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Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 1 of 50
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`No. 21-16560
`_________________________________________________________________
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`
`
`
`CITY OF RENO,
`
`Plaintiff-Appellant,
`
`v.
`
`NETFLIX, INC. and HULU, LLC,
`
`Defendants-Appellees.
`
`On Appeal from the United States District Court
`for the District of Nevada
`Case No. 3:20-cv-00499-MMD-WGC
`Hon. Miranda M. Du
`
`
`APPELLANT’S OPENING BRIEF
`
`
`
`Jason H. Kim
`SCHNEIDER WALLACE
`COTTRELL KONECKY LLP
`2000 Powell Street, Suite 1400
`Emeryville, California 94608
`Telephone: (415) 421-7100
`
`Leonard Stone
`SHOOK & STONE, CHTD.
`338 Ryland Street
`Reno, Nevada 89501
`Telephone: (775) 323-2200
`
`
`
`
`
`
`
`
`
`
`Attorneys for Appellant
`City of Reno
`
`Additional Counsel on Signature Page
`
`
`

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`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ................................................................................. iv
`
`STATEMENT OF THE ISSUES ON APPEAL .................................................... 1
`
`STATEMENT OF THE CASE .............................................................................. 3
`
`I.
`
`NEVADA’S VIDEO SERVICE LAW ..................................................... 3
`
`A. Overview of Nevada’s Video Service Law .................................... 3
`
`B.
`
`The Nevada Video Service Law’s Definitions ............................... 5
`
`C.
`
`The Nevada Video Service Law’s Remedial Provisions ................ 7
`
`II.
`
`SUMMARY OF ALLEGATIONS ........................................................... 8
`
`A.
`
`The Parties ...................................................................................... 8
`
`B. Netflix and Hulu’s Provision of Video Service Through Public
`Rights-of-Way ................................................................................ 8
`
`III. PROCEDURAL HISTORY .................................................................... 10
`
`STANDARD OF REVIEW ................................................................................. 11
`
`SUMMARY OF THE ARGUMENT .................................................................. 12
`
`ARGUMENT ....................................................................................................... 15
`
`I.
`
`NETFLIX AND HULU ARE “VIDEO SERVICE PROVIDERS” ....... 15
`
`II. THE PUBLIC INTERNET EXCEPTION DOES NOT APPLY TO
`NETFLIX AND HULU .......................................................................... 20
`
`III. RENO HAS A RIGHT TO BRING THIS LAWSUIT ........................... 26
`
`A.
`
`B.
`
`Reno has an Implied Private Right of Action Under Nevada’s
`Video Service Law ....................................................................... 26
`
`Reno has Standing to Seek Declaratory Relief ............................. 33
`ii
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`CONCLUSION .................................................................................................... 34
`
`CERTIFICATE OF COMPLIANCE ................................................................... 36
`
`CERTIFICATE OF SERVICE ............................................................................. 37
`
`ADDENDUM ...................................................................................................... 38
`
`
`
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`iii
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`

