When Brent Melton and Scott Dow got their idea of combining publicly-available property descriptions and satellite images off the ground in 2014, they weren't anticipating a response from Mississippi regulators.
The first wasn't long in coming, as the Mississippi Board of Licensure for Professional Engineers and Surveyors called Melton in for a meeting in 2015. They asked him to put a disclaimer on the Vizaline website that said the company's product, known as a Viza-plat, wasn't a survey. Vizaline complied.
The second was a stunner that put the company — which now employs six workers in Mississippi and works with 30 banks in five states — in jeopardy.
Two years after the meeting with the board, Melton and Dow received knocks on their doors as the board served them with a lawsuit that accuses them of "unlicensing surveying." The lawsuit demands the return of all the fees paid to Vizaline by its customers.
The Institute for Justice, a libertarian law firm that takes on cases involving economic freedom, private property rights, educational choice and the First Amendment, filed a counter suit on behalf of Vizaline on July 11 in Madison Chancery Court.
Paul Avelar, the lead counsel for the Institute on the case, says that this case represents another collision between regulators and tech startups, such as Uber and AirBnB, that is becoming a nationwide trend.
"The Mississippi for licensing for engineers and surveying says that our clients are committing the act of 'unlicensed surveying' and the board consists of entirely licensed surveyors and engineers and what they're saying is someone without a license is cutting into their little monopoly and they're not allow to do it," Avelar said. "That's very common in other instances like taxi cabs and Uber or hotels and Air BnBs, cosmetologists and hair braiders and funeral directors against people that just want to sell caskets, including a group of monks."
Avelar says a case decided by the U.S. Supreme Court in this term, NIFLA v. Becerra, is an important landmark for the First Amendment, which is the basis for Vizaline's counter-claim against the state.
In that case, California regulators tried to convince the court that they were only regulating professional speech regarding Christian non-profits and state-provided contraception and abortion services. The court, in a 5-4 decision, said speech is speech and there is no separation between types.
Also, Avelar says that the Mississippi Supreme Court's recent 8-0 decision on June 11 in King v. Military Department could be a good sign for Vizaline's case, as the court ruled that it will no longer give any deference to state agencies when it comes to interpretation of their governing statutes. The state's case is dependent on accepting their broad interpretation of the law governing surveying and what it constitutes.
Melton said that if Vizaline is successful in thwarting the board's legal challenge, they're looking to take it nationwide as he and Dow see a need in rural areas for their products.
The stakes are also big for the state's economic future. Melton said that if Mississippi wants to get off the bottom in every economic measure, the state government needs to stop putting unnecessary restrictions on up-and-coming businesses. He also said that it can't look good for businesses looking to relocate to the state from other areas.
"Mississippi is 50th in the nation in nearly everything and we need entrepreneurs that are forward thinking and willing to invest their time and money in Mississippi," Melton said. "You have a board that makes a decision like this and that person has second thoughts investing their energy and time into it. It really squashes the entrepreneurial process, because in Mississippi we need this."
Melton says his company never tried to pass its Viza-plat off as a survey substitute and said that no one from his company goes out to visit any of these properties. It takes about 48 hours for Vizaline to provide a bank with a Viza-plat.
"We only market to financial institutions and they know that it's not a legal survey," Melton said. "They don't use it in that way. There are times we'd recommend that they go ahead and get a survey or they look at our data and decide on their own to do that."
Vizaline utilizes a publicly-available legal description of a bank’s property and then inputs those parameters into a computer program that generates a line drawing of the property description. The program then overlays those drawings onto a satellite photograph.
Before, banks were dependent on legal descriptions of properties that use metes and bounds. Vizaline helps by giving a bank a bird's eye view of the property that is being used as collateral. This service helps smaller banks because it allows them to identify and resolve any discrepancies that might require the assistance of a surveyor and/or an attorney.
"I felt there was a better way to do this for financial institutions that would be fast for them, inexpensive and give them a way to see what they were lending on by turning their property description into a picture," Melton said. "It reduces their risk in lending and that's the business financial institutions are in, reducing risk."