April 2001 Update

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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 (11th 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

February 2001 Update

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ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

FreeSpeechLaw.com

The first anti-pornography crusaders are crawling out of their caves, now that it’s become safe for censorship under the Bush Administration. General Ashcroft sailed through his confirmation hearings without a single question about the adult entertainment industry, or his position on pornography and obscenity prosecutions. Inside sources say that the Justice Department is “cleaning its guns” in preparation for an attack on the industry.

Utah has appointed its first full time anti-porn warrior; Paula Houston. Her official title is the “Obscenity and Pornography Complaints Ombudsman.” During her introduction, Utah Attorney General Mark Shurtlerff said: “There’s absolutely no redeeming value to pornography…and I, for one, will not allow pornographers to hide behind the First Amendment.” Her first task will be to draft a comprehensive state “Moral Nuisance Law” designed to discourage obscenity and pornography.

In fact, it looks like the first round of arrests has already occurred. On March 3, 2001, the owner of a Salt Lake City magazine shop was charged with 51 felonies for selling pornographic videos to an undercover officer. Undercover officers went into the store, Bob’s Magazine and Video, and purchased over a hundred videos that were seized when the police executed a search warrant at the store on February 18. Prosecutors are looking for over two million dollars in fines against the owner.

For the first time, an Internet Service Provider has been found guilty of a child pornography offense. A Buffalo area ISP, named BuffNet, plead guilty, before the State Supreme Court in New York, of providing access to child pornography. It faces a five thousand ($5000.00) dollar fine at sentencing. An investigation determined that BuffNet failed to take any action after it was notified that one of its newsgroups was distributing child pornography. This case sets an interesting precedent when it comes to ISP liability for content found on its servers. Under the Communications Decency Act of 1996, ISPs have immunity from prosecution for many types of communications, but not for child pornography or obscenity. If ISPs are to be charged with the responsibility of making sure no illegal images exist on their servers, many ISPs will simply get out of the business. Given the sheer volume of communications that pass through a typical ISP, it would be nearly impossible to police content on a daily basis. So far, we have received no reports of an ISP being held liable for obscene materials, but time will tell.

“Sex” still remains the number one Internet search term despite the government’s attempt to impose a new morality. In a study involving some 9.1 million users, “sex” was the most popular search word, it being submitted one out of every three hundred terms. “Porn” along with “pornography” was the fourth most popular term, with “nude” “xxx” and “playboy,” also in the top ten.

Recently, the Federal Trade Commission stepped up their crusade against “dialers;” adult Internet sites providing access to their content using telephone bills instead of credit cards. Since the initiation of their campaign in October, 2000, most dialers have been chased off the Internet. For now: no credit card; no porn.

Yet another Internet censorship law has drawn the attention of the ACLU, who recently sued Vermont over its Internet child porn restrictions. The ACLU joined with the American Booksellers Association, and others, in filing suit in the United States District Court on February 7, 2001. According to the ACLU, the challenged legislation is a “broad censorship law that imposes severe content-based restrictions based on the availability, display and dissemination of constitutionally-protected speech.” Essentially, the law gives the State of Vermont jurisdiction in fifty states to prosecute people anywhere that material has been accessed which is offensive to minors. The Senate Judiciary Committee originally removed the child pornography ban because of concerns over constitutional free speech, however the House lawmakers ultimately reinstated the ban in the version of the law that passed. We will keep you posted on developments in this litigation.

In another Internet porn case, The First District Court of Appeal in California recently held that libraries can not be held liable for minors who get access to obscene images posted on the Net by third parties. The case of Kathleen R. v. City of Livermore, stemmed from a 12 year old boy’s use of his local library’s computer to download hardcore pornography to a disk. When his relatives later discovered the material, his family sued the library. Ultimately the Court concluded that simply providing minors access to the Internet does not affirmatively place them in danger, and therefore dismissed the suit.

