One Hundred Eighth Congress of the United States of America


S. 877

One Hundred Eighth Congress of the

United States of America


Begun and held at the City of Washington on Tuesday, the seventh day of January, two thousand and three

An Act

To regulate interstate commerce by imposing limitations and penalties on the trans- mission of unsolicited commercial electronic mail via the Internet.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the ‘‘Controlling the Assault of Non- Solicited Pornography and Marketing Act of 2003’’, or the ‘‘CAN- SPAM Act of 2003’’.


  1. FINDINGS.—The Congress finds the following:

    1. Electronic mail has become an extremely important and popular means of communication, relied on by millions of Americans on a daily basis for personal and commercial purposes. Its low cost and global reach make it extremely convenient and efficient, and offer unique opportunities for the development and growth of frictionless commerce.

    2. The convenience and efficiency of electronic mail are threatened by the extremely rapid growth in the volume of unsolicited commercial electronic mail. Unsolicited commercial electronic mail is currently estimated to account for over half of all electronic mail traffic, up from an estimated 7 percent in 2001, and the volume continues to rise. Most of these mes- sages are fraudulent or deceptive in one or more respects.

    3. The receipt of unsolicited commercial electronic mail may result in costs to recipients who cannot refuse to accept such mail and who incur costs for the storage of such mail, or for the time spent accessing, reviewing, and discarding such mail, or for both.

    4. The receipt of a large number of unwanted messages also decreases the convenience of electronic mail and creates a risk that wanted electronic mail messages, both commercial and noncommercial, will be lost, overlooked, or discarded amidst the larger volume of unwanted messages, thus reducing the reliability and usefulness of electronic mail to the recipient.

    5. Some commercial electronic mail contains material that many recipients may consider vulgar or pornographic in nature.

    6. The growth in unsolicited commercial electronic mail imposes significant monetary costs on providers of Internet access services, businesses, and educational and nonprofit institutions that carry and receive such mail, as there is a finite volume of mail that such providers, businesses, and

S. 877—2

institutions can handle without further investment in infra- structure.

    1. Many senders of unsolicited commercial electronic mail purposefully disguise the source of such mail.

    2. Many senders of unsolicited commercial electronic mail purposefully include misleading information in the messages’ subject lines in order to induce the recipients to view the messages.

    3. While some senders of commercial electronic mail mes- sages provide simple and reliable ways for recipients to reject (or ‘‘opt-out’’ of) receipt of commercial electronic mail from such senders in the future, other senders provide no such ‘‘opt-out’’ mechanism, or refuse to honor the requests of recipi- ents not to receive electronic mail from such senders in the future, or both.

    4. Many senders of bulk unsolicited commercial electronic mail use computer programs to gather large numbers of elec- tronic mail addresses on an automated basis from Internet websites or online services where users must post their addresses in order to make full use of the website or service.

    5. Many States have enacted legislation intended to regu- late or reduce unsolicited commercial electronic mail, but these statutes impose different standards and requirements. As a result, they do not appear to have been successful in addressing the problems associated with unsolicited commercial electronic mail, in part because, since an electronic mail address does not specify a geographic location, it can be extremely difficult for law-abiding businesses to know with which of these dis- parate statutes they are required to comply.

    6. The problems associated with the rapid growth and abuse of unsolicited commercial electronic mail cannot be solved by Federal legislation alone. The development and adoption of technological approaches and the pursuit of cooperative efforts with other countries will be necessary as well.

  1. CONGRESSIONAL DETERMINATION OF PUBLIC POLICY.—On the basis of the findings in subsection (a), the Congress determines that—

    1. there is a substantial government interest in regulation of commercial electronic mail on a nationwide basis;

    2. senders of commercial electronic mail should not mis- lead recipients as to the source or content of such mail; and

    3. recipients of commercial electronic mail have a right to decline to receive additional commercial electronic mail from the same source.


In this Act:

  1. AFFIRMATIVE CONSENT.—The term ‘‘affirmative con- sent’’, when used with respect to a commercial electronic mail message, means that—

    1. the recipient expressly consented to receive the message, either in response to a clear and conspicuous request for such consent or at the recipient’s own initiative; and

    2. if the message is from a party other than the party to which the recipient communicated such consent, the recipient was given clear and conspicuous notice at

S. 877—3

the time the consent was communicated that the recipient’s electronic mail address could be transferred to such other party for the purpose of initiating commercial electronic mail messages.


    1. IN GENERAL.—The term ‘‘commercial electronic mail message’’ means any electronic mail message the primary purpose of which is the commercial advertisement or pro- motion of a commercial product or service (including con- tent on an Internet website operated for a commercial purpose).

    2. TRANSACTIONAL OR RELATIONSHIP MESSAGES.—The term ‘‘commercial electronic mail message’’ does not include a transactional or relationship message.

    3. REGULATIONS REGARDING PRIMARY PURPOSE.—Not later than 12 months after the date of the enactment of this Act, the Commission shall issue regulations pursu- ant to section 13 defining the relevant criteria to facilitate the determination of the primary purpose of an electronic mail message.

    4. REFERENCE TO COMPANY OR WEBSITE.—The inclu- sion of a reference to a commercial entity or a link to the website of a commercial entity in an electronic mail message does not, by itself, cause such message to be treated as a commercial electronic mail message for pur- poses of this Act if the contents or circumstances of the message indicate a primary purpose other than commercial advertisement or promotion of a commercial product or service.

  2. COMMISSION.—The term ‘‘Commission’’ means the Fed- eral Trade Commission.

  3. DOMAIN NAME.—The term ‘‘domain name’’ means any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet.

  4. ELECTRONIC MAIL ADDRESS.—The term ‘‘electronic mail address’’ means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the ‘‘local part’’) and a reference to an Internet domain (commonly referred to as the ‘‘domain part’’), whether or not displayed, to which an electronic mail message can be sent or delivered.

  5. ELECTRONIC MAIL MESSAGE.—The term ‘‘electronic mail message’’ means a message sent to a unique electronic mail address.

  6. FTC ACT.—The term ‘‘FTC Act’’ means the Federal Trade Commission Act (15 U.S.C. 41 et seq.).

  7. HEADER INFORMATION.—The term ‘‘header information’’ means the source, destination, and routing information attached to an electronic mail message, including the origi- nating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message.

  8. INITIATE.—The term ‘‘initiate’’, when used with respect to a commercial electronic mail message, means to originate or transmit such message or to procure the origination or

S. 877—4

transmission of such message, but shall not include actions that constitute routine conveyance of such message. For pur- poses of this paragraph, more than one person may be consid- ered to have initiated a message.

  1. INTERNET.—The term ‘‘Internet’’ has the meaning given that term in the Internet Tax Freedom Act (47 U.S.C. 151 nt).

  2. INTERNET ACCESS SERVICE.—The term ‘‘Internet access service’’ has the meaning given that term in section 231(e)(4) of the Communications Act of 1934 (47 U.S.C. 231(e)(4)).

  3. PROCURE.—The term ‘‘procure’’, when used with respect to the initiation of a commercial electronic mail mes- sage, means intentionally to pay or provide other consideration to, or induce, another person to initiate such a message on one’s behalf.

  4. PROTECTED COMPUTER.—The term ‘‘protected com- puter’’ has the meaning given that term in section 1030(e)(2)(B) of title 18, United States Code.

  5. RECIPIENT.—The term ‘‘recipient’’, when used with respect to a commercial electronic mail message, means an authorized user of the electronic mail address to which the message was sent or delivered. If a recipient of a commercial electronic mail message has one or more electronic mail addresses in addition to the address to which the message was sent or delivered, the recipient shall be treated as a sepa- rate recipient with respect to each such address. If an electronic mail address is reassigned to a new user, the new user shall not be treated as a recipient of any commercial electronic mail message sent or delivered to that address before it was reassigned.

  6. ROUTINE CONVEYANCE.—The term ‘‘routine convey- ance’’ means the transmission, routing, relaying, handling, or storing, through an automatic technical process, of an electronic mail message for which another person has identified the recipi- ents or provided the recipient addresses.

  7. SENDER.—

    1. IN GENERAL.—Except as provided in subparagraph (B), the term ‘‘sender’’, when used with respect to a commercial electronic mail message, means a person who initiates such a message and whose product, service, or Internet web site is advertised or promoted by the message.

    2. SEPARATE LINES OF BUSINESS OR DIVISIONS.—If an entity operates through separate lines of business or divi- sions and holds itself out to the recipient throughout the message as that particular line of business or division rather than as the entity of which such line of business or division is a part, then the line of business or the division shall be treated as the sender of such message for purposes of this Act.


    1. IN GENERAL.—The term ‘‘transactional or relation- ship message’’ means an electronic mail message the pri- mary purpose of which is—

      1. to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender;

S. 877—5

      1. to provide warranty information, product recall information, or safety or security information with respect to a commercial product or service used or purchased by the recipient;

      2. to provide—

        1. notification concerning a change in the terms or features of;

        2. notification of a change in the recipient’s standing or status with respect to; or

        3. at regular periodic intervals, account bal- ance information or other type of account state- ment with respect to,

a subscription, membership, account, loan, or com- parable ongoing commercial relationship involving the ongoing purchase or use by the recipient of products or services offered by the sender;

      1. to provide information directly related to an employment relationship or related benefit plan in which the recipient is currently involved, participating, or enrolled; or

      2. to deliver goods or services, including product updates or upgrades, that the recipient is entitled to receive under the terms of a transaction that the recipient has previously agreed to enter into with the sender.

    1. MODIFICATION OF DEFINITION.—The Commission by regulation pursuant to section 13 may modify the definition in subparagraph (A) to expand or contract the categories of messages that are treated as transactional or relation- ship messages for purposes of this Act to the extent that such modification is necessary to accommodate changes in electronic mail technology or practices and accomplish the purposes of this Act.


  1. OFFENSE.—

    1. IN GENERAL.—Chapter 47 of title 18, United States Code, is amended by adding at the end the following new section:

‘‘§ 1037. Fraud and related activity in connection with elec- tronic mail

‘‘(a) IN GENERAL.—Whoever, in or affecting interstate or foreign commerce, knowingly—

‘‘(1) accesses a protected computer without authorization, and intentionally initiates the transmission of multiple commer- cial electronic mail messages from or through such computer, ‘‘(2) uses a protected computer to relay or retransmit mul- tiple commercial electronic mail messages, with the intent to deceive or mislead recipients, or any Internet access service,

as to the origin of such messages,

‘‘(3) materially falsifies header information in multiple commercial electronic mail messages and intentionally initiates the transmission of such messages,

‘‘(4) registers, using information that materially falsifies the identity of the actual registrant, for five or more electronic

S. 877—6

mail accounts or online user accounts or two or more domain names, and intentionally initiates the transmission of multiple commercial electronic mail messages from any combination of such accounts or domain names, or

‘‘(5) falsely represents oneself to be the registrant or the legitimate successor in interest to the registrant of 5 or more Internet Protocol addresses, and intentionally initiates the transmission of multiple commercial electronic mail messages from such addresses,

or conspires to do so, shall be punished as provided in subsection (b).

‘‘(b) PENALTIES.—The punishment for an offense under sub- section (a) is—

‘‘(1) a fine under this title, imprisonment for not more than 5 years, or both, if—

‘‘(A) the offense is committed in furtherance of any felony under the laws of the United States or of any State; or

‘‘(B) the defendant has previously been convicted under this section or section 1030, or under the law of any State for conduct involving the transmission of multiple commer- cial electronic mail messages or unauthorized access to a computer system;

‘‘(2) a fine under this title, imprisonment for not more than 3 years, or both, if—

‘‘(A) the offense is an offense under subsection (a)(1); ‘‘(B) the offense is an offense under subsection (a)(4) and involved 20 or more falsified electronic mail or online user account registrations, or 10 or more falsified domain

name registrations;

‘‘(C) the volume of electronic mail messages trans- mitted in furtherance of the offense exceeded 2,500 during any 24-hour period, 25,000 during any 30-day period, or 250,000 during any 1-year period;

‘‘(D) the offense caused loss to one or more persons aggregating $5,000 or more in value during any 1-year period;

‘‘(E) as a result of the offense any individual commit- ting the offense obtained anything of value aggregating

$5,000 or more during any 1-year period; or

‘‘(F) the offense was undertaken by the defendant in concert with three or more other persons with respect to whom the defendant occupied a position of organizer or leader; and

‘‘(3) a fine under this title or imprisonment for not more than 1 year, or both, in any other case.


‘‘(1) IN GENERAL.—The court, in imposing sentence on a person who is convicted of an offense under this section, shall order that the defendant forfeit to the United States—

‘‘(A) any property, real or personal, constituting or traceable to gross proceeds obtained from such offense; and

‘‘(B) any equipment, software, or other technology used or intended to be used to commit or to facilitate the commis- sion of such offense.


S. 877—7

‘‘(2) PROCEDURES.—The procedures set forth in section 413 of the Controlled Substances Act (21 U.S.C. 853), other than subsection (d) of that section, and in Rule 32.2 of the Federal Rules of Criminal Procedure, shall apply to all stages of a criminal forfeiture proceeding under this section.

‘‘(d) DEFINITIONS.—In this section:

‘‘(1) LOSS.—The term ‘loss’ has the meaning given that term in section 1030(e) of this title.

‘‘(2) MATERIALLY.—For purposes of paragraphs (3) and (4) of subsection (a), header information or registration information is materially falsified if it is altered or concealed in a manner that would impair the ability of a recipient of the message, an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation.

‘‘(3) MULTIPLE.—The term ‘multiple’ means more than 100 electronic mail messages during a 24-hour period, more than 1,000 electronic mail messages during a 30-day period, or more than 10,000 electronic mail messages during a 1-year period. ‘‘(4) OTHER TERMS.—Any other term has the meaning given

that term by section 3 of the CAN-SPAM Act of 2003.’’.

    1. CONFORMING AMENDMENT.—The chapter analysis for chapter 47 of title 18, United States Code, is amended by adding at the end the following:

‘‘1037. Fraud and related activity in connection with electronic mail.’’.


    1. DIRECTIVE.—Pursuant to its authority under section 994(p) of title 28, United States Code, and in accordance with this section, the United States Sentencing Commission shall review and, as appropriate, amend the sentencing guidelines and policy statements to provide appropriate penalties for viola- tions of section 1037 of title 18, United States Code, as added by this section, and other offenses that may be facilitated by the sending of large quantities of unsolicited electronic mail.

    2. REQUIREMENTS.—In carrying out this subsection, the Sentencing Commission shall consider providing sentencing enhancements for—

      1. those convicted under section 1037 of title 18, United States Code, who—

        1. obtained electronic mail addresses through improper means, including—

          1. harvesting electronic mail addresses of the users of a website, proprietary service, or other online public forum operated by another person, without the authorization of such person; and

          2. randomly generating electronic mail addresses by computer; or

        2. knew that the commercial electronic mail mes- sages involved in the offense contained or advertised an Internet domain for which the registrant of the domain had provided false registration information; and

S. 877—8

      1. those convicted of other offenses, including offenses involving fraud, identity theft, obscenity, child pornog- raphy, and the sexual exploitation of children, if such offenses involved the sending of large quantities of elec- tronic mail.

  1. SENSE OF CONGRESS.—It is the sense of Congress that—

    1. Spam has become the method of choice for those who distribute pornography, perpetrate fraudulent schemes, and introduce viruses, worms, and Trojan horses into personal and business computer systems; and

    2. the Department of Justice should use all existing law enforcement tools to investigate and prosecute those who send bulk commercial e-mail to facilitate the commission of Federal crimes, including the tools contained in chapters 47 and 63 of title 18, United States Code (relating to fraud and false statements); chapter 71 of title 18, United States Code (relating to obscenity); chapter 110 of title 18, United States Code (relating to the sexual exploitation of children); and chapter

95 of title 18, United States Code (relating to racketeering), as appropriate.



    1. PROHIBITION OF FALSE OR MISLEADING TRANSMISSION INFORMATION.—It is unlawful for any person to initiate the transmission, to a protected computer, of a commercial elec- tronic mail message, or a transactional or relationship message, that contains, or is accompanied by, header information that is materially false or materially misleading. For purposes of this paragraph—

      1. header information that is technically accurate but includes an originating electronic mail address, domain name, or Internet Protocol address the access to which for purposes of initiating the message was obtained by means of false or fraudulent pretenses or representations shall be considered materially misleading;

      2. a ‘‘from’’ line (the line identifying or purporting to identify a person initiating the message) that accurately identifies any person who initiated the message shall not be considered materially false or materially misleading; and

      3. header information shall be considered materially misleading if it fails to identify accurately a protected computer used to initiate the message because the person initiating the message knowingly uses another protected computer to relay or retransmit the message for purposes of disguising its origin.

