United Res. Sys., Inc. v. Wilson

614 F.Supp.3d 243

UNITED RESOURCE SYSTEMS, INC., Plaintiff,

v.Alan WILSON, in his official capacity as Attorney General of South Carolina, Defendant.

CA No. 3:21-cv-00364-JFA

United States District Court, D. South Carolina, Columbia Division.

Signed July 13, 2022

Chad Vinson Echols, David Anthony Grassi, Jr., Echols Firm, Rock Hill, SC, for Plaintiff.

Andrew LaRoche Hethington, James P. Sullivan, Howser Newman and Besley LLC, Charleston, SC, James Emory Smith, Jr., Robert DeWayne Cook, SC Attorney General's Office, Columbia, SC, Jeffrey Ian Silverberg, Kelley S. Cannon, Howser Newman and Besley, Columbia, SC, for Defendant.

ORDER

Joseph F. Anderson, Jr., United States District Judge

I. INTRODUCTION

This matter is before the Court on pending cross-motions for summary judgment from both Defendant Attorney General Alan Wilson ("Wilson"), in his official capacity, (ECF No. 33) and Plaintiff United Resource Systems, Inc. ("United") (ECF No. 36). Plaintiff brings this suit seeking a declaration that S.C. Code Ann. § 37-21-50 (the "Anti-Spoofing Statute") is in conflict with, and thus preempted by the federal Truth in Caller ID Act" of 2009 (TCIA).¹ (ECF No. 11). Additionally, Plaintiff contends that the Anti-Spoofing Statute is unconstitutional both on its face and as applied to Plaintiff. (ECF No. 11). Plaintiff seeks a permanent injunction preventing the enforcement of the provision.² Id. Defendant avers that the relevant sections of South Carolina Telephone Privacy Protection Act, S.C. Code Ann. §§ 37-21-10 –100 ("SCTPPA") are not preempted by federal law and are otherwise constitutional. (ECF No. 33). Additionally, Defendant asserts that Plaintiff lacks standing to bring the suit and thus summary judgment should be granted. Id. The parties’ cross-motions for summary judgment have been fully briefed and this Court heard oral arguments on the motions and took the matter under advisement. (ECF No. 44). Thus, this matter is ripe for review.

II. BACKGROUND

"Spoofing" involves deceiving a call recipient by misrepresenting an originating telephone number on the recipient's caller identification system ("caller ID") in order to mislead the recipient about who is calling. (ECF No. 36-1 at ¶¶ 4–9). This misrepresentation may be through number alteration that the recipient's caller ID receives or through blocking the caller's number so that the recipient is unable to determine who may be calling. (ECF Nos. 36-1 & 36-2). Both parties acknowledge that spoofing has both legitimate and illegitimate applications. (ECF Nos. 33 & 36).

In slight contrast to the manner of spoofing addressed above, Plaintiff calls customers utilizing "trunk lines" it lawfully purchases from its telecommunications provider. (See ECF Nos. 11 at ¶¶ 23-25 & 36-2 at ¶¶ 3-6).³ Trunk lines are bundles of telephone numbers available for simultaneous use through one system of delivery. (See ECF No. 36-2 at ¶ 8). Plaintiff uses trunk lines with South Carolina area codes to make interstate calls from Colorado to individuals with South Carolina area code phone numbers. (ECF Nos. 11 at ¶¶ 6, 25 & 36-2 at ¶¶ 4, 8). Employing the trunk lines, which use valid working telephone numbers assigned to Plaintiff, they select South Carolina area codes as the numbers that will populate on caller ID systems when calling recipients with South Carolina area code numbers. (ECF No. 36-2 at ¶¶ 5-6). Importantly, these South Carolina area code numbers are not the numbers from which the calls are initiated. Id. at ¶ 13.

In 2011, the Telephone Consumer Protection Act of 1991 (TCPA)⁴ was amended by the TCIA. Notably, the TCIA provides

[i]t shall be unlawful for any person within the United States, in connection with any telecommunications service or [Internet protocol]-enabled voice service, to cause any caller identification service to knowingly transmit misleading or inaccurate caller identification with the intent to defraud, cause harm, or wrongfully obtain anything of value.

47 U.S.C. § 227(e)(1). TCIA violators are subject to civil and criminal liability. See Id. at § 227(e)(5). Jointly, the TCIA and TCPA provide a private right of action, grant enforcement powers in both federal and state governments, grant intervenor rights to the Federal Communications Commission (FCC), and vest district courts with exclusive jurisdiction over claims alleging 47 U.S.C. § 227(e)(1) violations. Id. at § 227(e)(6), (g)(1)–(3).

