City of Creve Coeur v. DIRECTV, LLC

• Decision Date: 06 August 2019
• Docket Number: No. 4:18CV1495 SNLJ,No. 4:18CV1453 RLW,4:18CV1453 RLW,4:18CV1495 SNLJ
• Parties: CITY OF CREVE COEUR, MISSOURI, on behalf of itself and all others similarly situated, Plaintiffs, v. DIRECTV, LLC, et al., Defendants. AND CITY OF CREVE COEUR, MISSOURI, on behalf of itself and all others similarly situated, Plaintiffs, v. NETFLIX, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

CITY OF CREVE COEUR, MISSOURI, on behalf of itself and all others similarly situated, Plaintiffs, v. DIRECTV, LLC, et al., Defendants.ANDCITY OF CREVE COEUR, MISSOURI, on behalf of itself and all others similarly situated, Plaintiffs, v. NETFLIX, INC., et al., Defendants.

No. 4:18CV1453 RLW

No. 4:18CV1495 SNLJ

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

August 6, 2019

MEMORANDUM AND ORDER

This matter is before the Court on Plaintiff City of Creve Coeur, Missouri's Motion to Consolidate Its Cases (ECF No. 24), Defendants DISH Network Corp. and DISH Network L.L.C.'s Motion to Dismiss Complaint (ECF No. 26) and accompanying Request for Oral Argument (ECF No. 28), Defendant DIRECTV, LLC's Motion to Dismiss (ECF No. 29), and Plaintiff's Motions to Remand to State Court (No. 4:18CV1453, ECF No. 39; No. 4:18CV1495 SNLJ, ECF No. 28). The motions are fully briefed. After careful consideration, the Court grants the motion to consolidate this case with City of Creve Coeur, Missouri, et al., v. Netflix, Inc. and Hulu, LLC, No. 4:18CV1495 SNLJ and remands both cases to the Twenty-First Judicial Circuit of Missouri in St. Louis County.

BACKGROUND

Plaintiff filed two putative class actions on behalf of itself and similarly situated Missouri political subdivisions seeking declaratory judgment and other relief against DIRECTV, LLC, DISH Network Corp. and DISH Network L.L.C. (referred to collectively as "Satellite Defendants") in one case and against Netflix, Inc. and Hulu LLC (referred to collectively as "Streaming Defendants") in the other. In each case, Plaintiff alleges the service providers do business within the state but fail to remit fees as required by the 2007 Video Services Providers Act ("VSPA"), Mo. Rev. Stat. § 67.2675, et seq., and local code provisions.¹ The separate actions against the Satellite Defendants and the Streaming Defendants were filed on the same day in the Twenty-First Judicial Circuit of Missouri in St. Louis County. Within days of each other, both cases were removed to federal court: the case against Satellite Defendants was assigned to the undersigned and case against Streaming Defendants was assigned to the Honorable Stephen N. Limbaugh, Jr.

Plaintiff now seeks to consolidate the two separate cases. Pursuant to Local Rule 4.03, Plaintiff filed its Motion to Consolidate in the case before the undersigned as it bears the lowest cause number. Satellite Defendants and Streaming Defendants² (all four defendants are referred to collectively as "Defendants") filed Memoranda in Opposition (ECF Nos. 44, 45, 46, & 47) and Plaintiff filed a Joint Reply in Support of Consolidation (ECF No. 48).

Two days after Plaintiff filed its Motion to Consolidate, each Satellite Defendant filed separate Motions to Dismiss. (ECF Nos. 26 & 29) Streaming Defendants have also filed Motions to Dismiss in the case before Judge Limbaugh. (No. 4:18CV1495 SNLJ, ECF Nos. 9 & 12) In addition, Plaintiff filed Motions to Remand to State Court in each case. (No. 4:18CV1453, ECF No. 39; No. 4:18CV1495 SNLJ, ECF No. 28) The motions to dismiss and motions to remand are all fully briefed and also ready for disposition.

DISCUSSION

I. Consolidation

Rule 42(a) of the Federal Rules of Civil Procedure governs consolidation of cases and provides: "If actions before the court involve common questions of law or fact, the court may: (1) join for hearing or trial any or all maters at issue in the actions; (2) consolidate the actions; or (3) issue any other orders to avoid unnecessary cost or delay." A district court has broad discretion in determining whether to order consolidation. Enter. Bank v. Saettele, 21 F.3d 233, 235 (8th Cir. 1994). "The threshold issue is whether the proceedings involve a common party and common issues of fact or law. The mere existence of common issues, however, does not mandate that the cases be joined." A.O.A. v. Doe Run Res. Corp., No. 4:11CV44 CDP, 2016 WL 1182631, at *2 (E.D. Mo. Mar. 28, 2016) (citation omitted). "The party seeking consolidation has the burden of showing the commonality of factual and legal issues, and the Court must examine 'the special underlying facts' with 'close attention' before ordering consolidation." PB & J Software, LLC v. Acronis, Inc., No. 4:12-CV-690 SNLJ, 2012 WL 4815132, at *2 (E.D. Mo. Oct. 10, 2012) (quoting In re Repetitive Stress Injury Litig., 11 F.3d 368, 373 (2d Cir. 1993)). The purpose of consolidation is to promote convenience and economy in the administration of actions. Saettele, 21 F.3d at 235 (citation omitted). However, consolidation is not appropriate ifit leads to inefficiency, inconvenience, or unfair prejudice to a party. E.E.O.C. v. HEE Corp., 135 F.3d 543, 551 (8th Cir. 1998).

