Celebrity Fakes

Posted by admin on December 1, 2001

Celebrity Fakes: Just a Joke or Real Trouble?

By: Lawrence G. Walters

www.FreeSpeechLaw.com

The adult Internet world is replete with images of nude celebrities. Most of the available content consists of a celebrity’s visage morphed onto a nude body of someone else, closely resembling the star’s figure. The poses and sex acts in which the celebrity appears to be engaged are limited only by the Website designer’s imagination and budget. It is not uncommon to find realistic images of media stars engaged in explicit sexual behavior even though those celebrities have never appeared nude in the mainstream media. Websites containing such depictions have become both popular and profitable. However, this content has caused an uproar amongst celebrities and those representing their rights of publicity.

Once again, computer technology has outpaced the law, and therefore no specific set of legal principles applies to computer-morphed celebrity images. The United States Supreme Court is currently wrestling with a similar question, vis á vis computer morphed child pornography, which is created by placing the head of a child on the nude body of an adult. While Congress has passed legislation criminalizing computer-generated child pornography, morphed images of adult celebrities have, thus far, not been the subject of specific state or federal legislation. Accordingly, the emerging legal question is whether celebrity fakes constitute a “parody” protected by the First Amendment to the United States Constitution, or an illegal means of capitalizing on the celebrities’ right of publicity.

Potential Claims

The creators or operators of celebrity fake sites are subject to various potential claims. The most likely causes of action are defamation, right of publicity violations, invasion of privacy claims, copyright infringement, and/or trademark infringement, dilution or disparagement. With the exception of copyright infringement, which is exclusively federal in nature, the remaining claims might be brought in either state or federal court.

A. Copyright

A copyright claim could be asserted if the celebrity fake site posts a photograph that is substantially similar to a copyrighted image, without permission of the copyright holder. Since one cannot obtain a copyright on one’s image or likeness, the celebrity would be an unlikely copyright claimant. The owner of the copyright, such as a photographer or content producer would generally bring such a claim, perhaps at the behest of the celebrity. However, the copyright holder can assign (i.e. transfer) this claim to any third party, who then has the right to bring the claim. If the bulk of a copyrighted image is used on a celebrity fake Website, such that it can be labeled an infringing “derivative work,” copyright law provides powerful remedies. Under the Digital Millennium Copyright Act, (“DMCA”), the copyright owner need simply serve a DMCA Notice on the Website’s host and billing company, demanding that the site be disabled or removed immediately. If the celebrity fake image is, indeed, found to be infringing on someone’s copyright, and it is not removed promptly upon receipt of the DMCA notification, both the Webmaster and the hosting/billing companies will be liable for copyright infringement. If the image was timely registered with the U.S. Copyright Office, statutory damages for copyright infringement range from $750 – $30,000 per infringing image, plus attorney’s fees. If the Website contains hundreds of images and galleries, the damages can easily approach the six-figure range.

B. Trademark Infringement, Dilution or Disparagement

A less likely claim that might be asserted is trademark infringement, dilution or disparagement under the Lanham Act.¹ If the celebrity uses a specific trademark, logo or trade dress which appears in the computer-altered image on the celebrity fake Website, a claim may be asserted for a trademark violation. For example, if the celebrity is dressed (or partially dressed) in her trademarked line of clothing, or is holding a product he or she endorses, a trademark claim may be soon to follow. The trademark owner will inevitably argue that associating a protected trademark with adult entertainment dilutes or diminishes the mark’s value. The celebrity might also bring a claim under the Lanham Act for unfair competition or what is commonly known as “palming off.”

C. Defamation

State laws provide a remedy to those who are defamed by publication of untrue facts to third parties. Defamation laws do not only apply to the written word – video and graphic images can be the subject of a defamation action as well. For example, if a celebrity fake includes images of Brittany Spears engaging in fellatio with Justin Timberlake, and Ms. Spears can prove that such depiction is false, an action for defamation might be asserted. Numerous defenses may come into play in such instances, as will be discussed below, such as the fact that the image was not presented as an accurate depiction of a real event but as a “fake.” An untrue message that the above occurred is defamation, and may constitute the more serious tort of defamation per se.

D. Privacy/Publicity Claims

State law also commonly provides for several types of invasion of privacy claims that could be raised by the celebrity; these include “false light” invasion of privacy, unauthorized publication of private facts and unauthorized capitalization on the celebrity’s right of publicity. Those claims center around the publication of facts, or depictions of events, that cast the celebrity in an unfavorable light, or attempt to profit on protected publicity rights. A celebrity, him or herself, is most likely to assert those kinds of claims.

All famous individuals have the right to profit from their own image, likeness and popularity. When someone unfairly tries to capitalize on a celebrity’s image for their own gain, a claim may be generated. The First Amendment imposes certain boundaries to these sorts of claims, however. For example, legitimate news organizations are entitled to accurately report on newsworthy events involving celebrities without violating these privacy/publicity rights, even if the celebrity’s image and likeness appears in the story. What constitutes legitimate news organizations and newsworthy events remain blurry issues.

E. Miscellaneous State Law Claims

Each state may supplement the above-referenced claims by providing additional causes of action for those injured by celebrity fake activities. Some states may provide redress through unfair trade practices legislation, false advertising laws, or through common law claims such as intentional infliction of emotional distress. The First Amendment also limits the reach of such common law claims.²

Defenses

While celebrity fake content may generate a number of potential claims, several defenses exist that may partially or completely absolve the publisher of liability. The likelihood of success of some of these defenses has not been established as of yet, given the lack of litigation surrounding these issues. One published decision, however, discusses the types of claims and defenses that the court will entertain in connection with celebrity fake sites: The case was brought by Perfect 10, Inc., a magazine and Website publisher against Cybernet Ventures, Inc., d/b/a Adult Check.³ Perfect 10 alleged that Adult Check profited from stolen images of celebrities appearing on Websites associated with the “Adult Check Family.”⁴ Perfect 10 sued Adult Check for copyright infringement, trademark infringement, trademark dilution, wrongful use of a registered mark, violation of the right of publicity, unfair competition, false advertising and racketeering. Adult Check raised numerous defenses to these claims, including the failure to allege “willfulness” as to the copyright infringement, failure to establish a “pattern of racketeering activity,” in response to the RICO claim, lack of standing to sue for copyright infringement, failure to identify specific injury resulting from the alleged racketeering activity, failure to plead a distinct RICO enterprise, failure to show a nexus between racketeering and the Adult Check enterprise, and federal preemption. The court rejected the majority of these defenses, and refused to dismiss any of the claims against Adult Check.⁵ While the court asked for additional facts to establish some of Perfect 10’s claims, all of the causes of action were allowed to proceed against Adult Check. If the Perfect 10 case is any indication of how other courts will rule, operators of celebrity fake websites may find themselves defending a host of potential claims; many with serious consequences. The following are some defenses that might be considered in response to such claims:

A. Parody/Fair Use Defense

The fact that a particular work constitutes a parody of a protected work is not a defense in itself, but is one factor to be considered in determining whether the defense of “Fair Use” can be established. Fair Use is a common affirmative defense to a claim alleging copyright or trademark infringement. The Fair Use defense is designed to allow someone other than the holder of the trademark or copyright to use the product, mark, or work in some way that does not legally infringe on the owner’s intellectual property. Although the general rule is that “parody” is only one factor to be considered in determining Fair Use, if a court concludes that a use is a parody, it appears to universally defeat a claim of intellectual property infringement or even a claimed violation of the right of publicity. Parodies receive full protection under the First Amendment even though they are designed to entertain, rather than to inform. It is also irrelevant, under the First Amendment analysis, whether or not the parody is for profit; even a commercial parody is entitled to full First Amendment protection.

One crucial factor, which the courts consider in evaluating whether a particular allegedly infringing use constitutes a parody, is whether there is a reasonable likelihood of confusion so that the allegedly infringing product provides an alternate means of satisfying the demand for the original product. The courts will assume that a legitimate parody does not, and is not intended to, satisfy the demand for the original product. A protected parody should point out the distinction between the original and the parody, and therefore eliminate confusion between the original product and the parody. Courts also recognized that parody, unlike satire, cannot stand on its own; identification with the object of the parody is essential. In other words, just because it is humor, doesn’t mean it is parody.

The courts used to consider how much of the original work was appropriated in determining whether a claim of parody was viable. Under the old test, a parody’s use of the original could not appropriate more than absolutely necessary to accomplish the parody’s purpose. However, in 1994, the Supreme Court reformulated that analysis and held that it is not how much of the original is taken which is determinative, but the intent in taking it and to what use the original is put that determines whether a parody is Fair Use.⁶ Under current law, a successful parody would defeat claims for copyright and trademark infringement if it portrays the original, but also sends a message that it is not the original, and simply serves to criticize the original, thereby lessening the potential for confusion.