The Anti-Spoofing Statute is contained within the SCTPPA and became effective when signed into law on May 18, 2018. In relevant part, the Anti-Spoofing Statute provides

(A) [n]otwithstanding another provision of law, a person may not with the intent to defraud, harass, cause harm or wrongfully obtain anything of value, including, but not limited to, financial resources or personal identifying information as defined in Section 16-13-510, make, place, or initiate a call or text message or engage in conduct that results in the display of misleading, false or inaccurate caller identification information on the receiving party's telephone or otherwise circumvent caller identification technology that allows the receiving party to identify from what phone number, location, or organization the call or text message has originated from or misrepresent the origin and nature of the call or text message. A person may not, with the intent described in this subsection:

(1) display a South Carolina area code on the recipient's caller identification system unless the person making, placing, or initiating the call or text message maintains a physical presence in the State; or

(2) display the receiving party's telephone number on the contacted party's caller identification system.

S.C. Code Ann. § 37-21-50 (2018). Those found to have violated the Anti-Spoofing Statute are subject to potential civil liability, where the call recipient can recover statutory damages between $1,000 and $5,000 for each violation. Id. at § 37-21-80(A) – (C).

III. PROCEDURAL HISTORY

Plaintiff filed the present action against Wilson in his official capacity as Attorney General of South Carolina, seeking a declaration that the "Anti-Spoofing Statute is preempted by federal law and is unconstitutional." (ECF No. 11). The amended complaint suggests that Plaintiff has engaged in actions which arguably violate the Anti-Spoofing Statute. Id. Plaintiff initiated this action after a putative civil class action was filed against it in South Carolina state court. See id. at ¶ 25. Defendant is not a party to that underlying state court action but does have the authority to independently investigate and enforce violations of the SCTPPA. See S.C. Code Ann. § 37-21-90. An enforcement action from Defendant is independent and supplemental to the private right of action. Id.

Defendant moves for summary judgment alleging Plaintiff lacks standing because they do not meet the required preeminent harm threshold. (ECF No. 33).⁵

Plaintiff brings this motion seeking a declaration that the Anti-Spoofing Statute is conflict preempted or is unconstitutional. (ECF No. 36). Specifically, Plaintiff contends that the Anti-Spoofing Statute is: (1) preempted by the TCIA; (2) in violation of the Commerce Clause; and (3) in violation of the First Amendment. Id.

Both motions have been fully briefed and the Court received oral argument on June 28, 2022. (ECF No. 39).

IV. LEGAL STANDARD

A. Summary Judgment

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of proving that summary judgment is appropriate. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In considering a motion for summary judgment, "[a]ny reasonable inferences are to be drawn in favor of the nonmoving party." S.C. Coastal Conservation League v. Pruitt , 318 F. Supp. 3d 959, 962 (D.S.C. 2018). However, to defeat summary judgment, the nonmoving party must identify an error of law or a genuine issue of disputed fact. Id. A party opposing a properly supported motion for summary judgment must set forth specific facts showing that there is a genuine issue for trial. Id. at 963 (citing Bouchat v. Balt. Ravens Football Club, Inc. , 346 F. 3d 514, 522 (4th Cir. 2003) ) (internal quotations omitted).

A party asserting that a fact is genuinely disputed must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, (including those made for purposes of the motion only), admissions, interrogatory answers or other materials." Fed. R. Civ. P. 56(c)(1)(A). A litigant "cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another." Beale v. Hardy , 769 F.2d 213, 214 (4th Cir. 1985). Therefore, "[m]ere unsupported speculation ... is not enough to defeat a summary judgment motion." Ennis v. Nat'l Ass'n of Bus. & Educ. Radio, Inc. , 53 F.3d 55, 62 (4th Cir. 1995).

"[W]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate." Teamsters Joint Council No. 83 v. Centra, Inc. , 947 F.2d 115, 119 (4th Cir. 1991). "Summary judgment is proper only when it is clear that there is no dispute concerning either the facts of the controversy or the inferences to be drawn from those facts." Pulliam Inv. Co. v. Cameo Props. , 810 F.2d 1282, 1286 (4th Cir. 1987). The Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Pursuant to the cross-motions for summary judgment, there is no genuine dispute of material fact. The Court...