Is It Time for a Digital Wall Around California?

• By: Gabrielle Faust
• On: 07/13/2026 12:32:45
• In: Texas Posts
• Comments: 0

By Earl Cooke
 
There's an old Texas joke that if California keeps sending its problems east, we may eventually have to build a wall at the state line—and there are more than a handful of Texans who believe the issues presented at the state line far exceed those at the federal border. While that physical wall isn't coming anytime soon, more and more businesses are deploying digital walls to keep California issues from invading their operations.

Texas businesses have long watched California export people, business models, and litigation theories into the Lone Star State. Those exports are moving even faster today, increasingly landing at the doorstep of automobile dealers here. By now, I suspect most recognize that what starts in California does not stay contained on its own—it moves through interconnected digital systems, including advertising platforms, analytics tools, and online customer engagement, and ultimately finds its way into courtrooms across the country.

TIADA has recently heard from larger dealers that have been targeted by lawsuits brought under California's Invasion of Privacy Act (CIPA), a statute originally enacted in 1967 to address wiretapping and eavesdropping. Originally designed for a very different era, plaintiffs' attorneys are now applying it to modern website technologies, arguing that tools such as live chat, analytics tracking, and session replay software can constitute unlawful interception of communications without proper consent.

Many dealers understandably ask how a California statute reaches a Texas business. Plaintiffs' theory is jurisdictional: if a California resident visits a dealership website, the alleged interception occurs on the user's device in California. That argument is increasingly being used to pull out-of-state businesses into California courts.

Plaintiffs often argue that these technologies constitute unlawful interception of communications without proper consent. Since each alleged violation can be treated separately at the greater of $5,000 per incident or three times actual damages, and a single website visit may include multiple interactions, exposure can quickly stack in high-traffic website environments. As a result, total damages in these actions can escalate rapidly, creating significant concern for business owners.

As these risks evolve, businesses are increasingly evaluating a range of mitigation strategies. One approach is geo-blocking, which restricts website access based on a user's location, typically through IP address filtering, allowing companies to limit exposure to higher-risk jurisdictions while maintaining broader access elsewhere.

A more targeted variation involves selectively disabling certain website features—such as chat tools, analytics tracking, or session replay software—for users in specific states rather than restricting full access.

A higher-profile example of this approach can be seen here in Texas, where  certain sites restricted access after state age-verification requirements were implemented. Rather than operate under the new regulatory framework, the platform opted to block users in the state, illustrating how regulatory obligations can ultimately lead to full jurisdictional withdrawal rather than partial compliance.

A total block represents the most aggressive end of that spectrum, where access from an entire jurisdiction is restricted altogether instead of attempting to tailor compliance. In contrast to geo-blocking or feature-level restrictions, it removes the market entirely as a compliance exposure.
This is not an isolated issue emerging from California, but one of many regulatory and litigation challenges originating there—prompting some operators to consider whether a total block is appropriate.