The seminal case recognizing the right to publish a parody involving altered images of famous individuals is Hustler Magazine v. Falwell.⁷ In that case, Hustler Magazine successfully argued that its outrageous depiction of Jerry Falwell’s first sexual experience, with his mother in an outhouse, was entitled to First Amendment protection as a parody. The court determined that no reasonable person would ever take the depiction seriously, and that even state law tort claims such as intentional infliction of emotional distress were barred by the First Amendment’s protection of free speech.

More recently, several cases have recognized that parody is a defense to right of publicity and other intellectual property claims. In Cardtoons, L.C. v. Major League Baseball Players Association,⁸ the a federal appeals court held that baseball cards featuring caricatures of major league baseball players did not infringe upon the players’ right of publicity since the cards were a legitimate parody, and therefore entitled to full First Amendment protection as social commentary on public figures engaged in a commercial enterprise. Another court decision giving credence to the parody defense is Mattel, Inc. v. Walking Mountain Productions,⁹ where the court held that an artist could appropriate entire Barbie Dolls, and alter them in order to comment or criticize the “Barbie ideal” and take photographs of the altered dolls without infringing on Mattel’s copyright, trademark or trade dress. Furthermore, simple photographs of the altered dolls did not satisfy the market demand for the original doll, thereby precluding any likelihood of confusion between the original and the parody.¹⁰ Another federal appeals court also recently held that a critic could use copyright-protected elements of an original work to create a new work that criticized or commented on the original without of being guilty of intellectual property infringement.¹¹ Although untested, the defense of Parody/Fair Use may apply to a celebrity fake site portrayed in a sufficiently satirical manner.

B. Newsworthiness

Another defense to claims of infringement, required by the First Amendment, is the defense of newsworthiness. Courts have recognized that limited use of protected images or publicity rights is necessary in order to accurately report on newsworthy events by legitimate news organizations.¹² While it may be difficult to determine what events in a celebrity’s sex life are newsworthy, and therefore covered by this defense, it is clear that depictions of fictitious events such as computer-generated images of celebrities that never existed in the real world, would not likely be protected by claims of newsworthiness. In order for this defense to be implicated, the celebrity content would need to be “real” images of arguably newsworthy events. Even then, the courts would inquire into the legitimacy of the Website as a news organization, and its real intent in publishing the images. The latter is a problem when the site specializes in erotica.

C. Truth

Truth is always a defense to libel and slander claims. In other words, defamation claims only apply to false statements of fact that negatively impact an individual’s reputation. If a Webmaster faced a defamation claim from a celebrity based on computer-altered images, “Truth” would be a difficult defense to establish since the images do not depict an accurate event. Put in other words, creating fake images which depict celebrities in poses or circumstances that never occurred may form the basis for a defamation claim, rendering the defense of truth impossible to establish. On the other hand, if the celebrity was actually captured in a public place posing nude, for example, and a Webmaster chose to post a photograph of such public pose, “Truth” may provide a defense to any defamation claim asserted in such circumstance. But the truth defense does not apply to other more applicable claims in such circumstance, such as violation of the right of publicity.

What Does This All Mean?

A publisher of celebrity fake images must tolerate a high level of risk to continue such an operation. The Webmaster may face publicity claims from the celebrities, or their representatives, along with intellectual property claims from photographers or trademark holders. If the Website clearly discloses that the photographs are not real, the likelihood of the celebrity prevailing on a defamation or false light claim is minimal. That is because the celebrity would need to prove that the Webmaster intended to make false statements of fact about the celebrity, or portray the celebrity in a way that is false while representing the depiction as true. A celebrity fake site is just that – fake. The publisher would have a difficult time convincing a judge or jury that the Website portrayed any real facts or circumstances relating to the celebrity’s sex life or real activities.

Depending on how similar the fake image looks to a copyrighted image, copyright liability may be imposed under a derivative work theory. If the fake image is readily distinguishable from the original image, and communicates an entirely different form of expression or idea from the original, establishing a copyright claim becomes more difficult. Even if the image is similar to the original, the defense of Fair Use will certainly be an issue. If the essence of the Website is satirical, critical or can otherwise legitimately be labeled a parody of the sex life of the celebrity, Fair Use may be established. On the other hand, a celebrity fake Website containing nothing but images of realistic looking sex acts by celebrities may be difficult to pigeon hole into the concept of a parody. Since there is no bright line distinction between what is satirical and what is an infringing work, competent counsel with experience in intellectual property and First Amendment issues should be consulted before establishing, or continuing to operate high risk content such as celebrity fake images. Courts will look at the overall intent and portrayal of the fake images to determine whether the Fair Use defense is applicable. While many courts may be hesitant to rule in favor of a sexually explicit Website on any issue, the parody and Fair Use defenses are strongly ingrained in intellectual property jurisprudence. As celebrity content continues to grow in popularity, these issues will wind their way through the court system and ultimately be resolved for better or worse. Until then, legal guidance is essential to assist the Webmaster in sorting through these obviously complex intellectual property issues.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters runs the firm’s Florida office, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt 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 or www.FreeSpeechLaw.com.

1 15 U.S.C. 22

2 See, Hustler Magazine v. Falwell, 485 U.S. 46 (1988).

3 Perfect 10, Inc., v. Cybernet Ventures, Inc., 167 F.Supp.2d 114 (C.D. Cal. 2001).

4 Id.

5 Id.

6 Campbell v. ACUFF-Rose Music, 510 U.S. 569 (1994)

7 45 U.S. 46 (1988)

8 95 F.3d 959 (10^th Cir. 1996)

9 2001 WL 929923 (C.D. Cal. Aug. 13, 2001), aff’d., 4 Fed. Appx. 400 (9^th Cir. 2001).

10 Id.

11 Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11^th Cir. 2001)

12 Zacchini v. Scripps – Howard Broadcasting Co., 433 U.S. 562, 97 S.Ct. 2849, 53 L.Ed.2d 965 (1977).

November 2001 Update

Posted by admin on November 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

It was back to business this month now that everyone, including the United States Supreme Court, has learned to live under the constant threat of terrorist attacks. The Anthrax infestation in the United States Supreme Court did not stop the Justices from hearing arguments in the Ashcroft v. Free Speech case at an off-site location. The case involved the constitutionality of the Child Pornography Prevention Act of 1996.1 As is widely known at this point, the law criminalizes images that appear to be minors engaged in sexual acts. During the argument, several of the Justices seemed to agree that the Act’s language could be overbroad. For example, Justice Stephen G. Breyer asked, “The movies ‘Traffic,’ ‘Lolita’ and ‘Titanic’ all have simulated sexual behavior by seventeen year olds, why wouldn’t people who rent these videos be guilty of possession of [child pornography under the Act?]”2 The attorney representing the Government claimed that the Act was passed because “the advent of computer technology allows the production of images that are virtually indistinguishable from actual photos.”3 Justice O’Connor, apparently concerned about criminalizing simple possession of simulated child pornography stated: “I don’t know what we’re supposed to do with a statute like this.”4 Justice John Paul Stevens pointed out that even “Romeo and Juliet” could be forbidden under the Act.5 A major concern with the constitutionality of this law was summed up by Justice Kennedy’s question: “What’s the government’s interest in preventing adults from playacting as children?”6 As written, the law criminalizes images of young looking adults involved in sexually explicit activity, and has kept operators of “teen” oriented adult Web sites on edge. A decision by the High Court is expected in early 2002.

