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Every few months brings a new class action against Netflix, Hulu, and Disney+ from American cities and towns looking to raise revenue by taxing these streamers.

The municipalities are typically looking to collect fees under old video service franchise statutes that predate the streaming era. Netflix, Hulu, and Disney+ don’t believe it’s fair, but they haven’t had the best of luck so far in court. The latest is a 7th Circuit Court of Appeals opinion out on Wednesday that sends the streamers back to Indiana state court to fight the tax battle.

The case was originally filed there by the cities of Fishers, Indianapolis, Evansville, and Valparaiso. The cities sought a declaration that the streaming platforms provide “video service” as defined by The Indiana Video Service Franchises Act of 2006. There are similar cases across the nation including in California, Missouri, Arkansas, Illinois, and on and on.

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Subsequently, Netflix, Disney, DirecTV and Dish removed this Indiana case to federal court. A district court ordered it sent back. The streamers appealed. That’s what has led to today’s appellate decision where the comity abstention doctrine reigns. Meaning, since taxation deemed one of the core activities of local government, they should get a crack at exercising jurisdiction. The 7th Circuit justices say the streamers can raise in local court their big arguments, which include their contention that federal law preempts the franchise fees, that the federal Internet Tax Freedom Act prohibits discriminatory treatment of e-commerce, and that the Indiana Video Service Franchises Act violates the First Amendment to the United States Constitution.

See the entire decision below, and don’t be surprised if this franchise fee issue is the one that causes Netflix to file its first petition for writ of certiorari at the Supreme Court. Even the 7th Circuit senses that.

Click here to read the full article.

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Scarlett Johansson sues Disney over ‘Black Widow’ release

Scarlett Johansson is suing the Walt Disney Co. over its streaming release of “Black Widow,” which she said breached her contract and deprived her of potential earnings.

In a lawsuit filed Thursday morning in Los Angeles Superior Court, the “Black Widow” star and executive producer said her contract guaranteed an exclusive theatrical release. The Wall Street Journal first reported the news of the lawsuit.

Johansson’s potential earnings were tied to the box office performance of the film, which the company released simultaneously in theaters and on its streaming service Disney+ for a $30 rental.

“In the months leading up to this lawsuit, Ms. Johansson gave Disney and Marvel every opportunity to right their wrong and make good on Marvel’s promise,” the lawsuit said. “Disney intentionally induced Marvel’s breach of the Agreement, without justification, in order to prevent Ms. Johansson from realizing the full benefit of her bargain with Marvel.”

Disney did not immediately respond to a request for comment.

After its release was delayed more than a year because of COVID-19, “Black Widow” debuted to a pandemic-best of $80 million in North America and $78 million from international theaters three weeks ago, but theatrical grosses declined sharply after that. In its second weekend in release, the National Association of Theater Owners issued a rare statement criticizing the strategy asserting that simultaneous release lends itself only to lost profits and higher quality piracy.

Once taboo, hybrid theatrical and streaming releases have become more normal for many of the biggest studios during the pandemic, with each adopting its own unique strategy. This weekend, Disney is employing the same strategy with “Jungle Cruise,” and next weekend Warner Bros. big budget “The Suicide Squad” opens both in theaters and on HBO Max.

The revised hybrid release strategies over the 16 months have occasionally led to public spats from not just theater owners, but stars, filmmakers and financiers who are unhappy with the potential lost revenues and the alleged unilateral decision-making involved.

The WSJ said Warner Media, for instance, paid over $200 million in “amended agreements” with talent over its decision to release its entire 2021 slate simultaneously in theaters and on HBO Max.

But none have been as public as Johansson’s lawsuit. The actor, who has been in nine Marvel movies going back to 2010’s “Iron Man 2,” quickly became a trending topic on Twitter on Thursday after news of the suit broke.

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