Teltech Systems, Inc. v. Barbour
2011 U.S. Dist. LEXIS 141689
S.D. Miss.2011Background
- Mississippi enacted the Caller ID Anti-Spoofing Act prohibiting false information entered into caller ID with intent to deceive, with penalties up to $1,000 and/or one year in jail.
- Plaintiffs TelTech Systems, Wonderland Rentals, and Meir Cohen provide spoofing services or use spoofing for market research and anonymity; Wonderland performs mystery shopping, TelTech offers SpoofCard, Cohen is TelTech president.
- Plaintiffs challenge the Mississippi Act on three grounds: preemption by the Truth in Caller ID Act, the Commerce Clause, and the First Amendment.
- The Truth in Caller ID Act of 2009 amended 47 U.S.C. § 227(e) to prohibit knowingly transmitting misleading or inaccurate caller ID information in connection with telecommunications services.
- The court finds Mississippi Act conflicts with federal law and has a substantial extraterritorial effect, leading to a grant of summary judgment for plaintiffs and denial of defendants’ motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Act preempted by federal law? | Mississippi Act conflicts with 47 U.S.C. § 227(e). | Act operates within state bounds and does not expressively preempt; it imposes additional restrictions. | Summary judgment for plaintiffs on preemption. |
| Does the Act violate the Commerce Clause via extraterritorial effects? | Act regulates commerce wholly outside Mississippi due to modern telecommunications. | Act applies in Mississippi only and does not directly regulate extraterritorial conduct. | Act violates the Commerce Clause; summary judgment for plaintiffs on this ground. |
| Does the Act raise First Amendment concerns? | Restricts truthful or anonymous expression via spoofing. | Regulation of deceptive practices falls within permissible state power. | Court found it unnecessary to reach the First Amendment issue. |
Key Cases Cited
- Castro v. Collecto, Inc., 634 F.3d 779 (5th Cir.2011) (explains forms of preemption (conflict preemption discussed))
- Mealy v. Beer Institute, Inc., 491 U.S. 324 (U.S. 1989) (extraterritorial reach of the Commerce Clause)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (U.S. 1970) (Pike balancing test for incidental burdens on commerce)
- Nat'l Solid Waste Mgmt. Ass’n v. Pine Belt Regional Solid Waste Mgmt. Auth., 389 F.3d 491 (5th Cir.2004) (dormant Commerce Clause framework for evenhanded regulations)
- In re Nat'l Century Financial Enters., Inc., 755 F. Supp. 2d 857 (S.D. Ohio 2010) (extraterritoriality discussion in multidistrict context)