As our nation becomes transfixed with the images of brutality from the hard line Taliban government in Afghanistan, we should pause and become thankful that we live in a free country. For example, our government cannot conduct secret court sessions to bring down government dissidents, detain criminal suspects without cause, conduct secret property searches without informing the property owner, allow investigators to review citizens’ Internet usage and email communications without probable cause, nor authorize secret search warrants to monitor communications of suspected anti-government operatives. Wait a minute! That’s exactly what the U.S. government can now do under the United and Strengthening America Act, signed into law on October 25, 2001. This legislation has been roundly criticized by the mainstream media as a needless evisceration of our civil liberties, and an overreaction to the terrorist strikes which threatens the American way of life. MSNBC calls the new law a “serious incursion into the set of civil liberties that makes this nation unique.”7 Many of the provisions contained in the anti-terrorism legislation can be used in regular criminal investigations that have nothing to do with terrorism. Of particular concern to the Adult Internet Industry is the new ease with which investigators would be able to obtain permission to review anyone’s email communications and Web site history. Once the terrorist threat subsides, adult webmasters may very well find themselves to be the unwitting victims of the current hysteria that allowed this unconstitutional legislation to sail through Congress. Of additional concern, from a free speech perspective, is the new expansive definition of “domestic terrorism” that could be used against protestors who might become too aggressive, but are clearly not terrorists.8 Congratulations must be given to the one courageous Senator Russell Feingold (D-Wisc.), who cast the sole vote against the legislation.9

For years now, adult webmasters have been struggling with the onerous penalties imposed by credit card companies for Internet chargebacks. Finally, one Web company has had enough and is doing something about it. On October 4, 2001, WebsiteBilling.com, Inc., a major online credit card processor, filed a multimillion lawsuit against Visa for unlawful and malicious conduct in connection with its chargeback penalties.10 The case was filed in the Southern District of Florida and seeks an excess of three million dollars in damages including an immediate reversal of the one million dollars in fines levied against the Plaintiff by Visa. The complaint also seeks an injunction preventing Visa from imposing additional unlawful fines and penalties. WebsiteBilling’s President, Richard Kwait, said, “Visa has an obligation to protect its e-commerce merchants with standards in the same way that retailers are protected. Countless U.S. businesses have been forced under because of Visa’s failure to protect them from consumer fraud, and all the while Visa lines its pockets with outrageous penalties assessed against merchants.11” The Adult Internet Industry anxiously awaits the outcome of this case, and hopes to benefit from any relief awarded by the federal court in Miami.

Another Web censorship law has been thrown out on free speech grounds. The State of Virginia passed a law attempting to protect children from “harmful” material on the Internet in April, 1999.12 The law was enjoined in August, 2000, pending a final ruling by the court. United States District Judge James H. Michael Jr. rendered that final ruling recently, holding that the attempt to restrict access of minors to indecent material on the Internet unconstitutionally burdens the rights of adults to receive protected speech.13 Virginia’s Attorney General announced plans to appeal the decision to the ultra-conservative Fourth Circuit Court of Appeals in Richmond, Virginia.14 Similar laws have been struck down on First Amendment grounds in New York, New Mexico and Michigan. Interestingly, the Judge recognized the possibility that advances in Internet technology may someday allow the government to restrict Internet content without violating Free Speech. “Technological advancements may, in the not too distant future, permit statutes similar to the one now before this Court to regulate constitutionally content on the Internet,” he said.15 That day may be coming soon given the upcoming argument before the United States Supreme Court in the Child Online Protection Act case on October 28, 2001. If the law is upheld, all American adult Internet content will be required to be placed behind a firewall, and secured from access by minors. If the High Court strikes the law down, all obscenity laws across the country may be consequently rendered unconstitutional.

Our firm is currently preparing for its own visit to the United States Supreme Court on December 4, 2001. The case involves the constitutionality of an adult entertainment regulation passed by the City of Los Angeles. John Weston, Esquire, is gearing up for his seventh United States Supreme Court argument on this case. The Court is expected to clarify the required predicate that the government must establish in order to support restrictive adult entertainment zoning regulations. This “secondary effects” analysis has been the subject of intensive litigation in the adult industry for decades. More on that case next month.

One final case worth mentioning: The Fourth District Court of Appeal in California recently determined that paying for a girl-girl sex show does not constitute “prostitution” under California law.16 The case arose from a performance at the “Flesh Club” where dancers performed sexual acts on each other in the VIP room for approximately nine minutes. The court determined that the crime of prostitution must involve sexual activity between the customer and the prostitute. Apparently, it is no longer a crime just to watch in California. This decision stands in sharp contrast to the way the Florida courts have ruled on the same issue. In State v. Conforti,17 a Florida Appellate Court upheld Florida’s prostitution law and called a similar girl-girl sex show, “somewhere on Mars,” referring to the “outer limits” of protection afforded to nude dancing under the First Amendment. As illustrated by these two diametrically opposed decisions; East is East, and West is West, and the twain shall never meet.

October 2001 Update

Posted by admin on October 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

Now is the time to rally around the Flag, but beware of collateral damage that may result from the war on terrorism. Most red-blooded Americans support President Bush’s decision to unleash “infinite justice” on the suspected terrorists. Our country has even gone so far as to place a $25 million dollar bounty on the head of Osama bin Laden. Our leaders have also taken some steps to protect national security by enhancing the ability of the government to detain foreigners for increasing amounts of time, and possibly deport aliens without a stated reason, which seems appropriate in the heat of the moment. However, Attorney General John Ashcroft has also asked for secret court authorization for wire taps, longer jail terms for terrorists, access to users’ Internet information without a court order and authority to review telephone voice messages with only a search warrant.1 The Administration also wants wiretap evidence obtained from other countries in violation of the Fourth Amendment to be admissible in court.2 These measures have caused Democrats and other civil liberties advocates to become “deeply troubled” by the constitutional implications. “Past experience has taught us that today’s weapon against terrorism may be tomorrow’s law against law-abiding Americans, says Representative John Conyers, D-MI.3

The President rejected the Taliban’s demands that we produce evidence linking bin Laden to the terrorist attacks, and yet intends to use military force to punish him and his associates for his crimes. Some experts on U.S. policy in the Middle East have opined that such military retribution will very likely only exacerbate the problem and elevate Osama bin Laden to the status of a martyr.4

The course the government has embarked on is a potentially dangerous road to travel from a constitutional perspective, and establishes a disconcerting precedent. While the terrorist attacks in September may seem to justify an exception to every rule, our willingness to approve summary execution of suspects without the presentation of evidence or any form of trial should, at the very minimum, raise our collective eyebrows. Such actions are usually reserved for totalitarian regimes, and fly in the face of our time-valued constitutional concepts, especially Due Process. While a quick, violent response may well be appropriate in this circumstance, one is forced to question whether any other circumstances justify the imposition of a summary execution without trial.

Years ago, we declared a war on drugs, accompanied by rhetoric not much different than that heard regarding the “war on terrorism” today. Assume a Columbian drug dealer mowed down fifty innocent people in Central Park during a drug deal gone bad using a submachine gun; would his actions also justify punishment without evidence or trial? What if nobody died, but ten were wounded? The treacherousness of this slippery slope becomes obvious when illustrated correctly. Those in the adult industry must remain ever vigilant and on guard against the erosion of civil rights regardless of the purported justification. If the rights to Due Process and a fair trial end up as “collateral damage” in the war on terrorism, we will end up with problems that pale in comparison to our current preoccupation with terrorists. Our government sets an example for the citizens of our country and, indeed, for the rest of the world. Our criminal justice system is seen as among the fairest on the planet. Making exceptions to the way we dispense justice, regardless of the level of the crime, is dangerous business. We must remain vigilant in the attempt to minimize any damage the First Amendment may suffer in the “war on terrorism,” in order to prevent the kind of erosion the Fourth Amendment suffered during in the war on drugs. Government officials have already tried to censor communications on the “Voice of America” because they are allegedly coming directly from bin Laden. Only in the defense of unpopular, even despicable speech, are the rights of all to Free Expression established and maintained.

The terrorist attacks on U.S. soil has, for the first time since the inception of the Internet, resulted in the term “sex” being knocked off the top ten most popular search engine terms.5 During times of war, people typically think less about sex and more about violence than during peacetime. We also tend to place a lower value on our civil liberties and a higher value on personal security, which gets us back to the concerns raised earlier: The Bill of Rights is likely to take a significant hit in the name of “fighting terrorism.”

This month did produce some good news; the Eleventh Circuit Court of Appeal reversed the decision of the trial court which had originally ordered the Voyeur Dorm to shut down.6 The Eleventh Circuit determined that Tampa improperly applied its Adult Entertainment Ordinance to the Voyeur Dorm, an online business. The Court pointed out that adult entertainment regulations are only justified if directed at adverse secondary effects of adult entertainment; not if they are directed at the entertainment itself. Voyeur Dorm did not cause the typical adverse secondary effects generally associated with adult businesses, such as increased crime and decreased property values, because the public did not set foot inside the Voyeur Dorm residence and no business was transacted at the physical location. All business occurred in “virtual space.”7 The court dodged the significant constitutional issues raised in the case, i.e., whether adult entertainment ordinances can constitutionally be applied to adult Internet businesses. Nevertheless, the adult Webmaster community has celebrated the victory.

