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8th Cir. Upholds License Plate Case Dismissal

(CN) - The Eighth Circuit upheld the dismissal of a constitutional challenge by two private companies that said an Arkansas law barring the use of automatic license-plate readers violated the First Amendment.

A three-judge panel of the federal appeals court ruled that the lawsuit's targets - the state's governor and attorney general - are immune from its claims.

Tuesday's decision affirmed a federal judge's ruling to throw out the case filed by Digital Recognition Network and Vigilant Solutions on the grounds that the companies lack standing to sue Arkansas Gov. Asa Hutchinson and Leslie Rutledge, the state's attorney general. Hutchinson and Rutledge were automatically substituted as defendants in place of their predecessors, Mike Beebe and Dustin McDaniel, respectively.

"The governor and attorney general do not have authority to enforce the Reader System Act, so they do not cause injury to Digital Recognition," Judge Steven Colloton wrote for the three-judge panel.

The 2013 law, dubbed the Automatic License Plate Reader System Act, made the companies' business dealings illegal in the state by restricting the use of automatic license-plate readers. The law provides for civil litigants to seek damages against any violators.

California-based Vigilant Solutions developed the technology that allows license plates to be read from digital photographs. Digital Recognition, a Texas company, sells cameras that companies mount on to trucks and other vehicles which automatically photograph everything the vehicles encounter, according to the ruling.

When a photographed vehicle is subject to repossession, Digital Recognition notifies the driver and sells the license-plate data it collects to clients, such as car finance and insurance companies.

Before the law took effect, Digital Recognition sold three camera kits to Arkansas companies. Two companies began using the kits but they are no longer for sale, according to court records.

The two companies claimed in their lawsuit that the law violates their rights to freedom of speech under the First Amendment. They sought injunctions prohibiting enforcement of the law and a declaration that it is unconstitutional.

But an Eastern Arkansas district court correctly granted the state officials' motion to dismiss because the Eleventh Amendment protects them from litigation and the companies lack standing, the St. Louis-based appeals court ruled.

"Digital Recognition nonetheless lacks standing to sue the governor and attorney general because the injury of which Digital Recognition complains is not 'fairly traceable' to either official," Colloton wrote.

The law makes an exception for some entities, such as law enforcement agencies.

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