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`TABLE OF AUTHORITIES
`
`Cases
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .......................................................................................... 11
`
`Baldonado v. Wynn Las Vegas, LLC,
` 124 Nev. 951 (Nev. 2008) ................................................................... 14, 26, 33
`
`Bilbrey v. Brown,
`738 F.2d 1462 (9th Cir. 1984) .......................................................................... 34
`
`City of Creve Couer v. Netflix, Inc., et al.,
`No. 18SL-CC02819 (Mo. Cir. Ct. Dec. 30, 2020) ......................... 17, 20, 21, 22
`
`City of Fishers, Indiana et al. v. Netflix, Inc., et al.,
`No. 49D01-2008-PL-026436 (Ind. Comm. Ct. Jan. 18, 2022) ............. 17, 20, 34
`
`City of Maples Heights, Ohio v. Netflix, Inc. et al.,
`No. 2021-0864 (Oh. Sup. Ct.) ........................................................................... 28
`
`In re GTE Tel. Operating Cos.,
`13 FCC Rcd. 22466 (1998) ............................................................................... 23
`
`In the Matter of Ann. Assessment of the Status of Competition in the Mkt. for
`the Delivery of Video Programming,
`32 FCC Rcd. 568 (2017) ..................................................................................... 9
`
`In the Matter of Fed.-State Joint Bd. on Universal Serv.,
`13 FCC Rcd. 11501 (1998) ............................................................................... 23
`
`In the Matter of Promoting Innovation & Competition in the Provision of
`Multichannel Video Programming Distribution Servs.,
`29 FCC Rcd. 15995 (2014) ............................................................................... 18
`
`National Ass’n of the Deaf v. Netflix, Inc.,
`No. 3:11-cv-30168, ECF No. 47 (D. Mass. May 29, 2012) ............................. 18
`
`Onink v. Cardelucci,
`285 F.3d 1231 (9th Cir. 2002) ............................................................................ 12
`
`Prudential Ins. Co. v. Insurance Comm’r,
`409 P.2d 248 (Nev. 1966) ................................................................................. 34
`
`iv
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`Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am.,
`768 F.3d 938, 945 (9th Cir. 2014) ...................................................................... 12
`
`Rosales-Martinez v. Palmer,
`753 F.3d 890 (9th Cir. 2014) ............................................................................ 17
`
`Sandvig v. Barr,
`451 F. Supp. 3d 73 (D. D.C. 2020) ................................................................... 22
`
`Transamerica Occidental Life Ins. Co. v. DiGregario,
`811 F.2d 1249 (9th Cir. 1987) .......................................................................... 33
`
`V & S Ry., LLC v. White Pine Cnty.,
`211 P.3d 879 (Nev. 2009) ........................................................................... 23, 29
`
`Statutes and Regulations
`
`28 U.S.C. § 1291 .................................................................................................... 3
`
`28 U.S.C. § 1332(a) ............................................................................................... 3
`
`28 U.S.C. §§ 2201-02........................................................................... 2, 11, 15, 33
`
`47 U.S.C. § 151 notes, ITFA 1105(5) .................................................................. 24
`
`47 C.F.R. § 79.4 ................................................................................................... 18
`
`N.R.S. § 228.380 .................................................................................................. 30
`
`N.R.S. §§ 711.020–711.850 ............................................................................... 1, 3
`
`N.R.S. § 711.141 ........................................................................................... passim
`
`N.R.S. § 711.145 ........................................................................................ 6, 13, 18
`
`N.R.S. § 711.151 .................................................................................. 5, 12, 15, 16
`
`N.R.S. § 711.240 .................................................................................................. 30
`
`N.R.S. § 711.410 .................................................................................................. 32
`
`N.R.S. § 711.470 .................................................................................. 4, 11, 13, 19
`
`N.R.S. § 711.510 .................................................................................................. 11
`
`
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`v
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`N.R.S. § 711.670 ........................................................................................... passim
`
`N.R.S. § 711.680 ........................................................................................... passim
`
`N.R.S. § 711.850 ........................................................................................... passim
`
`O.R.C. §§ 1332, et seq. ........................................................................................ 28
`
`Rules
`
`Fed. R. Civ. Proc. 8(a)(2) ..................................................................................... 11
`
`Fed. R. Civ. Proc. 12(b)(6) ........................................................................ 1, 11, 12
`
`Fed. R. Civ. Proc. 23 ............................................................................................ 10
`
`
`
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`vi
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`
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`STATEMENT OF THE ISSUES ON APPEAL
`
`The district court erred by dismissing pursuant to Rule 12(b)(6)
`
`Plaintiff/Appellant the City of Reno, Nevada’s (“Reno”) lawsuit against
`
`Defendants/Appellees Netflix, Inc. (“Netflix”) and Hulu, LLC (“Hulu”). In this
`
`class action, Reno seeks to require Netflix and Hulu to obtain a certificate of
`
`authority to act as “video service providers” in Nevada and to pay franchise fees
`
`to Reno and other class members, as required by Nevada’s Video Service Law,
`
`N.R.S. §§ 711.020—711.850. The district court dismissed Reno’s lawsuit on two
`
`grounds, both of which are erroneous. Excerpts of Record (“ER”) ER-82-93.
`
`The first issue on appeal is whether Reno adequately alleges that Netflix
`
`and Hulu are “video service providers” as defined in N.R.S. § 711.141. Reno
`
`alleges that Netflix and Hulu provide video programming comparable to cable and
`
`broadcast television through Internet Service Providers that in turn operate
`
`wireline facilities that use public rights-of-way. The district court erroneously
`
`resolved this issue based on only one aspect of this definition, the “public Internet
`
`exception” in subsection (3).
`
`The second issue on appeal is whether the public Internet exception of
`
`N.R.S. § 711.141(3)(a) applies to Netflix and Hulu because their video content is
`
`transmitted in part through the Internet. Section 711.141(3)(a) excludes from the
`
`definition of “video service” “[a]ny video content provided solely as part of, and
`
`1
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`through, a service which enables users to access content, information, electronic
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`mail or other services that are offered via the public Internet.” At the same time,
`
`Section 711.141(1) expressly includes in the definition of “video service” video
`
`programming delivered by “Internet protocol technology.” The district court
`
`erroneously held that the subsection (3) exception applies to Netflix and Hulu and
`
`thus they do not provide “video service,” and thus, Netflix and Hulu are not “video
`
`service providers.” ER-87-88.
`
`The third issue on appeal is whether Reno may bring this lawsuit, either by
`
`implied private right of action under Nevada’s Video Service Law or under the
`
`federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-02. The district court
`
`erroneously held that it could not, citing two provisions of the law. First, the
`
`district court relied on N.R.S. §711.680, which authorizes the Nevada Attorney
`
`General to bring claims for “disputed underpayments, even though this case
`
`involves non-payment and not “underpayment” ER-89-90. Second, the district
`
`court relied on N.R.S. § 711.850, which allows—but does not require—local
`
`governments and video service providers alike to file a complaint with the Nevada
`
`Bureau of Consumer Protection for violations of Nevada’s Video Service Law.
`
`ER-90-92. The district court did not expressly consider whether Reno has a right
`
`of action under the federal Declaratory Judgment Act.
`
`2
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`