For the first time in our history, a major American newspaper has created a “pornography beat.” The Los Angeles Times has finally accepted the existence of the erotica industry as a legitimate source of ongoing news.8 “We couldn’t ignore it anymore,” said Ralph Frammolino, a Times reporter. The adult industry is one of the bigger businesses in the San Fernando Valley area, claiming revenues of $10 billion dollars a year.9 The Times will not be attempting to bury this topic on the back page either. The stories will be given considerable space, often running more than 1,500 words, and will sometimes be prominently placed.10 Kat Sunlove, the Adult Industry’s Legislative Affairs Director noted: “Politically, we’re no longer a pariah.”11 Even the legislators California stand up and take notice when the adult industry speaks, according to Sunlove.

Our government’s gearing up to fight common enemies abroad has likely resulted in the settlement of a couple of cases against the Adult Internet Industry. Recently, the Federal Trade Commission (“FTC”) announced it settled charges against several adult Web site operators who used “dialer” programs to connect users to their erotica.12 Dialer programs became commonplace in the Adult Internet Industry as an alternative to credit card billing after it became increasingly difficult for webmasters to obtain merchant accounts with major credit card companies. These dialer programs disconnect customers from their regular Internet Service Provider and reroute the Internet connection to a provider in Madagascar, costing unwitting subscribers thousands of dollars in long distance fees. After many months of legal wrangling, the FTC settled the charges with Charlo Barbosa B.C., Ltd., Virtuallinks, Hillary Shaeinkin, Witch’s Web, Inc., Honey Bun, Inc. and Free Sugar, Inc. The FTC also settled fraud charges against RJB Telecom, Inc., of Scottsdale, Arizona, who were accused of illegally billing customers’ credit cards. According to Reuters, the company agreed to post a $250,000 bond and to undergo scrutiny to ensure that it does not continue the practice. Perhaps this is a time for putting aside our differences and focusing on the common enemies.

As the ACLU prepares to take on Attorney General John Ashcroft in the United States Supreme Court on the COPA case, sex education and Free Speech groups have filed Amici Curae (“Friend of the Court”) briefs with the High Court, arguing against the legislation. 13 As is widely known by now, the case involves a constitutional challenge to the Child Online Protection Act (COPA) passed by Congress in 1998. The law was struck down by the lower courts on the grounds that the concept of “local community standards” cannot be constitutionally applied to a global medium such as the Internet. Recently, the National Coalition Against Censorship and five other organizations filed briefs asking the Court to uphold the lower court rulings and invalidate the legislation, once and for all. In their briefs, groups such as the Society for Scientific Study of Sexuality, the Institute for The Study of Human Sexuality and the Sexual Health Network argued that there is no body of scientific evidence which establishes that reading or viewing sexual material harms minors. The groups also take issue with the government’s assertion that pornography does not promote a “normal sexual perspective.” The case will be argued on November 28, 2001.

Many webmasters aptly note the federal Government is currently distracted by the war on terrorism and therefore is unlikely to launch a major offensive against the Adult Internet Industry. It may very well be that recent events have caused the Justice Department to reevaluate its priorities. However, webmasters should remain cognizant of the fact that the last Bush administration sent many individuals to jail for their participation in the Adult Industry. With approval ratings hovering around 90%, the current administration can easily conclude that it can do no wrong. It is during just such a time that participants in this unpopular industry must remain on guard.

God bless America.

September 2001 Update

Posted by admin on September 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

You may be fed up with the anti-porn rhetoric here in the United States, but when the media releases reports that people are flogged in Iran for selling erotic CD’s,1 or webmasters are arrested for “suspicion of operating a pornographic Web site” in Hong Kong,2 it becomes readily apparent things could be much worse. Here, in the United States, the Adult Internet Industry thus far has flourished, despite some economic ups and downs.

While the days of easy money are long gone,3 the past Administration allowed this industry to become strong and forever embedded in the fabric of the World Wide Web. Sure, there will be some prosecutions on the federal level against adult Web sites in the coming years; possibly even many. But social conservatives and “morality police” will not succeed in accomplishing any significant change in sexual behavior of the people of the Western Hemisphere; nor will they succeed in driving underground what has become a powerful industry. Unlike Afghanistan, which recently banned the Internet entirely,4 Americans will never accept a wholesale prohibition on any form of protected speech. Not to mention that the Constitution forbids it.5

The last ten years of unprecedented growth in the Adult Media Industry resulted in irreversible acceptance of the fact that mainstream erotica is available in our motel rooms, our televisions, satellite systems, and computers. This phenomenon makes it more difficult for prosecutors to convince jurors their neighbors should not be allowed access erotica of choice. The current erotica saturation will make the selection of any particular work for prosecution to appear arbitrary and capricious. Why this movie? Why not that mpeg? Certainly any obscenity prosecution will have a chilling effect on the distribution of other similar materials, but given the vast amount of explicit content out there, the random selection of any particular work for prosecution borders on the absurd.

Assuredly, however, the same cannot be said for images involving minors. At every turn, the Government tries to mix the issues of obscenity and child pornography. The Division of the federal government that prosecutes obscenity cases is called the “Child Exploitation and Obscenity Unit” (a/k/a the “God Squad”). Recent reports indicate that this Unit is preparing to gear up after basically eight years of inactivity. Whenever law enforcement can wave the banner of “Protect the Children,” it will. That argument sells much better than “Restrict What Consenting Adults Can View,” which is why so many obscenity cases are prosecuted in conjunction with charges of child pornography. The chances of being charged with an adult obscenity offense skyrockets when the government can also argue the defendant exploits children. Many expect that also will be true with respect to Web sites that do not restrict acces by minors.

Attorney General John Ashcroft’s first offensive against Internet content ostensibly was a large-scale Texas child pornography prosecution nicknamed “Operation Avalanche.”6 Ashcroft grabbed headlines across the world, in an obvious attempt to link the concept of adult Web sites to child pornography with this case – which, by the way, was assembled and prosecuted for the most part during Janet Reno’s watch.

Since most Internet experts have concluded it will be futile to attempt arresting actual producers of child pornography in Indonesia and Russia,7 the U.S. Postal Inspection Service decided to go after subscribers to the Web sites. Now there’s an interesting use of tax dollars! It was conclusively established that pedophilia is an incurable disease, often caused by a sexually abusive childhood. Putting 100 people in federal prison for viewing illegal images on their computers may garner a day’s headlines but it does nothing about the root of the problem of production that actually victimizes the children.

Adult webmasters can take these arguments away from the government, however. Unfortunately, the Internet is currently replete with images of child pornography on foreign Web sites, newsgroups and many voyeur sites. Any responsible webmaster should take a strong and definite stance against child pornography, using minors in any type of explicit imagery or allowing minors access to it. That includes monitoring the content of any sites which one is affiliated with, linked to, or promoting. Do not loose sight of the fact the Texas bust of Landslide Productions, Inc., involved only links to child pornography. The convicted webmasters had no content on their site.

Currently, a debate is emerging whether nudist sites and “Youth and Beauty” glamour sites featuring teenagers or children constitute child pornography as that term is defined under state and federal law. While there is some legal support for the position that the First Amendment protects the dissemination of nude or semi-nude images involving minors,8 this issue has not been conclusively decided. Such material raises unique legal concerns. However, webmasters all can agree that any images involving erotic depiction of children should be avoided and condemned. Without reliance on the issue of protecting children the Government is left with nothing but “restricting adult access to erotica” as a battle cry in any obscenity prosecution. Hardly a consensus builder!

Jurors will be less swayed by the Government’s arguments if minors are entirely taken out of the mix. We live in an age of tolerance, not judgment. The “live and let live” philosophy has taken hold in both urban and rural areas of our country. Life is too short to spend time in a courtroom judging what your neighbor watches in the bedroom. More importantly, given the current availability of explicit imagery jurors may be viewing the same materials.

The U.S. Supreme Court is about to decide an important case that will determine the definition of child pornography under federal law.9 It may turn out that webmasters will face prosecution for using young looking models, regardless whether all models were over the age of eighteen when photographed. While such restrictions appear to push the limits of constitutional regulation in a free society, webmasters should make a concerted effort to level the playing field by drawing a bright-line distinction between adult erotica and deplorable child pornography and by restricting adult Web sites to adults. Failure to do so will only empower your enemies and support their effort to blur the line between protected speech and illegal materials.

Interviewing lawyers to secure the best representation

Posted by admin on August 1, 2001

CROSS-EXAMINING YOUR COUNSEL

By: Lawrence G. Walters, Esq.

www.FreeSpeechLaw.com

It’s time to take the plunge! You are ready to take the advice of all the resource sites, chat rooms and articles you’ve read and hire an attorney. You know that your record-keeping compliance needs to be tightened up, and you have always been a little nervous about that fetish gallery, anyway. So now what do you do? Open the yellow pages? Call the local Bar Association?

