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NC and SC Estate Planning and Elder Law Firm

Wednesday, November 23, 2016

Suing To Set Up Shop

With all that has been going on in the world over the past month, it was easy to miss the fact that an interesting new lawsuit has been filed against the state of South Carolina. The fact that the state is getting sued is not news. That happens all the time. What is different about this case is that it is about whether or not an innovative new company is able to do business in South Carolina.

Opternative is a Chicago-based company that allows consumers to get a prescription for glasses or contacts over the internet. They have developed a system where anyone with a computer and a smartphone can take an eye test in the comfort of their own home.

Earlier this year, the South Carolina legislature passed a law banning Opternative and companies like it from doing business in the state, claiming online eye exams are a threat to public health. Gov. Nikki Haley vetoed the law, “because it uses health practice mandates to stifle competition for the benefit of a single industry… putting us on the leading edge of protectionism, not innovation.” But the legislature voted almost unanimously, 39-3 in the Senate and 100-1 in the House, to override her veto.

Opternative, along with the Institute for Justice, is now suing the state, claiming that the statute outlawing their business model is nothing more than “economic protectionism.” They argue that the state is protecting the interests of existing businesses, not thinking about public health and safety, so they are asking the courts to overturn the law.

Our firm isn’t involved with this case, but it caught our eye because lawsuits like this are relatively unusual. Laws and regulations that stamp out emerging industries, however, are quite common. We frequently work with start-up companies that have to work through regulatory issues while they are trying to get their business off the ground.

Most of our clients aren’t outright banned from operating in the state, but there are always issues that arise when a business uses new technology to challenge an existing industry. It will be interesting to watch and see how Opternative’s strategy of suing the state plays out.


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