Vizaline Provides an Innovative, Valuable Service to Customers
When banks take on a piece of property as collateral for a loan, underwriting principles require the bank to have a survey performed on large and expensive properties. But for smaller, less expensive properties, conducting a survey is not required or financially feasible. The more information banks have about their properties, the better. Less uncertainty means safer loans, safer banks and safer customers.
Brent spent his whole career working at small banks. He wanted to offer banks something much easier to comprehend than legal property descriptions. He wanted to help banks “see” the properties without having to commission pricey surveys.
As the information age brought new and powerful digital geospatial and visualization tools, Brent realized his idea had potential. After retiring, he decided to bring his idea to fruition. Through the Mississippi Enterprise for Technology, Brent pitched his concept to a group of technology entrepreneurs at the Stennis Space Center in Mississippi. There, he met his future business partner, Scott Dow.
Scott has a background in business, technology and entrepreneurship. He started his own computer networking company while still in college. He spent years managing IT networks for a variety of customers. And more than 20 years ago, he co-founded a company that conducts remote sensing—using helicopter-mounted cameras and lasers—to create 3D maps. Scott’s expertise in remote sensing and geospatial modeling led him to work on projects with electric utilities, the military and the Defense Advanced Research Projects Agency.
Vizaline brought its first product—“Viza-plat,” now called “Viza-audit”—to market in April 2014, calling it a “New Way to Visualize Your Legal Descriptions.”
What Vizaline does is straightforward. It takes the legal description of a bank’s property, plugs it into a computer program, generates a line drawing of the property description and overlays those drawings onto satellite photographs. Vizaline compiles the resulting images into an advisory report for the bank, flagging any apparent errors or discrepancies in the legal descriptions (such as when a described property has borders that do not connect). This provides the bank with the ability to easily visualize its property assets, as well as identify issues that should be corrected with a formal survey or with the help of attorneys.
Vizaline’s startup was successful. They employed six people in Mississippi and worked with more than 30 banks in five states. Banks from many other states expressed interest in their product. But the future of this Mississippi-founded and Mississippi-based tech startup was threatened by the Mississippi Board of Licensure for Professional Engineers and Surveyors, simply because the Board members would rather not deal with a little competition.
Mississippi Board of Licensure for Professional Engineers and Surveyors Sued to Shut Down—and Bankrupt—Vizaline and Brent
It did not take long for the Board to take notice of Vizaline. In a May 2015 meeting, the Board called on Vizaline to revise its website and make clear that Vizaline’s work product is not intended to be used as a survey. Vizaline immediately complied with the Board’s demand.
The Board, however, still wasn’t happy that, in its view, Vizaline was encroaching on their cartel. But the Board doesn’t have the legal authority to stop a business simply because it might present fair market competition for board members, so it chose to adopt an interpretation of Mississippi’s surveyor licensing laws that was so broad, it would cover anyone who uses data to superimpose points and lines on satellite images. Google Maps, Uber, Zillow or anyone who describes the Earth in any way would be in violation. Although Vizaline had never conducted a single survey, in February 2016 the Board elected to sue Vizaline and Brent for engaging in the “unlicensed practice of surveying.”
The Board’s lawsuit sought to permanently stop Vizaline from operating in Mississippi and “immediately disgorge themselves” of all fees and compensation earned in the state. That is, the government wanted to force Vizaline and Brent to repay its customers every dollar it earned in Mississippi, even though Vizaline’s customers never complained about Vizaline, continued to be satisfied, and wanted to continue to employ Vizaline’s services.
The Board’s lawsuit against Vizaline, if successful, would not only have forced the tech startup out of the state, it could have bankrupted the company.
The First Amendment Protects Vizaline’s Speech
The lawsuit that the Board filed against Vizaline and Brent was a violation of the First Amendment. That is why Brent, Scott and Vizaline teamed up with the Institute for Justice to defend their free speech rights and to stop the Board’s self-serving and anticompetitive actions.
A series of U.S. Supreme Court cases decided in just the past decade make clear that Vizaline’s “activity” is pure speech protected by the First Amendment. First, the Court has made clear that the First Amendment applies where “conduct triggering coverage” of a regulation “consists of communicating a message”—such as providing expert advice.[c]Holder v. Humanitarian Law Project, 561 U.S. 1, 26-28 (2010).[/c]
Second, the Court has made clear that “the creation and dissemination of information are speech within the meaning of the First Amendment” and that the First Amendment is “implicated when information [a speaker] possesses is subjected to restraints on the way in which the information might be used or disseminated.”[c]Sorrell v. IMS Health Inc.,564 U.S. 552, 568, 570 (2011).[/c]
And third and most recently, in the case of NIFLA v. Becerra, which was decided in June 2018, the Supreme Court rejected restrictions on “professional speech”—speech made as part of an occupation—which some had treated as a separate category of speech subject to lesser constitutional scrutiny.[c]King v. Mississippi Military Department, 2017-CC-00784-SCT (¶ 12) (Miss. 2018).[/c]
To be clear, Vizaline does not conduct surveys—it does not establish property boundaries or place survey markers (the absolute reference points used to mark boundaries or triangulate locations in surveying). Vizaline’s reports do not purport to be authoritative—they don’t get turned into legal descriptions of property and put into recorded deeds or easements.