This article will examine what qualifies an attorney to represent an adult Web site, and what questions you should ask potential counsel. It is intended for those webmasters seeking counsel for the first time, or those who want to make sure their existing counsel is the right choice. This was a topic of much interest and discussion at the recent Internext convention, and will hopefully be useful to newbies and veterans alike.

It has been said that this is a good time to know a great lawyer. But what makes a lawyer great? If you have heart disease, you don’t go to your family practitioner. You look for the best heart surgeon in the country, right? It’s the same with lawyers. We’re all specialists these days, or should be. The days of the general practitioner are long gone, in accounting, medicine and law. All lawyers have their niche. So what kind of lawyer is best for adult website representation?

Obviously you need an attorney with experience, but the Internet has not been around that long, so no lawyer has much Adult Internet Law experience. The partners of Weston, Garrou & DeWitt, the author included, have been representing adult webmasters since there was such a thing, but the practice area is less than a decade old. So while you may not find a lawyer with much Adult Internet Law experience, you should at least eliminate potential candidates who do not have significant experience in the Adult Entertainment Industry, in general. The Industry, of which you are a part, has been around since the 1950’s, when people were thrown in jail for selling Playboy. Many of the lessons learned from the battles involving other types of adult media are extremely useful in representing adult webmasters. For example, the video distributors of the 1980’s, during the Regan-Bush Era, fought many of the same types of battles that the Internet industry will face in the George W. Era.

It is essential that your attorney have experience representing adult industry clients, for several reasons. First, adult clients are different. They are treated differently by judges and juries, and can be some of the toughest clients to represent. Legal arguments that will be readily accepted by the courts when advanced by “mainstream” litigants often will be summarily rejected when the client is involved in the adult industry. Your lawyer should be accustomed to that treatment, and react accordingly. Adult Entertainment Industry lawyers must always be more prepared than attorneys in other practice areas because their clients are held in low esteem by the conservative judicial system.

Accordingly, you should not be your attorney’s first Adult Industry client. We’ve seen it time and time again: The client who comes to us at the last minute because the silk stocking law firm that represented the adult business during its formation stages is ducking for cover when the media is pounding down the door on some high-profile case involving their favorite topic; sex. “Our other clients wouldn’t understand,” they say. Your lawyer should be prepared to defend you in the court of popular opinion when the going gets tough. If not, you should find one that will. You cannot afford to place yourself in a position where you may need to “switch horses” in the middle of a crisis. If your counsel decides to bail out under those circumstances, it may be too late for another attorney to take over and do an effective job. So ask your lawyer if he or she is in for the long haul.

Adult Industry Update July 2001

Posted by admin on July 1, 2001

ADULT INDUSTRY UPDATE

July – August, 2001

By: Lawrence G. Walters

www.FreeSpeechLaw.com

Last month it was Ashcroft, this month it’s George W, himself! The President has kicked off his “Values Campaign,” which will include a critique of what he considers the degradation of American culture through excessively violent and sexually explicit movies and television shows that mock traditional values.[1] Where have we heard that nonsense before? From Sen. Joe Lieberman, D-Conn., who has solicited Bush’s help with his censorship legislation seeking to hold media producers responsible for marketing mature content to minors.[2] The Media Marketing Accountability Act of 2001 would increase the powers of the Federal Trade Commission in connection with enforcement of deceptive advertising practices against entertainment companies.[3] No response from the Bush camp, yet.

As the conservative politicians are banning together, so are the Adult Industry groups: Recently, the Free Speech Coalition, www.FreeSpeechCoalition.com, announced that it would merge with the Global Internet Alliance (GIA), an organization of leading adult webmasters, in an effort to combine forces in order to achieve greater lobbying strength.[4] “I think it strengthens both of our organizations to come together like this,” said Bill Lyon, the FSC Executive Director.[5] The GIA originally formed to combat problems that webmasters were having with the credit card companies. Now, they realize that the problems facing the Adult Industry, webmasters included, are much larger than originally anticipated. This is particularly true given “the hassles the Republicans are going to try and generate for the Internet.”[6] This merger is further evidence of the conversion occurring between various facets of the adult entertainment industry, which formerly maintained separate identities.

No matter how bad it gets here, just be glad you don’t live in Iran. Twenty Iranians were recently flogged in the public square in Tehran for selling “obscene” compact discs and videotapes, according to the official news agency.[7] Virtually any adult material is considered “obscene” in Iran, where women must cover most of their bodies.[8] Despite the flogging, other dealers continued to sell similar material not far from where the punishment occurred.[9] Whether any of the allegedly “obscene” discs or tapes included flogging was not disclosed.

It is no secret that Internet filtering software is not perfect, and can be avoided by most teenagers, even those with minimal computer skills. A search for non-sexual terms will generate a healthy dose of erotic websites.[10] However, a fledgling Internet security firm called MessageLabs recently unveiled software that actually distinguishes between “artistic” nudes and adult material.[11] The firm boasts 95% accuracy and claims that the software even includes “posture recognition” to help weed out offensive images. This brings new meaning to “Girls Lean Back Everywhere.”

Adult webmasters are closely following an obscenity case against Michael A. Jones, from Greenwood Illinois. Jones has been charged with 9 misdemeanor counts of obscenity and 5 counts of child pornography following a search of his home and computers.[12] Jones’ website sells CD-ROMs, with digital images and video clips, to other websites; he is essentially a “content distributor.” McHenry County Sheriffs raided Jones’ house and business in October and searched for about 5 hours before seizing computers and thousands of CD’s.[13] Police conceded that most of the thousands of images and videos were legal, but determined that images of suspected minors and “extreme sadomasochistic” images of women crossed the line.[14] Since this is one of the first cases to test the obscenity laws relating to content distributed online, it will be followed with great interest by the adult webmaster community.

Utah’s newly-appointed porn czar, Paula Houston, recently asked the United States Attorneys Office to consider bringing federal obscenity charges in connection with ten unsolicited emails that contained links to websites with sexual content or attached sexual images, according to Yahoo! News. “There are some that are very sexually graphic,” Houston said. Is this the first time she’s seen these things that clog our in boxes on a daily basis? A spokesperson for the United States Attorneys office in Utah confirmed that the cases are being actively investigated.

Another case of interest involves the First Amendment right to anonymous speech on the Internet. The New Jersey Superior Court recently upheld an earlier ruling that a corporation cannot obtain the identity of an anonymous user of an Internet message board since it did not demonstrate that it suffered “harm” from the user’s posts.[15] The Court’s decision also asked future courts faced with these types of requests to come up with a series of guidelines to govern when anonymous users’ identities may be divulged.[16] This case will potentially set a precedent for the recurring issue of the level of protection to be afforded anonymous speech on the Internet.

The Adobe Systems Corporation is in some hot water over its cooperation with the FBI in an effort to arrest a Russian software developer accused of finding a way to circumvent the security features in Adobe’s Acrobat eBook Reader.[17] The Electronic Frontier Foundation (EFF), a technological civil liberties group, announced that it would call for a rally against Adobe to protest its cooperation with the Government. The EFF called the arrest “disgraceful.”[18]

Beware the lure of offshore transfers! Recently, the U.S. Second Circuit Court of Appeals upheld the conviction of Jack Cohen, for illegal offshore gambling activities, stemming from his relationship with offshore casino web sites. Cohen argued that all of the gambling occurred offshore, in countries where gambling was legal. The Appeals Court rejected the argument, and upheld his conviction. U.S v. Cohen, 2001 WL 863590 (2d Cir. July 31, 2001). For more information on the dangers of “offshore” relationships for webmasters, read the author’s recent article on the subject found at: http://www.lawrencewalters.com/offshore.php3

While the Adult Internet Industry continues to grow, as evidenced by the growing attendance at the recent Internext Convention in Las Vegas, traditional adult print media is struggling. It was recently reported that Penthouse Publisher Bob Guccione has been forced to sell two plots of land in Atlantic City to pay off a reported $28 million in debts.[19] Apparently, General Media’s $56 million in liabilities exceed its assets by more than two to one.[20] Even its Web site is struggling. “There are sites on the Internet much more explicit than anything he can do,” says an insider.[21] One magazine analyst, Martin Walker, notes: “Young kids don’t need the same erotica any more. The changes in sexual mores in this country mean they have access to the real thing.” Oh, to be young again.

[1] K. Walsh, “A Brand New Front in The Culture Wars,” U.S. News and World Report (July 23, 2001.)

[2] “Lieberman Wants Bush Help on Media Bill,” AVN News (June 22, 2001).

[3] Id.

[4] T. Hymes, “GIA Merges with FSC,” AVN Online (July 17, 2001).