    2. PROHIBITION OF DECEPTIVE SUBJECT HEADINGS.—It is unlawful for any person to initiate the transmission to a pro- tected computer of a commercial electronic mail message if such person has actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that a subject heading of the message would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact

S. 877—9

regarding the contents or subject matter of the message (con- sistent with the criteria used in enforcement of section 5 of the Federal Trade Commission Act (15 U.S.C. 45)).


      1. IN GENERAL.—It is unlawful for any person to ini- tiate the transmission to a protected computer of a com- mercial electronic mail message that does not contain a functioning return electronic mail address or other Inter- net-based mechanism, clearly and conspicuously displayed, that—

        1. a recipient may use to submit, in a manner specified in the message, a reply electronic mail mes- sage or other form of Internet-based communication requesting not to receive future commercial electronic mail messages from that sender at the electronic mail address where the message was received; and

        2. remains capable of receiving such messages or communications for no less than 30 days after the transmission of the original message.

      2. MORE DETAILED OPTIONS POSSIBLE.—The person initiating a commercial electronic mail message may comply with subparagraph (A)(i) by providing the recipient a list or menu from which the recipient may choose the specific types of commercial electronic mail messages the recipient wants to receive or does not want to receive from the sender, if the list or menu includes an option under which the recipient may choose not to receive any commercial electronic mail messages from the sender.

      3. TEMPORARY INABILITY TO RECEIVE MESSAGES OR PROCESS REQUESTS.—A return electronic mail address or other mechanism does not fail to satisfy the requirements of subparagraph (A) if it is unexpectedly and temporarily unable to receive messages or process requests due to a technical problem beyond the control of the sender if the problem is corrected within a reasonable time period.


      1. IN GENERAL.—If a recipient makes a request using a mechanism provided pursuant to paragraph (3) not to receive some or any commercial electronic mail messages from such sender, then it is unlawful—

        1. for the sender to initiate the transmission to the recipient, more than 10 business days after the receipt of such request, of a commercial electronic mail message that falls within the scope of the request;

        2. for any person acting on behalf of the sender to initiate the transmission to the recipient, more than

10 business days after the receipt of such request, of a commercial electronic mail message with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message falls within the scope of the request;

        1. for any person acting on behalf of the sender to assist in initiating the transmission to the recipient, through the provision or selection of addresses to which the message will be sent, of a commercial electronic

S. 877—10

mail message with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that such message would violate clause (i) or (ii); or

        1. for the sender, or any other person who knows that the recipient has made such a request, to sell, lease, exchange, or otherwise transfer or release the electronic mail address of the recipient (including through any transaction or other transfer involving mailing lists bearing the electronic mail address of the recipient) for any purpose other than compliance with this Act or other provision of law.

      1. SUBSEQUENT AFFIRMATIVE CONSENT.—A prohibition in subparagraph (A) does not apply if there is affirmative consent by the recipient subsequent to the request under subparagraph (A).

    1. INCLUSION OF IDENTIFIER, OPTOUT, AND PHYSICAL ADDRESS IN COMMERCIAL ELECTRONIC MAIL.—(A) It is unlawful for any person to initiate the transmission of any commercial electronic mail message to a protected computer unless the message provides—

  1. clear and conspicuous identification that the mes- sage is an advertisement or solicitation;

  2. clear and conspicuous notice of the opportunity under paragraph (3) to decline to receive further commer- cial electronic mail messages from the sender; and

  3. a valid physical postal address of the sender.

(B) Subparagraph (A)(i) does not apply to the transmission of a commercial electronic mail message if the recipient has given prior affirmative consent to receipt of the message.

    1. MATERIALLY.—For purposes of paragraph (1), the term ‘‘materially’’, when used with respect to false or misleading header information, includes the alteration or concealment of header information in a manner that would impair the ability of an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation, or the ability of a recipient of the message to respond to a person who initiated the elec- tronic message.




      1. IN GENERAL.—It is unlawful for any person to ini- tiate the transmission, to a protected computer, of a commercial electronic mail message that is unlawful under subsection (a), or to assist in the origination of such mes- sage through the provision or selection of addresses to which the message will be transmitted, if such person had actual knowledge, or knowledge fairly implied on the basis of objective circumstances, that—

        1. the electronic mail address of the recipient was obtained using an automated means from an Internet website or proprietary online service operated by another person, and such website or online service included, at the time the address was obtained, a notice stating that the operator of such website or online

S. 877—11

service will not give, sell, or otherwise transfer addresses maintained by such website or online service to any other party for the purposes of initiating, or enabling others to initiate, electronic mail messages; or

        1. the electronic mail address of the recipient was obtained using an automated means that gen- erates possible electronic mail addresses by combining names, letters, or numbers into numerous permuta- tions.

      1. DISCLAIMER.—Nothing in this paragraph creates an ownership or proprietary interest in such electronic mail addresses.

    1. AUTOMATED CREATION OF MULTIPLE ELECTRONIC MAIL ACCOUNTS.—It is unlawful for any person to use scripts or other automated means to register for multiple electronic mail accounts or online user accounts from which to transmit to a protected computer, or enable another person to transmit to a protected computer, a commercial electronic mail message that is unlawful under subsection (a).

    2. RELAY OR RETRANSMISSION THROUGH UNAUTHORIZED ACCESS.—It is unlawful for any person knowingly to relay or retransmit a commercial electronic mail message that is unlaw- ful under subsection (a) from a protected computer or computer network that such person has accessed without authorization.

  1. SUPPLEMENTARY RULEMAKING AUTHORITY.—The Commis- sion shall by regulation, pursuant to section 13—

    1. modify the 10-business-day period under subsection (a)(4)(A) or subsection (a)(4)(B), or both, if the Commission determines that a different period would be more reasonable after taking into account—

      1. the purposes of subsection (a);

      2. the interests of recipients of commercial electronic mail; and

      3. the burdens imposed on senders of lawful commer- cial electronic mail; and

    2. specify additional activities or practices to which sub- section (b) applies if the Commission determines that those activities or practices are contributing substantially to the pro- liferation of commercial electronic mail messages that are unlawful under subsection (a).


    1. IN GENERAL.—No person may initiate in or affecting interstate commerce the transmission, to a protected computer, of any commercial electronic mail message that includes sexu- ally oriented material and—

      1. fail to include in subject heading for the electronic mail message the marks or notices prescribed by the Commission under this subsection; or

      2. fail to provide that the matter in the message that is initially viewable to the recipient, when the message is opened by any recipient and absent any further actions by the recipient, includes only—

        1. to the extent required or authorized pursuant to paragraph (2), any such marks or notices;

S. 877—12

        1. the information required to be included in the message pursuant to subsection (a)(5); and

        2. instructions on how to access, or a mechanism to access, the sexually oriented material.

    1. PRIOR AFFIRMATIVE CONSENT.—Paragraph (1) does not apply to the transmission of an electronic mail message if the recipient has given prior affirmative consent to receipt of the message.


120 days after the date of the enactment of this Act, the Commission in consultation with the Attorney General shall prescribe clearly identifiable marks or notices to be included in or associated with commercial electronic mail that contains sexually oriented material, in order to inform the recipient of that fact and to facilitate filtering of such electronic mail. The Commission shall publish in the Federal Register and provide notice to the public of the marks or notices prescribed under this paragraph.

    1. DEFINITION.—In this subsection, the term ‘‘sexually ori- ented material’’ means any material that depicts sexually explicit conduct (as that term is defined in section 2256 of title 18, United States Code), unless the depiction constitutes a small and insignificant part of the whole, the remainder of which is not primarily devoted to sexual matters.

    2. PENALTY.—Whoever knowingly violates paragraph (1) shall be fined under title 18, United States Code, or imprisoned not more than 5 years, or both.


  1. IN GENERAL.—It is unlawful for a person to promote, or allow the promotion of, that person’s trade or business, or goods, products, property, or services sold, offered for sale, leased or offered for lease, or otherwise made available through that trade or busi- ness, in a commercial electronic mail message the transmission of which is in violation of section 5(a)(1) if that person—

    1. knows, or should have known in the ordinary course of that person’s trade or business, that the goods, products, property, or services sold, offered for sale, leased or offered for lease, or otherwise made available through that trade or business were being promoted in such a message;

    2. received or expected to receive an economic benefit from such promotion; and

    3. took no reasonable action—

      1. to prevent the transmission; or

      2. to detect the transmission and report it to the Commission.


    1. IN GENERAL.—Except as provided in paragraph (2), a person (hereinafter referred to as the ‘‘third party’’) that pro- vides goods, products, property, or services to another person that violates subsection (a) shall not be held liable for such violation.

    2. EXCEPTION.—Liability for a violation of subsection (a) shall be imputed to a third party that provides goods, products, property, or services to another person that violates subsection

  1. if that third party—

S. 877—13

    1. owns, or has a greater than 50 percent ownership or economic interest in, the trade or business of the person that violated subsection (a); or

(B)(i) has actual knowledge that goods, products, prop- erty, or services are promoted in a commercial electronic mail message the transmission of which is in violation of section 5(a)(1); and

(ii) receives, or expects to receive, an economic benefit from such promotion.

  1. EXCLUSIVE ENFORCEMENT BY FTC.—Subsections (f) and (g) of section 7 do not apply to violations of this section.

  2. SAVINGS PROVISION.—Except as provided in section 7(f)(8), nothing in this section may be construed to limit or prevent any action that may be taken under this Act with respect to any viola- tion of any other section of this Act.


  1. VIOLATION IS UNFAIR OR DECEPTIVE ACT OR PRACTICE.— Except as provided in subsection (b), this Act shall be enforced by the Commission as if the violation of this Act were an unfair or deceptive act or practice proscribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

  2. ENFORCEMENT BY CERTAIN OTHER AGENCIES.—Compliance with this Act shall be enforced—

    1. under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the case of—

      1. national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;

      2. member banks of the Federal Reserve System (other than national banks), branches and agencies of for- eign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, organizations operating under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 and 611), and bank holding companies, by the Board;

      3. banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation; and

      4. savings associations the deposits of which are insured by the Federal Deposit Insurance Corporation, by the Director of the Office of Thrift Supervision;

    2. under the Federal Credit Union Act (12 U.S.C. 1751 et seq.) by the Board of the National Credit Union Administra- tion with respect to any Federally insured credit union;

    3. under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) by the Securities and Exchange Commission with respect to any broker or dealer;

    4. under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) by the Securities and Exchange Commission with respect to investment companies;

    5. under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) by the Securities and Exchange Commission with respect to investment advisers registered under that Act;

S. 877—14

    1. under State insurance law in the case of any person engaged in providing insurance, by the applicable State insur- ance authority of the State in which the person is domiciled, subject to section 104 of the Gramm-Bliley-Leach Act (15 U.S.C. 6701), except that in any State in which the State insurance authority elects not to exercise this power, the enforcement authority pursuant to this Act shall be exercised by the Commission in accordance with subsection (a);

    2. under part A of subtitle VII of title 49, United States Code, by the Secretary of Transportation with respect to any air carrier or foreign air carrier subject to that part;

    3. under the Packers and Stockyards Act, 1921 (7 U.S.C.

181 et seq.) (except as provided in section 406 of that Act (7 U.S.C. 226, 227)), by the Secretary of Agriculture with respect to any activities subject to that Act;

    1. under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, or production credit association; and

    2. under the Communications Act of 1934 (47 U.S.C. 151 et seq.) by the Federal Communications Commission with respect to any person subject to the provisions of that Act.

  1. EXERCISE OF CERTAIN POWERS.—For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of this Act is deemed to be a violation of a Federal Trade Commission trade regulation rule. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this Act, any other authority conferred on it by law.

  2. ACTIONS BY THE COMMISSION.—The Commission shall pre- vent any person from violating this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act. Any entity that violates any provision of that subtitle is subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commis- sion Act in the same manner, by the same means, and with the same jurisdiction, power, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incor- porated into and made a part of that subtitle.

  3. AVAILABILITY OF CEASEAND-DESIST ORDERS AND INJUNCTIVE RELIEF WITHOUT SHOWING OF KNOWLEDGE.—Notwithstanding any other provision of this Act, in any proceeding or action pursuant to subsection (a), (b), (c), or (d) of this section to enforce compliance, through an order to cease and desist or an injunction, with section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), neither the Commission nor the Federal Communications Commission shall be required to allege or prove the state of mind required by such section or subparagraph.


    1. CIVIL ACTION.—In any case in which the attorney gen- eral of a State, or an official or agency of a State, has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by any person who

S. 877—15

violates paragraph (1) or (2) of section 5(a), who violates section 5(d), or who engages in a pattern or practice that violates paragraph (3), (4), or (5) of section 5(a), of this Act, the attorney general, official, or agency of the State, as parens patriae, may bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction—

      1. to enjoin further violation of section 5 of this Act by the defendant; or

      2. to obtain damages on behalf of residents of the State, in an amount equal to the greater of—

        1. the actual monetary loss suffered by such resi- dents; or

        2. the amount determined under paragraph (3).

    1. AVAILABILITY OF INJUNCTIVE RELIEF WITHOUT SHOWING OF KNOWLEDGE.—Notwithstanding any other provision of this Act, in a civil action under paragraph (1)(A) of this subsection, the attorney general, official, or agency of the State shall not be required to allege or prove the state of mind required by section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3).


      1. IN GENERAL.—For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is the amount calculated by multiplying the number of violations (with each separately addressed unlawful message received by or addressed to such residents treated as a separate viola- tion) by up to $250.

      2. LIMITATION.—For any violation of section 5 (other than section 5(a)(1)), the amount determined under subparagraph (A) may not exceed $2,000,000.

      3. AGGRAVATED DAMAGES.—The court may increase a damage award to an amount equal to not more than three times the amount otherwise available under this paragraph if—

        1. the court determines that the defendant com- mitted the violation willfully and knowingly; or

        2. the defendant’s unlawful activity included one or more of the aggravating violations set forth in sec- tion 5(b).

      4. REDUCTION OF DAMAGES.—In assessing damages under subparagraph (A), the court may consider whether—

        1. the defendant has established and implemented, with due care, commercially reasonable practices and procedures designed to effectively prevent such viola- tions; or

        2. the violation occurred despite commercially reasonable efforts to maintain compliance the practices and procedures to which reference is made in clause (i).

    3. ATTORNEY FEES.—In the case of any successful action under paragraph (1), the court, in its discretion, may award the costs of the action and reasonable attorney fees to the State.

    4. RIGHTS OF FEDERAL REGULATORS.—The State shall serve prior written notice of any action under paragraph (1) upon

S. 877—16

the Federal Trade Commission or the appropriate Federal regu- lator determined under subsection (b) and provide the Commis- sion or appropriate Federal regulator with a copy of its com- plaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice imme- diately upon instituting such action. The Federal Trade Commission or appropriate Federal regulator shall have the right—

      1. to intervene in the action;

      2. upon so intervening, to be heard on all matters arising therein;

      3. to remove the action to the appropriate United States district court; and

      4. to file petitions for appeal.

    1. CONSTRUCTION.—For purposes of bringing any civil action under paragraph (1), nothing in this Act shall be con- strued to prevent an attorney general of a State from exercising the powers conferred on the attorney general by the laws of that State to—

      1. conduct investigations;

      2. administer oaths or affirmations; or

      3. compel the attendance of witnesses or the produc- tion of documentary and other evidence.


      1. VENUE.—Any action brought under paragraph (1) may be brought in the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code.

      2. SERVICE OF PROCESS.—In an action brought under paragraph (1), process may be served in any district in which the defendant—

        1. is an inhabitant; or

        2. maintains a physical place of business.

    3. LIMITATION ON STATE ACTION WHILE FEDERAL ACTION IS PENDING.—If the Commission, or other appropriate Federal agency under subsection (b), has instituted a civil action or an administrative action for violation of this Act, no State attorney general, or official or agency of a State, may bring an action under this subsection during the pendency of that action against any defendant named in the complaint of the Commission or the other agency for any violation of this Act alleged in the complaint.

