Collection Agency Defeats MTD in Suit Against S.C. AG Seeking to Overturn Anti-Spoofing Statute

In what is certainly a first for me, a collection agency — which is represented by The Echols Firm — has defeated a motion to dismiss a lawsuit for lack of standing. But this is not a run-of-the-mill Fair Debt Collection Practices Act suit. In this case, the agency is fighting to overturn a state law in South Carolina that requires anyone who calls into South Carolina using a South Carolina number on their Caller ID to have a local presence in that state.

A copy of the ruling in the case of United Resource System v. Attorney General of South Carolina can be accessed by clicking here.

The South Carolina Telephone Privacy Protection Act contains an anti-spoofing measure which creates liability for anyone calling someone living in South Carolina while displaying a local Caller ID number without maintaining a local presence. Violations of the statute are subject to statutory damages of $1,000 each, which can be increased to $5,000 if the violations are deemed to be willful.

The plaintiff in this suit is the defendant in a separate class-action alleging it violated the anti-spoofing statute. That lawsuit led it to sue the state, seeking to have that provision invalidated. The Attorney General filed a motion to dismiss, which was denied yesterday by a District Court judge in South Carolina. The Attorney General argued that the plaintiff lacked standing to sue because the state had no plans to prosecute the defendant for violating the anti-spoofing statute.

But Judge Joseph A. Anderson, Jr. of the District Court for the District of South Carolina disagreed with the AG’s arguments.

“If Defendant truly wanted to show Plaintiff had no standing in this action, he would have expressly disavowed any intention to enforce the Anti-Spoofing Statute against Plaintiff,” Judge Anderson wrote. “Instead, Defendant appears to argue that he may or may not enforce this recent statute, but Plaintiff should be forced to live in constant fear of that enforcement with no means of recourse. This Court declines such an invitation. Defendant’s explicit failure to disavow future enforcement in this action indicates that the threat of prosecution is not imaginary.”

The defendant also attempted to argue that the plaintiff lacked standing because the concrete injury that was suffered was the civil liability in the lawsuit that was filed against it. But regardless of the outcome of that civil suit, the plaintiff said it was still at risk of an “adverse action” by the defendant, a claim with which Judge Anderson agreed.

“The fact that Plaintiff is also simultaneously engaged in a state court action concerning third-party consumer claims arising from the same provision does not diminish the pre-enforcement standing Plaintiff possess in this action,” Judge Anderson wrote. “Although the actions may be interrelated, they are not codependent.”

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