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`STATEMENT OF JURISDICTION
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`
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`The district court had original jurisdiction over this case pursuant to 28
`
`U.S.C. § 1332(a). Reno and all class members (cities and counties in Nevada) are
`
`Nevada citizens. ER 95 & 98, ¶¶ 4 & 22. Defendants are both organized under the
`
`laws of Delaware and headquartered in California. ER-95, ¶¶ 5-6. The amount in
`
`dispute is over $75,000.
`
`
`
`The district court entered Judgment on September 3, 2021. ER-81. The
`
`Judgment is final and appealable under 28 U.S.C. § 1291 because it disposed of
`
`all claims by Reno against Netflix and Hulu. Reno timely filed its Notice of
`
`Appeal on September 22, 2021. ER-104-105.
`
`STATEMENT OF THE CASE
`
`NEVADA’S VIDEO SERVICE LAW
`
`A. OVERVIEW OF NEVADA’S VIDEO SERVICE LAW
`
`In 2007, the Nevada Legislature passed Assembly Bill 526 to amend
`
`I.
`
`
`
`
`
`Chapter 711 of the Nevada Revised Statutes. The amendments are codified at
`
`N.R.S. §§ 711.020–711.850 and are collectively referred to as Nevada’s Video
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`Service Law.
`
`
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`Nevada’s Video Service Law requires “video service providers” (as defined
`
`below) to, among other things: (1) obtain a certificate of authority from Nevada;
`
`and (2) pay franchise fees to the local governments where their subscribers are
`
`located.
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`3
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`Specifically, N.R.S. § 711.470 provides that:
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`Except as otherwise provided in this chapter, a person shall not act
`
`as a video service provider or construct or operate a video service
`
`network in any service area unless the person has obtained a
`
`certificate of authority for that service area.
`
`And N.R.S. § 711.670(1) provides that:
`
`For the privilege of providing video service through a video service
`
`network that occupies or uses, in whole or in part, any public right-
`
`of-way or highway within the jurisdiction of a local government, the
`
`local government may require a video service provider to pay a
`
`franchise fee to the local government based on the gross revenue that
`
`the provider receives from its subscribers within the jurisdiction of
`
`the local government.
`
`In N.R.S. § 711.470, the obligation to obtain a certificate of authority
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`applies separately to both “video service provider[s]” and those who “construct or
`
`operate a video service network.” And in N.R.S. § 711.670, the franchise fee paid
`
`to the local government by the video service provider is a quid pro quo for use by
`
`that video service provider of the public rights-of-way and highways controlled
`
`by that local government.
`
`4
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`