Another large-scale obscenity prosecution has come down; this time in South Bend, Indiana. Several retail video stores were hit with incitements from the Grand Jury in early February, 2001. One of the stores, Pleasureland, faces four felony counts of racketeering, money laundering, conspiracy, and fifteen misdemeanor counts of pandering obscenity. Similar charges were brought against Little Denmark, and its owner Robert Henderson. All charges stem from sale or rental of adult videotapes. The Grand Jury returned indictments, but of course only heard the prosecutor’s version of the arguments. Recently, at least one First Amendment lawyer has sprung into action and is representing one of the video stores charged. This case promises to turn into a Free Speech versus morality debate that may set the tone for obscenity prosecutions in the new millennium. In the words of one of the Defendants, Ed Ballanow: “You’re not guilty until you go to court.”

One final note; it looks like the U.S. Supreme Court is about to tackle the issue of adult entertainment once again. On March 5, 2001, the Court announced that it would review the Ninth Circuit Court of Appeals’ decision in Alameda Books, Inc. v. City of Los Angeles, which invalidated an adult use ordinance which prohibited business that both sold adult products and contained facilities for viewing of adult movies or videos. Randy Garrou, Esq., of our firm represented the Plaintiffs in that case, and is now preparing to brief these issues in the United States Supreme Court. John Weston, Esq., will argue the case before the Justices, his Seventh argument before the U.S. Supreme Court on issues of censorship of erotica. We will keep you posted on the status of this important litigation.

Lawrence G. Walters, Esquire, formerly of Wasserman & Walters, is now a partner with 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

January 2001 Update

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ADULT INDUSTRY UPDATE

By: Lawrence G. Walters

www.firstamendment.com

There’s no denying it; an undercurrent of fear has gripped the adult entertainment industry. The nomination of John Ashcroft for Attorney General is a good indicator of the type of law enforcement climate we are likely to see under the Bush administration. Conventional wisdom dictates that the Justice Department, with someone like Ashcroft at the helm, will dust off the antiquated obscenity laws and begin an attack on the adult industry, the likes of which have not been seen since the Regan years.

The good news is that the emergence of new media, such as the Internet, has created unique legal arguments that may potentially render these outdated laws unconstitutional.

According to AVN.com, a number of major production companies have been meeting to formulate strategies to counter a feared Bush administration crackdown on the industry. The Clinton administration has prosecuted few obscenity cases over the last eight years, choosing instead to concentrate its law enforcement resources on child pornography offenses. By all indications, that is about to change.

Putting aside the risk involved, the adult Internet industry has consistently been profitable. According to www.ihollywoodforum.com, “It’s the only segment of the entertainment industry that consistently makes money.”However, many of the owners of adult Internet companies are members of Generation X, and have not lived through the law enforcement crackdown during the Regan/Bush years. There also exists a pervasive attitude amongst Webmasters that virtually any sexually explicit content is legal so long as it does not involve children or animals. This is a dangerous conclusion, and one not well-supported by the history of obscenity prosecutions in this country. For instance, this writer has defended obscenity prosecutions brought against relatively tame works such as Deepthroat and Behind the Green Door. The bottom line is that obscenity can be anything that a jury believes it is, so long as the content is sexually explicit. Many of the larger companies are having their content reviewed by their attorneys in order to reduce the risk of obscenity prosecutions under the new administration. We have also suggested that our clients engage the services of psychologists and sex therapists to review all content before distribution. The next four years promise to be an interesting time for the adult industry, and a busy time for First Amendment lawyers.

The profits and success of the adult industry are, of course, driven by consumer desire. According to a new poll by Harlequin Enterprises, 75% of the population has erotic fantasies, although less than half act them out. Argentineans and Chileans are the most likely to have erotic fantasies, with 95% of the individuals polled admitting to having such fantasies. Japan was at the bottom of the list. Regardless of how the new administration approaches the issues of pornography and obscenity, it can’t outlaw the desire for intimate human contact.

