Collection Agency Wins MSJ Against S.C. AG in Anti-Spoofing Lawsuit

A big win for the industry, thanks to Chad Echols and David Grassi from The Echols Firm, which won a summary judgment ruling from a District Court judge in South Carolina yesterday against the state Attorney General, with the judge ruling that a state law governing the spoofing of phone numbers is pre-empted by federal legislation and violates the Constitution’s Commerce Clause.

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

The plaintiff sued the state seeking to overturn a 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 after it was sued for violating the law. The state had previously been defeated on a motion to dismiss, attempting to argue the plaintiff lacked standing to sue.

The defendant attempted to argue in its motion for summary judgment that the plaintiff still lacked standing, but Judge Joseph F. Anderson, Jr. of the District Court for the District of South Carolina determined that the threat of enforcement of the statute and the private right of action were enough for the plaintiff to have standing to sue.

Judge Anderson ruled that the federal Truth in Caller ID Act (TCIA) preempted the South Carolina Telephone Privacy Protection Act’s anti-spoofing statute because it attempts to regulate communications beyond the borders of South Carolina. “… A cell phone user with an Atlanta, Georgia, area code phone number can keep that same number if she moves to Columbia, SC,” Judge Anderson wrote. “That cell phone user would no longer be in Georgia, yet she would still retain the same number. Thus, if Plaintiff called that user, they would be calling from Colorado using a trunk line with a Georgia area code to a Georgia number even though the recipient now resides in South Carolina. The legislation would no longer only impact intrastate telecommunications as Defendant suggests. Thus, this scenario involves interstate regulation that the TCIA specifically prohibits.”

Legislation that regulates commerce outside of a state’s borders also violates the Commerce Clause, Judge Anderson noted. The defendant argued that the plaintiff could “alleviate any potential liability” if it stopped using South Carolina area codes when contacting individuals in South Carolina. But, as Judge Anderson wrote, the plaintiff would still be in danger of violating the statute in that situation “because a recipient may have moved to South Carolina yet kept a mobile phone number with an area code from a different state.”

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