[5] Id.

[6] Id.

[7] “Don’t Peddle Porn in Iran,” Reuters (July 12, 2001).

[8]Id.

[9] Id.

[10] P. Festa, “Porn Outsmarts Search Filters,” ZDNet News (July 2, 2001).

[11] “Anti-Porn Software Adds ‘Posture Recognition’ To Flesh Detection,” Silicon.com (July 5, 2001)

[12] D. Stockman, “Jones Arraigned On 5 Obscenity Charges,” Northwest Herald Online (July 6, 2001).

[13] Id.

[14] Id.

[15] M. Bartlett, “New Jersey Court Upholds Anonymity of Net Bulletin Board,” Newsbytes (July 11, 2001).

[16] Id.

[17] D. McGuire, “Civil Liberties Group Blasts Adobe for Aiding FBI in Arrest,” Newsbytes (July 19, 2001).

[18] Id.

[19] “Macho Life Gets Tough For Head Of ‘Penthouse’,” Taipei Times (July 2, 2001).

[20] Id.

[21] Id.

July 2001 Update

Posted by admin on July 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

www.FreeSpeechLaw.com

Last month it was Ashcroft, this month it’s George W, himself! The President has kicked off his “Values Campaign,” which will include a critique of what he considers the degradation of American culture through excessively violent and sexually explicit movies and television shows that mock traditional values.1 Where have we heard that nonsense before? From Sen. Joe Lieberman, D-Conn., who has solicited Bush’s help with his censorship legislation seeking to hold media producers responsible for marketing mature content to minors.2 The Media Marketing Accountability Act of 2001 would increase the powers of the Federal Trade Commission in connection with enforcement of deceptive advertising practices against entertainment companies.3 No response from the Bush camp, yet.

As the conservative politicians are banning together, so are the Adult Industry groups: Recently, the Free Speech Coalition, www.FreeSpeechCoalition.com, announced that it would merge with the Global Internet Alliance (GIA), an organization of leading adult webmasters, in an effort to combine forces in order to achieve greater lobbying strength.4 “I think it strengthens both of our organizations to come together like this,” said Bill Lyon, the FSC Executive Director.5 The GIA originally formed to combat problems that webmasters were having with the credit card companies. Now, they realize that the problems facing the Adult Industry, webmasters included, are much larger than originally anticipated. This is particularly true given “the hassles the Republicans are going to try and generate for the Internet.”6 This merger is further evidence of the conversion occurring between various facets of the adult entertainment industry, which formerly maintained separate identities.

No matter how bad it gets here, just be glad you don’t live in Iran. Twenty Iranians were recently flogged in the public square in Tehran for selling “obscene” compact discs and videotapes, according to the official news agency.7 Virtually any adult material is considered “obscene” in Iran, where women must cover most of their bodies.8 Despite the flogging, other dealers continued to sell similar material not far from where the punishment occurred.9 Whether any of the allegedly “obscene” discs or tapes included flogging was not disclosed.

It is no secret that Internet filtering software is not perfect, and can be avoided by most teenagers, even those with minimal computer skills. A search for non-sexual terms will generate a healthy dose of erotic websites.10 However, a fledgling Internet security firm called MessageLabs recently unveiled software that actually distinguishes between “artistic” nudes and adult material.11 The firm boasts 95% accuracy and claims that the software even includes “posture recognition” to help weed out offensive images. This brings new meaning to “Girls Lean Back Everywhere.”

Adult webmasters are closely following an obscenity case against Michael A. Jones, from Greenwood Illinois. Jones has been charged with 9 misdemeanor counts of obscenity and 5 counts of child pornography following a search of his home and computers.12 Jones’ website sells CD-ROMs, with digital images and video clips, to other websites; he is essentially a “content distributor.” McHenry County Sheriffs raided Jones’ house and business in October and searched for about 5 hours before seizing computers and thousands of CD’s.13 Police conceded that most of the thousands of images and videos were legal, but determined that images of suspected minors and “extreme sadomasochistic” images of women crossed the line.14 Since this is one of the first cases to test the obscenity laws relating to content distributed online, it will be followed with great interest by the adult webmaster community.

Another case of interest involves the First Amendment right to anonymous speech on the Internet. The New Jersey Superior Court recently upheld an earlier ruling that a corporation cannot obtain the identity of an anonymous user of an Internet message board since it did not demonstrate that it suffered “harm” from the user’s posts.15 The Court’s decision also asked future courts faced with these types of requests to come up with a series of guidelines to govern when anonymous users’ identities may be divulged.16 This case will potentially set a precedent for the recurring issue of the level of protection to be afforded anonymous speech on the Internet.

The Adobe Systems Corporation is in some hot water over its cooperation with the FBI in an effort to arrest a Russian software developer accused of finding a way to circumvent the security features in Adobe’s Acrobat eBook Reader.17 The Electronic Frontier Foundation (EFF), a technological civil liberties group, announced that it would call for a rally against Adobe to protest its cooperation with the Government. The EFF called the arrest “disgraceful.”18

Beware the lure of offshore transfers! Recently, the U.S. Second Circuit Court of Appeals upheld the conviction of Jack Cohen, for illegal offshore gambling activities, stemming from his relationship with offshore casino web sites. Cohen argued that all of the gambling occurred offshore, in countries where gambling was legal. The Appeals Court rejected the argument, and upheld his conviction. U.S v. Cohen, 2001 WL 863590 (2d Cir. July 31, 2001). For more information on the dangers of “offshore” relationships for webmasters, read the author’s recent article on the subject found at: http://www.lawrencewalters.com/offshore.php3

While the Adult Internet Industry continues to grow, as evidenced by the growing attendance at the recent Internext Convention in Las Vegas, traditional adult print media is struggling. It was recently reported that Penthouse Publisher Bob Guccione has been forced to sell two plots of land in Atlantic City to pay off a reported $28 million in debts.19 Apparently, General Media’s $56 million in liabilities exceed its assets by more than two to one.20 Even its Web site is struggling. “There are sites on the Internet much more explicit than anything he can do,” says an insider.21 One magazine analyst, Martin Walker, notes: “Young kids don’t need the same erotica any more. The changes in sexual mores in this country mean they have access to the real thing.” Oh, to be young again.

June 2001 Update

Posted by admin on June 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

www.FreeSpeechLaw.com

In one month: (1) Attorney General John Ashcroft promises to prosecute Internet obscenity; (2) Morality in Media proposes an amendment to the United Nations Treaty to Combat Internet and Satellite Pornography; and (3) the United States Supreme Court threatens to reverse the strongest Circuit Court opinion protecting online adult materials. These can be difficult times to operate an adult Website given the downturn in the economy and the unfavorable legal climate, but this cloud may have a silver lining.

The first order of business is the United States Supreme Court: Initially, it agreed to review the Third Circuit Court of Appeals opinion Ashcroft v. ACLU, striking down the Child Online Protection Act (“COPA” or “CDA II”), finding that the concept of “community standards” could not be constitutionally applied to the Internet. Many legal experts felt that this opinion would render obscenity prosecutions difficult if not impossible to pursue against Internet content since essentially the same community standards test is used for obscenity laws. Although no one can predict the outcome of this case, which should be decided this spring, the result likely will impact First Amendment jurisprudence well beyond COPA.

Some in the adult industry have actually hoped that the Supreme Court reverses the Third Circuit’s decision based on the misguided belief that such a decision would eliminate free adult content on the Internet, and boost sales for subscription sites. While reversal might result in some incidental benefit to pay sites by decreasing the amount of free adult materials available on the Web, a substantial amount of free content will remain available from offshore, as well on the Usenet and newsgroups. The individuals who post images in these venues will be undeterred, and potentially unaffected, by the implementation of the COPA law because they have the capability of remaining anonymous and are not posting for profit or for any commercial purpose. Many of the free sites would be forced to either shut down, or begin requiring an AVS or credit card to continue offering access to images. This will of course benefit the age check services and the pay sites. However, the negative impacts resulting from a reversal of the COPA decision will not be worth any of the incidental benefits to the pay sites under a cost benefit analysis.

Depending on the precise language of the Supreme Court’s forthcoming opinion on COPA, prosecutors may well become emboldened, should the Court strongly reject the Third Circuit’s community-standards analysis, and begin instituting obscenity prosecutions across the country with reckless abandon. The pendency of the Ashcroft v. ACLU appeal has likely dissuaded many prosecutors from initiating obscenity charges, given the viable defense relating to community standards outlined by the Third Circuit’s decision. Should this defense be eliminated by the Supreme Court, those pay site operators who claimed that they would benefit by the shake out may live to regret the day they advocated for a reversal in this case.