All Vizaline does is use existing public information, legal descriptions of property, to generate new information—a user-friendly visual representation of that information. They communicate this information to their bank clients to advise their bank clients about their property portfolios. This is speech, fully protected by the First Amendment. As the U.S. Supreme Court concluded in NIFLA, that the Board calls this the “practice” of an “occupation” does not change the First Amendment’s protection of Vizaline’s speech.
Regulatory Boards Stretch Occupational Licensing Laws to Shut Down Their Competitors
The Board’s lawsuit is yet another example of occupational licensing run amok in America. In the 1950s, merely 1 in 20 American workers needed the government’s permission to do their jobs. Today, that number is 1 in 4. The move to reform occupational licensing and reduce these government-imposed restrictions is a bipartisan issue. The administrations of both President Obama and President Trump have called for occupational licensing laws to be curtailed.
The same legislation that creates a license also frequently creates a licensing board to administer that license. Often, the law requires that boards be composed almost entirely of occupational practitioners, as is the case with the Mississippi Board of Licensure for Professional Engineers and Surveyors. The result is that licensing boards are frequently run by people with a vested interest in the occupation. This is often called “regulatory capture”—where the practitioners of a field overtake the regulation of the field and, because they wield often-unchecked power, they administer that power in such a way that protects existing service providers from competition. A common tactic is to broaden the definition or scope of practice of a licensed occupation, a practice IJ has termed “license creep.” Licensing legislation ordinarily describes the activities that define the practice of the occupation. Through license creep, boards expand these definitions to often encompass occupations that operate well outside of the actions that typically define a field. In this case, Vizaline does not conduct surveys, it does not establish property boundaries or place survey markers—all traditional practices of surveying—yet through the Board’s licensing creep, the Board now seeks to expand the definition of surveying to include Vizaline’s work as the practice of surveying.
In 2018, the State of Mississippi enacted significant reforms in the Occupational Board Compliance Act to put a stop to license creep. Under this Act, a special commission has to review occupational regulations proposed by licensing boards to ensure they “increase economic opportunities…by promoting competition,” and use “the least restrictive regulations necessary to protect consumers,” in accordance with new state policy.
This reform was prompted by a 2015 U.S. Supreme Court decision. In North Carolina State Board of Dental Examiners v. FTC, the Supreme Court recognized that state boards composed of market participants—such as Mississippi’s Board of Licensure for Professional Engineers and Surveyors—can be sued for federal antitrust violations since they can use the power of government regulations to engage in anti-competitive activities.
Mississippi’s reform was meant to put a stop to boards behaving badly. But unfortunately, the Act did not affect enforcement actions. Boards are still free to engage in license creep through enforcement actions, even if they cannot make new regulations to do the same thing. That is why the Institute for Justice’s defense of Vizaline is so important; it seeks to block this power grab by Mississippi’s Board of Licensure for Professional Engineers and Surveyors.
The Mississippi Supreme Court Recognizes the Threat from Unchecked Regulatory Boards
The problem of license creep is exacerbated when judges—rather than interpret statutes for themselves—defer to those boards’ expanded definitions. In the federal courts, this is called “Chevron deference”—from the U.S. Supreme Court case Chevron v. Natural Resources Defense Council. Over the years, most state courts adopted similar deference doctrines. That tide, however, has now begun to reverse as courts recognize the doctrine undermines the separation of powers which is critical to protecting individual liberty.
In 2016, then-judge, now-U.S. Supreme Court Justice Neil Gorsuch wrote an influential decision about Chevron deference, calling it “a problem for the people whose liberties may now be impaired not by an independent decisionmaker seeking to declare the law’s meaning as fairly as possible—the decisionmaker promised to them by law—but by an avowedly politicized administrative agent seeking to pursue whatever policy whim may rule the day.”[c]Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1153 (10th Cir. 2016) (Gorsuch, J., concurring).[/c]
Since that decision, a growing chorus of judges and courts have echoed these sentiments.
In June of 2018, the Mississippi Supreme Court joined the chorus. In a landmark ruling—King v. Mississippi Military Department—the Court abolished judicial deference to administrative agencies’ interpretations of law.[c]King v. Mississippi Military Department, 2017-CC-00784-SCT (¶ 12) (Miss. 2018).[/c]
This means that Mississippians can now count on the courts to “fulfill their duty to exercise their independent judgment about what the law is” as a check on overreaching administrative agencies.
Vizaline and Brent countersued the Board, raising a single claim under the First Amendment, seeking to vindicate the right to use, create and disseminate information as part of their business providing advice to banks about their property portfolios.
Vizaline and Brent defended themselves from the Board’s lawsuit in state court by arguing that Vizaline is not “surveying” as defined by Mississippi’s surveyor licensing laws and that Vizaline’s business is protected by the First Amendment in any event.
The Litigation Team
The litigation team consists of Paul Avelar, Managing Attorney of the Institute for Justice Arizona Office and Institute for Justice Attorney Kirby Thomas West.
Adam Stone, Kaytie Pickett, and Amber Kipfmiller of the Jackson, Mississippi, office of Jones Walker, have teamed up with IJ to serve as local counsel.
About the Institute for Justice
The Institute for Justice is the national law firm for liberty and the nation’s leading advocate for First Amendment rights and economic liberty. IJ has challenged efforts to use occupational-licensing laws to silence speech by tour guides, veterinarians, diet coaches and makeup artists.
For more information about this case, please contact IJ Reporting and Communications Associate Matt Powers at email@example.com or (703) 682-9320 ext. 254.