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`B.
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`THE NEVADA VIDEO SERVICE LAW’S DEFINITIONS
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`N.R.S. § 711.151(1) defines a “video service provider” as “any person that
`
`provides or offers to provide video service over a video service network to
`
`subscribers in this State.” (Emphasis added to indicate terms defined by statute.)
`
`N.R.S. § 711.151(2) further provides that this term “includes, without limitation:
`
`(a) An incumbent cable operator or other cable operator; (b) A community antenna
`
`television company; and (c) A multichannel video programming distributor.”
`
`“Video service” is in turn defined by N.R.S. § 711.141:
`
`1. “Video service” means the provision of multichannel video
`
`programming generally
`
`considered
`
`comparable
`
`to video
`
`programming delivered by a television broadcast station, cable
`
`service or other digital television service, whether provided as part of
`
`a tier, on-demand or on a per-channel basis, without regard to the
`
`technology used to deliver the video service, including, without
`
`limitation, Internet protocol technology or any successor technology.
`
`2. The term includes without limitation:
`
`
`
`
`
`(a) Cable service; and
`
`(b) Video service delivered by a community antenna
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`television system.
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`3. The term does not include:
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`
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`(a) Any video content provided solely as part of, and
`
`through, a service which enables users to access content,
`
`information, electronic mail or other services that are offered
`
`via the public Internet.
`
`
`
`
`
`(b) Direct broadcast satellite service.
`
`(c) Any wireless multichannel video programming
`
`provided by a commercial mobile service provider.
`
`
`
`N.R.S. § 711.141(3)(a) (the “public Internet exception”) was one basis of
`
`the district court’s dismissal order.
`
`
`
`Finally, “video service network,” the other key defined term that is part of
`
`the definition of “video service provider,” is defined by N.R.S. § 711.145:
`
`
`
`1. “Video service network” means a wireline facility, or any
`
`component thereof, which is:
`
`
`
`
`
`
`
`
`
`(a) Located in this State;
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`(b) Constructed in whole or in part in, on, under or over
`
`any public right-of-way or highway; and
`
`
`
`
`
`
`
`
`
`
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`(c) Used to provide video service.
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`2. The term includes, without limitation:
`
`
`
`
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`(a) A cable system; and
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`(b) A community antenna television system.
`
`6
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`C.
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`THE NEVADA VIDEO SERVICE LAW’S REMEDIAL PROVISIONS
`
`In finding that Reno did not have a private right of action under Nevada’s
`
`Video Service Law, the district court cited two provisions of that law, N.R.S.
`
`§ 711.680 and N.R.S. § 711.850. Section 711.680(4) allows the Nevada Attorney
`
`General to sue a video service provider for a “disputed underpayment” of
`
`franchise fees. Nothing in that subsection, however, references: (a) the failure by
`
`a video service provider to obtain a certificate of authority or (b) a complete
`
`nonpayment of franchise fees. Rather, subsection (4) provides that “[a]ny action
`
`to recover a disputed underpayment of a franchise fee from a video service
`
`provider must be commenced and prosecuted by the Attorney General on behalf
`
`of the affected local government.” (Emphasis added.)
`
`N.R.S. § 711.850 is permissive rather than mandatory and allows both video
`
`service providers and local governments to file a complaint with the Bureau of
`
`Consumer Protection alleging a violation of the Nevada Video Service Law.
`
`Subsection (1) provides that “[a] video service provider or a local government may
`
`file with the Bureau of Consumer Protection a written complaint alleging a
`
`violation of the provisions of this chapter.” (Emphasis added.) And subsection (2)
`
`provides that, after the filing of such a complaint, the Consumer’s Advocate “may
`
`commence in a district court an action to enforce the provisions of this chapter
`
`and to seek equitable or declaratory relief.” (Emphasis added.)
`
`7
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`II.
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`SUMMARY OF ALLEGATIONS
`
`A.
`
`THE PARTIES
`
`The City of Reno, Nevada is a Nevada municipal corporation located in
`
`Washoe County, Nevada. ER-95, ¶ 4. It sues on its own behalf and as a
`
`representative of a class of Nevada cities and counties in which Netflix and/or
`
`Hulu provide video service. ER-98, ¶ 22.
`
`Netflix and Hulu are both Delaware entities with headquarters in California.
`
`ER-95, ¶¶ 5-6. Both provide to subscribers a library of films and television
`
`programs as well as producing and distributing original films and television
`
`programs. Id. In addition, Hulu provides live video programming. Id., ¶ 6.
`
`B. NETFLIX AND HULU’S PROVISION OF VIDEO SERVICE THROUGH
`PUBLIC RIGHTS-OF-WAY
`
`In providing video programming, Netflix and Hulu compete with other
`
`video service providers such as cable companies and broadcast television stations.
`
`ER-96, ¶ 9. Netflix and Hulu offer video programming comparable to that
`
`provided by cable and broadcast television. Id.
`
`Netflix and Hulu subscribers view this programming using Internet-
`
`connected devices such as smart televisions, streaming media players,
`
`smartphones, tablets, video game consoles, set-top boxes from cable and satellite
`
`providers, Blu-ray players, and personal computers. ER-96, ¶ 10. Through Internet
`
`protocol technology, the Netflix or Hulu subscriber sends a request for certain
`
`8
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`