Potential criminal prosecution is not the only problem facing the adult Internet industry. Recently, America Online (“AOL”) filed a lawsuit against Cyber Entertainment Network (“CEN”), a company that owns and operates adult Websites. The suit accuses CEN, and others, of sending junk email to AOL members, typically known as “Spam.” In addition to naming CEN, and its owners, the lawsuit names eight employees and twenty-five Webmasters under contract to promote the adult Websites. The Complaint seeks an injunction against further Spamming and damages, which could include ten ($10.00) dollars for each unsolicited email or $25,000.00 per day that each message was transmitted. The suit accuses CEN of violating its own “no Spam”policy by encouraging Webmasters to send unsolicited emails promoting its network of sites, according to Yahoo! News. This lawsuit is the latest attempt by AOL to deal with one of its biggest recurring problems: SPAM. On some days, customer complaints have reached 25,000, accordingtotheCompany. “Whatwe’reactingonisanobligationtoourmembersto hold spammers accountable,”said AOL’s Nicholas Graham. “we are pursuing the owners of a program who give out incentives for porn spamming-and those that then go out and harvest email addresses and screen names to expressly send Spam”he said. Ebay has announced a similar crackdown on members who send unsolicited email to other members, in response to mounting complaints.

By way of update from last month’s report on the City News & Novelties, Inc. v. City of Waukesha case pending in the U.S. Supreme Court; the Court recently decided to dismiss the case as moot. This decision appears to be a small victory for the adult industry since it was feared that the Court could use this case to take away significant First Amendment protections called procedural safeguards. Under the procedural safeguards doctrine, applicants for adult entertainment licenses are entitled to a decision on the application within a specified, brief time period, and a prompt judicial review of any licensing decision. For now, the law of procedural safeguards will remain the same. It could have been much worse.

The City News case was dismissed as moot after the adult business involved had closed its doors and indicated its intent to remain closed. Precisely the same scenario occurred in the Supreme Court case decided last year in the case of the City of Erie, Pennsylvania v Paps A.M.. According to the U.S. Supreme Court, the distinction was that the adult business had prevailed in the lower court in the Erie case, whereas the adult business had lost in the lower court in the City News case. Accordingly, if the Court had dismissed the Erie case as moot, the City would have been injured by the continuation of a decision in favor of the adult business. In contrast, the City of Waukesha would not be injured by dismissal of the City News case since the City had prevailed below. The lesson here is that the Court will do everything in its power to prevent a decision favorable to adult businesses.

In other news, the U.S. Supreme Court recently allowed an Appeals Court decision to stand which limited “sexually explicit communication”on the Internet. This decision was rendered from the Fourth Circuit Court of Appeals, which is seen as one of the most conservative courts in the country. The decision upheld a 1996 Virginia law that barred state employees from engaging in sexually explicit communication on the Internet.

The ACLU challenged the law on behalf of six University professors, claiming that it amounted to an attack on academic freedom. In a surprising holding, the Fourth Circuit Court of Appeals determined that job-related speech does not involve matters of public concern, and therefore is not protected by the First Amendment. The decision is seen as a serious threat to academic freedom in this country.

Webmasters who are seeking to avoid prosecution in the U.S. by moving overseas take heed: Singapore recently announced its intent to prosecute porn sites, no matter where they’re located. In a report from a Singapore-based online news service on January 05, 2001, the Singapore government announced its intention to prosecute its citizens who operate pornographic Websites, even if those sites are located on servers outside the country. The Computer Crimes Division of Singapore’s Criminal Investigation Department said: “The police will trace the location of the site and ask the overseas hosting company to help with investigations.” The CCD also confirmed that they were on the lookout for potential violators, according to the report. Under Singaporean law, operators of pornographic Websites can be prosecuted under the “Undesirable Publications Act”and face $10,000.00 in fines and up to three years in jail. The warnings appear to be working, since most Singaporean based adult Websites have shut down. We call that kind of self-censorship the “chilling effect.” Although… it seems like it’s getting pretty cold around these parts too.

Lawrence G. Walters, Esquire, is a partner in the law firm of Wasserman & Walters in Winter Park, Florida. His practice concentrates in First Amendment and Internet law. He represents clients involved in all aspects of adult media. All statements made in the above article are expressions of opinion only, and should not be considered specific legal advice. You should always consult your own lawyer regarding any legal issue. You can access the firm’s web site at: www.firstamendment.com