    4. REQUISITE SCIENTER FOR CERTAIN CIVIL ACTIONS.— Except as provided in section 5(a)(1)(C), section 5(a)(2), clause (ii), (iii), or (iv) of section 5(a)(4)(A), section 5(b)(1)(A), or section 5(b)(3), in a civil action brought by a State attorney general, or an official or agency of a State, to recover monetary damages for a violation of this Act, the court shall not grant the relief sought unless the attorney general, official, or agency estab- lishes that the defendant acted with actual knowledge, or knowledge fairly implied on the basis of objective circumstances, of the act or omission that constitutes the violation.


    1. ACTION AUTHORIZED.—A provider of Internet access service adversely affected by a violation of section 5(a)(1), 5(b), or 5(d), or a pattern or practice that violates paragraph (2), (3), (4), or (5) of section 5(a), may bring a civil action in

S. 877—17

any district court of the United States with jurisdiction over the defendant—

      1. to enjoin further violation by the defendant; or

      2. to recover damages in an amount equal to the greater of—

        1. actual monetary loss incurred by the provider of Internet access service as a result of such violation; or

        2. the amount determined under paragraph (3).

    1. SPECIAL DEFINITION OF ‘‘PROCURE’’.—In any action brought under paragraph (1), this Act shall be applied as if the definition of the term ‘‘procure’’ in section 3(12) contained, after ‘‘behalf’’ the words ‘‘with actual knowledge, or by con- sciously avoiding knowing, whether such person is engaging, or will engage, in a pattern or practice that violates this Act’’.


      1. IN GENERAL.—For purposes of paragraph (1)(B)(ii), the amount determined under this paragraph is the amount calculated by multiplying the number of violations (with each separately addressed unlawful message that is trans- mitted or attempted to be transmitted over the facilities of the provider of Internet access service, or that is trans- mitted or attempted to be transmitted to an electronic mail address obtained from the provider of Internet access service in violation of section 5(b)(1)(A)(i), treated as a separate violation) by—

        1. up to $100, in the case of a violation of section 5(a)(1); or

        2. up to $25, in the case of any other violation of section 5.

      2. LIMITATION.—For any violation of section 5 (other than section 5(a)(1)), the amount determined under subparagraph (A) may not exceed $1,000,000.

      3. AGGRAVATED DAMAGES.—The court may increase a damage award to an amount equal to not more than three times the amount otherwise available under this paragraph if—

        1. the court determines that the defendant com- mitted the violation willfully and knowingly; or

        2. the defendant’s unlawful activity included one or more of the aggravated violations set forth in section 5(b).

      4. REDUCTION OF DAMAGES.—In assessing damages under subparagraph (A), the court may consider whether—

        1. the defendant has established and implemented, with due care, commercially reasonable practices and procedures designed to effectively prevent such viola- tions; or

        2. the violation occurred despite commercially reasonable efforts to maintain compliance with the practices and procedures to which reference is made in clause (i).

    3. ATTORNEY FEES.—In any action brought pursuant to paragraph (1), the court may, in its discretion, require an undertaking for the payment of the costs of such action, and assess reasonable costs, including reasonable attorneys’ fees, against any party.

S. 877—18


  1. FEDERAL LAW.—(1) Nothing in this Act shall be construed to impair the enforcement of section 223 or 231 of the Communica- tions Act of 1934 (47 U.S.C. 223 or 231, respectively), chapter

71 (relating to obscenity) or 110 (relating to sexual exploitation of children) of title 18, United States Code, or any other Federal criminal statute.

(2) Nothing in this Act shall be construed to affect in any way the Commission’s authority to bring enforcement actions under FTC Act for materially false or deceptive representations or unfair practices in commercial electronic mail messages.

  1. STATE LAW.—

    1. IN GENERAL.—This Act supersedes any statute, regula- tion, or rule of a State or political subdivision of a State that expressly regulates the use of electronic mail to send commer- cial messages, except to the extent that any such statute, regulation, or rule prohibits falsity or deception in any portion of a commercial electronic mail message or information attached thereto.

    2. STATE LAW NOT SPECIFIC TO ELECTRONIC MAIL.—This Act shall not be construed to preempt the applicability of—

      1. State laws that are not specific to electronic mail, including State trespass, contract, or tort law; or

      2. other State laws to the extent that those laws relate to acts of fraud or computer crime.

  2. NO EFFECT ON POLICIES OF PROVIDERS OF INTERNET ACCESS SERVICE.—Nothing in this Act shall be construed to have any effect on the lawfulness or unlawfulness, under any other provision of law, of the adoption, implementation, or enforcement by a provider of Internet access service of a policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages.


  1. IN GENERAL.—Not later than 6 months after the date of enactment of this Act, the Commission shall transmit to the Senate Committee on Commerce, Science, and Transportation and the House of Representatives Committee on Energy and Commerce a report that—

    1. sets forth a plan and timetable for establishing a nation- wide marketing Do-Not-E-Mail registry;

    2. includes an explanation of any practical, technical, secu- rity, privacy, enforceability, or other concerns that the Commis- sion has regarding such a registry; and

    3. includes an explanation of how the registry would be applied with respect to children with e-mail accounts.

  2. AUTHORIZATION TO IMPLEMENT.—The Commission may establish and implement the plan, but not earlier than 9 months after the date of enactment of this Act.


  1. IN GENERAL.—Not later than 24 months after the date of the enactment of this Act, the Commission, in consultation with the Department of Justice and other appropriate agencies, shall submit a report to the Congress that provides a detailed analysis of the effectiveness and enforcement of the provisions of this Act and the need (if any) for the Congress to modify such provisions.

S. 877—19

  1. REQUIRED ANALYSIS.—The Commission shall include in the report required by subsection (a)—

    1. an analysis of the extent to which technological and marketplace developments, including changes in the nature of the devices through which consumers access their electronic mail messages, may affect the practicality and effectiveness of the provisions of this Act;

    2. analysis and recommendations concerning how to address commercial electronic mail that originates in or is transmitted through or to facilities or computers in other nations, including initiatives or policy positions that the Federal Government could pursue through international negotiations, fora, organizations, or institutions; and

    3. analysis and recommendations concerning options for protecting consumers, including children, from the receipt and viewing of commercial electronic mail that is obscene or porno- graphic.


The Commission shall transmit to the Senate Committee on Commerce, Science, and Transportation and the House of Rep- resentatives Committee on Energy and Commerce—

  1. a report, within 9 months after the date of enactment of this Act, that sets forth a system for rewarding those who supply information about violations of this Act, including—

    1. procedures for the Commission to grant a reward of not less than 20 percent of the total civil penalty collected for a violation of this Act to the first person that—

      1. identifies the person in violation of this Act;


      1. supplies information that leads to the success-

ful collection of a civil penalty by the Commission; and

    1. procedures to minimize the burden of submitting a complaint to the Commission concerning violations of this Act, including procedures to allow the electronic submission of complaints to the Commission; and

  1. a report, within 18 months after the date of enactment of this Act, that sets forth a plan for requiring commercial electronic mail to be identifiable from its subject line, by means of compliance with Internet Engineering Task Force Standards, the use of the characters ‘‘ADV’’ in the subject line, or other comparable identifier, or an explanation of any concerns the Commission has that cause the Commission to recommend against the plan.


Section 227(b)(1) of the Communications Act of 1934 (47 U.S.C. 227(b)(1)) is amended, in the matter preceding subparagraph (A), by inserting ‘‘, or any person outside the United States if the recipient is within the United States’’ after ‘‘United States’’.


  1. IN GENERAL.—The Commission may issue regulations to implement the provisions of this Act (not including the amendments made by sections 4 and 12). Any such regulations shall be issued in accordance with section 553 of title 5, United States Code.

S. 877—20

  1. LIMITATION.—Subsection (a) may not be construed to authorize the Commission to establish a requirement pursuant to section 5(a)(5)(A) to include any specific words, characters, marks, or labels in a commercial electronic mail message, or to include the identification required by section 5(a)(5)(A) in any particular part of such a mail message (such as the subject line or body).


  1. EFFECT ON OTHER LAW.—Nothing in this Act shall be inter- preted to preclude or override the applicability of section 227 of the Communications Act of 1934 (47 U.S.C. 227) or the rules pre- scribed under section 3 of the Telemarketing and Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102).

  2. FCC RULEMAKING.—The Federal Communications Commis- sion, in consultation with the Federal Trade Commission, shall promulgate rules within 270 days to protect consumers from unwanted mobile service commercial messages. The Federal Communications Commission, in promulgating the rules, shall, to the extent consistent with subsection (c)—

    1. provide subscribers to commercial mobile services the ability to avoid receiving mobile service commercial messages unless the subscriber has provided express prior authorization to the sender, except as provided in paragraph (3);

    2. allow recipients of mobile service commercial messages to indicate electronically a desire not to receive future mobile service commercial messages from the sender;

    3. take into consideration, in determining whether to sub- ject providers of commercial mobile services to paragraph (1), the relationship that exists between providers of such services and their subscribers, but if the Commission determines that such providers should not be subject to paragraph (1), the rules shall require such providers, in addition to complying with the other provisions of this Act, to allow subscribers to indicate a desire not to receive future mobile service commercial messages from the provider—

      1. at the time of subscribing to such service; and

      2. in any billing mechanism; and

    4. determine how a sender of mobile service commercial messages may comply with the provisions of this Act, consid- ering the unique technical aspects, including the functional and character limitations, of devices that receive such messages.

  3. OTHER FACTORS CONSIDERED.—The Federal Communica- tions Commission shall consider the ability of a sender of a commer- cial electronic mail message to reasonably determine that the mes- sage is a mobile service commercial message.

  4. MOBILE SERVICE COMMERCIAL MESSAGE DEFINED.—In this section, the term ‘‘mobile service commercial message’’ means a commercial electronic mail message that is transmitted directly to a wireless device that is utilized by a subscriber of commercial mobile service (as such term is defined in section 332(d) of the Communications Act of 1934 (47 U.S.C. 332(d))) in connection with such service.


If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of this Act and the application of such provision to other persons or cir- cumstances shall not be affected.

S. 877—21


The provisions of this Act, other than section 9, shall take effect on January 1, 2004.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

First Amendment Protections for Employees

First Amendment Protections for Employees

Involved in the Adult Industry – The Marcie Betts Case

By: Lawrence G. Walters

Imagine showing up for your day job one Friday afternoon and being summoned by your boss for a “chat.” When you arrive at his or her office, you are handed a stack of pictures of you downloaded from the adult Website that nobody was supposed to know about. Your employer then hands you a pink slip, and tells you to immediately clean out your desk. Welcome to the world of workplace discrimination – but this kind of discrimination is usually not against the law.

This scenario is becoming more and more common these days; and most employees are out of luck because of the “Employment at Will” doctrine. That legal principle essentially allows employers to terminate workers for any reason, or no reason whatsoever. However, one fired employee, by the name of Marcie Betts, stood up and fought back, and recently won the right to job reinstatement; on First Amendment grounds. This is her story:

Marcie Betts was a prison guard, or “corrections officer” as they now prefer to be called. She worked at Roxbury Correctional Institution in Hagerstown, Maryland, and was an exemplary probationary employee. Before she was hired, she sold some nude pictures of herself to an adult Website called During the interview process with the Division of Corrections, she was never asked whether she had been involved in adult entertainment or nude modeling, although an extensive background investigation was conducted and plenty of

opportunity existed for such inquiry. She was hired in November, 2003, and after some training time, reported for work the middle of January, 2003. She immediately received positive feedback from her superiors and co-workers about her job performance. However, it was not long before rumors of her involvement with the adult Website began to surface, to her surprise and dismay. After initially attempting to shrug off the rumors, the Warden ultimately confronted her with evidence of her participation in the Website. An investigation was launched, during which it was uncovered that an inmate almost obtained a magazine containing an image of Ms. Betts. As it turns out, this inmate had a subscription to a magazine entitled Tabu Tattoo, wherein a single image of Marcie Betts appeared. Inmates at Roxbury Correctional Institute are allowed to receive sexually explicit materials; however, this magazine was intercepted before the inmate ever received it, because it contained a picture of a corrections officer, which made it contraband. Importantly, inmates there are not permitted to access the Internet at this particular institution. Therefore, there was no indication that any inmate ever actually accessed or viewed any erotic image of Marcie Betts — either online or in any other medium.

Nonetheless, Ms. Betts was terminated on January 29, 2003, as a result of her pre- employment nude modeling and involvement with the Website. Although she was not represented by counsel at that point, the firing certainly seemed unfair, and possibly unconstitutional, at least to her. In upholding the firing during the initial administrative review process, a hearing officer determined that “some” of the images justifying the termination were not protected by the First Amendment. Parenthetically, none of the subject images were ever declared to be obscene by any court or jury, and therefore this finding defied logic. At that point, Ms. Betts retained the author as lead counsel, and Jon Katz, Esq., as local counsel, to defend her interests and seek reinstatement as a corrections officer with the Division of Corrections. She

also set up a legal defense fund website,, to inform the public about this significant battle. Importantly, as a public employee, she enjoyed a Fifth Amendment property right in her employment, unlike most private sector employees. Also, given the reasons asserted for the termination, substantial Free Speech interests were at stake as well.

Terminated employees are entitled to a full-blown adversarial hearing on the legality of their termination, under Maryland administrative law. Such a hearing was immediately requested, and in response, on September 22 through 23, 2003, an Administrative Hearing was conducted before Administrative Law Judge D. Harrison Pratt to determine whether involvement in an adult Website constituted legal justification for terminating a public employee. The Division of Corrections pulled out all the stops in its attempt to justify this termination, even going so far as to hire a surprise expert witness, the former Director of the Virginia Department of Corrections, which generally is not cheap. Although this expert was not disclosed until a few days before the hearing, he was allowed to testify as to all the “parade of horribles” that would occur if Ms. Betts were allowed to function as a Corrections Officer after having appeared nude on an adult Website. The essence of the Department’s position was that once a female appeared in erotic photography, and the inmate population learned about it, that female was forever transformed into nothing more than a sex object who would thereafter be subject to immediate sexual abuse by the inmate, who could not control themselves upon learning of such information. Such concerns were dismissed as “speculative” by the Judge, who on November 12, 2003, determined that the termination violated Marcie Betts’ First Amendment rights to freedom of speech, and that those rights outweighed any safety concerns identified by the Division. The Judge also did not overlook the fact that even though these images had been in global circulation for several months before she was fired, no inmate had ever come into possession of a single

image of Marcie Betts. She is therefore now entitled to reinstatement with full pay and benefits, along with compensation for attorney’s fees incurred in seeking her job back. An online copy of the decision can be found here.

Those employees working for private employers may not be so lucky if their involvement in the adult entertainment field is uncovered and used as a basis for termination. The First Amendment’s guarantee of freedom of speech only prohibits governmental censorship and retaliation, and is not applicable to private employers. While other legal theories might be used to challenge a discharge based on involvement in adult media in the private sector, such as breach of contract, gender discrimination or retaliatory discharge, these claims are much more difficult to pursue, particularly in the absence of a written employment contract. Only a couple of states and cities have enacted legislation protecting employees from adverse employment action based on leisure time or off duty conduct. However, as the role of the employer becomes more and more controlling in the average citizen’s daily life, such legislation is likely to catch on. Large employers have become something akin to quasi-governments given their power over our daily lives and ability to control our behavior. The role of the employer is often much more influential than the role of the government, in one’s daily routine. Accordingly, federal legislation is necessary to protect the privacy interests of workers nationwide, to prevent the employer from taking the place of Big Brother in 2004. For now, at least one adult Internet model’s First Amendment rights have been vindicated; something all too rare in modern times.

Lawrence G. Walters, Esq., is a partner in the national law firm of Weston Garrou & DeWitt, with offices in Orlando, Los Angeles, and San Diego. Mr. Walters represents clients involved in all aspects of adult media. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at, through his website: or via AOL Screen Name: “Webattorney.”







Recently, Acacia Media Technologies Corporation, (“Acacia”), sent a round of letters directed to those in the adult Internet industry who have provided “access” to Websites allegedly violating their patent claims by streaming video. Most of these new targets fall into the category of affiliates or link lists, and do not actually stream any video from their sites. Acacia’s theory of liability in this case will be contributory or vicarious patent infringement. Initial reactions have ranged from shock and dismay, to depression and resignation to exit the adult industry completely. Once the initial effect wears off, it will be time to take a level-headed look at the various options available to webmasters prior to the stated deadline of November 30, 2003.

The following information must be prefaced by a disclaimer: This author is not a registered patent attorney, and thus does not intend to provide any commentary or advice on the enforceability of Acacia’s patents, or the merits of its claims. However, the Acacia issue has affected many of the author’s clients, thus resulting in a certain level of education and analysis, under the guidance of outside patent counsel. This article will not recommend any particular option over any other, but will attempt to set forth the various choices, and logical consequences thereof.