As an initial matter, Defendants argue the Court should deny Plaintiff's Motion to Consolidate because Plaintiff chose to file separate cases. While perhaps uncommon, it is not dispositive that Plaintiff is the one to file the instant Motion to Consolidate after initially choosing to file separate cases in state court. See, e.g., PB & J Software, 2012 WL 4815132, at *1. Further, Defendants argue consolidation would be premature because of the other pending motions. See, e.g., Thompson v. City of St. Peters, No. 4:15CV404 RLW, 2016 WL 1625373, at *2 (E.D. Mo. Apr. 21, 2016). Other courts in this district, however, have ruled on motions to consolidate before other pending motions. See, e.g., Capitol Indem. Corp. v. March, Nos. 1:13CV75 SNLJ, 1:13CV142 LMB, 2013 WL 6838778, at *4 (E.D. Mo. Dec. 27, 2013).

These cases involve a common party: Plaintiff on behalf of itself and "all Missouri political subdivisions that collect video-service-provider fees, and in which Defendants have provided or continue to provide video service." (No. 4:18CV1453, ECF No. 6, at ¶ 11; No. 4:18CV1495 SNLJ, ECF No. 5, at ¶ 12) The fact that each defendant is a separate entity does not defeat this commonality factor. See St. Bernard Gen. Hosp., Inc. v. Hosp. Serv. Ass'n of New Orleans, Inc., 712 F.2d 978, 989 (5th Cir. 1983) ("The fact that a defendant may be involved in one case and not the other is not sufficient to avoid consolidation."). Therefore, the Court must consider whether the cases involve common questions of law or fact and determine whether consolidation would promote convenience and economy in the administration of the actions. See Fed. R. Civ. P. 42(a); Saettele, 21 F.3d at 235.

Plaintiff argues these cases involve common questions of law and fact. Plaintiff asserts the same three claims against the Satellite Defendants and the Streaming Defendants: declaratoryjudgment, injunctive relief, and accounting (Count I); unjust enrichment (Count II); and unpaid fees, interest, and penalties (Count III). Cf. PB & J Software, 2012 WL 4815132, at *2 (denying the plaintiff's motion to consolidate four separate patent infringement cases because, of the plaintiff's 18 claims, the plaintiff "simply alleges that 'at least one claim' of the Patent has been infringed by each defendant, so it is not at all clear that the defendants are alleged to infringe the same claim"). The ad damnum clauses of each petition also seek the same relief.³ According to Plaintiff, both cases will center on common questions of fact to prove its claims: e.g., whether Defendants provide video service in Missouri and whether each defendants' programming is delivered in part over wireline facilities located in public right-of-way.

Each defendant opposes consolidation and uses similar reasoning. Defendants argue the relevant statutes and local codes will apply differently to Satellite Defendants compared to Streaming Defendants as the former have historically provided their service via satellite communication and the latter via internet streaming. According to Streaming Defendants, this distinction means they are not "video service providers" as defined under the VSPA.Additionally, Satellite Defendants argue a provision of the federal Telecommunications Act of 1996 preempts municipalities from imposing taxes or fees on satellite video service providers. See Pub. L. No. 104-104, Title VI, § 602(a), 110 Stat. 144(a) (1996) (reprinted in 47 U.S.C. § 152, historical and statutory notes) ("Preemption.--A provider of direct-to-home satellite service shall be exempt from the collection or remittance, or both, of any tax or fee imposed by any local taxing jurisdiction on direct-to-home satellite service.").⁴ Defendants also argue consolidation will make discovery and trial more inefficient and inconvenient because each defendant will have its own documents, discovery responses, witnesses, as well as local and national counsel that will need to coordinate with each other for all scheduling purposes.

Based on this analysis, the Court finds that Plaintiff's cases against Satellite Defendants and Streaming Defendants present common issues of fact or law that warrant consolidation. The cases will clearly involve similar questions of law related to the interpretation of the VSPA even if the act applies differently to Satellite Defendants compared to Streaming Defendants. Further, any such differences can be litigated and adjudicated in the same consolidated action.⁵ The Court also finds judicial economy is best served by deciding the issue of consolidation first in order to avoid potentially conflicting rulings on the other pending motions. While the Court has sympathy for the parties and attorneys given the possible logistical difficulties that might arise coordinating between Plaintiff and all Defendants, cases involving multiple parties are commonplace in modern corporate litigation and do not outweigh the risk of conflicting rulings. Lastly, and significantly, no party will be unfairly inconvenienced or prejudiced as both cases areat the same stage in litigation because both cases were initially filed in state court on the same day, removed to federal court within days of each other, no defendant has filed an answer, and no...