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`programming to Netflix or Hulu’s dedicated servers and these servers relay the
`
`programming to the requesting subscriber. ER-96-97, ¶ 11.
`
`Netflix and Hulu subscribers typically use a broadband Internet connection,
`
`such as DSL or fiber optic cable, to receive Netflix and Hulu programming. ER-
`
`97, ¶ 15. Internet access is provided by Internet Service Providers (“ISPs”), such
`
`as AT&T and Spectrum in Reno. Id. The ISPs broadband Internet connections rely
`
`upon wireline facilities located in whole or in part in public rights-of-way. Id.
`
`In addition to using the facilities of local ISPs, Netflix and Hulu use
`
`proprietary networks to facilitate timely and high-quality delivery of video
`
`programming to their subscribers. Netflix for example uses a content delivery
`
`network called Netflix Open Connect to deliver 100 percent of its video
`
`programming to subscribers. ER-97, ¶ 12. Many of Netflix’s subscribers receive
`
`Netflix’s programming from servers either inside of, or directly connected to, the
`
`subscriber’s local ISP’s network. Id., ¶ 13. Netflix has “end-to-end” control of its
`
`entire Open Connect system, including servers located in Nevada. Id.
`
`As early as 2017, the U.S. Federal Communications Commission (“FCC”)
`
`found that what it terms “OVDs” (online video distributors), such as Netflix and
`
`Hulu, increasingly compete with traditional “MVPDs” (multichannel video
`
`programming distributors). Eighteenth Report, In the Matter of Ann. Assessment
`
`of the Status of Competition in the Mkt. for the Delivery of Video Programming,
`
`32 FCC Rcd. 568 at ¶ 64 (2017). This comes in at least two forms. First, MVPD
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`9
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`subscribers “cancel MVPD service entirely and substitute content from OVDs,
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`possibly together with over-the-air broadcasters.” Id. Second, MVPD subscribers
`
`“cancel their subscriptions to premium movie channels and substitute movies from
`
`OVDs.” Id. Because local governments receive a percentage (up to five percent)
`
`of the gross revenues received by video service providers who currently comply
`
`with Section 711.670 of Nevada’s Video Service Law, such as incumbent cable
`
`providers, competition by OVDs such as Netflix and Hulu has and will continue
`
`to result in loss of franchise fee revenue to local governments absent the payment
`
`of franchise fees by OVDs. This is so even though, as set forth above, OVDs such
`
`as Netflix and Hulu use public rights-of-way to the same extent as the traditional
`
`MVPDs who currently pay franchise fees.
`
`III. PROCEDURAL HISTORY
`
`
`
`Reno filed its Complaint in the U.S. District Court for the District of Nevada
`
`on September 2, 2020. ER-94-102. Pursuant to Rule 23 of the Federal Rules of
`
`Civil Procedure, Nevada sought to represent a class of “[a]ll Nevada cities and
`
`counties in which one or more of the Defendants has provided video service (the
`
`“Class”).” ER-98, ¶ 22.
`
`Nevada’s Complaint alleges two counts. Count I is for Defendants’
`
`violation of N.R.S. § 711.670 for failing to pay Reno and other class members the
`
`franchise fee required by that statute. ER-100-01, ¶¶ 31-35. Count II seeks
`
`declaratory relief under the federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-
`
`10
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`02. ER-101-02, ¶¶ 36-38. Reno sought a declaration that: Defendants provide
`
`“video service” and are “video service providers” under the Nevada Video Service
`
`Law; Defendants were required to obtain certificates of authority under Section
`
`711.470 and 711.510 of that law; and Defendants are required to pay franchisee
`
`fees of up to five percent of their gross revenues to Reno and other class members
`
`under Section 711.670 of that law and have violated that law by failing to do so.
`
`ER-102, ¶ 38.
`
`
`
`Netflix and Hulu filed motions to dismiss pursuant to Rule 12(b)(6) of the
`
`Federal Rules of Civil Procedure. ECF Nos. 28 and 32. The district court held a
`
`hearing on the motions on August 31, 2021. ER-3-80. On September 3, 2021, the
`
`district court entered an Order dismissing Reno’s complaint and subsequently
`
`entered Judgment in favor of Netflix and Hulu. ER-81-93. Reno filed a timely
`
`notice of appeal on September 22, 2021. ER-104-05.
`
`STANDARD OF REVIEW
`
`A court may dismiss a complaint for “failure to state a claim upon which
`
`relief can be granted.” Fed. R. Civ. Proc. 12(b)(6). A complaint need only provide
`
`“a short and plain statement of the claim showing that the pleader is entitled to
`
`relief.” Fed. R. Civ. Proc. 8(a)(2). To survive a motion to dismiss, a complaint
`
`must contain sufficient factual matter to “state a claim to relief that is plausible on
`
`its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In determining whether a
`
`complaint meets this standard, the court “must accept as true all factual allegations
`
`11
`
`