Any webmaster who has received the recent Acacia Media demand has the following basic options:

Option 1 – Accept the License Agreement

Acacia has provided a “grace period” until November 30, 2003, to accept the terms of its Webmaster License Agreement and/or Content Provider License Agreement for its DMT Technology. The terms of its Agreement can be found on Several of the large adult media corporations have accepted the License Agreement, including Vivid Entertainment Group, Wicked Pictures, Platinum Bucks and LFP, Inc. (Hustler). Essentially, the License Agreement requires webmasters to pay Acacia a royalty fee amounting to a percentage of gross receipts realized from the Website containing the streaming content. This option essentially puts you into business with Acacia, with whom you will be sharing revenues. An accounting of revenues may be requested to confirm that Acacia is getting its “fair share.” This option will reduce the webmasters’ bottom line, but in a known percentage. For those webmasters who do not like to gamble, this option will eliminate all risk on a go-forward basis, and quantify any exposure to liability for past patent infringement.

Option 2 – Join the Defense Group

A number of adult media companies have joined a coalition of industry players who have chosen to stand and fight against the validity of Acacia’s patent claims. Some members of the group have already been sued, and are actively in litigation. The defense group has hired the renowned patent firm of Fish & Richardson,, to represent its interests in the Acacia litigation. Those who have not been sued can request an opinion letter from defense counsel, regarding the validity of Acacia’s patent claims in regard to the actual technology being used by any particular Website for streaming video. An Association has been formed to back the defense group called the Internet Media Protective Association, More information can be found on that site about joining the Association and/or the defense group. Acacia, however, has claimed that some members of this group are conspiring to interfere with Acacia’s attempts to negotiate License Agreements with defendants who choose to settle.1

Option 3 – Hire Individual Patent Counsel

Webmasters affected by the Acacia issue always have the option of hiring their own personal patent attorney. Webmasters searching for such representation should make sure that any candidate for legal counsel is a “registered patent attorney.” The field of patent law is extremely specialized. Attorneys should not dabble in a field like patent litigation. Webmasters should only consider patent attorneys who have had years of experience litigating patent claims in federal court. It is most advisable to seek a referral to such a legal specialist from your own general counsel or Internet attorney. Retaining private patent counsel is the best, and of course the most expensive, option. Any webmaster’s unique situation can only be thoroughly evaluated by an experienced patent attorney who is focused solely on that client’s particular circumstance. However, it should be noted that independently evaluating each of Acacia’s patent “claims,” and comparing those claims with the specific technology used for streaming video on any given Website, can be a time consuming and costly process that also requires the involvement of a computer engineer. There can be no question about the fact that Acacia realizes the time and expense required to property evaluate its complex claims, which consequently makes acceptance of the License Agreement more attractive. However, it may be that after proper evaluation, it is determined that your method of video streaming does not infringe on Acacia’s patents. If such is the ultimate conclusion, the cost of the analysis would be money well spent.

Option 4 – Negotiate with Acacia Independently

Any webmaster can pick up the phone and call Acacia, or send the company an email. Acacia has no obligation to negotiate on the terms of its License Agreement; however nothing prevents that from happening. Acacia can settle on different terms with different individual defendants. However, negotiating the resolution of a patent claim without legal counsel is dangerous business for several reasons. Initially, anything you say to a representative of Acacia could be considered an “admission” or “statement against interest” under the Federal Rules of Evidence, and therefore admissible in subsequent legal proceedings against you. There may be various settlement privileges that come into play, preventing the admissibility of such statements, however a webmaster treads on dangerous ground if he or she decides to get into a substantive discussion with a representative of Acacia regarding the issues of video streaming, or any other relevant legal fact. Attorneys can negotiate such issues without the fear of making binding admissions, or giving away sensitive information that could bear on potential defenses. It is therefore always advisable to utilize the services of an attorney when embarking on such negotiations. Another concern is the disadvantage that a webmaster is at, compared to a member of Acacia’s legal staff. Acacia holds all the cards in the negotiation, and discussing patent claims with its representatives will be similar to negotiating with someone who speaks another language. It may be difficult for the webmaster to know if any particular terms being proposed are fair or reasonable.

Option 5 – Wait and See Approach

Acacia has provided a grace period until November 30, 2003, within which to evaluate one’s options, and make a decision. Therefore, nothing must be done today, and a webmaster can take advantage of the grace period to learn as much as possible about the issue before making any decisions. There are many sides to this story, and numerous complex legal, factual and technological issues are involved. Discussion boards are alive with debate surrounding this topic, and much can be learned by your fellow industry participants. A new Website has been created for the purpose of fighting “patent abuse” entitled: Several industry leaders are calling for an organized opposition to Acacia’s claims, and such resistance is growing. On the other hand, a number of larger companies have accepted the License Agreement, which itself provides valuable information, by implication. Educating yourself regarding the details of this complex problem is essential in order to make a proper decision. Option 6 – Do Nothing

Unfortunately, many affected webmasters will choose to bury their heads in the sand and take no action in response to Acacia letter. Many simply believe that this is “wrong” and so they should not have to spend any time or money in response to these claims. However, even the most frivolous legal claim must be taken seriously, since failure to act may result in the loss of rights or opportunities. For example, Acacia may withdraw its offer to accept the current License Agreement, and seek to hold many webmasters responsible for past infringement, spanning a period of several years. Damages in patent infringement case can be astronomical, depending on the specific situation. Some webmasters are hoping that the “court case” involving Acacia will be resolved soon, and that its patent claims will be invalidated. Such is an unrealistic expectation, however, since the litigation against the existing defendants is in its early stages. No substantive rulings have occurred to date regarding the enforceability of Acacia’s patents. It could be years before a final decision is handed down, once a trial has occurred and all appeals have been exhausted. Therefore, each webmaster must act in his or her own best interests now, without regard to how other defendants will fare in court.


In an era where financial success in the adult industry is becoming more and more elusive, the time and effort necessary to deal with these patent claims can result in tremendous resentment and despair. However, nothing has been able to significantly impact the viability of the adult Internet industry, despite attacks from within and without. The industry will continue to survive, and it is in Acacia’s best interests that it does, if this company intends to base its future profits on royalties received from successful players. So, in a way, everybody is in this together. Webmasters should therefore take some time to carefully evaluate their options and make appropriate decisions, in their own best interests.

Lawrence G. Walters, Esq., is a partner with the law firm of Weston, Garrou & DeWitt, which maintains offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters. You can reach Lawrence Walters at, or AOL Screen Name: “Webattorney.”

September 2003 Update


By: Lawrence G. Walters, Esq.


This month’s Update will not be the usual collection of interesting news stories and legal tidbits. The current prosecution of Extreme Associates and the industry’s response thereto is and must be the single most important issue for adult webmasters to consider presently. That issue therefore will be the focus of this month’s Update.

Marybeth Buchanan, the Assistant United States Attorney heading up the prosecution against Extreme Associates, claims that even Playboy may be obscene in parts of the country.1 Yes, ladies and gentlemen, this is the United States in year 2003. The Department of Justice refuses to inform the public where it will draw the line regarding what it believes to be obscene, but it promises that at least 49 other federal obscenity prosecutions are in the works.2 If history is to be any guide as to what to expect in the future, it is likely that the feds will start prosecuting extreme, fringe, fetish material, and slowly work their way towards more acceptable forms of alternative erotica, like BDSM, interracial, facial, or even gay material. The nation’s Obscenity Czar, Andrew Osterbaan, recently pointed out that even producers of “mainstream” erotica are not immune, and that cases currently in the works include one of the largest producers of adult videos in the world.3 There is no list of what content is or is not legal that webmasters can use as a guide in producing erotica. All adult materials are presumed to be protected by the United States Constitution unless and until declared obscene by a judge or jury.

The single most significant fact to be gleaned from the Extreme Associates prosecution is the government’s contention that individual video clips appearing on can be independently alleged to be obscene without taking into consideration any other materials appearing on the site; ignoring the requirement that material be considered as a whole. Should that view prevail, Internet obscenity cases will immediately become significantly more difficult to defend. Currently, many webmasters rely on significant amounts of artistic or literary material appearing on their sites as a means to satisfy the Miller Test for obscenity, which provides a defense against charges that a work is obscene, if, taken as a whole, the work either lacks prurient appeal or contains serious literary, artistic, scientific or political value.4 If the courts will now allow the government to single out individual video clips, or potentially specific images, for prosecution under federal obscenity laws, that would be tantamount to ripping out pages of a book and asking a judge or jury to declare each of those specific pages obscene, without considering the whole book. While the practice of charging individual video clips as independently obscene will certainly be challenged in the Extreme Associates case, it evidences the government’s creative, yet sinister, approach to federal obscenity prosecutions.

Equally diabolical is the Department of Justice’s decision to bring this case in the Western District of Pennsylvania on the basis that: 1) Video tapes were allegedly sent to that location from Extreme Associates in California, and 2) The video clips were downloaded in Pennsylvania. Mixing the online delivery of Website content across state borders with the physical delivery of tangible media to that same location confuses the community standards issue for the courts and the jury, and muddies the waters on the arguments relating to the difficulties in applying the concept of local community standards to online communications. The argument goes something like this:

Defense counsel: Your Honor, you can’t apply the community standards of Western Pennsylvania to online content originating from California.

The Government: But Your Honor, the Defendant sent video tapes into this community, and was certainly aware that their content would be received in that location.

The Court: How is this different from any other case where a national distributor sends video tapes to various locations across the country?

Defense Counsel: Well, Your Honor, my client did not know that its Website content would be downloaded in Pennsylvania even though it sent similar content through the mail to that location.

The Court: Are you asking this Court to instruct the jury to apply a different set of community standards to the online content as opposed to the video tapes?

Defense Counsel: Possibly, or maybe there should be a national standard applied to the Website content, and a local standard applied to the video tapes.

The Court: Well, it seems like the jury will get awfully confused on what standard they must use to evaluate the legality of these materials, don’t you think, counselor?

The Government: Your Honor, If Extreme knew that it may be subject to the community standards of Pittsburgh, Pennsylvania when sending video tapes there, the Court should apply local community standards for our purposes when evaluating Extreme’s Website content.

Defense Counsel: But Your Honor, there’s a difference . . . The Court: Sounds reasonable to me.

The United States government has, without a doubt, thought through many of the legal and constitutional arguments that will be raised in the defense of the Extreme Associates prosecution. The feds often pick specific issues and venues in the attempt to establish precedent in their favor. The Extreme Associates prosecution may be one of those cases. As noted earlier, the government could be starting with the fringe material and working its way to mainstream erotica. According to one Justice Department official, “There is no particular behavior that is off the table.”6 Along the way, this approach could be calculated to establish precedent favorable to the government to assist in prosecution of the more mainstream material. It will take a team of talented and dedicated attorneys, along with some brave federal judges to recognize what the government is trying to accomplish, and put a stop to this blatant censorship campaign. Should the government obtain victories in the earlier, more difficult cases, that precedent will come back to haunt the industry in a big way. An acquittal in the Extreme Associates case, on the other hand, could prove a huge setback for the government.

The Extreme Associates case should serve as a call to arms for the adult Internet industry since rulings in that case will undoubtedly affect the industry as a whole. Our industry did not assist in any way with the first federal obscenity prosecution against adult webmasters in Beckley, West Virginia.7 Consequently, the amateur couple producing videos for sale over a Website, along with their webmasters, have all pled guilty to one count of conspiracy to distribute obscene materials, in exchange for the dismissal of three other counts.8 The industry now has an opportunity to get involved in this current prosecution which specifically involves material downloaded from the Internet. Groups such as the Internet Freedom Association ( and the Free Speech Coalition ( need your support and membership. If the industry turns its back on webmasters producing extreme or fringe content, the feds may soon be coming for you with a long line of victories in their hip pocket to use against you. Keep in mind, the federal government has unlimited financial resources to prosecute these cases, under the recently-passed PROTECT Act. On the other hand, adult webmasters number in the tens of thousands, and command the attention of millions of online web surfers. This industry can fight back financially and politically by pooling its resources to fight these first few cases brought by the government, and by using the great communication tool called “the Internet” to remove the censors from power.

Rumor already has it that Attorney General John Ashcroft may not return to his post if George Bush is elected to a second term.9 Ashcroft is already on the ropes, trying to defend the USA Patriot act, however his attempts to do so have met with a cool reception.10 It has now been established that the Act has been used against common criminals, instead of reserved for the terrorists, as promised.11 If the moderates and political advisors in the current administration get the message that this campaign against erotica will cost them significant votes from the mainstream, merely to pacify the ultra-right wing zealots, this obscenity campaign will be dropped like a hot potato fresh out of the microwave oven.

The adult Internet industry resents and resists organization and cooperation like the plague. On the one hand, it is such individualistic and rebellious attitudes that make adult webmasters such enjoyable clients to represent. However, in the interests of industry survival, the ego attachments and natural distrust of any sort of formal organization held by the adult webmaster community must give way to a collaboration based on the consistency of interests associated with fighting government censorship in the early stages. There is still time.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

August 2003 Update


By: Lawrence G. Walters, Esq.

Extreme Indictment

The adult Internet industry received another jolt this month as word began to leak out that a federal indictment had been returned against Extreme Associates, Inc., along with Robert Zicari and Janet Romano. Extreme Associates was raided several months earlier; however this indictment was the first formal action taken as a result of the raid. The Justice Department followed a similar pattern as that seen in the case pending against the Defendants in the West Virginia obscenity case relating to scatological content, and alleged a conspiracy to distribute obscene content through the United States Mail, and further sought forfeiture of proceeds generated as a result of the conspiracy.1 However, this case differs in one important respect: It also alleges that the Defendants violated the federal obscenity laws by offering Internet content for downloading on the World Wide Web.2 Therefore, this is the first known case to involve the application of the United States’ obscenity laws to content available exclusively on the Internet. Previous cases have focused on obscene materials delivered via the United States mail. Thus, webmasters can expect to see all of the constitutional arguments play out in this case, which have heretofore been merely the subject of academic debate on message boards and resource sites.

The Justice Department promises that this Indictment is merely the first in a “wave of criminal cases” against the adult Internet industry.3 Reports indicate that the issue of pornography has worked its way to the top of Attorney General John Ashcroft’s agenda, now that the War on Terrorism is under control.4 In announcing the Indictment, Ashcroft said: “Today’s Indictment marks an important step in the Department of Justice’s strategy for attacking the proliferation of adult obscenity. . . [We] will continue to focus our efforts on targeted obscenity prosecutions that will deter others from producing and distributing obscene material.”5 The prosecution against Extreme Associates will be no cakewalk for the government, however. First Amendment attorney Louis Sirkin of Cincinnati, Ohio has been retained to defend the charges, and other talented lawyers are certain to join in the fray. Since this case raises such groundbreaking issues as “Which community standard applies to evaluate online communications?” and, “What constitutes the ‘whole work’ on a Website for purposes of the obscenity test?” the industry will be closely following this case. In the words of Obscenity Czar, Andrew Oosterbaan, “It’s not the first, and it won’t be the last.”6 This will be an important case for the industry to watch, and will certainly be the subject of future coverage in Update.

Summer Internext Draws to a Close

The adult Internet industry’s largest tradeshow ended with a bang (or several of them) in early August, as Hollywood, Florida picked up the pieces left by adult webmasters visiting from all over the world. Legal matters were the topic of conversation throughout the tradeshow floor, as webmasters commiserated about issues such as billing woes, Acacia Media’s patent claims, and expected obscenity prosecutions against adult webmasters. This author has never seen the adult Internet industry as fixated on legal issues as it seems to be at present.

Ashcroft’s List

In a move that has shocked many in the legal community, it was recently reported that Attorney General John Ashcroft wants federal prosecutors to create a list of judges who impose more lenient sentences than federal guidelines recommend.7 Critics say that such a creation of such a blacklist could interfere with judicial independence.8 Ashcroft directed all United States attorneys to promptly report any judge that imposes a “downward departure” from the sentencing guidelines that are not part of a plea agreement or in exchange for cooperation by the defendant.9 Those convicted of obscenity offences need not be concerned with such “downward departures” since the recently passed PROTECT Act virtually eliminates the discretion of judges to provide such sentence reductions, in those cases. Ashcroft defended the creation of the list by claiming an interest in making sure that criminal sentences are faithfully, fairly and consistently enforced.10 Interestingly, Ashcroft did not ask for a list of judges who exceed the sentences recommended by the guidelines.

