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AI# 11082
Regular City Council Meeting
5.22.
10/25/2022:
Information
Agenda Item
Resolution - City Council:
Consider a resolution making findings of the City Council of the City of Lubbock and affirming proper notice having been given to the public under Texas Government Code, Subchapter C, Chapter 2254, and further authorizing and directing the City Manager to execute a contingent fee contract and other related documents for legal services by and between the City of Lubbock and McKool Smith, P.C., Ashcroft Sutton Reyes LLC, and Korein Tillery.
Item Summary
Several Texas cities have recently entered into litigation between themselves and Netflix, Inc., Hulu LLC, Disney DTC LLC, and other video service providers contending the defendants did not pay franchise fees they lawfully owed. The suit seeks to recover damages owed and to obtain an order requiring these providers, termed Video Service Providers (VSPs) to pay the relevant franchise fees going forward. Section 66.005 of the Texas Utilities Code contains relevant provisions regarding these franchise fees.
The litigation is expected to be lengthy and require specialized legal counsel. The current plaintiff cities have engaged such counsel, specifically McCool Smith, P.C., Ashcroft Sutton Reyes LLC and Korein Tillery LLC. This group, termed Counselors are conducting the current litigation on a contingent fee basis and are willing to accept the City of Lubbock as an additional plaintiff and under the same terms.
State law provides the process by which a City may enter into a contingent fee contract for legal services, this item complies with those requirements, including establishing written findings contained in the referenced resolution. Upon passage by the City Council, the contract must receive approval through the Office of the Attorney General.
Fiscal Impact
This contract contains no cost to the City of Lubbock due to it being a contingent agreement. If the litigation is successful, attorney fees will be deducted from the settlement. If successful, Lubbock will receive a portion of the franchise fee owed in arrears as well as future franchise fees.
Staff/Board Recommending
Lubbock City Council
Attachments
Resolution - Agreement for Legal Services regarding Franchise Fees
Agreement for Legal Services regarding Franchise Fees
Item 5.22 Public Notice
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