`

`Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 18 of 50
`
`in the complaint and draw all reasonable inferences in favor of the nonmoving party.”
`
`Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945
`
`(9th Cir. 2014).
`
`This Court reviews dismissal under Rule 12(b)(6) de novo. Id. Issues of
`
`statutory interpretation are also subject to de novo review. Onink v. Cardelucci, 285
`
`F.3d 1231, 1233 (9th Cir. 2002).
`
`SUMMARY OF THE ARGUMENT
`
`
`
`Reno adequately alleges that Netflix and Hulu are “video service providers”
`
`as defined in N.R.S. § 711.151. “Video service providers” provide “video service
`
`over a video service network.” Id. “Video service” in turn means “multichannel
`
`video programming generally considered comparable to video programming
`
`delivered by a television broadcast station, cable service, or other digital service,”
`
`including “on-demand” programming, “without regard to . . . technology”
`
`including “Internet protocol technology.” N.R.S. § 711.141. Reno alleges that
`
`Netflix and Hulu’s video programming meets every element of that definition, as
`
`they both provide subscribers a wide variety of television programs comparable
`
`to, if not the exact same as, the television programs offered through broadcast or
`
`cable. Furthermore, Netflix and Hulu deliver their programming “on demand”
`
`and through “Internet protocol technology.”
`
`
`
`And Netflix and Hulu deliver their programming “over a video service
`
`network.” They rely on highspeed wireline Internet facilities of local ISPs. These
`
`12
`
`

`

`Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 19 of 50
`
`wireline facilities in turn are “constructed in whole or in part in, on, under or over
`
`any public right-of-way or highway.” N.R.S. § 711.145(1).
`
`Nothing in the definitions of “video service provider,” “video service,” or
`
`“video service network” require the “video service provider” to own or operate
`
`the “video service network.” To the contrary, various provisions of Nevada’s
`
`Video Service Law impose the obligation to obtain a certificate of authority and
`
`pay franchise fees separately on “video service providers” and those who own
`
`and operate “video service networks.” See, e.g., N.R.S. §§ 711.470 & 711.670.
`
`The public Internet exception of N.R.S. § 711.141(3)(a) does not apply to
`
`Netflix and Hulu. The plain language of this exception requires that their video
`
`programming be “provided solely as part of, and through, a service which enables
`
`users to access content, information, electronic mail or other services offered via
`
`the public Internet.” Id. This exception was intended to apply to ISPs. But, unlike
`
`ISPs that provide public Internet access to end users to “access content,
`
`information, electronic mail, or other services,” as well as video content that is
`
`incidental to or only “part of” of the service they offer, video programming is not
`
`“part of”—but is the entirety of—Netflix and Hulu’s service.
`
`Even if video programming was “part of” Netflix’s and Hulu’s service, it
`
`cannot be determined at the motion to dismiss stage whether they transmit their
`
`content via the “public Internet.” The term “public Internet” is a term of art that
`
`has specialized meaning in the communications industry and whether Netflix and
`
`13
`
`