The Supreme Court also announced that it would review a decision from the Seventh Circuit Court of Appeals regarding the procedural safeguards are required by the First Amendment when analyzing a permit scheme which imposes a prior restraint on Free Speech. What all that legal mumbo-jumbo means is that the Supreme Court could take away significant protections that many in the adult industry have relied upon in obtaining licenses or permits to operate adult bookstores, video stores, or gentlemen’s clubs across the country.

In 1990, the Supreme Court announced, in a case entitled FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 110 S.Ct. 596 (1990), that any local ordinance imposing licensing requirements on adult businesses must guarantee that the business receives a decision on its application for a license within a specified, brief time period, and that the ordinance provide a means to have a court “review” its decision in a “prompt” manner. These protections were provided to prevent cities and counties from “dragging their heels” by simply not acting on a permit application, and thereby keeping the adult business from opening indefinitely, and keeping the courts from reviewing their decision, lack of it. Scores of ordinances across the country have been invalidated in lawsuits brought by adult businesses for failing to contain these procedural safeguards, most of which were allowed to open after pointing out the deficiency. Now that the Supreme Court has announced its intention to review this issue, First Amendment lawyers have become concerned that the current makeup of the Supreme Court could change the rules of the game on this issue.

Now that the morality groups have had their say in Washington during last month’s round of meetings, Attorney General John Ashcroft has announced that his Justice Department would help state law enforcement officials imprison adult site operators who feature obscene images. “I am concerned about obscenity and I’m concerned about obscenity as it relates to our children,” Ashcroft said in his first appearance before the House Judiciary Committee.

These statements come after Ashcroft’s meeting with Republican Congressman Steve Largent (R-OK) and numerous anti-pornography groups such as Morality in Media, Focus of the Family, the National Law Center, and the American Family Association, among others.

Apparently, Ashcroft’s Justice Department has not been deterred by the recent acquittal in Cincinnati, Ohio, involving Elyse Passion, an adult video store in Butler County, Ohio. The County has now hired Steve Tolbert, the loosing attorney in that case, to act as the “Anti-Obscenity Prosecutor” for Butler County. Of the recent acquittal on obscenity charges, Mr. Tolbert stated, “I’m not willing to concede that one case sets community standards for obscenity. It’s a fight that will be fought.”

All of this bad news has galvanized the National Obscenity Law Center (a subgroup of Morality in Media, Inc.) to call for an amendment to the United Nations’ Treaty on obscenity to combat Internet and satellite porn. In its recent Obscenity Law Bulletin, the group claimed that entrepreneurs around the world have abused the Internet by making available depictions of “masturbation, copulation, pedophilia, sadomasochism, falatio, bestiality, necrophilia, oralism and cunnalingus, as well as advertisements for the same.” The group claims that current domestic laws of various nations are inadequate to control the trans-border, transnational transmission of obscenity because of extraterritorial origin.⁷ It is also noted that the same “evils” can be viewed via satellite transmission.

The mindset of this group can be summed up by its comment claiming, “trans-national obscenity is one of the most culture destroying phenomena of our time.” The National Obscenity Law Center uses all of its perennial arguments to justify international regulation of digital erotica such as harm to morality, harm to marriage, harm or violence toward and the degradation of women, harm to children, harm caused by rapists fueled by pornography and the harm of nude performances. Perhaps such an effort could succeed in a country without Free Speech protections, however it is appalling that a group based in the United States would even endorse a document called the “Agreement for the Suppression of the Circulation of Obscene Publication.”

there may be a silver lining associated with all of this, at least for the companies willing to fight. The current posturing by the Justice Department, and local authorities, along with fears generated by potential adverse Supreme Court decisions, have convinced many to flee the adult industry. Demand for erotica, however will not decline-it never does. Forbes Magazine claims that the American adult industry now generates 11 billion dollars in sales annually! For those companies willing to stand and fight, the financial rewards may be significant. Money aside, we may even be able to preserve important First Amendment freedoms along the way.

May 2001 Update

Posted by admin on May 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

www.FreeSpeechLaw.com

Happy “Victims of Pornography” Month! Each May, a coalition of anti-pornography groups celebrates its efforts to draw attention to the “horrors” of erotic materials. This year, they’re hoping that their efforts will result in more obscenity prosecutions against the adult industry.

For the last eight years or so, Washington officials would barely acknowledge the effort with a nod and a wink, and just usher these groups out the door with promises of more child pornography prosecutions. This year is different, however: The festivities began May 2, with an event attended by several groups and a couple of elected officials. Representative Steve Largent (R-OK) took the opportunity to blast former President Bill Clinton for not enforcing obscenity laws. “It’s a disease that has to be stopped,” Largent said, “and we have the cure.” Bruce Taylor, President of the National Law Center for Children and Families stated, “the Attorney General has made both public and private statements that he intends to enforce all the laws, including the obscenity laws.” Typical, because of his Religious-Right affiliation, our Attorney General recently stated that he: “might be willing to trade First Amendment rights to improve the culture.” Thomas Jefferson must be twirling in his grave!

The week of May 7 brought more fun and games. Representatives of nearly a dozen anti-pornography organizations were set to meet with General Ashcroft this week, in the hopes to persuade the government to start prosecuting obscenity cases. In testimony to the House Appropriations Committee on May 4, 2001, Ashcroft called pornography “a matter of great concern to me and to this Administration.” Numerous anti-pornography groups have meetings scheduled with Ashcroft including the Concerned Women for America, the Family Research Council, Morality in Media, Citizens for Community Values, the American Center for Law and Justice, Focus on the Family and the Center for Reclaiming America. Conspicuously absent from the meeting agenda are any groups advocating civil liberties or Free Speech.

Patrick Truman, the American Family Association’s Government Affairs Director, believes that even some Cable TV programs can be prosecuted under obscenity statutes.⁵ It was Truman who ran the Justice Department’s Child Exploitation and Obscenity Section during the Ronald Regan and George Bush administrations. Truman also believes that there is ample material available for prosecution on the Internet, which allows for the same kind of interstate sting operations he used during his Justice Department days.

Although many in the adult industry are concerned about what Attorney General Ashcroft will do, another nominee to watch is Robert Flores, recently nominated to be the Administrator of the Office of Juvenile Justice and Delinquency Prevention. Mr. Flores is currently the Vice President and Senior Counsel for the Nation Law Center for Children and Families. The goal of that organization is the “protection of children and families from the harmful effects of illegal pornography by assisting in law enforcement and law improvement.” He is one of the leading proponents of launching prosecutions against Adult Websites; he previously worked for the Justice Department as an obscenity prosecutor from 1989-1997.

All of this law enforcement rumbling is enough to make some adult entrepreneurs get out of the business altogether. In fact, that may have played a part in Yahoo!’s decision to abandon its brief foray into the adult merchandise distribution business. However, some adventuresome company will always be there to pick up the slack. While the censors might be in power now, there will always be a freedom fighter willing to take the heat to test the limits of Free Speech. In the past, it has been Hugh Hefner, Bob Guccione, Larry Flynt and many others. The next four years will surely have more pioneers of compatible stamina.

Even some mainstream Websites are turning to sex to make up for lost advertising revenue. Salon.com, for example, has added new content including what it calls “erotic art and photography” for a $30.00 annual fee. As mainstream Internet and Cable TV companies turn to sex to spice up their bottom line in these slow economic times, these companies will certainly gain the attention of the morality groups impose their sense of morality on everyone else. Big companies generate big headlines. Dave McClure, President of the United States Internet Industry Association believes that people like Truman, and his American Family Association, are interested in going after big names like Yahoo! or AOL.

While many adult industry insiders believed that erotic entertainment would be the first victim of censorship legislation during the new Administration, as it turns out the video game industry may be targeted first. On April 25, 2001, Senator Joseph Lieberman, (D-Conn.), joined by Hillary Clinton of New York, and Herb Kohl of Wisconsin, filed proposed legislation to punish media companies who market products to children that are intended for adults. The legislation will primarily affect the interactive game industry and the music industry. The bill has been labeled an attack on Free Speech by the Motion Picture Association of America. Senator Lieberman responds by claiming, “that’s not censorship, that’s common sense.”

