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August 09, 2002 12:10am
Adult Industry Update August 2002 - Train Wreck
Source: Lawrence G. Walters, Esq.
by: Company Press Release

As the reports begin to surface about the training session conducted for United States Attorneys, to teach them how to prosecute adult Webmasters for obscenity violations, one is reminded of the metaphoric train wreck in slow motion. We know it's coming, but there's nothing we can do to stop it. Well - almost nothing.

The federal obscenity law is currently the subject of a debatable, but certainly well intentioned legal challenge pending in the Southern District of New York.

1 Webmasters have finally organized a trade group, the Internet Freedom Association ("IFA") to advocate for their interests in the political and legal processes. Also, many Webmasters have finally taken the hint and eliminated explicit material from their free tours, while having their hardcore content reviewed by First Amendment counsel. But none of these efforts are likely to derail the Department of Justice from initiating an all-out assault on the adult Website industry in the United States. Attorney General John Ashcroft has even motivated his soldiers by making outlandish claims about adult Webmasters' ties to organized crime.

2 Times like these separate the men from the boys (and the women from the girls). There is more to being an adult industry participant than generating revenue, one would hope. The adult entertainment industry has produced a long line of freedom fighters, dedicated to preserving the right to Free Expression and beating back government aggression at every turn. The free ride enjoyed by many during the last ten years has produced much complacency, but the tough times ahead will produce many heroes. If the First Amendment could speak, it would reassure those many heroes about to be born, and let them know that she will offer solace and support during times of uncertainty and persecution.

Many in the adult Webmaster community will cash in their chips and seek to avoid any risk. Others will publicly challenge the government, offering to take the first hit. But most will continue their day-to-day operations, hoping to fly under radar and watch someone else go down first. It is this latter group that is at greatest risk. Change is inevitable, and the change in the political winds must result in some re-tooling in the adult Internet industry. Legal compliance simply must become the number one concern - even more important than the bottom line. Business debts can be paid off, written off or discharged in bankruptcy. However criminal punishment must be avoided in the first instance.

Final Warning

Take a moment to review a few practical tips for surviving in the Ashcroft era:

1. Clean up your free tours. Providing hardcore images to children in this political climate means you have a death wish.

2. Pay an attorney to review your site. Even if you retained counsel several years ago and have not made substantial changes since, the enforcement policy has changed and so has the law. Legal advice in this industry can quickly go stale. Ask your lawyer to take a second look at your content for compliance with current law.

3. Tighten up your 2257 compliance. Remember, over ninety percent of adult Websites do not fully comply with the Records Keeping and Labeling law requirements. In fact, full compliance is extremely difficult for a Website, particularly one that purchases the rights to display images from various different content producers. Gone are the days when one can feel safe by simply listing a name or an email address of a records custodian to contact for more information about the required records. Each image must be tied separately to a records custodian, and a physical address (not a post office box) must be provided. If you act as your own records custodian, you must consult with an attorney regarding the proper manner of maintaining and cross-referencing the records you compile.

4. Treat your customers and employees right. Experience teaches that oftentimes it is not the content that catches the attention of law enforcement; it is the complaint by an unhappy customer or a disgruntled employee who feels cheated. Running a clean ship and acting with business integrity is not only the right thing to do; it's in your best interests. If you are paying individuals to perform services, you might need an employment law checkup.

5. Pick the right spot. An adult Website can be operated from virtually anywhere in the world. Why take chances in a particularly conservative or puritanical location when you can set up shop in a more tolerant area? Check the laws of your local jurisdiction or have your attorney do so. Get a feel for the politics of your region and its history of hostility or tolerance for adult businesses. Research the court records to determine if any obscenity prosecutions have occurred within the last ten to fifteen years. And, perhaps most importantly, keep abreast of the local news. Often, an upcoming assault on the adult industry will be telegraphed in speeches, workshops, public meetings, or threats by law enforcement and local fundamentalists.

In the News

With those caveats in mind, it is time to turn to the recent happenings in the industry. Add Vermont to the list of states that have passed legislation seeking to restrict minors' access to the Internet, only to have the law declared unconstitutional by a federal court. In that case, various Free Speech groups challenged a Vermont statute criminalizing the transfer of sexually explicit materials to minors. The court held that just like numerous other similar statutes, this law violated the First Amendment rights of Internet Website operators displaying or offering links to sites displaying materials that might be regulated by the statute.

The government argued that it had an interest in deterring the "grooming" of minors to become participants in sexual activities later in life. While the court accepts that such may be a valid governmental interest, it held that the statute was not narrowly tailored to meet this goal. In addition, the statute had a chilling effect on the dissemination of indecent but constitutional speech to adults due to the inability to ascertain the age of Internet users.

While online erotica featuring adults seems to be catching a break in the courts, the same cannot be said for operators of "teen" model sites. Law enforcement is turning up the heat against several Internet sites featuring preteen and teen models. At the same time, a Bill is pending at the federal level which would make it a criminal offense to operate such a site.