Legislative Update

Yet another anti-porn bill has been introduced in Congress. This one is called the “Protecting Children from Peer-to-Peer Pornography Act,” and is cosponsored by Joe Pitts (R-Pa.) and Chris John (D-La.).11 The Bill would require Internet file swapping services to obtain parental consent before allowing children to use their software. “Its alarming today how easy it is for our children to inadvertently access pornography over the Internet and become victims of sexual predators. . . ,” said Pitts.12 The Bill requires that the Federal Trade Commission and the Commerce Department develop “do not install beacons” that parents could use to block the ability to download file swapping software. However, some experts express doubt that such technology could be effectively developed.13 “I don’t think anybody has built such a thing and frankly I don’t think such a thing is possible, or at least not likely to be effective in this kind of world,” said Fred von Lohmann, senior staff attorney with the Electronic Frontier Foundation (EFF).14 Not to mention the fact that children can access erotic material through many other means, such as chat rooms, news groups and email. Acknowledging the difficulty in creating such technology, the Bill’s sponsors provide an eighteen month window within which to develop the “beacons.”15

Governor Flynt

Many Californians reeled, and some just smiled, as Hustler publisher, Larry Flynt, threw his hat into the ring of gubernatorial contenders in the political circus known as the Governor Davis Recall Vote. Flynt, a registered Democrat, civil libertarian and free speech advocate, claims he would resolve California’s budget problems by expanding slot machine gambling within the State.16 More than 250 people have registered to run as candidates in the recall election scheduled for October 7, 2003.17 The best known candidate is, of course, Arnold Schwarzenegger. Nobody knows how this menagerie will shake out, but the result may have far reaching consequences for the upcoming presidential election in 2004. The State of California carries the largest number of electoral votes, and is a cherished prize for any presidential candidate. If a Republican is elected as California’s new governor, in response to the recall petition, President George W. Bush may stand a better chance of being reelected, depending on the winner’s success in attempting to resolve the serious financial issues facing the State of California.

Toys in the Dishwasher

Life isn’t all fun and political games for Larry Flynt. He recently found himself on the receiving end of a law suit for sexual harassment, filed by a former employee who claimed she found sex toys in the company dishwasher.18 Elizabeth Rene Raymond, a former executive assistant to two top officers of Flynt’s company, was fired from her job a year ago, and now claims that Flynt fostered a hostile work environment.19 She claims that the toys in the dishwasher were used on the prostitutes who visited his office.20 That’s one way to suit up for the Governor’s race.

Turning of the Tide?

The tide may be turning back in favor of individual privacy after a long run in favor of enhanced security measures by the federal government. In two separate moves, the United States House of Representatives voted overwhelming to pull back a key provision of the Patriot Act, which allows the government to conduct a “sneak and peek” searches of private property,21 and the Senate has moved to kill the Total Information Awareness (TIA) program which would have made records of millions of law abiding Americans subject to governmental scrutiny.22 The Senate also denied funding to the controversial Computer Assisted Passenger Prescreening System (CAPPS II) which would have evaluated the flight risk of airline passengers upon ticketing, until further study can be conducted.23 Both Houses of Congress may be reacting to a popular backlash against more intrusive surveillance methods proposed or enacted in response to the 9-11 terrorist attacks. Additional evidence of such backlash can be seen in the litigation instituted by the ACLU against the library snitch provisions of the Patriot Act, requiring libraries to provide information about their patron’s reading habits.24 Attorney General John Ashcroft is desperately trying to hold on to the power granted by the Patriot Act, by scheduling an 18 city, 4 week, nationwide tour, during which he will attempt to “explain” the Patriot Act to a skeptical America.25 United States’ citizens are a private bunch of people, and this sort of intrusive spying on domestic citizens was certain not to be tolerated for very long after the initial shock of 9-11 wore off. It appears that surveillance agencies such as the CIA and FBI must now resort to good old fashioned police work and maybe a healthy dose of information sharing to avert future terrorist attacks.

Penthouse Goes Bust

After weeks of speculation, and some public denials, Penthouse finally threw in the towel and filed for Chapter 11 bankruptcy.26 The petition for bankruptcy was filed by General Media, Inc, a subsidiary of Penthouse International, Inc., seeking protection so it can restructure its operations and debt.27 The August issue of Penthouse will still be published, although the future of the company thereafter is uncertain. Some industry experts have speculated that print magazines such as Penthouse will have difficulty surviving in light of “lad” magazines such as Stuff and FHM, along with Internet erotica.28

Shielding Innocent Eyes

With all the talk in the adult Internet industry about challenges to governmental efforts to force the adult industry to protect children from inadvertent exposure to adult content, the adult webmaster community’s inherent obligation to do so often gets lost in the mix. Not only is protecting children from adult content the right thing to do, it makes good business sense. Children are a terrible source of traffic, and increase the legal risks associated with presenting adult content. The adult Internet industry is comprised of brilliant programmers and innovators, some of whom have forged many technological advances such as the VCR and many common business practices found on the Web. Certainly such a talented and diverse group can develop technology designed to weed out the presence of minors from inappropriate content. This author has developed a birth date verification script, which is made available to his clients, as an interim solution until something technologically superior can be developed. However, a collective call should emanate through this industry to focus on the issue of protecting children, while at the same time protecting the rights of adult webmasters to purvey erotic material to a consenting adult audience. A proposal to create a .xxx domain name was revealed and explained by its proponent, ICM Registry, at the recent Internext convention. Whether through such grouping or other technique, some form of voluntary age restriction must be implemented before the government does it for us. Just recently, the government filed an appeal to the United States Supreme Court, seeking to reinstate COPA.29 This issue will truly be the greatest challenge facing the adult Internet industry in the conceivable future.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

1 United States of America v. Extreme Associates, Inc. et. al., Case No. [Under Seal]; released August 7, 2003.

2 Id.

3 P.Huffstutter, “U.S. Indicts Porn Sellers, Vowing Extensive Attack,” Los Angeles Times (August 8, 2003)

4 Id.

5 Id.

6 T. Ove, “Indictment made in Pittsburgh signal wider U.S. attack on porn,” Pittsburgh Post-Gazette (August 8, 2003).

7 Associated Press, “Ashcroft Wants List of Lenient Federal Judges” (August 7, 2003).

8 Id.

9 Id.

10 Id.

11 L. Morahan, “Anti-Porn Bill Targets Internet ‘File Sharing,’” (July 28, 2003).

12 Id.

13 Id.

14 Id.

15 Id.

16 Associated Press, “Hustler Publisher Flynt to Run for California Governor,” (August 1, 2003)

17 Id.

18 “Larry Flynt Sued Over Sex Toys in Dishwasher,” (August 6, 2003).

19 Id.

20 Id.

21 A. Clark, “House Takes Aim at Patriot Act Secret Searches,” Washington Post (July 22, 2003).

22 Senate moves to kill Pentagon terrorism surveillance program,” (July 16, 2003).

23 R. Mark, “Senate Cans CAPPS II Funding,” (July 14, 2003).

24 Bell, Maya, “ACLU offers Big Brother warning to library patrons,” (July 31, 2003).

25 “Ashcroft to Launch Patriot Act Tour,” (August 14, 2003).

26 “Penthouse Publisher Files for Bankruptcy,” (August 12, 2003).

27 Id.

28 “Limp Sales Send Penthouse Bust,” (August 15, 2003).

29 C. Farrar, “White House Wants COPA Restored: Report,” (August 14, 2003).

July 2003 Update


By: Lawrence G. Walters, Esq.


With the balance of the Supreme Court in play, all eyes were on the Justices this month as rumors of potential retirements ran rampant. As the Court announced its final decisions of this term, Chief Justice William Rehnquist playfully announced the only retirement would come from the Supreme Court’s Law librarian. Thus, for now at least, some semblance of balance remains in the nation’s high Court – but how long is the question?

The Court gave the nation another pleasant surprise when it rendered its decision in Lawrence v. Texas, the now-famous Texas Sodomy case.1 The decision went much farther than expected by striking down anti-sodomy laws across the country based on an enhanced, due process based, privacy right to be free from governmental interference into private sexual behavior, overruling the 1986 Bowers v. Hardwick case, holding the precise opposite. While the Court could have easily rendered a narrow decision striking down the Texas law based on its unequal treatment of same-sex versus opposite-sex behavior, on well recognized equal protection grounds, it went much further by striking down all sodomy laws due to their impact on non- traditional lifestyles. The effect of this decision on future cases involving private sexual activity has yet to be felt, but it cannot be disputed that the mold for new constitutional arguments has just been forged, and civil rights lawyers now have a new weapon in their arsenal to be used when battling governmental interference in our sex lives.

One can only wonder whether last month’s decision from the federal court in Miami, Florida, holding that group sexual activity intended for live broadcast over the Internet is not constitutionally protected, would have been different if the Court had the benefit of this recent Supreme Court decision.2 In light of the fact that an appeal has recently been filed by the Plaintiffs in that Florida case, we may soon know the answer to that question. For bettor or for worse, the Eleventh Circuit of Appeal will soon likely render a decision on whether such conduct is constitutionally protected. Adult Industry Update will continue to monitor this important case for the adult industry.


The adult Internet industry may soon gain an unlikely ally: The Federal Bearu of Investigation. A bill entitled “The Piracy Deterrence and Education Act of 2003” 3 requires the FBI to develop a program to deter online theft of copyrighted material, particularly through peer- to-peer networks.4 The bill also encourages copyright owners, ISPs and other law enforcement agencies to work together to battle this growing concern. Copyright protection apparently makes for strange bedfellows.

The proposal is not without its detractors, of course. The Electronic Freedom Foundation (EFF) predictably complains that the Bill apparently requires ISPs to reveal private information regarding users whenever asked by organizations such as the Recording Industry Association of America.5 It also gives the FBI “a chance to scare a lot of users into thinking the government is after them,” according to Wendy Seltzer, Staff Attorney for the EFF.


The recent onslaught of anti-spam legislation at the State and Federal levels is being fueled by one thing: porn! Senator Charles Schumer (NY-D), an otherwise liberal legislator, has teamed up with the Christian Coalition to pass the Stop Pornography and Abusive Marketing Act, conveniently known as the SPAM Act.7 “Pornographic e-mail is really pushing people to act,” said Ray Everett Church, a consultant at The Christian Coalition hopes the anti-spam legislation will stop the “filth of pornography and junk e-mail that our children and grandchildren are receiving everyday on the Internet.”9 The Act allows consumers to sue spammers for $1,000 dollars per unlawful message, and creates a national Do Not Spam registry, similar to the Do Not Call lists recently implemented at the federal level aimed at telemarketing solicitors.10 An influential Senate committee also passed a similar anti-spam measure imposing criminal sanctions on spammers, and providing the Federal Trade Commission with greater authority to track down guilty parties.11 Junk e-mail is now thought to make up over half of all e-mail communications.12

Morality in Media takes another tactic when it comes to reducing spam. It says that the answer lies in aggressive enforcement of Internet obscenity laws.13 “When U.S. Attorneys begin to vigorously enforce Internet obscenity laws, (and, in appropriate cases, the RICO-Obscenity Law) against websites that market hardcore pornography, these websites will not be around to push unwanted porn spam into countless American homes and work places.”14 Remember the days when you could have your spam and eat it too?


“Today’s Internet is overwhelmed by obscenity – much of it illegal,”15 This quote summarizes our Opposition’s view of online erotica. Groups such as the National Law Center for Children and Families (NLCCF) are shouting: “It’s about time,” in response to the recent Justice Department’s obscenity indictments against a Texas couple who operated an online video business called the “Rape Video Store.”16 “The good lesson here is that the DOJ is starting to do obscenity cases again,” and said Bruce Taylor, President of the NLCCF. The case that’s got Taylor and company all in a tizzy involves a former Dallas police officer, and his wife, who allegedly sold rape fantasy videos through their website in the mid to late 90’s. Shortly before the statute of limitations ran out, the couple was charged – even after state obscenity charges were dropped. One of the Defendant’s attorneys claims that the indictment is a crusade by the Bush Administration against people who enjoy legitimate erotica. “The Justice Department is running roughshod over my client’s First Amendment rights.”17 “These new indictments are evidence that the Department of Justice knows how to investigate (obscenity crimes) – they know how to find the criminals – and (also) the good guys are back in business and they know how to do their job,” Taylor added. The “good guys” as of yet do not include Taylor, who has been vying for a high level position in the Justice Department’s Obscenity Unit since Bush took office. Thus far, actual federal obscenity indictments have been scattered, although more intensive enforcement is anticipated by industry leaders now that the United States attorney’s have been trained in the lost art of prosecuting a federal obscenity case.

Some good news on the obscenity front this month: Jennifer Dute, who had been charged and convicted of pandering obscenity in Hamilton County Ohio, had her conviction reversed and obtained a new trial by the Ohio First District Court of Appeals. Dute had been serving a jail sentence pending appeal but is now entitled to a bond pending her new trial. The Appeals Court found that the Trial Court committed reversible error when it failed to admit other comparable interracial video tapes into evidence to demonstrate community acceptance of the videos alleged to be obscene.20 Secondly, the Court found that the trial judge should have made an individual inquiry of each juror as to whether they had been influenced by media reports broadcast during the trial which referenced Dute’s prior conviction for obscenity in 1999. Finally, the Appeals Court noted, the matter of sentencing, that there was no evidentiary basis for Trial Court’s finding that Dute was involved with some sort of criminal activity. Dute was sentenced to spend a year in jail.


In a continuing black eye for the Internet industry, police appear to be loosing the battle to close down child porn websites. It has been reported that approximately 90 new child porn websites open every week, making it difficult for law enforcement authorities to keep up.23 Surprisingly, the United States tops the list of countries where these sites originate, with 1,937 sites identified last year.24 Russian child porn sites have also skyrocketed within the last year, increasing 106 percent.25 The increase has been blamed on Russian mafia gangs seeking huge profits through child porn. “There is a huge demand for this material,” said detective Peter Spindler of the Mets Protection Group. Adult webmasters are again encouraged to join Adult Sites Against Child pornography,, which is leading the adult industry’s initiative on this issue.


As predicted, details are now beginning to emerge which confirm previous wide spread fears that the Patriot Act is being used in “non-terror investigations.”26 Official policy allows evidence gathered under the extraordinary anti-terrorism powers conferred by the USA Patriot Act to be used in prosecuting common criminals with no connection to terrorism.27 “We would use whatever tools are available to us, within reason, to prosecute violations of any law,” said Byran Sierra, a Justice Department Spokesman.28 In a recent report, the Justice Department also revealed that information that has been obtained from computer service providers under the Patriot Act and used in investigations unrelated to foreign terrorism.29 Such investigations included a kidnapping, a bomb threat against a school, a hacker who extorted his victim, and a lawyer who defrauded clients.30 Much of the specific information relating to actual uses of the Patriot Act is still being withheld, based on security concerns. The government has still failed to answer the more basic question of whether we as a nation are safer as a result of these new investigatory powers now in the hands of the federal government.


Conventional wisdom holds that two of the most divisive issues of all time are religion and politics. Neither are discussed in Adult Industry Update on any regular basis. However, with the upcoming presidential election campaign just starting to heat up, the issue of politics is worth a mention. Initially, the adult Internet industry is made up of both Republicans and Democrats. Regardless of one’s political leanings on mainstream issues, it cannot be disputed that Republican Administrations are remarkably less friendly than Democratic ones, to the adult industry as a whole.

During the Clinton Administration, the adult industry enjoyed its heyday, and was essentially free from intensive federal regulation. That has all changed now that the baton has been passed to the Republicans, who quickly appointed John Ashcroft to lead an ultra conservative Justice Department. This industry is in a unique position to influence the next presidential election, given the vast number of potential voters it reaches with its products and communications.

This is not a political endorsement of the Democratic Party. Frankly, this author is of the opinion that both political parties are in need of reform and enlightenment, and he is a registered member of neither party. However, as a matter of industry survival, it is essential that adult webmasters and related service providers begin to organize and plan to influence the upcoming presidential election. It is in the industry’s short term interest to help elect a president who will replace the John Ashcroft Justice Department with one headed by a more enlightened, progressive legal thinker who will devout the country’s precious law enforcement resources to the detection and prosecution of real crime, and stop trying to influence the type of media adults read and watch.

Moreover, it is in the industry’s long term interests to ensure that any Supreme Court justice who decides to retire within the next several years is replaced by an individual who can bring balance and minority voices to the Court, instead of yet another ultra conservative who will tip the scales of every decision in favor of the right wing vote. As we saw with the Bush v. Gore decision, the Supreme Court is not immune to politics.