While Washington is looking to crack down on graphic video games, a federal appeals court recently found that these games are entitled to full First Amendment protection. The Seventh Circuit Court of Appeals struck down, on Free Speech grounds, a City of Indianapolis, Indiana Ordinance limiting access of minors to video games that depict violence or sex. The Ordinance prohibits any operator of five or more video game machines in one place to allow an unaccompanied minor to use an amusement machine that is harmful to minors. The term “harmful to minors” has been used in legislation protecting minors from sexually oriented material for decades, but had not been extended to violent content until this bizarre law. The Ordinance was challenged by several Free Speech organizations before it even went into effect. The trial court temporarily upheld the Ordinance by refusing to enter preliminary injunction, but the Seventh Circuit Court of Appeals later reversed and enjoined the Ordinance. It concluded that the graphic video games at issued were not obscene, but were fully protected by the First Amendment. It rejected the notion that two allegedly empirical studies claiming a link between violence and video games established a compelling interest to justify the restriction on First Amendment rights. The court compared the actions of the City in prohibiting access to violent video games to forbidding children from reading The Divine Comedy, War and Peace or Dracula. “Violence has always been and remains a central interest of humankind and a recurrent, even obsessive theme of culture both high and low,” the court noted. This ruling sets the stage for a big battle between the censors, who are up in arms regarding recent school shootings, and the $20 billion dollar a year video game industry, dead set on protecting First Amendment rights.

Recently, even the Wall Street Journal stepped up to defend the adult Internet industry. I guess politics makes for strange bedfellows. Even though the Journal has a reputation in some quarters for staunch conservativism, it defended the adult Web industry as a significant part of online commerce. It further decried the pressure placed on companies not to do business with adult Internet providers as a threat to Web industry freedom. The Journal editorial noted that the online adult industry has been essentially unaffected by the pressure from mainstream advertisers, since adult sites seem to be one of the more hardy online business.

Despite that perception, the economic downturn has even affected adult Internet sites. Operators of both large and small adult Websites report that the days of easy customer acquisition and steady revenue growth are over. The revenue slow down is blamed on a massive saturation of free adult content, and stricter rules on credit card processing. Many users are canceling their memberships because they have lost their jobs or are being crushed by credit card debt. Adult industry insiders observe that there are now too many adult sites, and that average users have become overwhelmed by the never-ending banners and pop up windows typically associated with erotic Websites. “This may be the year Webmasters will make the decision whether they’ll stay in the business or not,” said Lee Noga, an executive with Cybererotica.

As predicted in last month’s Update, City Officials in Tarpon Springs ordered a nude voyeur Website operating within the City limits to close, or face $800.00 a day in fines. The City’s Code Enforcement Board told www.youcanwatch.com to shut down on April 12, 2001. The Website’s attorney argued that his client’s business is located in Cyberspace, not in Tarpon Springs. The Board members voted 7-0 against the company. Big surprise! Their attorney says that they will appeal. Can we watch?

Lawrence G. Walters, Esquire recently became a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters continues to practice in Central Florida, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt 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 or www.FreeSpeechLaw.com

April 2001 Adult Industry Update

Posted by admin on April 1, 2001

ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

FreeSpeechLaw.com

First Amendment attorneys may be watching a bunch of adult films in the upcoming months. Several of the larger adult video companies are hoping to make sure that their products are defensible against obscenity prosecutions by having their lawyers review all movies before distribution. “We do our own editing. Then we send them to our First Amendment attorneys,” says the president of Vivid Entertainment Group, according to AVN Online. “The legal time alone is expensive as you can imagine” he added. This may be money well spent, however, given the dramatic change in the political climate surrounding the adult entertainment industry. Attorney General John Ashcroft is certainly no friend of adult media, and already has blamed recent school shootings on violence in the media.

Gone are the days when adult videos were sold out of the back of a van, wrapped in brown paper packages. Now even Yahoo! has gotten into the act. Yahoo! is the first Internet giant to jump into the online erotica market. This decision illustrates the desperation facing many mainstream Internet companies seeking new sources of advertising dollars in the slowing economy. While many online ventures have gone bust, including recently Kazoo.com, adult Websites have continued to flourish. Some analysts believe that entering into this market will hurt Yahoo’s business reputation; long term. But there is no denying the old adage: Sex sells.

At the same time, the FCC recently issued new “indecency guidelines” attempting to tighten up the rules on what will be tolerated over the airwaves by the new Administration. “Understandably, the public is outraged by the increasingly coarse content aired on radio and television at all hours of the day, including times when children are most likely to be listening or watching,” said FCC Commissioner Suzan Ness, who further referred to today’s media as “an onslaught of on-air smut.” The new factors that the FCC will consider when processing indecency complaints is the explicitness and graphic nature of the broadcast, the extent to which sexual innuendo is repeated and the extent to which the broadcast panders, titillates or possesses intentional shock value. Whether these new guidelines are constitutional, or not, is another matter.

One thing is clear: the government does not want the execution of Tim McVeigh broadcast over the World Wide Web. The Feds will broadcast the death over closed circuit television to a select audience of victims. Recently however, Entertainment Network, Inc., which operates VoyeurDorm.com and DudeDorm.com, filed suit in the U.S. District Court, for the Southern District of Indiana, trying to obtain permission to show the execution live over the Internet. The company argued that it had a constitutional right to place a Web cam in the execution chamber in the federal pen, which is located in Indiana. Perhaps Justice officials believe that the execution would be “indecent.”

Elsewhere, government officials empanelled by Congress, will be taking a tour of the country to receive open testimony regarding Internet porn. The National Research Counsel will be holding public hearings in Austin, Kansas City, Salt Lake City, Miami and San Diego to discuss approaches to protecting children from pornography and other “inappropriate” Internet content. The Committee will make recommendations to Congress regarding anti-porn legislation. This is your chance to be heard.

In the latest ruling on the “linking” issue, a court in India ordered a number of business leaders from www.Rediff.com to stand trial for “giving access to pornographic material.” This is the latest in a growing number of cases worldwide where Websites are being held responsible for content found on linked sites. Rediff.com is a portal that allows users to conduct essentially free-form searches. Although this portal does not create directory listings of adult materials, users can locate such content using its search engine. Rulings such as this- and others in both the United States and elsewhere- are resulting in increasing concern amongst Adult Webmasters. It’s one thing to be held responsible for content on a Website; but it’s quite another to be prosecuted for content found on only one of many links.

Local governments cannot turn a blind eye to the fact that adult entertainment does not cause increases in crime and decreases in property values. At least that’s what a federal court of appeals held in the recent case, Flanigan’s Enterprises, Inc. of Georgia v. Fulton County, Georgia, 2001 WL 166375 (11^th Cir. 2001). For many years, First Amendment lawyers have battled the so-called “Secondary Effects Doctrine,” by virtue of which cities and counties regulate topless bars and adult bookstores They presume that such establishments cause sufficient problems to justify their intense regulation, pretending that adult entertainment is essentially the root of all evil in the community, but without any real empirical proof. Many courts even allowed local governments to ignore contrary evidence showing that property values increased in areas surrounding adult entertainment, or that patrons were better behaved in topless bars than in the local corner pub. This problem came to an end with the Flanigan’s decision, where the court ruled that Fulton County must consider the results of its own study of adult entertainment when enacting such restrictive laws.

Looming over all of this is another case, Alameda Books v. City of Los Angeles, that stands to decide just how much proof is needed to support adoption of regulations affecting expressive adult businesses. In that case, which will be argued by our firm’s senior partner, John Weston, the United States Supreme Court will address the fate of the Secondary Effects Doctrine. The Justices may clarify this issue, once and for all, for First Amendment practitioners. Arguments before the High Court are expected to occur in October or November, 2001.

On a lighter note, Las Vegas police recently told lawmakers that they could not prosecute a stagehand who secretly videotaped showgirls in various states of undress in a casino dressing room. In Las Vegas, there is no law against secretly photographing people for sexual gratification. Apparently, the stagehand had videotaped showgirls through a camera he had placed in a box in their dressing room. States and locales across America have been busily enacting anti-voyeurism laws which, for the first time, criminalize acts of videotaping individuals against their will. Could it be that Las Vegas is behind the times?

Local government has set its sights on another “Voyeur House.” The City of Tarpon Springs, near St. Petersburg, Florida, has scheduled a hearing to determine whether the voyeur house depicted at www.ucanwatch.com violates the City’s prohibitions on adult use businesses. Adult Webmasters are closely watching this case, as it may strongly impact the fate of thousands of such voyeur houses across the country that typically do not obtain adult use permits prior to going live on the World Wide Web. If my instincts are right, the site may soon be called: ucan’twatch.com.

Lawrence G. Walters, Esquire, formerly of Wasserman & Walters, is a partner with the law firm of Weston, Garrou & DeWitt, based in Los Angeles. Mr. Walters continues to practice in Central Florida, and represents clients involved in all aspects of adult media. Weston, Garrou & DeWitt 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 or www.FreeSpeechLaw.com

Year: 2001