At least three cases have been brought across the country against such sites: The first involves a "mom and pop" site run by an Arkansas couple that featured their twelve-year-old daughter. They have been charged with the state law felony of "engaging children in sexually explicit conduct for use in visual or print medium," and face a maximum of ten years in prison or a $10,000 fine. Their children have been placed in protective custody pending the outcome of the trial.

Earlier this year, a federal grand jury in Missouri indicted one if its residents on federal child pornography charges, based on allegations that he operated at least one preteen "model" site and enticed a minor to engage in sexually explicit conduct.

The third case involves the highly publicized charges against the owner of trueteenbabes.com. The accused entered a not-guilty plea to 886 felony counts involving a state statute against sexual exploitation of children and remains in jail on a half million-dollar bond. He could face life in prison if convicted at trial which is set to begin on October 3, 2002. All of those cases involve the volatile issue of "erotic nudity," in the absence of sexual activity.

While the legal landscape surrounding this issue is unclear at best, there can be no doubt that operators of any underage model sites are at risk of prosecution under currently-existing or soon-to-be-enacted legislation. At least one case has held that erotic photography, even of fully clothed children, violated federal child pornography laws.

On the copyright front, the Electronic Frontier Foundation, ("EFF"), recently announced that it would not seek United States Supreme Court review of the case involving 2600 magazine, wherein it argued that a prohibition on the dissemination of information about a DVD copying program violated the First Amendment.

In December 1999, eight major motion picture studios sued 2600 magazine for publishing an article containing the DeCss Computer Software allowing the DVD copying. 2600 magazine lost at both the District Court and the Second Circuit Court of Appeals which both held that the program could be used to infringe on the copyrights of major motion picture studios. Interestingly, an appellate court in California came to the opposite conclusion and held that an injunction prohibiting the dissemination of this information violated First Amendment rights. That case is currently on appeal at the California Supreme Court level.

Those copyright cases raise a fascinating legal issue regarding the relationship between the court process and the First Amendment. Ordinarily, actions by private parties do not implicate First Amendment rights, since the constitution only prohibits the government from abridging Free Speech or expression. However, when a private party uses the court process to restrict otherwise protected communications, the courts are grappling with the question of whether the First Amendment is implicated or potentially violated. These cases may have significant precedential value concerning any attempt to restrict the free flow of information online. Some of these issues may be resolved in yet another suit challenging the constitutionality of the Digital Millennium Copyright Act (DMCA), filed on July 25, 2002 by the ACLU.

The Plaintiff in the case is Ben Edelman, who claims that the DMCA prevents him from evaluating Web filtering software. Edelman was one of the experts who testified at the court hearings in the case challenging the Child Internet Protection Act (CIPA) the federal law recently struck down that required libraries to install Internet filtering devices or risk loss of federal funding. The ACLU remains hopeful that this case will produce better results than previous challenges to the DMCA.

Adult search engines beware: The FTC has issued a warning to search engines about "paid placement ads," where companies pay a fee determined by the search engine to have their product or name displayed at the top of the search result list. Such business model has become commonplace on the Web, but consumer groups have become fed up with the increasing use of such "paid inclusion" ads. The FTC sent letters to AltaVista, AOL Time Warner, Direct Hit Technologies, iWon, LookSmart, Microsoft and Terra Lycos, warning that the intermingling of non-paid Websites with paid inclusion Websites in the search database may cause consumer confusion and mislead consumers.

Given the prevalence of such paid inclusion ads in the adult Internet industry, operators should take heed of this warning and consult with their counsel if any concern is identified. Maybe Ashcroft is turning the heat up on adult Websites in the attempt to deflect criticism from his traditional backers over his power grab fueled by the War on Terrorism. Many religious conservatives who were instrumental in impressing President Bush to appoint Ashcroft as Attorney General, now are rumored to have become deeply dissatisfied by his actions.

"His religious base is now quite troubled by what he's done," says Grover Norquist, President of the Americans for Tax Reform. Specifically, the groups have been complaining that Ashcroft has been overstating the evidence of terrorist threats and using such threats to extend the federal government's power, which conservatives instinctively oppose. Even some city governments have refused to cooperate with Ashcroft, quietly staging revolts against the USA Patriot Act.

Over the last several months, Cambridge, North Hampton, Amherst and Leveret, Massachusetts, have all passed resolutions that called the USA Patriot Act a threat to civil rights of the residents of their communities. Those cities joined Berkley, California and Ann Arbor, Michigan in rejecting the way the Bush Administration has decided to address the War on Terror within the homeland. Portland, Oregon broke ranks with the Justice Department even before the USA Patriot Act was passed, refusing to cooperate with FBI investigations of Middle Eastern students within the city. Boulder, Colorado is considering similar resolution to those passed in Massachusetts, and Denver has already passed a resolution expressing concerns about the threat to civil liberties. Councilwoman Kathleen Mackenzie of Denver said: "We were concerned about the abridgement of Free Speech because of national security concerns." "Giving up the right to dissent was to high a price to pay," she added. Perhaps adult Websites will prove to be an easier target than Muslim extremists. Then again, if history repeats itself, perhaps not.

About the Author:
Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court.

All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters.

You can reach Lawrence Walters at Larry@LawrenceWalters.com, FreeSpeechLaw.com or AOL Screen Name: "Webattorney".

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