The adult industry must therefore act to preserve its longevity by influencing the upcoming elections in such a way so as to give it the best chance of survival. More than ever, the fate of your business may well hinge on politics.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

June 2003 Update


By: Lawrence G. Walters, Esq.


It appears that the Child Exploitation and Obscenity Section of the Justice Department’s Criminal Division is back in action, after over a decade of relative calm for the adult industry. Recent comments and legal actions indicate that the “Section” is gearing up for an assault on the industry, using beefed-up obscenity laws, now that Congress passed the PROTECT Act. “I have the feeling that something big is going to happen in the near future,” said Patrick Trueman, a former federal obscenity prosecutor and current consultant to the American Family Association – referencing upcoming obscenity prosecutions.1 “I have been assured of that,” he added.2 Andrew Osterbaan, head of the Section, said that new prosecutors and Internet analysts were recently added to target those who sell obscene materials over the Internet and promised, “We hope to alter criminally offensive conduct on the Internet as you see it.”3 Osterbaan is also well aware of the inevitable First Amendment challenges that will be asserted in any such prosecution: “Obviously we’re going to be developing some new case law in that area,” he said.4 Recently, however, Trueman has been complaining about the lack of results by the Justice Department. “This is an issue they haven’t handled well . . . they haven’t made it a priority, and therefore there have been less than a handful of prosecutions and no prosecutions to date of major pornographers who are violating the law,” he said.5 Violating the law in whose opinion, one might wonder.

Possibly in response to this kind of pressure, Alabama Republican Senator, Jeff Sessions and Texas Republican Representative, Lamar Smith, are planning to introduce a resolution urging the Justice Department and all 93 United States Attorneys across the country to be more aggressive in prosecuting obscenity.6 Concerned Women for America (“CWA”), a so-called public policy group that also supports the resolution, accused United States Attorneys across the country of ignoring over 22,000 complaints of obscenity forwarded to them for investigation since June of last year through the “”7 The group is urging citizens to write letters to their United States Attorney, asking: “What are you doing about obscenity enforcement?”8

Disturbingly, eight out of ten Americans believe that federal laws against Internet obscenity should be vigorously enforced, according to a recent poll by the Wirthlin Worldwide research company.9 Another poll, conducted by Morality in Media, a well-known censorship group, concluded that 70% of respondents did not believe that obscenity laws were being vigorously enforced.10 The reliability of these polls is certainly suspect.

Signs of the upcoming obscenity prosecutions are already apparent: The Justice Department has initiated an obscenity prosecution against Mike and Sharon Corbett, alleging that videos sold through the Website,, are obscene. The Justice Department is also looking to renew a 1998 obscenity investigation involving Garry Ragsdale and Clarence Thomas Gartman, in connection with various rape-torture fantasy videos.11 Finally, there was the well-publicized raid against Xtreme Associates, conducted in April, 2003. All of this leads to the inevitable conclusion that obscenity battles are looming on the horizon, and that the adult Internet industry must organize and make their stand.


In a disturbing blow to the First Amendment’s protection of erotic speech, a federal judge recently ruled that the First Amendment does not protect “live acts of sexual intercourse, masturbation or oral sex between marital partners captured on ‘streaming’ or real time video tape for dissemination over the Web.”12 The judge issued the ruling in connection with a case brought by a former Sheriff’s Deputy against his former employer, the Palm Beach County Sheriff’s Office, alleging a deprivation of First Amendment rights as a result of his termination for engaging in group sexual activities displayed on the Internet.13 The court dismissed the Plaintiff’s claims, concluding: “[G]roup physical sexual activity staged, and photographed in a hotel room for mass distribution over a pay Website, does not constitute expressive conduct within the meaning of the First Amendment.”14 While the court paid lip service to the well- established precedent protecting the right to distribute or view non-obscene, sexually explicit materials, it denied such protection for those who “engage” in public sexual activity, “either in the middle of the street, or in a hotel room under the eye of a camera with intent to capture and distribute the images over the Web to a mass audience.15 This ruling strikes at the heart of the constitutional protections afforded those who perform in sexually oriented media. Given the financial status of the Plaintiffs, an appeal of this unfortunate decision is unlikely in the absence of significant industry support.


Pressure from Visa and MasterCard over administrative and chargeback requirements have caused a major Internet billing company to go under. announced its withdrawal from the Industry and cessation of business on May 23, 2003, citing “arbitrary fines” by card associations, foreign banks and their agents.16 Relatedly, a multi-million dollar fraud suit has been initiated by Paycom against MasterCard, accusing the credit card association of fraud and antitrust.17 Paycom is complaining about the “monopolistic” rules and “illegal” fines ranging in the millions of dollars.18

However, it is not only the adult Internet companies that are accusing the credit card companies of fraud. Another fraud suit was filed by three mainstream Internet merchants against Visa, MasterCard, American Express and Discover, claiming that these associations actually profit from Internet fraud and do not seek to stop it.19 The Complaint seeks class action status, claiming that the merchants bear virtually all the costs associated with fraud and theft online. Allegations of monopolistic abuse have also surfaced in this suit.20 “What we’re seeking is not only restitution of excessive penalties but also to cure tomorrow,” said the attorney representing the Plaintiffs in the Raleigh, North Carolina, litigation. The named Plaintiffs are eGeneral, which runs a health Website, New York-based Direct Foreign Exchange, PLC, which runs an online currency exchange, and West Virginia-based Howell Automotive, which sells auto parts online. The damages claimed in this suit could run into the hundreds of millions of dollars. “They are abusing their monopolistic powers because merchants cannot function online without being able to accept these credit cards,” Ishman added.21

This suit comes hot on the heels of a settlement reached by MasterCard and Visa in litigation brought against them by various retailers regarding their debit card practices.22 Visa/MasterCard agreed to pay three billion dollars to settle the class action case, and agreed to lower debit card fees and allow merchants to refuse certain cards.23 Hey, it’s just monopoly money!

The adult Internet Industry is frantically searching for a solution to its credit card and billing problems. With PayPal withdrawing, adult Websites are faced with fewer and fewer options. If the current impasse is not resolved soon, the government may not need to launch an assault on the industry to achieve its desired censorship result.


Federal lawmakers are continuing to wrestle with the Spam issue. The House is currently debating a bill being called “Reduction and Distribution of Spam Act,” authored by Representative Richard Burr (R–NC), which may have the best chance of being passed by the full House in light of its political support.24 Violators could spend up to two years in prison, and ISPs would be allowed to sue for $10 per each email sent to an opted-out recipient, with a cap of $500,000.25 However, critics are calling the bill “weak,” claiming that it would do more to protect mass email advertising than to combat spam.26 “If I thought that everything that was legal under this bill would end up in my mailbox, I’d jump off the Capitol building,” said one Internet industry participant.27 Lobbyists representing several direct marketing groups attended some of the meetings relating to the proposed legislation, which may have contributed to the weakening of the bill.28 Some state Attorneys General claim that the bill is riddled with loopholes, which may prevent the states from enforcing their own, tougher anti-spam laws. For example, the draft bill would provide any company with a “preexisting relationship” with customers the right to send email for up to three years.29 Anti-spam groups have also criticized the bill. “This is yet another bill . . . attempting to get rid of the porn and the scams, but really clearing the way for legitimate companies to spam,” said Joe Mozena, co-founder of the Coalition Against Unsolicited Commercial Email, or CAUSE.30 It is currently estimated that spam comprises over 40% of all email.31

One spammer felt the wrath of EarthLink’s disdain for the practice this month. Howard Carmack, identified as a ringleader of spammers, was hit with a $16.4 million judgment and a permanent injunction in federal court, in a lawsuit brought by EarthLink.32 A number of similar federal lawsuits are pending against other notorious spammers in an effort to cut down on junk email.33


Smile for the camera: Big brother is watching you – without a warrant. High definition satellite imagery is currently available to the government, and anybody else with a credit card. Under existing technology, high resolution images of virtually any coordinates on earth can be obtained through powerful satellite cameras.34 However, the widespread availability of these images is raising significant privacy concerns. “Do we really want the ability to track everybody all the time, without any suspicion, or without probable cause?” asked Attorney Doug Klunder, in a recent interview.35 These issues were recently the subject of a Washington Supreme Court case on whether a warrant should be required to track a person’s movements using satellite devices.36 A previous United States Supreme Court opinion, authored by conservative Justice Antonin Scalia, indicated that a warrant would be required to observe heat signatures emanating from a home, in connection with a marijuana growing investigation.37 In the home “all details are intimate details, because the entire area is held safe from prying government eyes,” Scalia said in the opinion.38 Maybe this will create a new niche for adult Websites:


In a brave move, the small town of Arcata, California, made it a crime to comply with the USA Patriot Act.39 The city ordinance would impose a fine of $57 on any City department head who voluntarily complies with investigations or arrests under the Patriot Act.40 Town officials acknowledge that the law is mostly symbolic, since federal law would trump any local ordinance; however the move has put the small town in the limelight. Critics of the Patriot Act claim that it violates civil liberties, however supporters claim that it helps fight terrorism.41 Perhaps Arcata will start a trend. On the other hand, the Commissioners may just end up in a CIA holding cell for all eternity.


The highly publicized case against James Grady ended in an acquittal recently.42 Grady was initially arrested on 886 counts of sexually exploiting children through child modeling sites operated in Arapahoe County, Colorado. However, when the trial started, the number was reduced to 39. The jury acquitted Grady of all 39 counts.43 The charges involved photographs of young girls, some 13 years old, in provocative poses with suggestive clothing, which prosecutors claimed constituted sexual exploitation of a minor. However, Grady had received written permission from the parents of the teens to post the pictures on his Website, The case is largely seen as precedent-setting for the child modeling industry.


The adult Internet industry is closely following the patent suit brought by Acacia Media over its claimed right to control the use of common video downloading technology over the Internet. Recently, Acacia won the right to use the term “adult entertainment” in describing the alleged infringers.44 Homegrown Video and New Destiny Media filed a motion asking the judge to remove all references to “adult entertainment,” which the movants sought to strike based on fears of prejudice.45 The judge allowed the descriptions to stand.46 Several adult Internet companies have come together to fight the patent claims. The group contends that the patent cannot be enforced since the technology had already existed and was being used at the time that the patents were awarded to Acacia.


“Plain silly:” That’s what an adult industry crusader in Australia called Queensland’s pornography laws.47 The statement was made in Brisbane District Court in a case involving the selling of some banned X-rated films and magazines by a company known as “Good Vibrations.”48 The company was found not guilty of selling the items, but the Office of Fair Trading appealed.49 The legal arguments focused on the interpretation of the Australian Constitution, as it applies to adult materials. In describing the prohibition on sale of adult materials in certain parts of Australia, the company’s lawyer claimed, “that’s not just unconstitutional, it’s just plain silly.”50 This case may set precedent for another 100 prosecutions, also pending in Queensland. See, the United States is not the only source of “silly” anti-porn laws.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

May 2003 Update


By: Lawrence G. Walters, Esq.

Protect Act Passed

The adult industry was sent reeling this month by the news that the federal PROTECT Act – presented to the electorate as an “Amber Alert” Bill – had been signed into law. S. 885. In fact, the Act goes far beyond assisting with the location of missing children, and is in reality a law largely aimed squarely at the adult entertainment industry. For example, the Act requires the Attorney General to appoint 25 additional trial attorneys to the Child Exploitation and Obscenity Section of the Criminal Division of the Department of Justice who are required to focus on the investigation and prosecution of federal child pornography “and obscenity laws.” § 513. The Justice Department has received essentially a blank check for funding these new attorneys, since the Act states: “There are authorized to be appropriated to the Department of Justice such sums as may be necessary to carry out this subsection.” § 513(a)(2). Moreover, the Department of Justice must report in the next 9 months, and every 2 years thereafter on what it is doing to enforce child pornography offenses, along with certain obscenity offenses relating to children. § 513(b)(1). Apart from that, the Act demands a separate report in one year about § 2257 enforcement. § 511(b). The Act also includes new crimes relating to virtual child pornography and the use of misleading domain names covered in detail in last month’s Update.

Of significant concern to adult webmasters are the beefed up sentences required under the Act for child pornography and obscenity crimes. The “Feeney Amendment” to the Bill was designed to essentially eliminate the discretion of judges to depart downward from the sentencing guidelines in these cases. § 401. Of course, the judges still are free to give harsher sentences.

The penalties for violation of Section 2257 relating to records keeping have also been increased from two years up to five years incarceration. §511(a)(3)(B). Repeat offenders get up to ten years. Again, there are no downward departures for these crimes under the Feeney Amendment. Conforming amendments to the sentencing guidelines can be expected. Parenthetically, the scope of media covered by Section 2257 has also been expanded, or clarified, to include any “computer generated image, digital image, or picture.” § 511(a)(2). While the existing definitions contained in Section 2257 were probably broad enough to already include online erotica, the Legislature has now made it clear that webmasters will be on the hook for compliance with Section 2257. The Attorney General’s obligation to report to Congress regarding the number of inspections and/or prosecutions initiated under Section 2257 is nearly certain to trigger enforcement. Moreover, in the past the records that the adult industry was required to keep under Section 2257 could not be used against the individuals required to maintain them. That stood to reason, since the government should not require you to maintain certain records, and then use those records against you in a criminal prosecution. This implicates the right against self-incrimination. However, the PROTECT Act now allows the government to use such records as evidence in child pornography and – you guessed it – obscenity prosecutions.

It is hard to over-state the impact of this new legislation. This law was passed without any public input, much less protest, from the adult industry. Certainly, the presentation of this Bill as a “child protection act” focusing on recovery of missing children made it difficult to oppose for any lawmaker, however the add-on amendments bode ill for the adult industry and should have been challenged prior to passage. At this point, any affected parties must resort to the judicial system to obtain potential any relief.

Steganography Revisited

In November, 2001, this author alerted the adult Internet industry to the issue of “steganography” which involves the embedding of small digital images or messages in otherwise innocent online pictures, as a means of clandestine communication. At that time it was speculated that the 9-11 hijackers and other Al Qaeda operatives used steganography to communicate with each other by embedding messages in erotic images posted on the Internet. That speculation has now been confirmed with the discovery of coded erotica containing images of the Twin Towers, downloaded just days before the 9-11 attacks.1 On September 4, 2001, pictures of the World Trade Center were saved as temporary files on one of the computers used by Abu Saleh, an Egyptian currently facing trial in abstentia in Milan on charges of international terrorism. The images had apparently been manipulated, with their colors modified, and mixed with various adult pictures, and sent back to the Web.2 Law enforcement officials claim that, in this way, Al Qaeda cell members communicated back and forth without being detected. Although the digital evidence is still being analyzed, this discovery provides additional potential grounds on which to investigate adult Websites. The last thing the adult Internet industry needs is to be inadvertently linked with terrorism, which might be used as a basis for investigation of adult Websites under the Patriot Act. Speaking of which . . .

The End of the Patriot Act?

In a victory for civil liberties, Senate Republicans recently backed down from an effort to make the sweeping surveillance and investigative powers provided by the Patriot Act, permanent.3 Senator Orrin Hatch, Chairman of the Senate Judiciary Committee, abandoned his effort to extend the Patriot Act legislation which is scheduled to expire in 2005. However, the Senate did approve a measure expanding the government’s ability to use the super-secret surveillance tools provided by the Act even if it cannot link the terrorist suspects to a known terrorist group. As the law currently reads, United States officials must establish a link to a foreign terrorist group in order to invoke the surveillance powers. “There’s a delicate balance between liberty and security,” said Senator Charles E. Schumer, the lawmaker who authored the expanded powers. The attempt to make the Patriot Act permanent touched off a significant civil liberties debate from lawmakers concerned about the reach of “Big Government.”4 In a brave statement, a spokesman for Representative F. James Sensenbrenner, Jr., a Wisconsin Republican who chairs the House Judiciary Committee, said that extending the Patriot Act’s powers, “will happen over his dead body.”5 The American Civil Liberties Union called the defeat of the proposed extension “a major victory.”6

Judicial Update

In a major victory for peer-to-peer file swappers, a Los Angeles federal judge ruled last month that companies, such as Kazza, which provide software and assistance to enable file swapping amongst Internet users, are not liable for illegal copying of music and videos by those users.7 “It’s a vindication, we are not pirates,” said Wane Rosso, President of Grokster, one of the file swapping companies.8 A spokesman for the Recording Industry of America expressed disappointment at the ruling, which will likely be appealed. Notably, the rate of swapping of copyrighted adult video files is skyrocketing.

