining state law claim warranted keeping the two
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`cases consolidated in federal court. The court declined to exercise its discretion to remand, citing
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`the “good reason to retain jurisdiction over state law claims” including avoiding the “duplication
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`of time, energy, and expense to decide” one case in state court and one in federal court. Id.; see
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`also Washington v. Burley, No. CIV.A. 3-12-154, 2012 WL 5289682, at *5 (S.D. Tex. Oct. 23,
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`2012) (denying remand and consolidating cases and finding that comity factor was outweighed by
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`benefits of consolidation).1
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`B.
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`The Court should permit full briefing on the merits of remand or issue a
`stay.
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`If this case is remanded and proceeds separately in the State Court, it will pose a high risk
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`of inconsistent adjudications and will impose substantial and duplicative burdens on the parties,
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`witnesses, and judicial resources. See Jentz v. ConAgra Foods, No. 10-cv-474, 2011 WL
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`13234406, at *2 (S.D. Ill. Dec. 23, 2011) (finding that consolidation “will conserve judicial
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`resources” by eliminating the need for “duplicative testimony and possible inconvenience or
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`hardship to witnesses” and “also prevents inconsistent verdicts”). Those factors were not present
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`1 In addition to the issue of duplicative litigation, full merits briefing on the question of remand would allow
`Defendants the opportunity to present the arguments that the Seventh Circuit found to be waived in City of
`Fishers. Although, in dicta, the Seventh Circuit suggested those arguments would not be persuasive in that
`case, this case presents different circumstances that tilt the confluence of Levin factors against remand.
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 7 of 9 Page ID #118
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`in City of Fishers. The Court should order the full briefing on the merits of remand or issue a stay
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`pending adjudication of the East St. Louis Case.2
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`III. Conclusion
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`Defendants respectfully request that the Court issue an order setting a briefing schedule on
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`the issue of remand or, alternatively, temporarily staying consideration of remand to allow the
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`parties in the East St. Louis Case a chance to address these issues.
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`Respectfully submitted,
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`Date: August 6, 2021
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`s/ Mary Rose Alexander
`Mary Rose Alexander
`Robert C. Collins III
`LATHAM & WATKINS LLP
`330 North Wabash Avenue, Suite 2800
`Chicago, IL 60611
`Tel: (312) 876-7700
`Email: mary.rose.alexander@lw.com
`Email: robert.collins@lw.com
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`Jean A. Pawlow (pro hac vice)
`LATHAM & WATKINS LLP
`555 Eleventh Street, N.W., Suite 1000
`Washington, D.C. 20004
`Tel: (202) 637-3330
`Email: jean.pawlow@lw.com
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`Counsel for Defendant Netflix, Inc.
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`s/ Jared R. Butcher
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`Pantelis Michalopoulos (pro hac vice)
`Matthew R. Friedman (pro hac vice)
`STEPTOE & JOHNSON LLP
`1330 Connecticut Avenue, N.W.
`Washington, DC 20036
`Tel: (202) 429-3000
`Fax: (202) 429-3902
`Email: pmichalopoulos@steptoe.com
`Email: mfriedman@steptoe.com
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`Jared R. Butcher (pro hac vice)
`CROSSCASTLE PLLC
`1701 Pennsylvania Avenue, NW
`Suite 200
`Washington, DC 20006
`Tel: (202) 960-5800
`Email: jared.butcher@crosscastle.com
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`Jeffrey L. Schultz
`ARMSTRONG TEASDALE LLP
`7700 Forsyth Blvd., Suite 1800
`St. Louis, Missouri 63105
`Tel: (314) 621-5070
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`2 The East St. Louis Court, home of the first filed action, may entertain a motion to consolidate the two
`federal actions. See Fed. R. Civ. Pr. 42(a) (allowing consolidation for “a common question of law or fact”);
`see also Blair v. Equifax Check Servs., Inc., 181 F.3d 832, 839 (7th Cir. 1999) (“By far the best means of
`avoiding wasteful overlap when related suits are pending in the same court is to consolidate all before a
`single judge.”); Brooks, 2019 WL 2139993, at *3 (finding that consolidation would avoid unnecessary
`duplication of time, energy, and expense, permit more efficient discovery regarding the overlapping issues
`in both cases, and “ensure consistent pre-trial rulings in both cases.”).
`7
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 8 of 9 Page ID #119
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`Fax: (314) 621-5065
`Email: jschultz@atllp.com
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`Counsel for Defendants DISH Network Corp.
`and DISH Network L.L.C.
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`s/ Natalie J. Kussart (with consent)
`Natalie J. Kussart
`Philip C. Graham
`SANDBERG PHOENIX & von GONTARD
`P.C.
`600 Washington Avenue, 15th Floor
`St. Louis, MO 63101
`Phone: (314) 231-3332
`Fax: (314) 241-7604
`Email: nkussart@sandbergphoenix.com
`Email: pgraham@sandbergphoenix.com
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`John P. Jett (pro hac vice forthcoming)
`Ava J. Conger (pro hac vice forthcoming)
`KILPATRICK TOWNSEND & STOCKTON
`LLP
`1100 Peachtree Street, Suite 2800
`Atlanta, GA 30309
`Tel.: (404) 815-6500
`Email: jjett@kilpatricktownsend.com
`Email: aconger@kilpatricktownsend.com
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`Counsel for Defendant DIRECTV, LLC
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`s/ Darci F. Madden
`Darci F. Madden
`BRYAN CAVE LEIGHTON PAISNER,
`LLP
`One Metropolitan Square
`211 North Broadway, Suite 3600
`St. Louis, MO 63102
`Telephone: (314) 259-2000
`Email: dfmadden@bclplaw.com
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`Victor Jih, pro hac vice
`Russell L. Kostelak, pro hac vice
`Kelly Yin, pro hac vice
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`633 West Fifth Street, Suite 1550
`Los Angeles, CA 90071-2027
`Telephone: (323) 210-2900
`Facsimile: (866) 974-7329
`Email: vjih@wsgr.com
`Email: rkostelak@wsgr.com
`Email: kyin@wsgr.com
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`Attorneys for Defendants Hulu, LLC and
`Disney DTC, LLC
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`8
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`Case 3:21-cv-00807-SMY Document 40 Filed 08/06/21 Page 9 of 9 Page ID #120
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`CERTIFICATE OF SERVICE
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`I hereby certify that on August 6, 2021, a true and correct copy of the foregoing was filed
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`electronically. Service of this filing will be made on all ECF-registered counsel by operation of
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`the Court’s electronic filing system.
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`/s/ Pantelis Michalopoulos
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`9
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