`

`Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 20 of 50
`
`Hulu deliver their video programming over the public Internet—or tunneled
`
`through a premium and privately “managed network”—is an issue of fact that can
`
`only be decided after discovery (and expert analysis) reveals the precise manner
`
`in which their content is delivered to their subscribers.
`
`Finally, Reno is entitled to bring this lawsuit. It has an implied private right
`
`of action under the Nevada Video Service Law because: (1) as the intended
`
`recipient of franchise fees, it is in the class for whose benefit the law was enacted;
`
`(2) nothing in the law’s legislative history suggests an intention to deny a private
`
`remedy; and (3) recognizing a private right of action would not be inconsistent
`
`with the legislative scheme. Baldonado v. Wynn Las Vegas, LLC, 194 P.3d 96,
`
`101 (Nev. 2008). Contrary to the district court’s holding, neither N.R.S. § 711.680
`
`nor N.R.S. § 711.850 apply here to provide an adequate remedy. N.R.S. § 711.680
`
`arguably applies to a lawsuit by the Attorney General for a “disputed
`
`underpayment” rather than a non-payment or failure to obtain a certificate of
`
`authority. And N.R.S. § 711.850 is permissive rather than mandatory–it was
`
`intended to allow, but not require, local governments and video service providers
`
`to submit disputes relating to consumer protection to Nevada’s Bureau of
`
`Consumer Affairs and Consumer Advocate.
`
`Even if Reno lacked a private right of action under the Nevada Video
`
`Service Law, it nonetheless had standing to seek relief under the federal
`
`14
`
`

`

`Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 21 of 50
`
`Declaratory Judgment Act, 28 U.S.C. §§ 2201-02. The district court erred by
`
`failing to consider whether Reno was entitled to such relief.
`
`ARGUMENT
`
`NETFLIX AND HULU ARE “VIDEO SERVICE PROVIDERS”
`
`I.
`
`
`Nevada’s Video Service Law is agnostic as to the technology used to deliver
`
`video programming and capable of responding to future developments in such
`
`technology. In defining “video service provider,” the law lists three examples of
`
`such providers existing at the time (cable, community antenna television, and
`
`MVPD) but makes clear that this listing is “without limitation.” N.R.S.
`
`§ 711.151(2). Similarly, in defining “video service,” the law again enumerates
`
`cable and community antenna television as examples of such service, but again
`
`includes the term “without limitation.” N.R.S. § 711.141(2).
`
`In that same definition, “video service” is defined without regard to the
`
`technology used to deliver video programming:
`
`“Video service” means the provision of multichannel video
`
`programming generally
`
`considered
`
`comparable
`
`to video
`
`programming delivered by a television broadcast station, cable
`
`service or other digital television service, whether provided as part of
`
`a tier, on-demand or on a per-channel basis, without regard to the
`
`technology used to deliver the video service, including, without
`
`limitation, Internet protocol technology or any successor technology.
`
`15
`
`

`

`Case: 21-16560, 02/02/2022, ID: 12358941, DktEntry: 8, Page 22 of 50
`
`N.R.S. § 711.141(1) (emphasis added).
`
`Against this backdrop, Reno adequately alleges that Netflix and Hulu are
`
`“video service providers” under the Nevada Video Service Law. A “video service
`
`provider” is “any person that provides or offers to provide video service over a
`
`video service network to subscribers in this State.” N.R.S. § 711.151(1) (emphasis
`
`added).
`
`
`
`First, Netflix and Hulu provide “video service.” Netflix and Hulu make
`
`available to their subscribers a wide variety of video programming “generally
`
`comparable to video programming delivered by a television broadcast station,
`
`cable service or other television service” on an “on-demand” basis through
`
`“Internet protocol technology.” N.R.S. § 711.141(1); ER-95-97, ¶¶ 5-15. Not only
`
`is Netflix and Hulu programming “co

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