Spam, Spam, Spam, Spam, Spam

The Federal Trade Commission, (“FTC”) has gone on the offensive against “deceptively bland” spam, and has asked a federal judge to block unsolicited emails that use innocuous subject lines, false return addresses and empty “reply to” links.9 The FTC asked for a restraining order against Brian Westby, an alleged spammer based in St. Louis. The FTC cited such unassuming subject lines as “married but lonely” and “did you hear the news” as examples of the illegal deception.10 Also brought to the limelight was the issue of “spoofing,” where the sender of junk email makes it appear that the mail came from an innocent third party.11 The FTC has become more active in pursuing spammers in recent years, and has announced hundreds of settlements.12

The State of Virginia has also gone on the offensive against spam by passing a new law criminalizing the transmission of unsolicited bulk electronic email.13 The law makes it a felony to transmit more than 10,000 unsolicited bulk emails in a 24 hour period, or more than 100,000 attempted recipients in any 30 day time period.14 Also included in the prohibitions are penalties for enabling the falsification of electronic mail transmission or other routing information.15

It is likely that spammers will be faced with many more such laws in the near future, as spam continues to clog our inboxes, and make email communication less and less efficient.

Wal-Mart Censorship

Magazines, which are considered relatively benign by most in the adult Internet industry, are being pulled from the shelves of Wal-Mart, and labeled “too racy” for Wal-Mart shoppers.16 Maxim, Stuff and FHM men’s magazines will no longer be carried by the nation’s largest retailer.17 While private companies are entitled to make business decisions as to what media is sold, any decision by this huge retailer greatly affects the availability of the censored product. During the formation of our country, when publishers used the printing press to communicate, the government was in the strongest position to influence the availability of a specific publication, through its censorship policies. However, in present times, decisions such as this by Wal-Mart have a greater impact, as de facto censorship, than the government could ever have by passing a law.

Wal-Mart’s attempt at taking the moral high-ground may be a bit hypocritical if reports from female employees in San Francisco are true. More than a hundred complaints have been filed by the women against the company, as part of a lawsuit against the retail chain, alleging that male managers at Wal-Mart stores required their female counterparts to attend meetings at strip clubs and Hooter’s.18 The plaintiffs’ attorney claims that “women are treated as second class employees at Wal-Marts from Florida to Alaska.”19 The workers are attempting to certify a class action against Wal-Mart based on discrimination against female employees.20 At least those employees will not be forced to look at those racy men’s magazines any longer!

Producer Gone Wild

In a black eye for the adult industry, the owner and producer of the successful “Girls Gone Wild” video line is facing sex and drug charges in Panama City, Florida.21 Joe Francis, Chief Executive of Mantra Entertainment, was arrested in April on allegations that he told minors to lie about their age on camera.22 After a search of five locations and his private jet turned up corroborating videotapes and drugs, Francis was charged with drug trafficking and racketeering relating to prostitution.23 Three of his employees also were charged. Francis has denied the charges but documents relating to the case have been sealed as part of an ongoing investigation.24

Video Game Industry Under Fire

The State of Washington has proposed a Bill making it illegal for retail stores to provide violent video games to minors.25 The measure passed in both the State House and Senate, and the Governor is expected to sign the Bill shortly. Store clerks and owners who violate the law could face fines up to $500 per instance. The Washington Chapter of the ACLU, the Media Coalition and the Interactive Entertainment Merchants Association have called on the Governor to veto the Bill on First Amendment grounds, calling it “an attack on Free Speech.”26 The courts have issued conflicting decisions as to the constitutionality of similar laws, and the United States Supreme Court has yet to speak on the issue.


Do we really live in a world where large groups of men and women masturbate in public at a “Masturbate-A-Thon?”27 Or where investors snap up shares of a publicly-traded brothel?28

Or where 87 passengers fly nude from Miami to Mexico on a commercial airline?29 Yes we do. The times, they are a-changing.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

1 A. Salomon, “Porn – Concealed Terror,” (May 2003).

2 Id.

3 E. Lichtbalu, “Senate Deal Kills Effort to Extend Anti-terror Act,” (May 9, 2003).

4 Id.

5 Id.

6 Id., quoting Timothy Edgar, Legislative Counsel for the ACLU.

7 “Court Rejects Music Industry Suit Against Web File Swappers,” Associated Press (April 25, 2003).

8 Id.

9 “Judge Asked to Quash ‘Deceptively Bland’ Spam,” Reuters (April 17, 2003)

10 Id.

11 Id.

12 Id.

13 Ch. 987, HBNO 2290.

14 Id.

15 Id.

16 D. Carr & C. Hayes, “3 Racy Men’s Magazines Banned by Wal-Mart,” (May 6, 2003).

17 Id.

18 “Female Wal-Mart Workers: Meeting Held at Strip Clubs,” (April 29, 2003).

19 Id., quoting Brad Seligman.

20 Id.

21 “Maker of ‘Girls Gone Wild’ Videos Faces Sex, Drug Charges,” Associated Press (April 11, 2003).

22 Id.

23 Id.

24 Id.

25 M.Frishberg, “Video Game Merchants Under Fire,” (May 2, 2003).

26 Id.

27 “San Francisco Hosts ‘Masturbate-A-Thon,’” (May 5, 2003).

28 “Investors Pounce on Brothel Shares,” (May 1, 2003).

29 “Passengers Take it Off at Takeoff,” 7, 2003).

April 2003 Update


By: Lawrence G. Walters, Esq.


In the courts this month, the Third Circuit Court of Appeal again struck down the Child Online Protection Act (“COPA”). The law has never been enforced and was sent back to the Third Circuit Court of Appeals from the United States Supreme Court to consider additional arguments that the Circuit Court did not resolve the first time around. One concern that the court noted in striking down the law is that in attempting to define “harmful material,” COPA makes no distinctions between things appropriate for a five year old and something harmful to a seventeen year old.1 Also, since the law requires that surfers desiring to view erotica provide a credit card number, this unfairly requires adults to identify themselves before viewing constitutionally protected material.2 Another review by the United States Supreme Court is likely as a result of this decision.

Meanwhile, Texas Republican Representative Lamar Smith unveiled what he calls the “Child Obscenity and Pornography Act of 2003,” which would prohibit the sale or trading of child pornography or obscenity involving prepubescent children.3 Of particular concern is porn peer to peer file swapping which uses services such as Kazza as a swap meet for child pornography.4 One way or another, we will wind up with more federal restrictions on providing adult materials to children.

The United States Supreme Court rendered an interesting ruling this month: The Court ruled against lingerie seller Victoria’s Secret on its trademark claim against a small sex toy and adult video store named “Victor’s Secret.”5 The Court noted that federal trademark law requires substantial evidence that a competitor actually caused harm by using a similar-sounding name.6 Notably, this ruling produced a unanimous decision in favor of an adult entertainment establishment. With Justices Scalia and Reinquist voting in favor of a sex store, perhaps there is hope for justice at the High Court. Notably, this case is not a green light to use sound-alike names – do so only with extreme caution and sound legal advice.


Congress recently passed the new virtual child pornography law, creatively entitled “The Child Abduction Prevention Act of 2003.”7 Apparently, our lawmakers did not understand the import of last years United States Supreme Court decision striking down portions of the Child Pornography and Prevention Act of 1996, which was Congress’ first attempt to regulate “virtual” child pornography. Many of the same concerns are created by the new legislation, although the House is certainly bobbing and weaving in its attempt to come up with something that will pass constitutional muster. Section 1466A of the Bill prohibits the production, distribution, receipt, or possession with intent to distribute, of any visual depiction which is, or is indistinguishable from, that of a prepubescent child engaging in sexually explicit conduct. This Bill will certainly be challenged if it is passed into law, and the United States Supreme Court may once again be faced with a difficult decision on the constitutional reach of the government’s authority to regulate depictions of pretend children. Because it is limited to prepubescent minors, however, there will be less impetus to challenge it because responsible businesses always stay clear of such images. The likely challenges will come from criminal defendants.

More disturbing than virtual child pornography restrictions are the other add-ons to this Bill, relating to deceptive domain names and federal records keeping requirements. The Bill contains a new prohibition on the use of “misleading” domain names by adult websites. “The Internet can be used to deceive children into viewing inappropriate material,” said Representative Mike Pence (R-Ind.), who drafted the domain name amendment to the Bill.8 Specifically, Section 2252B(b) provides, “Whoever knowingly uses a misleading domain name with the intent to deceive a minor into viewing material that is harmful to minors on the Internet shall be fined under this Title or imprisoned not more than four years, or both.”9 Interestingly, webmasters who use the words “sex” or “porn” are provided a safe harbor from prosecution. Couldn’t the Representatives come up with a few more words that clearly denote adult content? That project might have provided an interesting afternoon task for some House staffers. The test for determining what is “harmful to minors” under this new Bill is the same test used in the COPA law, which is the subject of substantial federal court litigation regarding its constitutionality. If COPA is struck down by the United States Supreme Court this time around, the misleading domain name law likely will fall with it.

Perhaps most disturbing is the last sub-section of the Child Abduction Prevention Act that requires the Attorney General to submit a report to Congress detailing the number of times since January, 1993, that the Department of Justice has inspected Section 2257 records of adult content producers.10 This sub-section also requires Attorney General John Ashcroft to disclose the number of violations prosecuted as a result of those inspections.11 It seems as though any member of Congress could simply pick up the telephone and call General Ashcroft to ask him these questions. Accordingly, it is unlikely that the purpose of the legislation is really to obtain this statistical information. Rather, it is to light a fire under the Department of Justice to persuade federal agents to begin inspecting records and prosecuting violations. This provision, buried in the fine print of this proposed law, should be of extreme concern to all webmasters who have any question about the extent of their § 2257 compliance. It is reasonable to assume that the Department of Justice will begin inspecting § 2257 records on a widespread basis, even if this section of the Bill is defeated (fat chance!). Compliance with the dictates of Title 18, U.S.C. §2257 cannot be overemphasized in these uncertain times for the adult industry.


The Feds are at it again, with at least two new federal obscenity prosecutions directed at adult video content distributed through the United States Mail. Federal agents, postal inspectors and LAPD officers raided the offices of Extreme Associates on April 8, 2003, and seized records, videos and Model Releases relating to several movies.12 The raid on Extreme Associates came only days after the Justice Department arrested a West Virginia couple on obscenity charges relating to the operation of a “scat” fetish site,  Justice Department officials have threatened to seize the couple’s home, out of which the business was allegedly operated. The case is pending in Bluefield, West Virginia – hardly a bastion of liberal thought. It appears that the long-feared reinstatement of regular federal obscenity prosecutions against adult content has finally become a reality, prompting many adult industry participants to review their content and seek legal guidance regarding its defensibility. Thus far, distractions abroad have likely prohibited an all-out assault on the adult industry by the Department of Justice, just as a matter of resource allocation.


The big news on the payment processing front this month was the pull-out by PayPal from the adult internet industry. Many webmasters were surprised to receive a notice from PayPal that as of May 12, 2003, it would no longer support transactions for adult content or products. PayPal previously had served as a viable alternative means of paying for adult content, especially for smaller amateur sites that could not obtain a merchant account, or afford to comply with the new regulations imposed by the third party billing processors. Some industry leaders have speculated that PayPal’s pull out from the adult industry may be a signal of hard times to come; some even suggesting that the company was tipped off and given an opportunity to get out before the going gets tough. While such conspiracy theories are sometimes interesting to consider, there has been no official confirmation that PayPal had access to inside information.

Also generating some panic amongst adult webmasters is the rumor that Visa will no longer provide processing services for AVS sites. Although there is no official word yet from Visa, it is interesting to note that AdultCheck has changed its description of services from an “Age Verification System” to an “Access Verification System.”14 These continued payment processing hurdles force one to consider whether at some point in the future, adult content might only be purchased by sending cash in the mail.


Most tuned-in webmasters are painfully aware of the patent claims by Acacia Research, which contends that it owns patents to what is commonly known as “streaming media.” Acacia has sued several adult Websites, and made over 700 claims against companies in the adult entertainment industry because of their perceived profitability. That conclusion may itself be a miscalculation on Acacia’s part, since experts have recently opined that Internet erotica is not the money catcher it’s often believed to be outside the professional adult industry.15 Notably, there have also been some misinterpretations as to the volume of adult material on the Internet. Recent estimates indicate that total erotic content is still less than five percent of all material available online.16 In any event, Acacia has filed suit against a number of adult companies (along with many non-adult ones) under the theory that they are violating Acacia’s patent claims. Several such companies have organized and retained the national intellectual property law firm of Fish & Richardson to defend their interests, in the attempt to defeat the patent claims.17 Although there’s been no resolution to the merits of Acacia’s claims, a jury recently struck down four patent infringement claims against two Internet security companies in a Delaware trial, where the Plaintiff claimed to have invented a popular method for processing secure transactions over the Internet.18 The Plaintiff had been granted seven patents between November, 1993, and October, 1999, to cover Secure Sockets Layer (SSL) which is commonly used to scramble data during Internet transactions between Websites and their customers.19 A second trial on these issues is looming, and nobody is counting their chickens on that case yet. However, this may be a positive indicator of which way the wind is blowing on Internet patents.


Another Marriott Hotel in Cincinnati has succumbed to the pressure of the Citizens for Community Values (“CCV”), a censorship group focused on eliminating adult fare from area hotels. The Cincinnati Marriott North in Westchester, Ohio, is the second local hotel to bow to pressure from the censorship group and law enforcement officials.20 The Butler County Prosecutor’s Office warned that owners might face obscenity charges unless they cut off pay per view adult entertainment. After receiving complaints about a couple of movies, local prosecutors indicated that Marriott officials “were very cooperative.”21 Chilling effect in action! FEDS SEIZE WEBSITES

In a move that has concerned some civil libertarians, federal agents from the Justice Department are starting to seize and take over Websites owned by businesses that distribute bongs, roach clips, rolling papers and other alleged drug paraphernalia. Civil liberties groups and legal scholars fear that the government could use the new seizure policies to spy on Web surfers who visit the confiscated sites.22 David Sobel, General Counsel for the Electronic Privacy Information Center, recently said, “The government is suddenly in a position of being able to monitor the Web-surfing activities on unwitting individuals who believe they are going to a Website . . . but possibly implicating themselves into some law enforcement investigation.”23 Thus far, 15 to 20 sites have either been taken over or redirected by the Justice Department, according to Attorney General John Ashcroft. In the meantime, those looking to consume tobacco products via exotic smoking devices are encouraged to avoid online shopping and to visit their local head shop instead.


Anti-spam crusaders have been emboldened by the recent Eighth Circuit Court of Appeals decision upholding the federal junk fax law.24 In this case, American Blast Fax, Inc. and challenged provisions of the Telephone Consumer Protection Act of 1991, prohibiting unsolicited fax advertising on First Amendment grounds. Although the trial court struck down the restrictions as a violation of Free Speech, the Eighth Circuit Court of Appeals reversed and found the legislation constitutional. In light of this court decision, anti-spam advocates began pushing harder for a federal law against unsolicited email. Ray Everett-Church, Counsel to the Coalition Against Unsolicited Commercial Email, claims that the same arguments used to justify the unsolicited fax regulation can be made about spam.25 Comparing spam to fax, Everett said, “The junk email problem cries out even louder for a solution.”26 However, the Electronic Frontier Foundation argues that regulating email spam may not be as easy as regulating junk faxes. The Appeals Court decision focused on the costs associated with tying up fax machines and using up paper and ink to receive faxes, which largely differentiates unsolicited email.27 Nonetheless, Senator Conrad Burns (R-Montana) introduced federal anti- spam legislation called “Controlling the Assault of Non-Solicited Pornography and Marketing Act,” but it was not called to the Senate floor for a vote.28 More recently, a Bill was introduced in Arkansas, requiring spam to contain an identifying URL, the phrase; “ADV: Adult,” a valid functioning email address to allow removal, and a toll-free telephone number for recipients to call to be removed from the list.29 Although approximately sixteen states have passed anti-spam legislation, attempts at regulating unsolicited email at the federal level have thus far been unsuccessful.


Online casino gambling has been dealt another potential setback this month as the House Financial Services Committee approved a Bill that would require credit card companies and payment services such as PayPal to block money transfers to Internet gambling sites.30 “No one is immune to the potential ruin that Internet gambling can bring,” said Committee Chairman, Michael Oxley (R-Ohio).31 However, Massachusetts Democrat Bonnie Frank opposed the measure, likening it to a new form of prohibition.32 A similar bill is pending in the Senate. The online gambling industry has been dogged by conflicting court decisions regarding the applicability of federal gambling law to online gaming, along with competing legislation alternatively proposing both criminalization and potential legalization of Internet gaming. ONLINE POLITICKING

The Internet has provided an ideal venue for grassroots political campaigns, and several new Websites are popping up to assist in the endeavor. For example,, is a new free service that gathers people together to discuss various subjects that has found a niche in campaigning for candidates.33 Since its inception, has held dozens of events around the country for voters to support their presidential candidates. As this author has preached for years, webmasters may hold the key to the next presidential election should they use their power to effect political change.

Blue Balling the Boys Overseas

Last month, Update reported that at least one company was sending adult fare care packages to troops stationed abroad. It was not long before censorship groups like Focus on the Family and Concerned Women for America have objected to the offer of erotic assistance. Detractors cited degradation of women and concerns about the Muslim reaction to adult entertainment as reasons to halt the shipments.34 Focus on the Family also integrated the concept of obscenity; “The interstate distribution of obscene material is a criminal violation, and United States attorneys and even the FBI should investigate . . . ”35 The Middle East might as well be initiated with American culture sooner, rather than later.


The winner of the bizarre story of the month is a tie: Tennessee has proposed to ban X- rated videos from cars, and a man was arrested after refusing to remove an anti-war shirt in the mall. The State Senate of Tennessee has voted unanimously to ban X-rated videos from cars and other vehicles if the TV screens can be seen from the street.36 Erotica fans can still view the tapes if their car windows are tinted or covered by shades, so long as they keep their eyes on the road! The final oddity this month is the well-publicized arrest of the individual who failed to remove a shirt proclaiming “Peace on Earth, Give Peace a Chance.”37 Mall officials quickly distanced themselves from the security officer’s actions, and the guard was fired. Perhaps these absurd actions are necessary to give the American public a refresher course in First Amendment rights.

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

March 2003 Update


By: Lawrence G. Walters, Esq.

Swearing in the Enemy

Insiders recently revealed that President George W. Bush has tapped some of the adult industry’s sworn enemies for potential appointment as the nation’s “Porn Czar.” The prime suspect is Bruce A. Taylor, an infamous censor and President of the National Law Center for Children and Families, (“NLC”).1 Others under consideration are Patrick Truman of the American Family Association and J. Robert Flores, also with the NLC.2 These potential appointments should come as no surprise, as Bush took an aggressive stance against erotica during his campaign, saying, “Porn has no place in a decent society.”3 One source predicts that thirty or more companies will be targeted by the Justice Department in the short term.4 There is also widespread speculation that the content depicted in modern adult films will change, in reaction to the potential appointments. On the list of endangered scenes are food used as sex objects, urination, coffins, blindfolds, interracial and, of course, “the money shot.”5 Not all industry participants are ducking for cover, however. Rob Black of Extreme Associates was recently quoted as saying, “I’m not going to hide in the closed. I’m not going to stop anything.”6

War Drums

As the war drums continue to beat at home, one adult Website has begun offering free erotica for the troops abroad. DirectLink Media Group has created a Website offering 500 free videos and DVD products to military personnel “to make their time away from home a bit easier.”7 Directlink is one of the largest mail order and Internet companies in the world, and hopes to rally the troops out there fighting for our freedoms. “They deserve any kind of support we can give,” said Aaron Gordon, President of That should help make it hard on our enemies. It should be interesting to see if this stuff makes it past Iraqi customs.

Perhaps our beloved Attorney General, John Ashcroft, accidentally got on the list for some free adult materials: A package was found addressed to General Ashcroft at a federal courthouse last month. The package was originally thought to be dangerous, but was later cleared by the bomb squad, who determined that the only material in the box was a collection of erotica. Rumor has it that Ashcroft still thought it was dangerous. Charges will be filed, according to law enforcement officials.9 The box was destroyed.

Obscenity Update

One down . . . none to go! The country’s only “Porn Czar” got the axe recently in light of Utah’s budget crisis. Paula Houston was appointed to the post two years ago, however the State Attorney General decided that Utah no longer had the “luxury” of affording the nation’s only Porn Czar.10 For her part, Houston said: “I certainly hope I never have to look at pornography again.”11 Thankfully, she wont. The State’s Attorney General, concerned about the public perception of the termination cautioned, “We hope pornographers will not see this as a sign we’re giving up.”12 Riiiiight!!

In another setback for the censors, a Clermont County, Ohio grand jury has declined to indict Red Roof Inn hotel owners for providing X-Rated movies to guests.13 The Citizens for Community Values, (“CCV”), a pro-censorship group, pressured Clermont County prosecutors to take the obscenity case involving the movie Lots of Filthy Sex to the grand jury in the hopes of obtaining an indictment. However, the film, depicting multiple sex acts by various individuals, was not found obscene by the grand jury.14 This was the first Ohio County to show one of the in-room hotel movies to a grand jury. While law enforcement officials vow to continue seeking indictments, the Red Roof Inn continues to offer adult fare to its patrons.15

While most of the obscenity law news was positive this month, one case did result in a conviction. A thirty year old former parochial school teacher plead guilty to downloading two pictures of adult women posing nude on the Internet, resulting in a conviction under the federal obscenity law, Title 18, U.S.C. Section 1462.16 The conviction will result in the government looking over the Defendant’s shoulder any time he surfs the Internet, to make sure his activity is appropriate.17 The government will also be allowed to attach software to monitor his online activity, and the Defendant must provide passwords to any member areas.18 According to Morality in Media, which has followed the case, only seven other prosecutions under any United States obscenity law occurred in year 2001.19 Seven too many!

The federal government may soon become much more active in its fight against online erotica if a bill introduced by Rep. Nick Lampson (D-Tx) is passed. The measure would authorize twenty million dollars over the next four years for the “Customs Cyber Smuggling Center,” which conducts undercover operations to catch individuals distributing contraband over the Internet.20 This year, Congress earmarked $2.5 million for the program. The Clinton administration had not specifically funded the Center in previous years.21

Blocking Brouhaha

The State of Pennsylvania’s plan to require ISPs to block certain erotic Websites sparked controversy and outrage by prominent civil liberties activists last month. At least 423 Websites have been blocked so far under a highly unusual law passed last year requiring ISPs to block subscribers’ access to the sites.22 The law imposes a $5000 fine on companies providing Internet access to Websites with illegal content, but imposes no penalty on the pornographic Websites themselves.23 The Pennsylvania Attorney General, Mike Fisher, allowed citizens to file an online complaint using a form on his Website. The law requires the ISPs to block subscribers from visiting thousands of Websites with completely unrelated content and ownership, that may be located on the same server as sites with illegal images.24 The Center for Democracy in Technology has launched an investigation into the Attorney General’s actions, and is attempting to force him to disclose details about the unusual blocking efforts.25 Only one ISP, WorldCom, Inc., disputed a request to block – resulting in a court order to comply. Under a common technique called “virtual hosting,” a number of Websites can share a single numeric Internet address. In one case, a single Website was reported to have shared its numerical address with 970,411 other sites.26 The Pennsylvania law makes no allowance for such address sharing, and requires complete blocking of all sites residing on the same address or servers. Talk about overkill!

More Trouble for ISPs

In another action involving Internet Service Providers, a federal judge recently ordered Verizon Communications to disclose the identity of an alleged peer-to-peer user in a case brought by the music industry. The Recording Industry Association of America brought suit against Verizon under the Digital Millennium Copyright Act, (“DMCA”), forcing the ISP to reveal the name of a Kazaa subscriber who has allegedly shared hundreds of music recordings. United States District Judge John Bates ordered the release of the name in this case which is widely viewed as a “test case” for online privacy.27 Various civil liberties groups have complained that the DMCA procedure allowing a turbocharged subpoena process to obtain copyright infringers’ names violates consumer privacy.28 Verizon plans to mount an appeal, citing a concern that the decision could open the floodgates to copyright holders sending numerous subpoenas to ISPs seeking the identities of subscribers.29 This case pits important civil liberties concerns against the rights of music and video producers. Numerous advocacy groups including the Electronic Frontier Foundation, Consumer Alert, the Electronic Privacy Information Center and the National Consumers League, filed briefs in the case as amici curiae. ISPs could be flooded with thousands of subpoena requests for user information if Verizon looses the appeal.

Disappearing Civil Liberties Act

You thought the Patriot Act was bad – get ready for Patriot Act II. The Bush administration is allegedly preparing a sweeping, comprehensive sequel to the United States Patriot Act which will ramp up the government’s intelligence-gathering powers, and allow increased surveillance and law enforcement prerogatives, while at the same time decreasing judicial review and the public’s right of access to information about the activities.30 The bill has apparently been drafted by Attorney General John Ashcroft, and is entitled the “Domestic Security Enhancement Act of 2003.” Although it has not been officially released to the public, rumors have been circulating about the existence of the proposed bill for months. One university law professor who has reviewed the draft legislation claims that it “raises a lot of serious concerns.”31 Apparently, the law drastically expands law enforcement powers and authorizes secret arrests, new death penalties, the creation of a DNA database based on “suspicion,” and the ability to eliminate American citizenship from people who belong to or support disfavored political groups.32 Speculation has been circulating that Ashcroft has been waiting for the right time to introduce the legislation, such as when the war with Iraq has begun, or a another terrorist strike hits.

In a last-ditch effort to save what’s left of our civil liberties, the ACLU has mounted an unprecedented appeal to the United States Supreme Court from a decision of the super-secret Foreign Intelligence Surveillance Act (“FISA”) Appeals Court. (That last line sounds like something straight out of Orwell’s 1984.) This court’s recent ruling reversed a trial court decision which had initially invalidated some of the Justice Department’s new surveillance procedures allowed by the USA Patriot Act.33 The appeals court had never met before, largely because the trial court almost always grants the surveillance request, and there is no opposing party in these proceedings.34 The appeals court reversed the strongly worded trial court decision, originally condemning the FBI for misleading the FISA court in 75 separate instances.35 The appellate court decision granted the Justice Department wide leverage to expand the use of secret surveillance for domestic law enforcement purposes. While there is no established procedure for allowing the ACLU to intervene in these proceedings, it is hoping that the United States Supreme Court will hear the appeal. Here’s hoping for the long shot to come in.

Larry Flintsky

The Russian equivalent to Larry Flynt has insisted that his country’s adult Internet industry needs to be cleaned up. Sergei Pryanishnikov has demanded that the Russian Parliament establish a clear definition of pornography to determine what is and what is not legal, so that he can conduct his business without having to pay bribes.36 The lack of clarity in Russia’s pornography definitions invites the intervention of law enforcement, who frequently take a cut, according to the story. Article 242 of the Russian Penal Code outlaws “illegal” creation of pornography, but implicitly allows it when it is “legal.”37 Pryanishnikov wants a clarification “so as to put an end to police corruption.” We could use the same thing here in the States.

Yahoo! is Kosher

Former Yahoo! President, Timothy Koogle, must have been on pins and needles awaiting the outcome of his criminal trial in a French court last month. Koogle faced up to five years in jail and a fine of almost $50,000 if convicted on charges brought by French authorities as a result of the sale of various Nazi memorabilia on Ultimately, however, the French court acquitted the former executive, finding that Yahoo! did not condone or praise Nazism, nor did it shed favorable light on the policies of Adolph Hitler by selling collectible items from the Third Reich.38 The ruling was hailed as a victory for campaigners for Free Speech on the Internet. In November 2002, a French court ordered Yahoo! to block French access to certain Websites offering the material for sale, however a United States judge later ruled that Yahoo! was not bound to tailor its Websites to French laws given the importance of First Amendment rights in the United States. Although Yahoo! prevailed in both the United States and French court proceedings, it still banned the sale of most Nazi memorabilia.39 The “chilling effect” works even from abroad.

Talk My Picture

The new breed of cell phones with built-in digital cameras are the new tool used by voyeurs to take unauthorized photos of people for adult Websites, according to recent reports.40 These readily disguisable cameras have been taken inside gyms, health clubs and bathrooms to capture individuals in compromising positions across Central Florida.41 Images can then be quickly emailed and posted on adult Websites. Several individuals have already been prosecuted under Florida’s anti-voyeurism law. For their part, cell phone manufacturers claim that phones are not meant for illegal use. Attractive females are being warned to look around before picking up the soap in the shower at the local gym.

Woman Must Give Up Her Toys

A Haynesville, Texas woman charged with promotion of “obscene devices” as a result of her possession of a trunk load of sex toys has agreed to surrender the erotic items in exchange for dismissal of the obscenity charges.42 Such devices are illegal only in Texas and a handful of the southern states. Cathy Grubbs was pulled over for drunk driving last month and law enforcement discovered a box containing seventeen items described by law enforcement as “obscene devices.” Such devices are illegal only in Texas and a handful of the southern states. As part of the plea agreement, Grubbs will also admit to a drunk driving charge. The allegation that sexually explicit devices are illegal came as a surprise to the company distributing the items, Slumber Party, Inc.43 That news may come as a surprise to a good percentage of the United States population, given recent statistics showing that the sex toy industry is a multi billion dollar business.

New Virtual Child Porn Law

The feds are at it again, trying to fix the broken “virtual child porn” law declared unconstitutional by the United States Supreme Court last year. The new bill is called the “Prosecutorial Remedies and Tools Against the Exploitation of Children Today Act of 2003” (PROTECT Act). It has passed the Senate, and was referred to the House Committee on the Judiciary on February 25, 2003. The bill raises a whole host of issues potentially affecting the adult Internet industry, including enhanced penalties for Records Keeping violations, which will be addressed in future Updates if and when the bill passes.

Update Finally Has A Home

One final note, this Adult Industry Update is now available on its own Website: On the site, users will be able to access the current issue, along with all back issues, dating back to October 1998. Users can also sign up to receive the Update along with breaking news stories affecting the adult industry by email. Check it out now at:

Lawrence G. Walters, Esquire is a partner with the law firm of Weston, Garrou & DeWitt, with offices in Orlando, Los Angeles and San Diego. Mr. Walters represents clients involved in all aspects of adult media. The firm handles First Amendment cases nationwide, and has been involved in much of the significant Free Speech litigation before the United States Supreme Court over the last 40 years. 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, or AOL Screen Name: “Webattorney.”

1 D. Frick, “Pornography in Retreat,” The Position (February 24, 2003).

2 Id.

3 Id.

4 Id., citing: Mark Kromer of The Nation.

5 Id.

6 Id., quoting

7 D. Miller, “Internet Company Offers Free Porn for U.S. Troops,” (January 28, 2003).

8 Id.

9 “Suspicious Package Sent to Ashcroft Ends Up Being Porn,” TheMilwaukeeChannel com (February 10, 2003).

10 K. Stewart, “‘Porn Czar’ Job Gets the Ax,” The Salt Lake Tribune (January 15, 2003).

11 Id.

12 Id.

13 M. McCain, “Grand Jury Declines to Indict Motel Owner on Porn Charges,” The Cincinnati Enquirer (February 6, 2003).

14 Id.

15 Id.

16 R. Sylvester, “Local Man’s Obscenity Plea Almost Unheard Of,” The Wichita Eagle (February 17, 2003).

17 Id.

18 Id.

19 Id.

20 E. Varon, “Bill Would Double Budget to Fight Internet Child Pornography,” (February 2003).

21 Id.

22 “Plan to Block Porn Sites Sparks Outrage,” (February 21, 2003).

23 Id.

24 Id.

25 Id.

26 T. Bridis, “Pennsylvania Forces ISPs to Block Access to Porn Websites,” (February 19, 2003).

27 D. McCullagh, “ISP Ordered to Identify Kazaa User,” (January 21, 2003).

28 Id.

29 Id.

30 C. Lewis & A. Mayle, “Son of the Patriot Act,” The Public i (February 7, 2003).

31 Id.

32 Id., quoting: Dr. David Cole, Georgetown University Law Professor and Author of “Terrorism and the Constitution.”

33 R. Singel, “ACLU Challenges Wire Tap Decision,” Wired News (February 2003).

34 Id.

35 Id.

36 M. Viatteau, “Russia’s Porn King Makes Legal Demands,” (February 11, 2003).

37 Id.

38 “Ex Yahoo! Chief Acquitted Over Nazi Sites,” (February 2003).

39 Id.

40 “Report: Voyeurs Using Phone Cameras to Snap Photos,” (February 19, 2003).

41 Id.

42 J. Lynch, “Sex Toy Dealer Ordered to Give up Toys, Cox News Service (January 16, 2003).

43 Id.